Article ID: | iaor201111585 |
Volume: | 57 |
Issue: | 11 |
Start Page Number: | 2040 |
End Page Number: | 2053 |
Publication Date: | Nov 2011 |
Journal: | Management Science |
Authors: | Ramachandran Karthik, Krishnan Vish |
Keywords: | design |
Science and technology advances drive firms to continually enhance their product's performance and launch sequentially improving offerings. Firms face challenges in marketing such improving products to well‐informed, forward‐looking consumers who anticipate product improvements and seek to delay their purchase timing. Product design, specifically a modular upgradable architecture in which improving and stable subsystems of a product are separated and selectively upgraded, can be a valuable approach for marketers to alleviate consumer concerns about product obsolescence. However, such an architecture‐based approach can present new challenges as well, and dealing with them requires carefully coordinated cross‐functional decision making by the firm. In this paper, we identify and formalize the notion of