Tag Archives: Normal Distribution

HOW FAST DO YOU BUY THINGS?

Normal Curve (Product Adoption)

When a new and good product hits the market, how fast or slow are you to buy it? Some people get it immediately. Others wait for varying lengths of time before making their purchase decision.

According to one Internet website (www.quickmba.com), consumers can be classified into 5 categories based on how quickly they acquire new items. A picture of the famous bell-shaped curve, like the one shown here, indicated the descriptive labels and sizes of the 5 groups.

By considering the percentage of people in each of the 5 groups (as well as the position of the short, dark “notches” on the bell curve’s baseline), you should be able to discern that the statistical concepts of mean and standard deviation were used to “define” each group. For example, a person would be classified as an Early Adopter if he/she tends to purchase new products with a speed that’s between 1 and 2 SDs faster than average.

It is interesting to note that there are 3 sections on the left side of this bell curve but only 2 on the right. The pink area begins 1 SD from the mean and extends all the way to the right. Thus, the percentage of Laggards is equal to the combined percentages of Innovators and Early Adopters. Some people, if creating this picture anew, might split the pink area into 2 parts (thus forming a total of 6 sections rather than 5), with the percentage of Laggards equal to the percentage of Innovators.

To see the original discussion of what was called the “Product Diffusion Curve,” go to http://www.quickmba.com/marketing/product/diffusion/

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IMPORTANT NUMBER IN STATISTICS: .6745

In a picture of the normal distribution, the baseline is usually marked off with numbers. The centered baseline number is the mean score. Other baseline numbers, to the right and to the left of the mean, typically correspond to scores that lie 1, 2, and 3 standard deviations away from the mean. If the picture were to show the scores positioned .6745 of a SD to right and left of the mean, we’d see the upper and lower quartile points, respectively. These points correspond to the 75th and 25th percentile points.

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