Bass Diffusion Model

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Predicting Innovation Curves. Explanation of Bass Diffusion Model of Frank M. Bass. ('69)

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The Bass Diffusion Model on the adoption and diffusion of new products and technologies by Frank M. Bass (A New Product Growth Model for Consumer Durables, 1969, Management Science, 15 , 215-227) and the later extensions of diffusion theory are used for market analysis and demand forecasting of new technologies. The Bass diffusion model is one of the tools to describe, and sometimes predict, the number of purchases for new consumer durable products.
 

Experience from many innovations shows that the spread of a new method or concept in a market can be characterized by the Bass formula:

Bass Diffusion formula

Parameters of the Bass Diffusion Model

The three parameters of the Bass Diffusion Model to predict Nt (Number of adopters at time t) are:

  • m = the market potential; the total number of people who will eventually use the product
  • p= the coefficient of innovation (external influence); the likelihood that somebody who is not yet using the product will start using it because of mass media coverage or other external factors
  • q= the coefficient of imitation (internal influence); the likelihood that somebody who is not yet using the product will start using it because of "word-of-mouth" or other influence from those already using the product.

Standard Bass curve for the diffusion of innovationsSee the picture on the right for a typical graphic of the standard bass curve (with the average values of p and q of 0.03 and 0.38, respectively).


Usage of the Bass Diffusion Model

Bass diffusion theory is simple enough to allow a first assessment. There is no immediate need for further complex modeling. However care must be taken as the standard model is only one of the many models of technology diffusion. Many variations on the Bass Diffusion Model have been developed over time, often claiming further precision or applicability for certain circumstances.


The dynamics of the innovation uptake curves, and how the technology or its application diffuse into the market, is a crucial analytic tool when assessing the business case for internal or external investments in new technologies. For early stage investments or internal business cases for new products, it is essential to have some understanding of the likely diffusion of the technology. By not having a mental model to test against reality, the amount of capital, time to market and the window of opportunity can be grossly misjudged. Diffusion of innovation models are important tools for effectively assessing the merits of investing in technologies that are new or novel and do not have prima facie, predictable patterns of user up-take.




Bass Diffusion Forum (5 topics) Help
  How is Bass Curve Model Different from Product Life Cycle
I can not find considerable differences in between the Bass Curve and the Product Life Cycle. Please advise......
     
  Calculating and Predicting a Product Life Cycle
If we had to determine the life cycle of a product how can it be done. What quantitative variables should we take in consideration for calculating the same and why?...
     
  External / Internal Influence Model
Why is the Bass Model also called "external internal influence model"?...
     
  Alternate Bass Model Formula
The Bass model can (I think) be written as:
New Cust =
Innovation * (Population - Customers) +
Immitation * Customers +
Imitation * (Customers * Customers) / population.
It is easy to explain the first two terms in lay terms...
     
  Calculating Nt-1 in Bass | Calculating m, p and q in the Bass Model
How do you calculate Nt-1 in the Bass formula?...
     



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Expert Tips - Bass Diffusion Premium
  Innovation Pitfalls - Avoiding Innovation Traps
 
  Limitations of Bass Diffusion - Diffusion of new Technology
 
  Social Persuasion: Determining the Potential of Social Influencers - Social Media Marketing, Social Influence, Opinion Leadership
 
  Why Some Technology Revolutions Take Off and Others Don't - Adoption of New Technologies
 

Resources - Bass Diffusion Premium
On the Bass diffusion theory. 4 Versions On the Bass Diffusion Theory - Four Versions of BD
Extended Bass Diffusion Model - Cross-country Diffusion of New Products
Product Life Cycle (PLC) versus Bass Diffusion - Product Management, Decision Making
 

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Compare with the bass diffusion model:  Innovation Adoption Curve (Rogers)  |  Product Life Cycle  |  BCG Matrix  |  ADL Matrix  |  Positioning  |  STRATPORT  |  Profit Pools  |  Marketing Mix  |  Four Trajectories of Industry Change  |  Disruptive Innovation


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