The diffusion pattern of new products: evidence from the Korean movie industry.

Abstract

The new product diffusion is based on the innovation diffusion theory assuming a new product is a type of innovation. New product diffusion patterns can inform various market characteristics. Thus, managers would benefit from studying the history of patterns to forecast how consumers react when a new product is introduced. This study focuses on capturing chronological changes in new product diffusion pattern for the case of Korean movie box office data, and applying the Bass model. We found that the level of innovation effect increases gradually for 15 years, which suggests that moviegoers have become more individualistic in recent years. However, the level of imitation effect increases only for domestic movies, which might be caused by the uncertainty avoidance tendency due to the lack of sequels or franchise products of domestic movies. This study enhances our understanding of historical changes of product diffusion patterns.