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Dynamics in the international market segmentation of new product growth

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  • Lemmens, Aurélie
  • Croux, Christophe
  • Stremersch, Stefan

Abstract

Prior international segmentation studies have been static in that they have identified segments that remain stable over time. This paper shows that country segments in new product growth are intrinsically dynamic. We propose a semiparametric hidden Markov model to dynamically segment countries based on the observed penetration pattern of new product categories. This methodology allows countries to switch between segments over the life cycle of the new product, with time-varying transition probabilities. Our approach is based on penalized splines and can thus be flexibly applied to any nonstationary phenomenon, beyond the new product growth context.

Suggested Citation

  • Lemmens, Aurélie & Croux, Christophe & Stremersch, Stefan, 2012. "Dynamics in the international market segmentation of new product growth," International Journal of Research in Marketing, Elsevier, vol. 29(1), pages 81-92.
    • Handle: RePEc:eee:ijrema:v:29:y:2012:i:1:p:81-92
    DOI: 10.1016/j.ijresmar.2011.06.003
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