Peak sales time prediction in new product sales: Can a product manager rely on it?

Trichy, V Krishnan, Shanfei Feng, DC Jain

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Abstract

Managers dealing with new products need to forecast sales growth, especially the time at which the sales would reach the peak, known as the peak sales time (T*). In most cases, they only have a few initial years' data to predict T*. Although product managers manage to predict T*, there is no method to date that can predict T* accurately. In this paper, we develop a new metric based on the diffusion modeling framework that can help in assessing the prediction accuracy of T*. This metric is built on the premise that observed sales growth is affected both by the force that systematically varies with time and by the non-systematic random forces. We show that the two forces must be carefully combined to assess if a predicted T* is accurate enough. In addition, we empirically prove the efficacy of the proposed metric.
Original languageEnglish
Article number114054
Number of pages11
JournalJournal of Business Research
Volume165
DOIs
Publication statusPublished - Oct 2023

Keywords

  • New product diffusion
  • Peak sales time
  • Prediction accuracy

Indexed by

  • ABDC-A
  • SSCI

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