The modeling and analysis of the word-of-mouth marketing

Pengdeng Li, Xiaofan Yang, Lu-Xing Yang, Qingyu Xiong, Yingbo Wu and Yuan Yan Tang

Physica A: Statistical Mechanics and its Applications, 2018, vol. 493, issue C, 1-16

Abstract: As compared to the traditional advertising, word-of-mouth (WOM) communications have striking advantages such as significantly lower cost and much faster propagation, and this is especially the case with the popularity of online social networks. This paper focuses on the modeling and analysis of the WOM marketing. A dynamic model, known as the SIPNS model, capturing the WOM marketing processes with both positive and negative comments is established. On this basis, a measure of the overall profit of a WOM marketing campaign is proposed. The SIPNS model is shown to admit a unique equilibrium, and the equilibrium is determined. The impact of different factors on the equilibrium of the SIPNS model is illuminated through theoretical analysis. Extensive experimental results suggest that the equilibrium is much likely to be globally attracting. Finally, the influence of different factors on the expected overall profit of a WOM marketing campaign is ascertained both theoretically and experimentally. Thereby, some promotion strategies are recommended. To our knowledge, this is the first time the WOM marketing is treated in this way.

Keywords: Word-of-mouth marketing; Overall profit; Differential dynamical system; Equilibrium; Global attractivity (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:phsmap:v:493:y:2018:i:c:p:1-16

DOI: 10.1016/j.physa.2017.10.050

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