Innovation and Marketing of New Products and Technologies
Autor: Nikolai Aasberg Kvilekval • May 29, 2017 • Case Study • 1,200 Words (5 Pages) • 692 Views
Case Assignment
Course: Innovation and Marketing of New Products and Technologies
Rotterdam School of Management
CEMS
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Student number: <…>
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May 23, 2017
Case: …
In order to make sophisticated predictions of the specific products penetration into the market I will be using the Bass model, which will aid to forecast the initial sales (year 2000) and predict the long-run total adoption of e-books. First of all we must determine the potential market size of the e-book market. In this case we assume the product to not having been launched yet and its safe to say there being some uncertainty related to whom the actual users will be. Based on my understanding of the potential market for e-books in combination with the listen information of previously launched products (which serve as an analogy for e-books), I estimated the total number of potential consumers for e-books in the year 2000 to be 25,776,752 million (see below).
Key statistics for total number of potential consumers in 2000 | |
Total US Population | 293700000 |
US Population reading literature | 46,7% |
US Internet penetration | 67,80 % |
Internet users likely to buy music online | 42,00 % |
Read reference book on computer | 66 % |
Total Market size (function m in model) | 25,776,752 |
The total US population formed the base of the market size, the population whom read literature is important to account for regardless of online or traditional books as we essentially target those who read. US internet penetration is included as one needs internet to access e-books. I also assume internet users likely to buy music online can be regarded as innovators at this point in time as they trust the current technology as well as online purchasing, even though I acknowledge a significant difference between e-books and online music (which will be further discussed later). Finally, the internet users likely to buy music online targets the consumers whom are innovators and trusting of the current technology, as well as online purchasing. Finally, as in my point of view the highest switching cost from traditional books to e-books is moving away from the tight association one has with switching physical pages, I believe its fair to assume reading a reference book online will also lead to reading recreational e-books.
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