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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
    DOI: 10.1287/mnsc.32.2.194
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    Cited by:

    1. Saurabh Panwar & P. K. Kapur & Ompal Singh, 2021. "Predicting diffusion dynamics and launch time strategy for mobile telecommunication services: an empirical analysis," Information Technology and Management, Springer, vol. 22(1), pages 33-51, March.
    2. V. Krishnan & Karl T. Ulrich, 2001. "Product Development Decisions: A Review of the Literature," Management Science, INFORMS, vol. 47(1), pages 1-21, January.
    3. 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.
    4. Sergei Savin & Christian Terwiesch, 2005. "Optimal Product Launch Times in a Duopoly: Balancing Life-Cycle Revenues with Product Cost," Operations Research, INFORMS, vol. 53(1), pages 26-47, February.
    5. P.J. Lamberson & Scott E. Page, 2018. "First mover or higher quality? Optimal product strategy in markets with positive feedbacks," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 27(1), pages 40-52, March.
    6. Terrence August & Marius Florin Niculescu, 2013. "The Influence of Software Process Maturity and Customer Error Reporting on Software Release and Pricing," Management Science, INFORMS, vol. 59(12), pages 2702-2726, December.
    7. 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 Policy Research Unit, University of Sussex Business School.
    8. 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.
    9. Christian Weckenborg & Karsten Kieckhäfer & Thomas S. Spengler & Patricia Bernstein, 2020. "The Volkswagen Pre-Production Center Applies Operations Research to Optimize Capacity Scheduling," Interfaces, INFORMS, vol. 50(2), pages 119-136, March.
    10. Ataman, B.M., 2007. "Managing brands," Other publications TiSEM 462dcbba-2ac1-46d1-a61c-f, Tilburg University, School of Economics and Management.
    11. Larysa Yakymova, 2020. "Developmental Patterns of Voluntary Pensions in CEE Countries: Analysis through the Bass Diffusion Model Reflecting the Observational Learning Mechanism," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 4, pages 166-192.
    12. Bossink, Bart A.G., 2017. "Demonstrating sustainable energy: A review based model of sustainable energy demonstration projects," Renewable and Sustainable Energy Reviews, Elsevier, vol. 77(C), pages 1349-1362.
    13. 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.
    14. M. Berk Ataman & Carl F. Mela & Harald J. van Heerde, 2008. "Building Brands," Marketing Science, INFORMS, vol. 27(6), pages 1036-1054, 11-12.
    15. Krishnan, Trichy V. & Feng, Shanfei & Jain, Dipak C., 2023. "Peak sales time prediction in new product sales: Can a product manager rely on it?," Journal of Business Research, Elsevier, vol. 165(C).
    16. Sumitro Banerjee & Miklos Sarvary, 2009. "How incumbent firms foster consumer expectations, delay launch but still win the markets for next generation products," Quantitative Marketing and Economics (QME), Springer, vol. 7(4), pages 445-481, December.
    17. 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.
    18. Luo, Yong (Eddie) & Wong, Veronica & Chou, Ting-Jui, 2016. "The role of product newness in activating consumer regulatory goals," International Journal of Research in Marketing, Elsevier, vol. 33(3), pages 600-611.
    19. 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.
    20. Bryan Bollinger & Kenneth Gillingham, 2012. "Peer Effects in the Diffusion of Solar Photovoltaic Panels," Marketing Science, INFORMS, vol. 31(6), pages 900-912, November.

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