Study On Domestic Automobile Product Market Life Cycle Based On Technology Diffusion Model

The automobile industry is one of the pillar industries in China. Domestic automobile market is highly competitive and instability. And the automobile produc t also has features of platform, series and diversity. All the above causes the abnormity and dynamics in automobile product life cycle. Thus, the new product development has to adapt to the market passively or follow the stereotype of period without scientific analysis tools and theoretical basis.Development policy of industry and operational decisions of firms often depend critically on product life cycle information. The existing researches focus on product category and the macro level of automobile industry. Little research on the diffusion of particular product and brand product, and its realization and application has been found.This study aims to establish scientif ic and quantitative product life cycle analysis model for product development to provide tools for objective analysis and flexible response.Product life cycle theory and technological innovation diffusion theory are employed to study one segment of China automobile industry, i.e. cross-type passenger vehicle. Not only the cycle descript ion of product life cycle is retained, but also the multidimensional models for product diffusion are suggested which are include three dimensions, i.e. overall demand of segment market, mult iple generation products of technology innovation and brand product. S o life cycle diffusion curves of industry product, technology update and brand product are described. The research is in-depth on structure, effectiveness and application of diffusion model. Then cross-type passenger vehicle in China as an example is verif ied empirical analysis. So as to form the product life cycle assessment system, discuss the product development method to extend of the automobile product life cycle. It deals with the follow ing research work:First, The key theory of product life cycle is stage recognit ion based on the product life diffusion curve, neither according with affecting factors nor analyzing prediction ability.The theory of technology diffusion is suggested, choose the product diffusion model, in order to get the life cycle curve model according with diffusion rule of automobile product:Since there is no recognized diffusion model for automobile products, several typical diffusion models are compared and analyzed to determine the basic model for cross-type passenger vehicle. Mea nwhile, parameter estimation is one of the key problems for application of diffusion model. Different algor ithms for parameter estimation impact the fitting results of the model. Therefore, a two-step estimation method combining GA (Genetic Algorithm) and NLS (Nonlinear Least Square) is analyzed for prepared work to construct and apply multidimensional models.Secondly, the product life cycle theory is ambiguous.The research object is from the product categories to brand products.The actual needs of life cy cle of automotive products are from the three dimensions of industry product, technology upgrading and brand products. Multidimensional diffusion model is constructed, considering various influence factors of three dimensions, in order to get different research dimension curve model of product life cycle:Product diffusion model with dynamic market environment:Replacement purchase and dynamic market inf luence product diffusion, limiting application of basic product diffusion model. A dynamic market variables set is constructed to reflect environment changes. The extended product diffusion model is proposed considering replacement purchase and dynamic market factors. Cross-type passenger vehicle is empirical studied. And the factors of repeat purchase, purchasing power, product cost, and government subsidies are analysed in the extended diffusion model. The results indicate that the suggested model with perfect fitness and forecasting accuracy shows better performance in explaining diffusion rule. Product life cycle is analysed from macro industry scope for sustainable development with extended model.Product diffusion model of successive generation:Products are updated under the driver of consumer demand and technology innovation. Based on diffusion theory, competition and heterogeneity are incorporated in classical multi-generation products diffusion model. The models which assume that competition and heterogeneity variables simultaneously influence the diffusion of successive generations at different level are proposed to examine the impact of factors. The results of China cross-type passenger vehicle in recent11years indicate that competition and heterogeneity act an important role in the diffusion of mult i-generation vehicle products. Meanwhile, empir ical results also validate the perfect fitness and forecasting accuracy of the suggested model incorporating competition and heterogeneity variables in mult i-generation products diffusion.Brand product diffusion model:Due to the complexity and variability of brand diffusion, the research on the diffusion model for brand products is diversity and uncertainty. Based on diffusion theory，competition and expansion of industry market are incorporated in classical diffusion model. The model which assumes that industry market simultaneously influenced various brands diffusion within a product category is proposed to examine the impact of industry market factors on brand diffusion. The results of three brands in cross-type passenger vehicle market in recent10years indicate that market expansion acts an important role in brand diffusion. Meanwhile empirical results also validate the effectiveness of incorporating market expansion variables in brand diffusion model. It can provide decision-making basis for product development strategy.Finally, establishment of product life cycle assessment system based on diffusion models:Combining the mult idimensional diffusion models, product life cycle of three levels including industry, technology and brand is discussed, to compensate for previous research. According to the analysis conclusion of product life cycle, it is proposed to maximize product platform value and extend platform life cycle as far as possible for product technology strategy. And product configuration strategy with mult i-objective optimization is suggested based on consumers’ individual preferences for realistic guidance of product development.