| Bass Diffusion Model |
Article Index for Bass |
Website Links For Bass |
Information AboutBass Diffusion Model |
|
The Bass diffusion model was developed by Frank Bass and describes the process how new products get adopted as an interaction between users and potential users. The model is widely used in Forecasting , especially Product Forecasting and Technology Forecasting . Mathematically, the basic Bass diffusion is a Riccati Equation with constant coefficients. Frank Bass published his paper "A new product growth for model consumer durables" in 1969 1 Prior to this, Everett Rogers published ''Diffusion of Innovations'', a highly influential work that described the different stages of product adoption. Bass contributed some mathematical ideas to the concept. ''Management Science'' 50 Number 12 Supplement, Dec 2004 ISSN 0025-1909 p1833-1840 This model has been widely influential in marketing and management science. In 2004 it was selected as one of the ten most frequently cited papers in the 50-year history of ''Management Science'' ''Management Science'' 15(5) p215 . It was ranked number five, and the only marketing paper in the list. It was subsequently reprinted in the December 2004 issue of Management Science. MODEL FORMULATION Where: is the rate of change of the installed base fraction is the installed base fraction is the ultimate market potential is the coefficient of innovation is the coefficient of imitation Sales is the rate of change of installed base (i.e. adoption) multiplied by the ultimate market potential :
Explanation The coefficient p is called the coefficient of innovation, external influence or advertising effect. The coefficient q is called the coefficient of imitation, internal influence or word-of-mouth effect. Typical values of p and q: 2
EXTENSIONS TO THE MODEL Generalised Bass model (with pricing) Bass found that his model fit the data for almost all product introductions, despite a wide range of managerial decision variable, e.g. pricing and advertising. This means that decision variable can shift the Bass curve in time, but that the shape of the curve is always similar. Although many extensions of the model has been proposed, only one of these reduces to the Bass model under ordinary circumstances.. This model was developed in 1994 by Frank Bass, Trichy Krishnan and Dipak Jain: where is a function of percentage change in price and other variables Successive generations Technology products succeed one another in generations. Norton and Bass extended the model in 1987 for sales of products with continuous repeat purchasing. The formulation for three generations is as follows: where is the incremental number of ultimate adopters of the ''i''th generation product is the average (continuous) repeat buying rate among adopters of the ''i''th generation product is the time since the introduction of the ''i''th generation product It has been found that the p and q terms are generally the same between successive generations. Relationship with other s-curves There are two special cases of the Bass diffusion model.
Use in online social networks The rapid, recent (as of early 2007) growth in online social networks (and other Virtual Communities ) has led to an increased use of the Bass diffusion model. The Bass diffusion model is used to estimate the size and growth rate of these social networks. REFERENCES EXTERNAL LINKS EXTERNAL LINKS
|
|
|