Development and Adoption Models and Their Uses in Industry Report

This report provides an in-depth analysis of the Bass Model, also known as the Bass Diffusion Model, and its significance in understanding and forecasting product adoption within a population. The report begins with an introduction to the Bass Model, explaining its role in describing the adoption of new products and the interaction between potential users. It delves into the contributions of Frank Bass, who developed the model, and its wide application in business for forecasting, particularly in product and technological forecasting. The main body explores the model's core components, including the coefficients of external and internal influence. Furthermore, the report discusses the implications of the diffusion model on other models and their usage, highlighting its relevance in the context of online social networks and virtual communities. It also emphasizes the model's usefulness across various industries, such as retail and manufacturing, for bringing innovation to the market and forecasting product adoption. The report also discusses the limitations of the Bass Model, such as the success bias and the challenges in parameter estimation, and how these limitations can be addressed. Finally, the conclusion summarizes the model's conceptual framework, its utility for long-term forecasting, and its impact on the development of adoption models after the 1960s, highlighting the valuable changes and outcomes it has brought.

Development and adoption
models and their uses in
industry

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Introduction to the Bass Model....................................................................................................3
Implication of the diffusion model on the other models and their usage.....................................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................7

INTRODUCTION
The Bass Model which is also known as the Bass Diffusion Model mainly describes the
process pertaining to how the new products are being adopted in the population. And this mainly
involves the differential equation. This model is useful in determining or presenting the rationale
in regard to how the current and the potential adopters interact. This research report is
emphasized on grabbing an understanding on the development of the adoption model and their
usefulness in respect to after the proposition of the Bass Model 1960s.
MAIN BODY
Introduction to the Bass Model
This model was developed by the Frank Bass and defines a procedure in terms of
describing how the new products are being adopted in respect to the interaction between the
potential users. This is the most famous generalization in the field of marketing and the Dirichlet
model which is in respect to the repeat buying and the choice of brand. Frank proposed this in
the paper named “A new product growth model for consumer durables" in the year 1969. Bass
made some contribution in the field of describing the various stages of the product adoption
which has resulted into contributing some mathematical concepts to the idea (Ntwoku, Negash
and Meso, 2017). This model is being widely used by the businesses in terms of forecasting and
mostly importantly in relation to the product and technological forecasting. This model is has
been having a greater impact over the marketing and the management science.
As per this model, the probability of the adopters of the new product in respect to the
time, t, it has been given that the new product has not been adopted and this mainly depends
upon the two forces (Fan, Che, and Chen, 2017). The first force, represents the coefficient p,
which depicts the adoption because of the mass media called as the coefficient of the external
influence. The second force is the presented as the q, which highlights that it is positively
influenced by the earlier adopter's. This is now terms as the coefficient of internal influence.

Implication of the diffusion model on the other models and their usage
This model has resulted into making modification in the other models in terms of
variables and assumption along with the usefulness. There has been a rapid growth in the online
social networks or any other virtual communities which has resulted into increase in the need for
the usage of the Bass Diffusion model. This is used for estimating the size and growth rate
pertaining to these social networks (Bertotti, Brunner and Modanese, 2016). This model provides
a more pessimistic system or the image about the future in comparison to the other models such
as the Weibull distribution. This model is useful in all the industry in respect to brining
innovation to the market. It is based on certain assumptions which cannot be ignored. It is useful
in industries like, retail, manufacturing sector, service industries and so forth, which are willing
to bring new product into the market or bringing in innovation. This model provides assistance to
Illustration 1: Representation of the Bass Diffusion Model

the organizations in respect to undergoing forecasting in terms of whether product will be
adopted by the users or not. For example, in the planning process, the most difficult and complex
part is the forecasting of the sales of the new products. In the initial stage there is not even a
complete product to be shown to the customers in order to get any feedback.
This model is majorly important and crucial for the organizations or the industries which
are innovation driven and is extensively useful in regard to gaining an understanding on how the
successful innovations have diffused the entire population. In terms of the application of the Bass
model and the other model based upon this model, especially in the context of the forecasting, it
is important to effectively take into account certain limitation (Lobitaña, 2020). The first and
foremost limitation of such model is that it stats how the successful innovation have diffused the
population but fails to account for their chances of success. Therefore, it will result into
gathering such data which will result into predicting the favourable or desirable forecasts in
regard to the innovation or the new product (Abu, Khaidi and Muhammad, 2020). This causes
success bias in the final outcome of the forecasting. In order to overcome this limitation, the
organizations can consider the probability of the failure. Another drawback is that the Bass
model can estimate its parameters from the data by making certain observation pertaining to the
actual sales. But, till this time, the organization has already made investment related decisions.
Therefore, in this way, after the proposition of the Bass Diffusion Model there has been a
complete change in the way innovative product or the technology is being studied in terms of its
impact over the potential users in adopting the same. There has been greater development and
modification in the previous models on the basis of the Bass Model in order to effectively meet
with the business requirement.
CONCLUSION
It can be inferred from the above that the Bass model offers a conceptually attractive and
the mathematically elegant framework which will help in explaining how the product diffusion
to the target population. This is mainly useful in regard to the long term forecasting along with
the adoption of the innovation. These forecasts are not only crucial for the business entities
which are introducing the innovation, like, Apple's introduction of iPod, but also for the entities
who are willing to introduce the similar or the related products into the market like speaker
makers etc. Over the past few years changes have been made on the assumptions of the original
Bass model which has resulted into getting a rich framework for new product adoption. But the

most important advantage of the model is pertaining to the forecasting the diffusion of the focal
products through the way of utilizing the parameters of the diffusion procedure in respect to the
analogous products. Thus, there has been great and valuable changes in the models of adoption
after the proposition of Bass Model 1960s which has resulted into getting more valuable
outcome.

REFERENCES
Books and Journals
Abu, N., Khaidi, S. M. and Muhammad, N., 2020. New tourism product forecasting–application
of Bass Diffusion Model and Grey Forecasting Model. Data Analytics and Applied
Mathematics (DAAM). 1(01). pp.37-43.
Bertotti, M. L., Brunner, J. and Modanese, G., 2016. The Bass diffusion model on networks with
correlations and inhomogeneous advertising. Chaos, Solitons & Fractals. 90. pp.55-63.
Fan, Z. P., Che, Y. J. and Chen, Z. Y., 2017. Product sales forecasting using online reviews and
historical sales data: A method combining the Bass model and sentiment
analysis. Journal of Business Research. 74. pp.90-100.
Lobitaña, J. M., 2020. Characterization of Mining Behaviour of Selected Metals in the
Philippines Through a Bass Diffusion Model. Journal of Higher Education Research
Disciplines. 5(1).
Ntwoku, H., Negash, S. and Meso, P., 2017. ICT adoption in Cameroon SME: application of
Bass diffusion model. Information Technology for Development. 23(2). pp.296-317.