Riding successive product diffusion waves :building a tsunami via upgrade-rebate programs
AbstractWe discuss how trade-in rebates can be used to manage product multigenerational innovation diffusion waves, and study the optimal behavior of the firm controlling the prices and rebates associated to product upgrades. We show how this strategy accelerates the diffusion and can lead to profit increments of about 5%. The strategy is profitable even when the rebate subsidizes the upgrades entirely.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Universidad Carlos III, Departamento de Economía de la Empresa in its series Business Economics Working Papers with number wb114011.
Date of creation: Nov 2011
Date of revision:
New product diffusion; Successive generations; Trade-in; Upgrades; Optimal strategies;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-04-17 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Morris A. Cohen & Jehoshua Eliasberg & Teck-Hua Ho, 1996. "New Product Development: The Performance and Time-to-Market Tradeoff," Management Science, INFORMS, INFORMS, vol. 42(2), pages 173-186, February.
- Dan Horsky & Karl Mate, 1988. "Dynamic Advertising Strategies of Competing Durable Good Producers," Marketing Science, INFORMS, INFORMS, vol. 7(4), pages 356-367.
- Engelbert Dockner & Steffen JÃ¸rgensen, 1988. "Optimal Pricing Strategies for New Products in Dynamic Oligopolies," Marketing Science, INFORMS, INFORMS, vol. 7(4), pages 315-334.
- Stefan Stremersch & Eitan Muller & Renana Peres, 2010. "Does new product growth accelerate across technology generations?," Marketing Letters, Springer, vol. 21(2), pages 103-120, June.
- Kenneth L. Judd, 1998. "Numerical Methods in Economics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262100711, December.
- Heese, Hans S. & Cattani, Kyle & Ferrer, Geraldo & Gilland, Wendell & Roth, Aleda V., 2005. "Competitive advantage through take-back of used products," European Journal of Operational Research, Elsevier, vol. 164(1), pages 143-157, July.
- Donald Lehmann & Mercedes Esteban-Bravo, 2006. "When giving some away makes sense to jump-start the diffusion process," Marketing Letters, Springer, vol. 17(4), pages 243-254, December.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: () The email address of this maintainer does not seem to be valid anymore. Please ask to update the entry or send us the correct address.
If references are entirely missing, you can add them using this form.