Modeling Product Marketing as a Diffusion Process: A System Dynamics Perspective

By Kaled Hameide and Tarek Abdel-Hamid.

Published by Knowledge Management: An International Journal

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Article: Print $US10.00
Article: Electronic $US5.00

The launch of a new product is of strategic importance to any company. While an exciting moment, it is also the culmination of a long complex process. It is a process that is not one dimensional, but rather a conglomerate of interrelated and interdependent factors such as design, distribution, logistics, finance, and advertising, among many others. All these various factors are interconnected, pushing on each other and being pushed on in return. Accordingly, it is safe to say that the launch and market diffusion of a new product is a clear example of a multi-loop, nonlinear, feedback system characterized by a large number of interrelated variables that interact dynamically over time through an information feedback process. This concept of understanding the behavior of complex systems over time through examining internal feedback loops is known as system dynamics. The objective of this paper is to demonstrate the utility of a system dynamics model to simulate the growth and diffusion of a new or specific product from a marketing perspective.

Keywords: Systems Dynamics, Modeling, Marketing

Knowledge Management: An International Journal, Volume 12, Issue 3, pp.81-95. Article: Print (Spiral Bound). Article: Electronic (PDF File; 542.586KB).

Kaled Hameide

Assistant Professor, Fashion Studies, College of the Arts, Montclair State University, Montclair, New Jersey, USA

Assistant professor in the Department of Fashion Studies at Montclair State University. He has worked in developing, marketing, and managing international franchises and brands for international markets. His current research interests and publications contributions focus on branding and the effects of technological innovation on the branding process. He is the author of the book Fashion Branding Unraveled, by Fairchild Publications.

Dr. Tarek Abdel-Hamid

Professor, Department of Information Sciences, Naval Postgraduate School, Monterey, California, USA

Professor of System Dynamics at the Naval Postgraduate School since 1986. He received his Ph.D. in System Dynamics at MIT, and a Master in EES & OR at Stanford. Prior to joining the Naval Postgraduate School, he spent two and a half years at the Stanford Research Institute. He has authored two books and more than 50 papers on System Dynamics and its applications. Together with Prof. Stuart Madnick (of MIT), he was awarded the 1994 Jay Wright Forrester Award, presented annually by the System Dynamics Society to recognize the best contribution to the field.