Predicting when the mass market starts to develop: The dual market model with delayed entry

The dual market phenomenon, in which a product's market is segmented into early and main markets, has attracted much attention in the field of innovation diffusion. It is known that main market adopters, also called the majority, begin to enter the market after a certain period, based on their levels of price sensitivity, which differ from those of early market adopters. This paper proposes a new dual market model that explicitly considers the delayed entry of the majority. We empirically estimate the delayed entry time (DET) for various consumer electronic products, comparing them with two other related phenomena of the early stages of diffusion: take-off and saddle. We also examine whether the DET of a new product can be predicted before it is reached. The result shows that the DET is predictable, using the coefficients of external and internal influence of the early market, also using those of the single market estimated from limited early data. The findings are managerially helpful because being aware of DET at an early stage enables managers to make timely decisions for serving the mass market.