Diffusion and experience curve pricing of new products in the consumer electronics industry

Abstract: 

The existence of experience curve is documented in a wide range of industries (Boston

Consulting Group, 1975). However, relating experience curve pricing to diffusion of new

products is rarely addressed in the empirical literature, with the exception of Bass (1980). This

paper adds to the literature by empirical calculation of the experience curve for a larger set of

products and relating it to the introductory stages of these products from the Consumer

electronics industry. The gradual price erosion observed in many consumer electronics products

is consistent with cumulative production learning curve. Results show excellent fit of data to

experience curve models. Comparison of the slope of experience curves for several consumer

electronics products with those from other industries is provided. The results should benefit the

consumer electronics and related industries in setting long term pricing strategies.

Publication Type: 
Journal Article
Year of Publication: 
2011
Journal, Book, Magazine or Other Publication Title: 
Journal of Management and Marketing Research
Date Published: 
Monday, January 3, 2011
Publication Language: 
English
ISSN Number: 
2327-5340
File Attachments: 

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