Innovation adoption modeling incorporating market expansion and change point attribute
Today, in an era of high technological products, the rate of innovation and knowledge creation plays a pivotal role in continued firm growth. In the last few decades, it has been observed that the world of product development and its management has evolved rapidly. In particular, the use of feature-addition or otherwise bringing some change in the marketing strategy after a certain time point (change point) is fast becoming commonplace. These attributes like: entry/exits of the competitor, change in price, change in quality, environmental changes, etc. tend to bring a remarkable change in the overall sales of an existing product mix. Many innovation diffusion models have been proposed over the past three decades that estimate the sales but very few models have considered the increase in market size after this strategic time point named as “change point” in marketing literature. The objective of this paper is to propose the innovation adoption modelling framework that incorporates this effect of increase in the market size. Results have been supplemented with numerical examples.