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Bass(1969) introduced a model for predicting first purchases of a new product. The following three parameters specify the model:
M = estimate of the market size, that is, the total number of customers that will eventually buy the product. For simplicity, we assume that the product is a durable good, so that a customer will purchase it at most once.
p = probability that a candidate customer in a given period will purchase the product just by chance, without any influence from existing customers. These folk are called the innovators.
q = rate at which a candidate customer is induced to purchase the product because of interaction with existing customers. The greater the number of existing customers, the greater the inducement. These folk are the followers; ! If p = 0, then the Bass model approximates a discrete time version of the logistic model for total cumulative sales.
If q = 0, then the Bass model approximates a discrete time version of the exponential cdf for total cumulative sales;