Single Peak Theory

Bass' Model

Simpler & Quantitative

Bass diffusion model Bass Formula
  • Where:
    f(t) is the rate of change of the installed base fraction
    F(t) is the installed base fraction
    p is the coefficient of innovation
    q is the coefficient of imitation

  • Sales S (t) is the rate of change of installed base f(t) (i.e. adoption) multiplied by the ultimate market potential m:

  • rate of change

    rate of change-2

Application

  • The coefficient p is called the coefficient of innovation, external influence or advertising effect. The coefficient q is called the coefficient of imitation, internal influence or word-of-mouth effect.

  • Typical values of p and q when time t is measured in years:

  • The average value of p has been found to be 0.03, and is often less than 0.01

  • The average value of q has been found to be 0.38, with a typical range between 0.3 and 0.5

  •  A case of a commodity is as follows.

new

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