Agent-based Analysis of Lead User Innovation in Consumer Product Market
In this paper we focus on some phenomena generated by lead user innovation and build a market model based on the lead user’s features that are derived from the conventional studies. Then we consider market mechanism and dynamics of the market with the lead user innovation. The innovation changes a conventional market concept that consumers and firms are entities that respectively demand and supply products. It is hard for marketers and managers to comprehend the market dynamics and mechanism generated by the change of market invoked by the innovation. Our simulations with the market model show two propositions: 1) If firms take the conventional strategies based only on conventional marketing strategies and technology management, lead user innovation takes the high market share from firms’ products. 2) If firms focus on an innovation community as a new strategy, they can manage lead user innovation.
KeywordsMarket Share Product Space Internal Model Market Model Evolutionary Learn
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