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The Market Trajectory of a Radically New Product: E-Cigarettes

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  • Kislev, Mickey M.
  • Kislev, Shira

Abstract

The study analyzes the diffusion of electronic cigarettes as an innovation, as well as how industry, society, and the individual affect its market dynamics. The study is based on five surveys conducted during the years 2017−2019, and including participants of all ages (age 12 to 80 and beyond). The article describes indicators for evaluating the sustainability of a really-new product like electronic cigarettes, following the market trajectory of this product as it sets its dominant design and shapes the use-system for the product type from now onward. This process has two phases: trial and adoption. The probability of each nicotine product type’s adoption is different, depending on the prevalence of trials of that product among the population. The results of e-cigarette trials and additional indicators reveal the point (critical mass-point) where social influence outweighs rational evaluation by the individual regarding nicotine products. By using triers’ prevalence as the indicator for measuring an entry of really-new product into the market, the authors could identify the sustainability of that really-new product at a much early phase. Therefore, the prevalence of triers can be used as a predictor for the diffusion rate of an innovative product in a certain population and should be measured. The authors also propose a regression model that estimates the prevalence of triers based on the extent of users in the population.

Suggested Citation

  • Kislev, Mickey M. & Kislev, Shira, 2020. "The Market Trajectory of a Radically New Product: E-Cigarettes," MPRA Paper 104425, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:104425
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    More about this item

    Keywords

    demerit good; electronic cigarette; innovation; diffusion; nicotine;
    All these keywords.

    JEL classification:

    • L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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