Essays on diffusion and repeat sales of consumer durables : a study of the consumer electronics market

Although repeat purchases dominate overall sales of consumer durables, diffusion of innovations research has paid them far less attention than new product adoptions. A large survey of 8,077 households allowed a detailed investigation of the differences between households in terms of their repeat purchase behavior of durables. Asymmetric effects were investigated using competing hazard models and showed that consumer innovativeness has a strong impact on discretionary replacements. A modified gamma distribution was introduced into aggregate sales modeling to account for differences between forced and discretionary replacement distributions. Insights from both the household purchasing analysis and aggregate sales modeling were integrated to develop a refined model of the product life cycle (PLC). The findings will help companies to better understand drivers of repeat purchases, to segment households in a more insightful way and to forecast repeat sales of durable goods more accurately.