Delre, S.A.

English

The main goal of this thesis is to incorporate part of the flourishing literature on network structures in a marketing context. Most of the results we have obtained and presented generate several implications. First of all we hope that the reader, after going through these chapters is convinced that often networks do play a role, that they can explain different market dynamics and that studying networks can be used to develop marketing strategies. Most of the theoretical implications derive from the following metaphor: a new product that diffuses into a society of consumers is like an epidemic that spreads into a population of susceptible individuals. Inspired by this metaphor, we believe that marketing can gain useful insights studying, adjusting and adopting epidemic models. This is what we explicitly do in chapters 2, 3 and 4. We build different network structures of consumers with their preferences and their attributes and we study how the diffusion dynamics of different products vary. Although we believe that the diffusion of a new product might look like the spread of an epidemic, we are also aware that these two processes are not completely the same. A substantial part of the work presented here consists of adapting the epidemic models to a marketing framework that can include product characteristics, personal preferences and social influence

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   University of GroningenEffects of social networks on innovation diffusion and market dynamicsDelre, S.A.IMPORTANT NOTE: You are advised to consult the publisher's version (publisher's PDF) if you wish to cite fromit. Please check the document version below.Document VersionPublisher's PDF, also known as Version of recordPublication date:2007Link to publication in University of Groningen/UMCG research databaseCitation for published version (APA):Delre, S. A. (2007). Effects of social networks on innovation diffusion and market dynamics. s.n.CopyrightOther than for strictly personal use, it is not permitted to download or to forward/distribute the text or part of it without the consent of theauthor(s) and/or copyright holder(s), unless the work is under an open content license (like Creative Commons).The publication may also be distributed here under the terms of Article 25fa of the Dutch Copyright Act, indicated by the “Taverne” license.More information can be found on the University of Groningen website: https://www.rug.nl/library/open-access/self-archiving-pure/taverne-amendment.Take-down policyIf you believe that this document breaches copyright please contact us providing details, and we will remove access to the work immediatelyand investigate your claim.Downloaded from the University of Groningen/UMCG research database (Pure): http://www.rug.nl/research/portal. For technical reasons thenumber of authors shown on this cover page is limited to 10 maximum.Download date: 07-06-2022 Table of Contents Preface .............................................................................................................................v Table of Contents..........................................................................................................vii 1 Introduction ............................................................................................................1 1.1 Purpose of the study .........................................................................................1 1.2 Innovation diffusion .........................................................................................3 1.3 The cinema market ...........................................................................................4 1.4 The methodology: computational models and simulations ..............................6 1.5 Contributions and outline of the dissertation....................................................8 2 Will it spread or not? The effects of social influences and network topology on innovation diffusion......................................................................................................11 2.1 Introduction ....................................................................................................11 2.2 The Social Percolation Model ........................................................................15 2.3 An Agent based Model for Innovation Diffusion...........................................17 2.3.1 Different Networks of Consumers .......................................................................................... 19 2.4 Simulations: Experiments and Results ...........................................................23 2.4.1 Effects of Social Network Structures ...................................................................................... 23 2.4.2 Agents’ Characteristics during the Innovation Diffusion ........................................................ 26 2.4.3 High Social Influence versus Low Social Influence................................................................ 28 2.4.4 Different Markets and Different Networks.............................................................................. 31 2.5 Conclusions ....................................................................................................38 3 Diffusion dynamics in small-world networks with heterogeneous consumers 43 3.1 Introduction ....................................................................................................44 3.2 Epidemics in Social Networks........................................................................47 3.3 Threshold Models in Social Networks ...........................................................50 3.4 The model.......................................................................................................51 3.5 Results ............................................................................................................54 3.5.1 Effects of social influence in different network structures ...................................................... 54 3.5.2 Different markets .................................................................................................................... 57 3.5.3 Heterogeneous population of consumers................................................................................. 59 3.6 Conclusions and Discussion ...........................................................................61 4 Targeting and timing promotional activities for the takeoff of new products 63 4.1 Introduction ....................................................................................................63 4.2 Background ....................................................................................................65 4.3 The Model ......................................................................................................69 4.3.1 A given threshold for selecting takeoffs.................................................................................. 72 4.4 Simulation Experiments and Results ..............................................................74 4.4.1 Targeting strategy: throwing rocks vs throwing gravel ........................................................... 74 4.4.2 The timing of post launch mass media campaigns .................................................................. 77 4.4.3 Different markets: white goods vs brown goods ..................................................................... 79 4.5 Conclusion and Discussions ...........................................................................82 5 Simulating the Motion Picture Market: why do the hits take it all?................87 5.1 Introduction ....................................................................................................88 5.2 The motion picture market .............................................................................92 5.3 The simulated motion picture market .............................................................95 5.4 Findings ..........................................................................................................99 5.5 Conclusions, implications and limitations ....................................................107 6 Discussion and implications...............................................................................111 6.1 Theoretical implications ...............................................................................111 6.2 Managerial implications ...............................................................................115 6.3 Methodological Implications........................................................................118 6.4 Future research .............................................................................................120 References ...................................................................................................................123 Samenvatting ..............................................................................................................141  

Effects of social networks on innovation diffusion and market dynamics

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Effects of social networks on innovation diffusion and market dynamics

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