Do the Math, Watch Sales Increase

If you thought math went out the window once you received your degree, think again. Wharton Professor Christophe Van den Bulte and doctoral student Yogesh V. Joshi say they have come up with a mathematical formula to help you determine how products will perform in the marketplace. From the music and movie industries to pharmaceuticals and high technology fields, this new formula could help get that new product selling fast.

by Kristina Knight

According to Van den Bulte and Joshi, the model will allow diverse industries to predict how new innovations will perform based on two types of consumers: Influential and Imitator.

The Influential consumer is a person used to change, comfortable with technology and willing to take a risk on a new product based the development process. According to the formula, these are the people who should be targeted right out of the box. On the other hand, the Imitator consumer is the average Joe on the street. These customers are not as comfortable taking a risk on a new product, but when the sales begin to increase they will jump on the bandwagon to follow the Influentials.

By figuring product diffusion before the ad campaigns start, marketers can produce more targeted campaigns. There are spreadsheets available to help forecast the trends, and the formula can also be used with SAS marketing software.