Abstract
Diffusion is a popular theory of communication used in marketing to model the first-purchase sales growth of a new product over time. As Mahajan et al (1990) put it diffusion theory suggests that a new product is first adapted by a few innovators who, in turn, influence others to adopt it. Taking this perspective on diffusion we can clearly see the pivotal role which interpersonal communication (word of mouth) between adopters and nonadopters plays in accounting for the rapid growth stage found in the diffusion process. It is important to remember that the value of diffusion modeling is not just restricted to historical data; rather leading academics in this field like Bass have made predictions based on early sales data which have resulted in successful predictions of diffusions before those products reached their peak. From a commercial perspective there are endless examples of diffusion processes, which will be elaborated on later, including: the diffusion of blockbuster movies; mobile phones and other analogous products. For the purposes of this assessment we will discuss the principal theories in this field playing particular attention to Bass and its variants, we will then apply these theories to the practical example of VCR diffusion.
