This paper is based on the book New Product Diffusion Models (Mahajan, Muller & Wind, 2000), and is organized as follows: The summary presents a short overview of the book, which addresses many issues of new product diffusion as well as some models that describe such diffusion processes. Among them are the basic Bass diffusion and multi-state flow models. The Interpretations section provides a in-depth discussion illustrating the author?s view of multi-state flow models and their relation to new product diffusion models. This section goes beyond the material covered in the book and is intended to provide the reader with a better understanding of the Bass model and its underlying assumptions. This section also includes a discussion on parameter extraction techniques, which is continued in subsequent sections. The application of the Bass diffusion model for the Xerox DocuTech family of products is discussed. The application of the Bass diffusion model in the digital color press market is also discussed. The outcome of this investigation shows that the Bass model requires from 6 to 10 years of sales to be a valid sales model, and that the model functions better if the market size is known. The examples show however, that once a few years of data are available and the market size is known, the model can predict sales quite accurately for a long time into the future, with very good precision.

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Sponsor: RIT, Alfred P Sloan Foundation, Adobe, Creo, R R Donnelley, Heidelberg, HP, IBM, MeadWestvaco, Nexpress, NPES, Standard Register, VIGC, Weyerhaeuser, Xerox. Document #PICRM-2004-02 Research Area: Industry Definition and Strategic Analysis

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Printing Industry Center (CIAS)


RIT – Main Campus