Modeling commercial processes and customer behaviors to estimate the diffusion rate of new products

Abstract

This paper presents a generic mathematical model for depicting the diffusion of an innovative product on a given market. Our approach relies on a probabilistic modeling of each customer behavior with respect to the commercial process which is used to promote such a product. We introduce in particular the concept of coherent market that corresponds to a market which can be analyzed in a uniform way within our model. This last notion allows us to recover the classical empirical results that were discovered and widely studied by E.M. Rogers and his school. We explain finally how to use our approach as a support for analytic predictive marketing.

Keywords

Analytic marketing / coherent market / commercial process / customer behavior / diffusion of innovations / Markovian model / probabilistic modeling / waiting time

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