Too Little, Too Early: Introduction Timing and New Product Performance in the Personal Digital Assistant Industry

Bayus, Barry L.; Jain, Sanjay; Rao, Ambar G.

doi:10.2307/3152064

Cited by 121 publications

(88 citation statements)

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“…George Lucas, who shot the second part of his Star Wars saga entirely on digital video cameras, is known for stating: "I can safely say that I'll never shoot another film on film" (Screen Digest 2002). Tradeoffs between development time, production cost, and product quality have already received attention from marketing researchers (e.g., Cohen, Eliashberg and Ho 1996;Bayus 1997;Bayus, Jain and Rao 1997;Hauser 2001;Bajaj, Kekre and Srinivasan 2004). It seems worthwhile to adapt the models they have proposed to the peculiar context of the motion picture industry.…”

Section: The Benefits Of Digital Technology Will Change the Productiomentioning

confidence: 99%

The Motion Picture Industry: Critical Issues in Practice, Current Research, and New Research Directions

2006

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The motion picture industry has provided a fruitful research domain for scholars in marketing and other disciplines. The industry has a high economic importance and is appealing to researchers because it offers both rich data that cover the entire product lifecycle for a large number of new products and because it provides many unsolved 'puzzles'. Although the amount of scholarly research in this area is rapidly growing, its impact on practice has not been as significant as in other industries (e.g., consumer packaged goods). In this article, we discuss critical practical issues for the motion picture industry, review existing knowledge on those issues, and outline promising research directions. Our review is organized around the three key stages in the value chain for theatrical motion pictures: production, distribution, and exhibition. Focusing on what we believe are critical managerial issues, we propose various conjectures, framed either as research challenges or specific research hypotheses, related to each stage in the value chain and often involved understanding consumer movie-going behavior.

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Section: The Benefits Of Digital Technology Will Change the Productiomentioning

confidence: 99%

The Motion Picture Industry: Critical Issues in Practice, Current Research, and New Research Directions

2006

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“…The literature on technological innovation is reviewed by Bayus (1995), Kamien and Schwartz (1982), and Reinganum (1989). We summarize below those areas of the literature that are most closely related to our model, indicating how our approach differs.…”

Section: Related Workmentioning

confidence: 99%

“…However, a longer development stage delays the commencement of these higher profits. For examples of these models, see Dutta et al (1995), Reinganum (1982), Cohen et al (1996bCohen et al ( , 1996a, Bayus et al (1997), and Bayus (1998). Although these models focus on the development and marketing aspects of innovation, they incompletely address the dynamic nature of this process.…”

Section: Related Workmentioning

confidence: 99%

New Product Innovation with Multiple Features and Technology Constraints

2002

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W e model a firm's decisions about product innovation, focusing on the extent to which features should be improved or changed in the succession of models that comprise a life cycle. We show that the structure of the internal and external environment in which a firm operates suggests when to innovate to the technology frontier. The criterion is maximization of the expected present value of profits during the life cycle. Computational studies complement the theoretical results and lead to insights about when to bundle innovations across features. The formalization was influenced by extensive interviews with managers in a high-technology firm that dominates its industry.

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“…Bayus (1997) finds that fast development of low-quality products is optimal only when the market window is short, the competitor is relatively weak, and the development cost curve is relatively steep. In a game-theoretic model, Bayus et al (1997) find that a profit-maximizing firm with a new technology may choose to be the first to market or wait and enter with a better product, depending on cost and market parameters. Klastorin and Tsai (2004) examine the choice of product design complexity (fixing development time) and price in a duopoly.…”

Section: Literature Reviewmentioning

confidence: 99%

The optimal pace of product updates

Druehl

Schmidt

Souza

2009

European Journal of Operational Research

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Some firms (such as Intel and Medtronics) use a time-pacing strategy for new product development, introducing new generations at regular intervals. If the firm adopts a fast pace (introducing frequently) then it prematurely cannibalizes its old generation and incurs high development costs, while if it waits too long, it fails to capitalize on customer willingness-topay for more advanced technology. We develop a model to gain insight into which factors drive the pace. We consider the degree to which a new generation stimulates market growth, the rate at which it diffuses (its coefficients of innovation and imitation), the rate of decline in its margin over time, and the cost of new product development. The optimization problem is non-concave; however we are able to solve it numerically for a wide range of parameters because there is a finite number of possible solutions for each case. Somewhat intuitively, we find that a faster pace is associated with a higher market growth rate and faster margin decay. Not so intuitively, we find that relatively minor differences in the new product development cost function can significantly impact the optimal pace. Regarding the Bass coefficients of innovation and imitation, we find that a higher sum of these coefficients leads to a faster pace but with diminishing effects, and that for relatively higher sums the coefficients are effectively substitutes.

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Too Little, Too Early: Introduction Timing and New Product Performance in the Personal Digital Assistant Industry

Cited by 121 publications

References 0 publications

The Motion Picture Industry: Critical Issues in Practice, Current Research, and New Research Directions

The Motion Picture Industry: Critical Issues in Practice, Current Research, and New Research Directions

New Product Innovation with Multiple Features and Technology Constraints

The optimal pace of product updates

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