Technology products’ organic growth or cannibalism? A multi-generation spatial mapping perspective

Authors: Min-Hua Wu & Ying-Chan Tang

Journal: Corporate Management Review. June. 2020, 40(1): 127-166.

Keywords: Compromise effect; technology trajectory; spatial mapping; marketing ambidexterity.

Abstract:
Given their short life-cycles, the market diffusion of high-tech products can be interpreted from the perspective of biological evolution. Rather than objects with fixed characteristics, such products can be viewed as a series of continuously progressing product groups. Therefore, this study analyzes the transaction data of a MP3 music player brand by logit-type market share models and calculates price competition indices in order to estimate the attractiveness of alternative products and to assess whether decoys could create consumer compromise and “extremeness aversion”. As attractiveness is incorporated in an autologistic choice model of spatial-temporal patterns, we use this model to capture the cross-selling patterns of a new product’s cannibalism or intrinsic growth. Integrating product interdependence by modeling a set of spatial autocorrelation choices allows for a superior fit compared to traditional linear sales predictions. Lastly, to survey the organic growth of new cross-generational products we assess long-term survivability via intra- and inter-competition spatial mapping. The findings herein cast doubts on the use of the prospect theory to predict consumer choices.