The Bass Model & Forecasting Product Adoption (Part I)
Market Sizing & Analogous Products
In the previous post, we mentioned the difficulty of conducting market research for truly novel products and services. But what about those that can be compared with things that already exist? If years ago, you wanted to say introduce the iPod, a product that could, in some respects be compared with other portable music players, establishing market size wouldn’t be an entirely subjective a task. A quick literature search for the market size of analogous products such as portable radios, walkmans, and CD players, could have provided baseline figures.
The Bass Model
Beyond the support it lends to fund raising activities, defensible market size information is also and important business planning tool. Market size information is one of the key metrics used in “the Bass Model,” a highly cited model for forecasting the adoption of new products and services. Hey, if you are planning to sell a tangible good or even a subscription-based web service, you simply have to graph the adoption curve to project revenues and expenses, and to determine what resources will be needed.
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