Strategic Planning with the Bass Diffusion Model - Product Adoption and Innovation Framework
Bass Diffusion Model - Product Adoption and Innovation is a technique that enables better strategic planning in business.
The Bass Diffusion Model is one of the most widely used and influental tools for predicting product demand. Based on empirical evidence, it provides mathematical formula for estimating future trends in the adoption of new innovations.
The model has been shown to work with almost all new product introductions, regardless of pricing and advertising decisions. This means that decision variable can shift the Bass curve in time, but that the shape of the curve is always similar.
The model is defined as follows:
This reads: The portion of the potential market that adopts at t given that they have not yet adopted is equal to a linear function of previous adopters.
In the above equation, t represents time from product launch and is assumed to be non-negative.
The three Bass Model parameters (coefficients) that define the Bass Model for a specific product are:
- M -- the potential market (the ultimate number of adopters),
- p -- coefficient of innovation and
- q -- coefficient of imitation.
Other Strategic Planning Frameworks
- 4P's Marketing Mix
- Seven S (7S) Management Framework
- AIDA - Attention, Interest, Desire, Action - Buying Process
- Ansoff's Matrix - Product-Market Growth Matrix - Expansion Strategy
- BCG Growth-Share Matrix
- Bass Diffusion Model - Product Adoption and Innovation
- Blue Ocean Strategy
- Choice Model for Decision-Making Behavior
- Competitive Advantage
- Core Competence - Collective Learning in the Organization
- Cost-Benefit Analysis
- Delta Model
- ERG (Existence, Relatedness, Growth) Theory of Motivation
- Experience Curve
- Framing Effect on Psychology and Marketing
- GE (McKinsey) Matrix
- Growth Phases
- Predicting Industry Evolution and Change
- OODA Loop - Observe, Orient, Decide, Act
- PDCA (Plan, Do, Check, Act) - The Deming Cycle
- PEST Analysis - Political, Economical, Social, Technological, Environmental, and Legal Factors
- Perceptual Mapping - Brand Marketing
- Porter's Five Forces
- Product and Marketing Positioning
- Product Lifecycle (Industry Lifecycle)
- Root Cause Analysis
- SWOT Analysis - Strengths, Weaknesses, Opportunties, Threats
- Technology Adoption Curve
- Value Chain
- Balanced Scorecard
- Customer Segmentation
- Pricing Strategy & Price Optimization
- Mergers and Acquisitions (M&A)
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