A thesis submitted in partial fulfillment of the requirements for the degree of Master of Engineering of the Asian Institute of Technology, Bangkok, Thailand

Thesis (M.Eng.) - Asian Institute of Technology, 1976

This study deal s with evaluating the impact of a prospective innovation on the technological substitution process between two products already in the market. Primarily , this research takes into account the technology-based consumer goods which are of durable nature. Seven factors of consumer behaviour are considered and a System Dynamics model constructed on the basis of the cause- effect relationships . These factors are: Price, Physical Appearance/Packaging/Display, Emotional, Technological, Economic motives of the buyers, Promotion and the Brand Loyalty towards the new product. Sensitivity analysis is also carried out to identify those factors which have a major impact upon the substitution rate . On the bas is of this study, it is found that the price of the new product and the brand loyal ty towards t he prospective innovation cause a retardation in the substitution process while the other five factors have little impact. The results obtained from this dynamic modeling were compared with the historical data and a close agreement was observed.