Abstract:

Through our research based on survival model, we identify two major factors that significantly influence our decision making on product elimination, as well as their impact mechanisms. These two factors are, namely, the changing rate of sales in the early stage and the average sales in pre-elimination stage. Specifically speaking, the higher these figures are, the less likely it is for products to be eliminated, which also means the longer these product may survive. The results of our research also demonstrate that brands with different market shares serving as a moderator in this model are impacted by different factors. Different from our stereotyped understanding, results of our research show that products with lower market share actually survive longer (than those with larger market share), which can be explained by substitution effect. Overall, findings of our research have laid a theoretical foundation for companies' decision making on product elimination.

Key words: product elimination, survival analysis, Cox model