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.

Analysis of the behaviour of the clients assisted and sales variables in the different phases of the product life cycle

“…These two terms can be understood as the breadth and depth of a product in different countries (Palacios, 2013, p. 94). For a correct application of the Bass model, companies must take into account, in the first place, the rapidity with which customers adopt the innovation and, second, whether the enterprise has the appropriate capabilities and sufficient organisational capacity to handle this growth (Ratcliff and Doshi, 2016, p. 272).…”

What Constitutes a Theoretical Contribution in the Business and Society Field?

“…The second point to note is that theory application papers do not necessarily have to be too long. Quite a number of such contributions in Business & Society have been research notes, a recent example being Ratcliff and Doshi’s (2016) application of Bass Theory to base of the pyramid research. The point here is that manuscripts based on theory application need to have an appropriate length-to-contribution ratio.…”

Global relevance of scaling African indigenous entrepreneurship

“…However, notwithstanding issue of resource constraints and institutional voids in Africa (Amankwah-Amoah & Hinson, 2019;Fyvie & Ager, 1999;Onwuegbuzie, 2014;Mafimisebi, 2016;Mafimisebi & Nkwunonwo, 2015;Njenga et al, 2018), African indigenous entrepreneurs continue to innovate at the base of the pyramid (cf. Desa, 2012;Hilson et al, 2018;Ratcliff & Doshi, 2016;Marinakis et al, 2017) providing valuable solutions to many of the grand societal problems. This makes African indigenous knowledge and innovation essential for this group at the bottom of the pyramid.…”

“…The focus on "at hand resources and strategies", usually available to indigenous entrepreneurs (Dana & Light, 2011;Duymedjian & Ruling, 2010), makes indigenous entrepreneurship distinct and worthy of consideration from the perspective of bricolage (Baker & Nelson, 2005;Garud & Karnoe, 2003;Keupp & Gasssmann, 2013;Witell et al, 2017). Albeit other theoretical perspectives such as effectuation and frugal innovation are equally suitable to explore entrepreneurial activities of indigenous entrepreneurs especially regarding base of the pyramid markets (e.g., Duymedjian & Ruling, 2010;Fisher, 2012;Perry, Chandler & Markova, 2012;Ratcliff & Doshi, 2016;Marinakis, Harms, Ahluwalia, & Walsh, 2017). Moving from these promising strands of literature, two issues are crucial in choosing bricolage as our theoretical lens.…”