A Conjoint-Hazard Model of the Timing of Buyers' Upgrading to Improved Versions of High Technology Products

30 Pages Posted: 10 May 2006

See all articles by V. Seenu Srinivasan

V. Seenu Srinivasan

Stanford University - Graduate School of Business

Sang-Hoon Kim

Seoul National University - College of Business Administration

Date Written: March 2006

Abstract

This paper presents a method to forecast the sales path of an improved version of a high technology product defined in terms of its price path and multiattribute product specification. The approach is potentially useful to managers to answer what if questions on the effects of alternative price paths and product specifications of the upgrade on when and how many of their customers will upgrade. The proposed approach integrates an individual-level conjoint utility model with a hazard function specification. An illustrative application to the personal digital assistant (PDA) category confirms the predictive validity and potential usefulness of the proposed approach. Among the empirical findings are that higher upgrade costs and expectation of faster product improvement tend to delay buyers' upgrading decisions.

Keywords: product upgrades, multiattribute models, hazard rate modeling, high-tech marketing, conjoint analysis, personal digital assistants

Suggested Citation

Srinivasan, V. Seenu and Kim, Sang-Hoon, A Conjoint-Hazard Model of the Timing of Buyers' Upgrading to Improved Versions of High Technology Products (March 2006). Stanford University Graduate School of Business Research Paper No. 1720 (R1), Available at SSRN: https://ssrn.com/abstract=893890 or http://dx.doi.org/10.2139/ssrn.893890

V. Seenu Srinivasan (Contact Author)

Stanford University - Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States
650-723-8505 (Phone)
650-725-6152 (Fax)

Sang-Hoon Kim

Seoul National University - College of Business Administration ( email )

San 56-1, Sillim-Dong
Kwanak-Gu
Seoul, 151-742
Korea

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