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Atar Model

The ATAR model provides a framework for estimating adoption rates for new products. It stands for Awareness, Trial, Availability, and Repeat. For a customer to regularly purchase a new product, they must first become aware of it, then try it out if available, and repeat purchasing if satisfied. The document provides an example where the market size is 1 million units. In year 1, 5% become aware, 20% of those try it, 70% can find it, and 80% repeat purchase, resulting in adoption of 0.56% or 5,600 units that year. Each element in the model involves assumptions and uncertainty. The model can be applied over multiple years to estimate overall adoption over time.

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1K views2 pages

Atar Model

The ATAR model provides a framework for estimating adoption rates for new products. It stands for Awareness, Trial, Availability, and Repeat. For a customer to regularly purchase a new product, they must first become aware of it, then try it out if available, and repeat purchasing if satisfied. The document provides an example where the market size is 1 million units. In year 1, 5% become aware, 20% of those try it, 70% can find it, and 80% repeat purchase, resulting in adoption of 0.56% or 5,600 units that year. Each element in the model involves assumptions and uncertainty. The model can be applied over multiple years to estimate overall adoption over time.

Uploaded by

Bilal Fayyaz
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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New Product Development

Prepared by: L. Cartier

The A-T-A-R Model1


Estimating the adoption rates for any new product can be a daunting process. One
approach is to estimate the percent of sales based on the market size. For example, if
the market size is 1.0 million units you might estimate annual sales as follows: Year 1
1% (10,000 units), Year 2 3% (30,000 units), etc. Even after completing extensive
research, these numbers are often little more than an educated guess with a great deal
of uncertainty. These estimates can be supported by a sensitivity analysis to help deal
with this uncertainty.
The ATAR model provides a framework to help estimate the adoption rate in each year.
The ATAR model (Awareness, Trial, Availability, Repeat), is based on concept of
Diffusion of Innovation. In order for a person to be a regular purchaser of the new
product they must first become Aware that it exists. Once they have become aware of it
they must make the decision to Try it out. In order to be able to try it out, it must be
Available for them to purchase. If they are happy with the trial, then they may decide to
adopt the product, that is, Repeat the purchase again.
For example, assume the market size for a new product is 1.0 million units (same as the
example above). The ATAR model is applied as follows:
Year 1
Percentage of potential purchases that become aware of the product:
x Percentage of the aware purchasers that decide to try the product:
x Percentage of the purchasers that are able to find the product:
x Percentage that like the product and decide to buy a second one:

5%
20%
70%
80%

The percentage of the market that will adopt the product in year 1 is:
5% x 20% x 70% x 80% = 0.56% (5,600 units)
This process is repeated for each year of the 10 year adoption period. In applying the
model it should be kept in mind that each element is still an assumption, and is therefore
subject to uncertainty.
It is important to remember that the new product will be in the pre-production stage
during the first year or two. As this is a testing stage, the adoption rates during this stage
will be limited.
In developing estimates for each element, the following should be kept in mind.
Awareness will depend on the extent to which the new product is advertised in the
marketplace. For example, it might cost $1.0 million to make 10% of the market aware of
the product.

Adapted from: Crawford, M & A. Di Benedetto, New Products Management, 9 th Edition, 2008, McGraw Hill
Irwin

New Product Development


Prepared by: L. Cartier

Trial implies that the customer actually decides to purchase the new product and try it
out. Receiving a free sample in the mail does not necessarily mean that they actually
tried the product.
Availability relates to the ease with which the purchaser can find the product to
purchase. This is directly related to the number of channels (retail stores, internet, etc)
that are available to the purchaser.
Repeat means that the trial was successful. In the case of convenience items, the
purchaser has decided to make repeat purchases. For one-time shopping goods, or
specialty goods purchases, repeat may mean recommending the product to a friend.

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