Title: Optimising adoption of a single product in multi-segmented market using innovation diffusion model with consumer balking

Authors: P.K. Kapur, Anu G. Aggarwal, Gurjeet Kaur, Mashaallh Basirzadeh

Addresses: Department of Operational Research, University of Delhi, Delhi-110007, India. ' Department of Operational Research, University of Delhi, Delhi-110007, India. ' Department of Operational Research, University of Delhi, Delhi-110007, India. ' Department of Operational Research, University of Delhi, Delhi-110007, India

Abstract: Survival in the market calls for delighting the consumers with quality product. However, due to reasons such as changing consumer preference, negative word of mouth, and better competitive strategy the potential buyer|s perception and expectation towards a product before its actual adoption may be changed (known as balking). In this paper, we have incorporated this balking concept in our proposed innovation diffusion modelling. Another major factor incorporated in the model is the effect of repeat purchasers. Further in the paper, we have formulated an optimal promotional effort allocation problem for the multi segmented market which involves decisions regarding the distribution of promotional effort among different segments of the market so that the adoption of the product gets maximised. The nonlinear complex problem incorporates the effect of balking as well as repeat purchasing and is solved using genetic algorithm. Numerical example is presented for illustrating the formulation and its solution.

Keywords: innovation diffusion; repeat purchasers; consumer balking; segmented markets; promotional effort; modelling; genetic algorithms.

DOI: 10.1504/IJTMKT.2010.039035

International Journal of Technology Marketing, 2010 Vol.5 No.3, pp.234 - 249

Published online: 11 Mar 2011 *

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