Browsing by Author "MacRae, Murray Stuart"
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- ItemForecasting the decline of superseded technologies : a comparison of alternative methods to forecast the decline phase of technologies : a thesis presented in partial fulfilment of the requirements for the degree of Doctor of Philosophy in Marketing at Massey University, New Zealand(Massey University, 2018) MacRae, Murray StuartAn understanding of the economic life of technologies is important for firms, as new technological diffusion often results in rapid erosion of the market value of a firm’s existing technological investments. Little is known about the decline of an older incumbent technology, despite significant effort has been devoted to studying the diffusion of new technologies over the last five decades. There is, it appears, a pro-innovation bias (Rogers, 1995), as theory has a singular focus on the growth side of the substitution phenomenon. Yet to a modern enterprise managing the decline of the older technology may be at least as important as managing the diffusion of the new technology. Consequently, this research takes the first steps towards addressing this gap by investigating how best to predict the decline of an incumbent technology, through an examination of the performance of well-established forecasting methods when applied to the decline phase of a technology life cycle. Interestingly, during the search for historic data it was found that decline series are both rarer than diffusion series, and short, although not as short as diffusion series. Three studies were undertaken; the first study was a competition of four marketing science diffusion models; the Pearl logistic, Gompertz, Bass, and log-logistic models. The second study tested a pooled analogous series approach against the four models from the first study. Twenty-five decline data series were used in those two studies. The final study applied expert judgment to the task using an online panel of 250 UK managers with forecasting experience. These managers undertook expert judgmental forecasting tasks on 12 of the 25 series, spilt over two cue information treatments. Both absolute and comparative measures of accuracy were deployed along with measures to understand bias and variability. The measures were not always in perfect consensus as to the best models in each study; however, the results in aggregate were conclusive. It was found that the Bass and the Pearl logistic were consistently the best marketing science models. However, the online panel of forecasting experts provided a pooled estimate that was competitive with those best marketing science models. Importantly, forecasts from presenting data on decline in tabular form to the panel outperformed the same data presented in graphical form, such that tabular presentation was better than any marketing science model. Also well performed was an analogous series model formed from the average value of a normalised pool of the 25 series, as this approach provided forecasts that were within the range of the two best iv diffusion models. A straight-line model fitted to the last three data points in the estimation data constantly matched or outperformed all three methods over short horizons. This indicates that simple diffusion models, such as a simple pooled average of available analogous series or even a straight-line model can provide a viable forecast, providing further evidence that simple methods are in general all that is needed to forecast in such situations. Despite laboratory research indicating that individuals are poor at this task, the judgmental study indicates that humans can be successfully used to forecast S-shaped curve trajectories in field trials; however, there are cost and time implications in using a panel that would preclude its use in many situations. References: Rogers, E. M. (1995). Diffusion of innovations (4th ed.). New York, NY: The Free Press.
- ItemSwitching determinants in subscription service markets : banking and electricity in New Zealand : a thesis presented in partial fulfilment of the requirements of the degree Master of Business Studies at Massey University, New Zealand(Massey University, 2004) MacRae, Murray StuartThis study examines the important role switching costs play in consumer loyalty to service providers. Banking and residential electricity consumers were studied in New Zealand using the framework developed by Burnham, Frels & Mahajan (2003). An attempt was made to replicate their measurement model using Burnham et al.'s eight first order constructs. An acceptable fit to the data was achieved, however, their instrument's scale items did not load as predicted indicating limited convergent and discriminant validity. In replicating Burnham et al.'s three factor second order model, of their three factors - procedural, financial and relational - only relational costs proved significant in influencing a consumer's intention to stay with their current service provider. A relationship between satisfaction with a service and a greater intention to stay with that service was confirmed. Possible explanations for the poor performance of the Burnham et al. structural model might be that their measurement model violates some basic rules for scale development. The lack of validity of some scales leads to speculation that the significant results reported by Burnham et al. were the result of fortuitous fit to their USA data. The value of a theory is in its general applicability to situations outside its original context. While the Burnham et al. (2003) theory may have been intuitively sound, this attempt to operationalise their model was hindered by a measurement instrument which lacked convergence, discriminance and reliability. The Burnham et al. model demonstrated in this replication an adequate fit to the data, but goodness-of-fit alone does not indicate a structurally sound model. It also requires validity. The findings of this thesis are that their model may require modification to some scales before it will be universally useful. Keywords: Customer retention, confirmatory factor analysis, structural equation modelling, switching costs, loyalty, satisfaction, switching, defection, subscription markets, services.