Marketing (forecasting)

Use the E-books case and your reading on Roger's five factors + Forecasting the

Adoption of new product to answer the following questions: You must show me you

Excel sheet and the answer for each question as well as answering these questions in

Word document by showing your calculation (My questions and your answers are

based on E-books case) + ( The reading on Roger's five factors + Forecasting the

Adoption of new product is to guide your answers and give you overview about

the Mass Model if you are not familiar with it. You will find all information you

need in these two reading in order to answer E-books case questions)

1. What do you expect the long-run total adoption of e-books to be (i.e., the parameter m in the Bass model)? The total market size, m, should be the total

number of potential consumers for e-books as opposed to the total number of

e-book purchases/downloads.

2. Do you expect the market for e-books to be guided more by imitators or innovators? Why?

3. What values of p and q should we use to model the adoption of E-books? Justify your answer using one or more of Rogers five factors and the values

the case provides for other markets.

4. Using your estimates of m, p and q, create an adoption forecast using the Bass model.

1. What are your expected cumulative sales in year 5? 2. In what year do sales peak?

5. Bonus: consider a more advanced model in which two segments (influentials and imitators) can influence themselves, but imitators can also be influenced

by influentials (but not the other way around). In this model, your sales

estimate is the sum of two Bass models. The first is identical to the traditional

model, but the second includes an additional parameter w that determines the

degree to which imitators are influenced by influentials (in addition to

themselves). The model for each is: n1 = [p1+q1(N1/m1)][(m1-N1)] and n2 =

[p2+q2[w(N1/m1)+(1-w)(N2/m2)]][m2-N2]. Assuming m1 = 100,000 and

m2=1,000,000, what values of p1,p2,q1,q2 and w, will produce the kind of

"Chasm" we discussed in Week 9, Class 1?

Please turn in both a document with your answers and a spreadsheet of your model.