GM inks research partnership with Hebrew University's Yissum for forecast sales model
Automaker General Motors (NYSE:GM) reported Tuesday that it has struck a partnership with Yissum Research Development, the technology transfer arm of the Hebrew University in Jerusalem, in a bid to develop a model to better forecast car sales.
GM will fund research projects of interest led by Yissum and in exchange, will be granted a right of first offer for an exclusive license to use any invention or product resulting from the sponsored research. No other terms were disclosed.
The first research project, which was chosen as part of this collaborative partnership, will focus on the prediction of car sales to get a better idea of what drives consumers to buy and also what deters them from making a purchase.
Currently, net sales data is unable to give a precise picture to forecast the extent of sales. Information of this kind would be invaluable to reflect the actual market potential and its fluxes over time, GM said in a statement.
Founded in 1964, Yissum protects and commercializes the Hebrew University's intellectual property. It has registered 6,100 patents covering 1,750 inventions and has licensed about 480 technologies.
Yissum's business partners include companies like Novartis (NYSE:NVS), Microsoft (NASDAQ:MSFT), and Johnson & Johnson (NYSE:JNJ). Products based on Hebrew University technologies that have been commercialized by Yissum currently generate $1.2 billion in annual sales.
For the first project, researchers from Hebrew University will flesh-out mathematical models that take sales data and data on people who have decided not to buy into account.
The team, which will be led by Professor Jacob Goldenberg, and Keren Hadad from the School of Business Administration and Marketing at Hebrew University, will give an in-depth analysis on the rate of buying as well as contributing factors to the decision process.
The mathematical model is based on the Bass diffusion model, which was developed by Frank Bass and describes the process of how new products get adopted as an interaction between users and potential users. The diffusion model is widely used in marketing, product and technology forecasting, GM said.
However, the Hebrew University group has developed a diffusion model that also incorporates potential consumers' decisions to decline purchases in response to negative forces acting upon them.
The model has already been tested using data from the Internet on the adoption of open-source software, and was able to estimate and predict the total number of decliners in the market.
Yissum’s CEO, Yaacov Michlin, commented: "Our researchers combine excellence and creativity and offer a unique outlook on consumer decision making that could have a significant impact on market understanding and sales in many fields and help with long-term company business planning."