Toward a demand forecasting model for preannounced new technological products

Abstract

This paper develops a model to forecast demand for a new preannounced technological product that builds upon existing product positioning models. Our model incorporates (i) the factors of technological ability of a firm to design the preannounced product, and (ii) the impact of the preannouncement on the product acceptance behavior of channel members and the choice behavior of prospective customers. Such behavior is governed by credibility of the firm's preannouncement and expectations about the availability of the new product; a channel member's decision to accept the new product depends upon the expected sales and the product's acceptance by other channel members. These issues lead logically to the interdependence between product positioning and preannouncement decisions of the firm. Our model also examines the trade-off between development time of a technologically superior product and preannouncement of a marginally better product. We conclude with a discussion of the data required to implement the forecasting model as well as implications for the product development process, competitive behavior, and future research.