Modeling the Marketing-Mix Influence in New-Product Diffusion

Following the publication of the Bass model in 1969 in Management Science, the earliest attempt to modify this model to include decision variables was an often-cited 1975 paper by Robinson and Lakhani that was also published in Management Science. In the ensuing years numerous modifications and extensions of the Bass model have been proposed to study the effects of decision variables on he diffusion process for new products. We review here the various published papers that include decision variables in diffusion models. In evaluating these publications, we provide benchmarks of desirable properties of diffusion models with marketing-mix variables. In further discussion and exploration of desirable properties for such models we present and evaluate proportional-hazard models, originally proposed by Cox (1972) for applications to survival data, that include decision variables. We provide a comparison of these models with the generalized Bass model developed by Bass, Krishnan, and Jain (1994). We conclude with a discussion of the limitations of the generalized Bass models and suggest possible areas for future research.