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Management article
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Reference no. SMR3723
Authors: Anirudh Dhebar
Published by: MIT Sloan School of Management
Published in: "MIT Sloan Management Review", 1996
Length: 15 pages

Abstract

Increasingly, hardware producers and software developers are falling over each other to be first to market with even newer and even more improved versions. To use IT-intensive products effectively, consumers often must make long-term financial and nonfinancial investments in the product or in the overall system; they expect to be able to use the product for an extended period before having to repeat the investment. The rapid introduction of new and improved versions can make a consumer regret a previous purchase, hesitate over any new purchase, and agonize over similar purchases in the future. It is not in a producer''s long-term interest if consumers balk. The author articulates the underlying reasons for - and the consequences of - adverse consumer reaction to rapid product improvement and offers suggestions for mitigating some of these reactions.

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Abstract

Increasingly, hardware producers and software developers are falling over each other to be first to market with even newer and even more improved versions. To use IT-intensive products effectively, consumers often must make long-term financial and nonfinancial investments in the product or in the overall system; they expect to be able to use the product for an extended period before having to repeat the investment. The rapid introduction of new and improved versions can make a consumer regret a previous purchase, hesitate over any new purchase, and agonize over similar purchases in the future. It is not in a producer''s long-term interest if consumers balk. The author articulates the underlying reasons for - and the consequences of - adverse consumer reaction to rapid product improvement and offers suggestions for mitigating some of these reactions.

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