Application of Multi-Generational Models in LCD TV Diffusions
This study applies three multi-generational model to expresses the diffusion of multi-generational LCD TVs.
Furthermore, this work conducts the analysis of forecast accuracy among the 32-, 40-, 42-, and 46-inch LCD TVs for the
multi-generational models. The effect of word of mouth is the greatest for 32-inch LCD TVs because 32-inch LCD TVs
enter into the market much earlier than other larger-sized LCD TVs and consumers of 32-inch LCD TVs rely the most on the
promotions from previous consumers. For all LCD TV sizes, the forecasting errors are the smallest in predicting cumulative
shipments of 46-inch LCD TVs in all multi-generational models. According to the criteria developed by Martin and Witt
(1989), the forecasting ability was “good” in predicting cumulative shipments of 46-inch LCD TVs, but only “reasonable” in
predicting cumulative shipments of 32-, 40-, and 42-inch LCD TVs for multi-generational Bass and Pearl models. Our
proposed multi-generational models predict large-sized 42- and 46-inch LCD TVs better than smaller-sized LCD TVs. The
size of 32- and 40- LCD TVs were not large enough and brought to the market earlier than the 42- and 46-inch LCD TVs.
When the 42- and 46-inch LCD TVs entered the market, consumers felt that the 42- and 46-inch LCD TVs were much
greater than the traditional LCD TVs. Consequently, the demand for large 42- and 46-inch LCD TVs grew rapidly. Thus, the
multi-generational Pearl models, which considers how the large-sized LCD TVs substitute for small-sized LCD TVs,
perform well in predicting large-sized LCD TVs.
Keywords - Technology Forecasting, Multi-generational Model, Substitution, Market segmentation.