n Management Dynamics : Journal of the Southern African Institute for Management Scientists - An innovation diffusion model incorporating change in the adoption rate




The innovation diffusion model proposed by Bass (1969) has been widely used in the literature and has found applications in several areas. The model categorises customers into two categories, namely innovators and imitators. In this study we propose an alternative formulation of the Bass model by using a logistic time-dependent rate function. The study also incorporates the change-point concept, where the rate of adoption per remaining potential adopters can be changed because of a change in marketing strategy. The applicability and effectiveness of the model is illustrated, using new product sales data. The least square method, has been used to estimate unknown parameters. Predictive validity and Mean Squared Error (MSE) have been used to validate the model. It has been observed that the results of the proposed model are accurate, and incorporate the competitive environment of the market.


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