Modeling the long term impact of existing products on perceived value of new products

Abstract

Innovation, continuous improvement, and changes forced by economics factors and marketing conditions are essential elements for bringing new products successfully in the marketplace; however, market competition with the existing products may have along term impact on the perceived value of the new products. Moreover, whether introducing new products/services or upgrades of existing products/services, better profit can be achieved by applying Lean product development technique and evaluating the long term impact of existing products on perceived value of new products will contribute in maintaining the desired profit margin. In this study, a two compartmental deterministic mathematical model for assessing the long term impact of existing products on perceived value of new products is proposed and analysed qualitatively. Numerical simulations support our analytical conclusions and illustrate possible behaviour scenarios of the model.