Using the Bass Model to Analyze the Diffusion of Innovations at the Base of the Pyramid

Abstract

This research note proposes the Bass Model as an empirical tool for analyzing the diffusion of new product and service innovations in Base of the Pyramid (BoP) markets. This approach allows researchers to test whether factors that seem theoretically relevant to the speed and trajectory of adoption actually matter empirically. The authors model the growth of three BoP success stories using the Bass Model: Patrimonio Hoy (PH), e-Choupal, and Grameen’s Village Phone (VP). In two of the three cases considered, the Bass Model estimates confirm Diffusion Theory predictions, but generate additional insight by quantifying the strength of the identified effects. In the case of PH, the Bass Model estimates conflict with the predictions of Diffusion Theory. Sorting out this paradox demonstrates the Bass Model’s potential to identify conflicting influences on consumer adoption, and measure how the relative strength of these competing forces nets out to determine the course of consumer adoption.