Technology diffusion models for strategic management purposes:A case of integrated systems in Kenya.

Abstract

The concept of diffusion has interested academics and practitioners in marketing for decades. It signifies the rate at which new product diffuses into the marketplace or the rate at which consumers try a new product. The simplest but most widely used mathematical solution to this problem is the standard Bass growth model for the timing of the initial purchase of new products (Bass, 1969). The diffusion theory often guides the construction of forecasting models for new product diffusion. To match the model with data, one needs to put forward a statistical model. This is what this project sets out to do. In this research we apply the Bass model to innovations in integrated system software. The purpose is to predict the timing and the magnitude of the sales peak and to determine whether the data follow the typica••l diffusion curve of innovations from the Bass model. Parameter estimates will be derived from analysis used in conjunction with the model to provide good descriptions of the growth of any new integrated software in the market. Some limitations on its use were noted however, particularly the effects of early fluctuations in the adoption process and consequent problems in forecasting ..: from early data.