The Influence of the Marketing Mix on the Diffusion of Innovation : Bass Model Redux

This study examines how the marketing mix influences the diffusion of demand for new and innovative products using the framework developed by Frank Bass (1969). The Bass Model was chosen because it is widely accepted within academia as a structured and disciplined approach for forecasting the intertemporal diffusion of demand. Our concern with the Bass Model is the assumption that market potential is fixed and independent of the marketing mix. Based on a careful review of the literature, revisions to the model were derived and tested by running twenty-eight example simulations with changes in the pre-specified levels of both price and advertising, given varying assumptions with respect to the elasticity coefficients in the marketing mix function. Our research suggests that management of the marketing mix effects all the key elements of the Bass Model including the coefficients of innovation and imitation, the total market size and thereby the rate of diffusion. These findings are significant with respect to the forecasting of demand and the implementation of effective business strategies