Analysis of Product Rollover Strategies in the Presence of Strategic Customers

Frequent product introductions emphasize the importance of product rollover strategies. With single rollover, when a new product is introduced, the old product is phased out from the market. With dual rollover, the old product remains in the market together with the new product. We study the interaction between product rollover strategies and strategic customers' purchase behavior. We fi nd that single rollover is more valuable when the innovation of the new product is low and the number of strategic customers is high. Interestingly and counter to intuition, the firm may suffer from a high value disposal option for the old product