The Application Of The Bass New Product Diffusion Model In Marketing In China

Since the study of innovation diffusion is introduced to technology forecasting and marketing science in 1960s, the field of innovation diffusion models has aroused researchers' extensive interest. There are many different innovation diffusion models proposed in technology forecasting and marketing science, among which the Bass models is the most famous. Since the publication of the Bass model in 1969, further study and extension of the model have resulted in an extensive literature. Meanwhile, the Bass model itself has been frequently applied to the American and Europe market, and becomes one of the major directions in the research of innovation diffusion models. In China, however, the study on innovation diffusion models and their applications is still at an early stage; and it is far behind oversea countries, whether in the theory or in the practice.This paper introduces systematically the conditions of the Bass model's application, the methods of parameter estimation and the procedures of the Bass model's applications, and tests the validity of the Bass model's application in Chinese market. Further, the paper explores three major aspects of the model's application: Chinese market forecasting, innovation adopters' classification in aggregate level and market segmentation.The full paper is made up of six parts. In part one, namely the introduction part of the paper, the related literatures are summarized, and the purpose and significance of this paper are generalized. In part two, some concepts about new product diffusion in market are introduced based on the innovation diffusion theory. And the process of new product diffusion, the process of new product adoption, and the development of adopter categories are especially discussed in this part. The third part elaborates the basic assumptions and the formula derivation of the Bass model, and discusses the methods of its parameter estimation. Also, several different forms of the Bass model are summarized, and the structure characteristics of the model and the curves of its different forms are analyzed in this part. Finally, the appropriateness of the model structure and the validity of the model are expounded. In part four, the basic steps about using the model are explained, and the problems need to be noticed in the model's application are pointed out. The validity of the Bass model's application in Chinese market is also tested in this part. In the fifth part of the paper, further applications of the Bass model in Chinese marketplace are studied. First, the Bass model's application in market forecasting on Chinese communication product is empirically studied. Second, the Bass model is applied to classify different adopter groups of Chinese Internet market, and the applicability of the model in this aspect is tested with the analyses of Internet adopters' general characteristics. Third, similar to the new approach to country segmentation in the foreign literature, the Bass model can be applied to Chinese market segmentation. Taking the Internet as an example, the whole Internet market is segmented based on the diffusion variables of different regions in this part, which leads to some practical results. In combination with related theories, the sixth part derives some revelation of Chinese new product marketing from the Bass model's applications in market forecasting, market segmentation and new product adopters' classification.