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A Market Entry Timing Model for New Technologies

Author

Listed:
  • Shlomo Kalish

    (Graduate School of Management, University of Rochester, Rochester, New York 14627)

  • Gary L. Lilien

    (113 Business Administration Building 11, The Pennsylvania State University, University Park, Pennsylvania 16802)

Abstract

A central issue in new product development and planning is the market timing/entry decision. An entry too early may risk pushing an under-developed product into the marketplace, with possible negative results; however, a product/technology may sacrifice sales if entry is delayed too long. A market diffusion model is developed that incorporates negative word-of-mouth associated with new product failure, resulting from premature introduction. Our analysis suggests that, when introducing a new technology, significant penalties may be associated with mistiming introduction. The analysis was applied to a problem facing the photovoltaic program of the Department of Energy. A proposal to construct a 100-home demonstration program for photovoltaics (PV) in the Southwest was being evaluated. The analysis of this case showed that an argument can be made to delay the demonstration program for several years and that significant risks (in terms of lowered ultimate market penetration) exist when starting this PV demonstration program prematurely.

Suggested Citation

  • Shlomo Kalish & Gary L. Lilien, 1986. "A Market Entry Timing Model for New Technologies," Management Science, INFORMS, vol. 32(2), pages 194-205, February.
  • Handle: RePEc:inm:ormnsc:v:32:y:1986:i:2:p:194-205
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    File URL: http://dx.doi.org/10.1287/mnsc.32.2.194
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    Citations

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    Cited by:

    1. V. Krishnan & Karl T. Ulrich, 2001. "Product Development Decisions: A Review of the Literature," Management Science, INFORMS, vol. 47(1), pages 1-21, January.
    2. John Hauser & Gerard J. Tellis & Abbie Griffin, 2006. "Research on Innovation: A Review and Agenda for," Marketing Science, INFORMS, vol. 25(6), pages 687-717, 11-12.
    3. Elcin Cetinkaya & Aurélie Thiele, 2016. "New product launch decisions with robust optimization," Computational Management Science, Springer, vol. 13(2), pages 263-292, April.
    4. Antonio Messeni Petruzzelli & Daniele Rotolo & Vito Albino, 2014. "Determinants of Patent Citations in Biotechnology: An Analysis of Patent Influence Across the Industrial and Organizational Boundaries," SPRU Working Paper Series 2014-05, SPRU - Science and Technology Policy Research, University of Sussex.
    5. Scott A. Shane & Karl T. Ulrich, 2004. "50th Anniversary Article: Technological Innovation, Product Development, and Entrepreneurship in Management Science," Management Science, INFORMS, vol. 50(2), pages 133-144, February.
    6. Ataman, B.M., 2007. "Managing brands," Other publications TiSEM 462dcbba-2ac1-46d1-a61c-f, Tilburg University, School of Economics and Management.
    7. repec:eee:rensus:v:77:y:2017:i:c:p:1349-1362 is not listed on IDEAS
    8. Sang-Gun Lee & Silvana Trimi & Won Byun & Mincheol Kang, 2011. "Innovation and imitation effects in Metaverse service adoption," Service Business, Springer;Pan-Pacific Business Association, vol. 5(2), pages 155-172, June.
    9. M. Berk Ataman & Carl F. Mela & Harald J. van Heerde, 2008. "Building Brands," Marketing Science, INFORMS, vol. 27(6), pages 1036-1054, 11-12.
    10. Brian Paul Cozzarin & William Lee & Bonwoo Koo, 2012. "Sony’s redemption: the Blu-ray vs . HD-DVD standards war," Prometheus, Taylor & Francis Journals, vol. 30(4), pages 377-394, December.
    11. Herbert Dawid & Marc Reimann, 2011. "Diversification: a road to inefficiency in product innovations?," Journal of Evolutionary Economics, Springer, vol. 21(2), pages 191-229, May.
    12. repec:eee:ijrema:v:33:y:2016:i:3:p:600-611 is not listed on IDEAS
    13. Dou, Wenyu & Ghose, Sanjoy, 2006. "A dynamic nonlinear model of online retail competition using Cusp Catastrophe Theory," Journal of Business Research, Elsevier, vol. 59(7), pages 838-848, July.
    14. Bryan Bollinger & Kenneth Gillingham, 2012. "Peer Effects in the Diffusion of Solar Photovoltaic Panels," Marketing Science, INFORMS, vol. 31(6), pages 900-912, November.

    More about this item

    Keywords

    marketing; new products; diffusion models;

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