Models of new product diffusion : current status and research agenda

Abstract

Diffusion models, mathematical attempts to describe the growth patterns of new products and relate them to variables such as price and population characteristics, have seen major development trends in the past few years. This paper reviews that progress in order to isolate those areas most likely to be fruitful for further development. The paper first reviews some of the behavioral underpinnings of diffusion models: the phenomena being modeled. Next, the major explicit form models are reviewed and classified according to whether they have market-controls or not and according to the number of stages they explicitly consider. These models are related to larger-scale simulation models (especially in the solar energy area) that use explicit-form models as building blocks. The paper concludes with a discussion of some important advances that still need to be made in this important and rapidly-growing area.