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An Integrated Trial/Repeat Model for New Product Sales

The primary objective of this paper is to be able to provide an accurate forecast of overall new produst sales. A paper by PS Fader, B G S Hardie, C-Y Huang

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By Creating a tight linkage between the trial and repeat purchase processes, we can leverage the limited amount of observed repeat data that are available in the initaial weeks after launch.

The integrated model allows managers to carefully diagnose the sub-components of new product sales (such as percent of triers repeating by time t, repeats per repeater, and so on), without requiring separate models for each one.

Overall, a flexible set of model components gives us a general framework to capture and understand the wide variety of possible purchase patterns that can occur for a new product soon after its launch.

This framework includes (and generalizes) many of the models considered by Gupta (1991) as well as other previous models that have addressed some of the specific issues described in the full abstract of this report available below.

We conduct a detailed empirical analysis using data from IRI's BehaviorScan service, and show how the model can be used to examine the differential impact on trial and repeat sales that emerges when we remove(or add) a aparticular promotional event.

To download this paper in full, click here

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