The Bass Model or Bass Diffusion Model was developed by Frank Bass. It consists of a simple differential equation that describes the process of how new products get adopted in a population. The model presents a rationale of how current adopters and potential adopters of a new product interact. The basic premise of the model is that adopters can be classified as innovators or as imitators and the speed and timing of adoption depends on their degree of innovativeness and the degree of imitation among adopters. The Bass model has been widely used in forecasting, especially new products' sales forecasting and technology forecasting. Mathematically, the basic Bass diffusion is a Riccati equation with constant coefficients.
In 1969, Frank Bass published his paper on a new product growth model for consumer durables.:1833 Prior to this, Everett Rogers published Diffusion of Innovations, a highly influential work that described the different stages of product adoption. Bass contributed some mathematical ideas to the concept.
Sales is the rate of change of installed base (i.e. adoption) multiplied by the ultimate market potential :
The time of peak sales
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:
Bass found that his model fit the data for almost all product introductions, despite a wide range of managerial decision variables, e.g. pricing and advertising. This means that decision variables can shift the Bass curve in time, but that the shape of the curve is always similar.
Although many extensions of the model have been proposed, only one of these reduces to the Bass model under ordinary circumstances.
This model was developed in 1994 by Frank Bass, Trichy Krishnan and Dipak Jain:
where is a function of percentage change in price and other variables
Technology products succeed one another in generations. Norton and Bass extended the model in 1987 for sales of products with continuous repeat purchasing. The formulation for three generations is as follows:
It has been found that the p and q terms are generally the same between successive generations.
There are two special cases of the Bass diffusion model.
Use in online social networks The rapid, recent (as of early 2007) growth in online social networks (and other virtual communities) has led to an increased use of the Bass diffusion model. The Bass diffusion model is used to estimate the size and growth rate of these social networks. The work by Christian Bauchkage and co-authors shows that the Bass model provides a more pessimistic picture of the future than alternative model(s) such as the Weibull distribution and the shifted Gompertz distribution.
The model is one of the most cited empirical generalizations in marketing; as of December 2014 the paper "A New Product Growth for Model Consumer Durables" published in Management Science had (approximately) 5740 citations in Google Scholar.
This model has been widely influential in marketing and management science. In 2004 it was selected as one of the ten most frequently cited papers in the 50-year history of Management Science. It was ranked number five, and the only marketing paper in the list. It was subsequently reprinted in the December 2004 issue of Management Science.
Perhaps the first thing to notice about the paper that has come to be known as the "Bass Model" (Bass 1969) is the title. It contains a typo. The paper was published with the title: "A New Product Growth for Model Consumer Durables." The correct title should be: "A New Product Growth Model for Consumer Durables."