Pyshnograiev Ivan, PhD, assoc. prof., National Technical University of Ukraine «Igor Sikorsky Kyiv Polytechnic Institute», Kyiv, Ukraine

ORCID ID: 0000-0002-3346-8318
e-mail: pyshnograiev@gmail.com

Dehtiar Daryna, student, National Technical University of Ukraine “Igor Sikorsky Kyiv Polytechnic Institute”, Kyiv, Ukraine

ORCID ID: 0000-0001-9078-9647
e-mail: darinadegtiar@gmail.com

Modeling the Decision-Making Process when Promoting New Products to the Market

Abstract. Introduction. A decision value has making of new products for prosperity of company, as users want and expect new and improved products. Therefore, every company needs own program of development of new product, which foresees a prospect and takes into account properties of commodities, such as a death “rate”, that leading out from a market through the certain interval of time.

Purpose. A model and econometric approach are presented, it allows to measure the theoretical features of prices quantitatively. In particular, the offered equalization allows to describe speed and terms of price transitions, in that time as we use the design of mixture, to check up relative importance of different triggers of landing of price. Finally, we apply a hierarchical structure for description of the empiric distributing of time and speed of price transitions and simultaneously for the exposure of the most reliable price factors.

Results. We find that most of this heterogeneity is due to firm effects.  Our model captures this heterogeneity, and it is flexible and useful for predicting and describing price landing patterns in our data.  Finally, we find that it is the age of gas generating units that drives the price decline. The next most likely driver is competition and the least likely is cumulative sales volume.  The latter finding contradicts the academic convention that sales are the main driver of prices. At least for our application we found strong evidence that sales are not the most likely driver of significant price reductions.

Conclusions. Competition and time alone are the main drivers of price reductions, while past sales and product mix are less likely. We also find considerable heterogeneity in the timing and speed of pricing across firms and product types.

Keywords: pricing policy; price landing; promotion; price; high-tech product; trigger; inhomogeneity; speed.

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