The impact of firm introductory strategies on consumers' perceptions of future product introductions and purchase decisions

In this research, we develop and test a model of the consumer's decision to immediately purchase a technologically advanced product or to delay such a purchase until a future generation of the product is released. We propose that for technologically advancing products, consumers consider both perfor mance lag (how far behind am I now) and expected performance gain (how far ahead will I be if I wait to buy a future expected release) in their purcha se decisions. Furthermore, we hypothesize that a firm's past product introd uctory strategy can significantly influence consumer perceptions of perform ance lag, performance gain, and the rate at which a product is advancing te chnologically We also propose that these perceptions of lag, gain and rate of technological change influence purchase action and ultimately determine whether or not a consumer will delay or immediately purchase a firm's curre nt technological offering. We investigate the above relationships by introducing a model of consumer p urchase behavior that incorporates the effects of a firm's frequency and pa ttern of next generation product introduction, and test the impact of diffe rent introductory strategies on performance lag, gain, rate of change perce ptions, and purchase action. In our first study we test our model in a mono polistic setting and show that, holding all else fixed, infrequent product upgrades and/or increasing intergenerational release times result in consum ers perceiving larger performance lags and gains. We also show that, holdin g all else fixed, consumers with larger performance lags and/or gains are l ess Likely to delay their purchases of the currently best available product . In our second study we test our model in a competitive setting and show t hat, holding all else fixed, a firm's past pattern of new product introduct ion can influence consumers' perceptions of the firm's product's rate of te chnological change. We also find that consumers are more likely to purchase products which they perceive to have higher rates of technological change. The key insight from this research is that firms have a strategic tool at t heir disposal that has been overlooked - the pattern of introduction of nex t generation products. Our findings suggest that a change in the frequency and/or pattern of introduction, in and of themselves, can influence consume rs' perceptions of future product introductions, and ultimately influence t heir purchase actions. Specifically, we demonstrate that by better understa nding consumers' purchase timing decisions, firms may be able to induce pur chase on the basis of introductory frequency and pattern alone. Additionall y, we demonstrate that by strategically managing consumer expectations of f uture product introductions, firms may be able to decrease the purchase lik elihoods of competing products. Implications of our research and its applic ation to the pattern and timing of preannouncements for new products are al so explored. (C) 2001 Elsevier Science Inc. All rights reserved.