Diffusion Model And Empirical Research Of Product Considering Repeated Purchase And Price

The introduction of advanced technology and technical transformation have resulted in our creation of new products and sped up our technical renovation in the commercial industry as well.The changes of consumption structure and consumption ideas have shortened the life cycle of product.Enterprises need to constantly adjust product structure,develop and launch new products in order to meet the challenges.Development and diffusion of the products are a quite complex systematic project,which are relevant to market structure,consumer preference and marketing strategy.The modern enterprise is facing a faster and more competitive market environment,therefore it is difficult to carry on the effective and reasonable decision about development and diffusion of the products.Grasping the product diffusion mechanism correctly will provide a theoretical basis for the development of new product and marketing strategies.A deep analysis to product diffusion mechanism will be helpful for the enterprises to improve their production skills and set themselves apart from the fierce market competition.Bass model is a milestone in the field of product diffusion,which has opened a new field in product diffusion research.Bass model has a series of assumptions,which limit its application.The non-linear differential dynamic model for diffusion behavior of product was built based on Bass model,which considered the factors of repeated purchase?price and performance.Multidisciplinary thought and theory methods were used to study product diffusion problem.Firstly.the non-linear differential dynamic model for diffusion behavior of single product was built based on Bass model,which considered the factors of repeated purchase and price.The analytical expressions of accumulative number of adopters and market steady accumulative number were obtained by solving differential equations.Considering the learning effect and solving the model' HJB equation,the analytical expressions of optimal pricing was obtained under biggest benefit.The evolution process of model' main variables and the optimal price were analyzed by simulation analysis.Optimal product pricing decreases over time,and level off in the end of product' life cycle.Some conclusions can be obtained through sensitivity analysis of various parameters,the increase of product diffusion coefficient and the decrease of consumption rate can promote the product diffusion;Optimal pricing increases with the increase of diffusion coefficient and decreases with the increase of the consumption rate and learning effect of the elastic coefficient.Secondly,the non-linear differential dynamic model for diffusion behavior of two generation products was built,which took the factors of price,performance and repeated purchase into account.Then its dynamic evolution process was analyzed.We found that the original product would be eliminated and the updated product would dominate the market when the price is fixed value.The market occupancy of the updated product would maintain a stable level.The correctness of the model and its theoretical conclusion was verified by simulation analysis.The inter-relationships between various parameters and the characteristics of system architecture were revealed through sensitivity analysis.Simulation results show that the increase of the updated product' diffusion coefficient can shorten the life cycle of two generation prodcuts.The increase of consumption rate and price of the updated product can lengthen the life cycle of two generation prodcut.With the increasing of learning effect,each phase profit NPV of two generation products all increase to some extent.Lastly,the updated product diffusion model is applied to 3G and 4G mobile phone diffusion of China.The market average prices of 3G and 4G mobile phone were obtained through questionnaire survey.The GA-NLS estimation method is put forward based on the characteristics of the Nonlinear Least Squares method and Genetic Algorithm,which can solve the problem of initial value selection of Nonlinear Least Squares method.Parameter estimation results are consistent with the actual situation.So we can conclude that the product diffusion model is effective.