Bass Technical Note

The Bass Model: Marketing Engineering Technical Note
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Table of Contents
Introduction Description of the Bass model Generalized Bass model Estimating the Bass model parameters Using Bass ModelEstimates for Forecasting Extensions of the Basic Bass model Summary References

Introduction
The Bass model is a very useful tool for forecasting the adoption (first purchase) of an innovation(more generally, a new product) for which no closely competing alternatives exist in the marketplace. A key feature of the model is that it embeds a "contagion process" to characterize the spread ofword-of -mouth between those who have adopted the innovation and those who have not yet adopted the innovation. The model can forecast the long-term sales pattern of new technologies and new durableproducts under two types of conditions: (1) the firm has recently introduced the product or technology and has observed its sales for a few time periods; or (2) the firm has not yet introduced the productor technology, but its market behavior is likely to be similar to some existing products or technologies whose adoption pattern is known. The model attempts to predict how many customers willeventually adopt the new product and when they will adopt. The question of when is important, because answers to this question guide the firm in its deployment of resources in marketing the innovation.Description of the Bass model
Suppose that the (cumulative) probability that someone in the target segment will adopt the innovation by time t is given by a nondecreasing
This technical note is asupplement to some the materials in Chapters 1, 2, and 7 of Principles of Marketing Engineering, by Gary L. Lilien, Arvind Rangaswamy, and Arnaud De Bruyn (2007). © (All rights reserved) Gary L. Lilien,Arvind Rangaswamy, and Arnaud De Bruyn. Not to be re-produced without permission.
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continuous function F(t), where F(t) approaches 1 (certain adoption) as t gets large. Such a function is...