Strategic management of new products: ex-ante simulation and market segmentation

Jae Young Choi

Korea Institute for Industrial Economics & Trade (KIET)

Jungwoo Shin and Jongsu Lee

Seoul National University

Introduction

Recent developments in the field of information technology (hereafter, IT) have brought rapid transformations in traditional industries, creating significant gains for businesses and consumers. This shift has led to a variety of new services and products appearing in the multimedia and financial industries. Despite their positive prospects as new growth industries, there are concerns that they might not be successful, as illustrated by the cases of iridium satellite phones (Coburn 2006).

This changing market situation raises question about the factors that will most affect the success of new products and how their success can be achieved. Technological achievements will undoubtedly impact the adoption of new products, but consumer evaluations of them will also play a crucial role. In fact, economic research into consumer behaviour and the valuations associated with consumer adoption of new products are essential for market success.