earticle

영어

Trade shows have been increasingly popular for durable goods manufacturers to show their new products or new product concepts to the market. In particular, trade shows provide an opportunity for a firm to communicate innovative features of its new products on the vertical and horizontal dimensions (e.g., quality and design). Durable goods manufacturer make an important decision of R&D for the long plan to obtain competitive advantages. However, little research has been done regarding how product concept demonstration activities interact with the firm's product line design strategy in competitive markets. We develop a model where two firms competing in the market, each offering two products with two product attributes that capture both vertical and horizontal differentiation. The equilibrium results indicate that product concept demonstrations in trade shows have the effect of preempting competition, as well as expanding the market size for both high and low quality products under certain market conditions.