Background Note | HBS Case Collection | February 2005 (Revised December 2013)

Forecasting the Adoption of a New Product

by Elie Ofek

Abstract

Provides tools and methodologies that allow forecasting demand for innovative new products. Highlights the Bass model—the theory behind it and ways to determine its parameters. Provides a detailed example of how to use the Bass model to forecast demand for satellite radio. Also covers ways to incorporate marketing mix variables and competition and explores the impact of these factors on the adoption and diffusion of an innovation. Finally, illustrates how to construct forecasts when early sales data are available via data-driven forecasting models.

Keywords: Forecasting and Prediction; Innovation and Invention; Marketing; Demand and Consumers; Mathematical Methods; Competition;

Citation:

Ofek, Elie. "Forecasting the Adoption of a New Product." Harvard Business School Background Note 505-062, February 2005. (Revised December 2013.)