Modeling New Product Launch Strategies within agent-based simulation

Document Type : Original Article

Authors

1 PhD Student, Department of Industrial Engineering, Science and Research Branch, Islamic Azad University, Tehran, Iran

2 Department of Industrial Engineering, Science and Research Branch, Islamic Azad University, Tehran, Iran

3 Department of Business Management, Science and Research Branch, Islamic Azad University, Tehran, Iran

Abstract

The prediction of the results of introducing a new product into the market is one of the vital issues the organization executives face before investing in marketing activities. The impact of various factors on the market as well as the specific characteristics of the market, depending on the region and its product type, has made it difficult to predict market behavior. In Iran, retailers are effective players, especially in the FMCG market. The objective of this paper was to suggest a model to the marketing managers to predict the result of launching their new product to market considering their special market attributes. Agent-based modeling, as a tool for modeling complicated systems, can be helpful for simulating real-world conditions. In the present paper, agent-based modeling was used to model the market for agents including brand owners, retailers and consumers with particular profit functions. The introduction over a three-year period of a new soft drink in the Iranian market is considered as a case study. The results showed that taking into account the needs of retailers and consumers simultaneously and changing policies based on long-term profitability make the new product diffusion process successful.

Keywords

References

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