Bass model

Résumé du document

Most Companies recognise that a continuing stream of new product developments is essential to ensure long term organisational health, but they also recognise that innovation is accompanied by high cost and risks. These risks can be controlled through a well-conceived and professionally managed program of new product development. Presumably a new product is introduced by a company when a favourably estimate has been made of its future sales, profits and other impacts on the firm's objectives. New products sales are shaped by many factors, including the size of the potential market, the nature of competition, and the company's marketing plan and resources. The appropriate sales-forecasting model varies with the type of new product situation. These situations are distinguished by the degree of newness of the product re-purchasing.

Extraits

[...] For a great many product innovations, the increase in the number of adopters may consist of first-time buyers as well as repeat buyers. The bass model, however only captures only the first-time buyers. Other studies incorporate the repeat/replacement dynamics of innovation diffusion. Top of the Document Norton and Bass (1987) assume that adopters continue to buy and that the average repeat buying rate over the population of adopters is constant. Model Calibration (Adapted from Kalish & Lilien 1986) Diffusion models such as those of Bass (1969), Mansfield (1968) and Fisher and Pry (1971) have relied upon fit to past data for validation. [...]

[...] Each generation is positioned to be better than its predecessors on relevant product attributes. Assessment of market penetration therefore is critical for successive generations of a high technology product. In addition to creating its own demand, each generation of the product cannibalises the diffusion of its predecessors The geographic boundaries of the social system do not change over the diffusion process. Despite the fact that the diffusion of an innovation occurs simultaneously in space and time, research on these two dimensions of diffusion seldom has been integrated in a marketing context. [...]

[...] awareness, knowledge). Some of the attempts to extend the two-stage models to incorporate the multistage nature of the diffusion process include Midgley (1976) etc Diffusion of an innovation is not influenced by marketing strategies Since the pioneering work of Robinson and Lakhani (1975) that incorporated the impact of price in the Bass model, several efforts have been made to study systematically the impact of marketing mix variables such as price, advertising, promotion and personal selling, and distribution on product growth. [...]

[...] However a product may also sacrifice sales if entry is delayed too long. The diffusion process is the spread of an idea or the penetration of a market by a new product from its source of creation to its ultimate users or adopters, while the adoption process is the steps an individual goes through from the time they hear about the innovation until final adoption. The difference among individuals in their response to new ideas is called their innovativeness; it represents the degree to which an individual is relatively early or late in adopting a new product or idea. [...]

[...] However a product may also sacrifice sales if entry is delayed too long. This diffusion model incorporates variables which can predict when and by how much market penetration can be achieved. Diffusion models relate to the adoption rates of new product to factors including time, population characteristics and product decision variable such as advertising and price. Dx/dt = + bX) where N = ultimate adopting population X = Cumulative number of adopters at a,b = parameters to be estimated. Top of the Document The Bass model is a model of first purchase this model is simple and captures two effects; the diffusion effect, primarily through the multiplicative nature of the + bX) term, and the saturation effect later on, captured through X). [...]