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New Product Diffusion & the Bass Model

Overview

This section is an overview of the definitions of New Product Diffusion and the Bass Model.

New Product Diffusion is a phrase related to communication amongst social systems with regard to spreading information about a new product. These social systems are close friends, families and wider local communities but also global communication. It is pointed out the power of the internet in this diffusion system.

Although it seems archaic to refer to the internet in this way, it is a system that is undeniably paramount in the growth of brands and products, and a metaphorical megaphone for word of mouth.

The Bass Model is used to predict how word of mouth can spread from people who have already bought into the new product or innovation to those who have not adopted the new product. The idea of the Bass Model is that there are two groups of people, innovators and imitators, and the proportion of each of these types of people affect the adoption rate of a new product or innovation.

Extras

Another way of defining "innovators" and "imitators" is the concept of Adopter Categories, which you may have heard of in the past. There are 5 categories: Innovators, Early Adopters, Early Majority, Late Majority and Laggards. In this scale:

Innovators buy new products simply because they are new;

Early Adopters create opinions and trends, they are more concerned with their reputation of being 'ahead of the curve';

Early Majority buyers tend to make decisions based on how useful a new product is for them and aren't as bothered about reputation;

Late Majority are much more cautious with their purchases and feel like they need some guidance in buying into a new product;

Laggards aren't enthusiastic about the new product, they switch because they either have no choice, or simply because everyone else has.

I will have an article about Switching in the future, looking into ways that you can support those making a transition to your brand, product or service.

New Product Diffusion

Rogers (2003, p.5), who developed the Diffusion of Innovation Theory, defines innovation or product diffusion as the communication of innovation through members of a social system. Kalish et al (1995, p.107) discusses the importance of communications between countries in global diffusion as suggested by Takada and Jain (1991). This idea of communication between countries is said to have become much easier according to Johansson (2008) who says, "the internet is inherently global" and that "Online messaging via the internet makes global communication instant and virtually cost-free".

The Bass Model

A widely used tool for predicting when the first adopters will purchase a new product is the Bass Model (Bass et al, 1994); the model can be used to calculate the "word of mouth between those who have adopted the innovation and those have not yet adopted the innovation." (University of Washington, 2010). The Bass Model is used to calculate diffusion as a result of two variables, internal and external influences; these are then combined to calculate the speed of diffusion (Stremersch and Tellis, 2004).

References

Bass, F.M., Krishnan, T.V., Jain, D.C., 1994. Why the Bass Model fits without decision variables. Marketing Science [online], 13 (3), 203-223.

Johansson, J.K., 2008. Global marketing: Foreign entry, local marketing, and global management [online]. 5th Edition. Boston: McGraw Hill Higher Education.

Kalish, S., Mahajan, V. and Muller, E., 1995. Waterfall and sprinkler new-product strategies in competitive global markets. International Journal of Research in Marketing [online], 12, 105-119.

Rogers, E.M., 2003. Diffusion of Innovations. 5th Edition. New York: Simon & Schuster Adult Publishing Group.

Stremersch, S., Tellis, G.J., 2004. Understanding and managing international growth of new products. International Journal of Research in Marketing [online], 21, 421-438.

Takada, H., Jainm D., 1991. Cross-National Analysis of Diffusion of Consumer Durable Goods in Pacific Rim Countries. The Journal of Marketing [online], 55 (2), 48-54.

University of Washington., 2010. The Bass Model: Marketing Engineering Technical Note [online]. University of Washington: University of Washington. Available here [18/04/2016].