New Product Diffusion Models in Marketing: A Review and Directions for Research

Mahajan, Vijay; Muller, Eitan; Bass, Frank M.

doi:10.2307/1252170

Cited by 1,166 publications

(660 citation statements)

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“…Parsing methods can retrieve the desired information automatically on the Internet, for the creation of databases. It is therefore possible to deduce the form of intertemporal pricing policies (Bass 1969, Mahajan et al 1990, Bass et al 1994, Rao an Kartono, 2009). …”

Section: The Impact Of Dynamic Effects On Pricingmentioning

confidence: 99%

“…The firm then charges more, when the consumers' willingness to pay increases because of network effects. This policy makes it possible to tap the consumer's intertemporal surplus (Mahajan et al 1990). The skimming policy implies an initial price higher than the myopic price.…”

Section: The Forms Of Pricing Policiesmentioning

confidence: 99%

“…This happens when innovators (early adopters) have a strong positive effect on followers (later adopters) A low introductory price encourages (subsidizes) the former to buy the product. Thus, when the product is well established, prices may rise because the followers' contribution to sales decreases over time (Mahajan, 1990). The penetration policy generates an initial price lower than the myopic price.…”

Section: The Penetration Policymentioning

confidence: 99%

“…However, from a theoretical standpoint, there is no reason why the population of buyers should remain constant. To the contrary, the modeler may consider a variable population of potential buyers (Mahajan et al, 1990). …”

Section: Models Of Monopolymentioning

confidence: 99%

“…The choice of prices by the firm impacts its sales and therefore its profits (Mahajan et al 1990;Jorgensen and Zaccour, 2004). Thus, it is interesting to characterize the pricing policies of the profit-maximizing firm, based on assumptions of consumer and firm behavior.…”

Section: Introductionmentioning

confidence: 99%

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Dynamic Pricing in Management Science

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Section: The Impact Of Dynamic Effects On Pricingmentioning

confidence: 99%

Section: The Forms Of Pricing Policiesmentioning

confidence: 99%

Section: The Penetration Policymentioning

confidence: 99%

Section: Models Of Monopolymentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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An empirical comparison of new product trial forecasting models

1998

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While numerous researchers have proposed different models to forecast trial sales for new products, there is little systematic understanding about which of these models works best, and under what circumstances these findings change. In this paper, we provide a comprehensive investigation of eight leading published models and three different parameter estimation methods. Across 19 different datasets encompassing a variety of consumer packaged goods, we observe several systematic patterns that link differences in model specification and estimation to forecasting accuracy. Major findings include the following observations: (1) when dealing with consumer packaged goods, simple models that allow for relatively limited flexibility (e.g. no S‐shaped curves) in the calibration period provide significantly better forecasts than more complex specifications; (2) models that explicitly accommodate heterogeneity in purchasing rates across consumers tend to offer better forecasts than those that do not; and (3) maximum likelihood estimation appears to offer more accurate and stable forecasts than non‐linear least squares. We elaborate on these and other findings, and offer suggested directions for future research in this area. © 1998 John Wiley & Sons, Ltd.

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Beyond diffusion: an affordability model of the growth of new consumer durables

Golder

Tellis

1998

J. Forecast.

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A ®rm's ability to compete in new product markets is vital to its pro®t-ability and long-term survival. Therefore, it is important to understand the development and growth of these markets. Following a pioneering study by Bass (1969), diusion models have traditionally provided this understanding in marketing. The great appeal of the Bass model is that it is a simple one that ®ts the data very well and provides parameters that have an intuitive behavioural interpretation. The model suers from three well-known limitations: (1) it does not include marketing variables that could in¯uence new product diusion and sales; (2) the model's parameters are unstable; and (3) the model's forecasts are inaccurate before the sales peak and especially prior to the point of in¯ection. Subsequent research has made progress especially in extending the Bass model to include marketing variables. However, the extensions have come at the cost of simplicity: the new models are far more complex than the simple Bass model. We propose an alternate simple model of new product growth for consumer durables, based on the concept of aordability rather than on diusion. We compare this model with the diusion model in terms of ®t, stability and validity of parameters, and forecasting ability. The alternate model is a little inferior to the diusion model in ®t, but superior in terms of the stability and validity of parameters and forecasting ability. We discuss the limitations and implications of our model. #

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New Product Diffusion Models in Marketing: A Review and Directions for Research

Cited by 1,166 publications

References 0 publications

Dynamic Pricing in Management Science

Dynamic Pricing in Management Science

An empirical comparison of new product trial forecasting models

Beyond diffusion: an affordability model of the growth of new consumer durables

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