Customer social network affects marketing strategy: A simulation analysis based on competitive diffusion model

To explain the competition phenomenon and results between QQ and MSN (China) in the Chinese instant messaging software market, this paper developed a new population competition model based on customer social network. The simulation results show that the firm whose product with greater network extern...

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Bibliographic Details
Published in:Physica A 2017-03, Vol.469, p.644-653
Main Authors: Hou, Rui, Wu, Jiawen, Du, Helen S.
Format: Article
Language:English
Subjects:
Competitive diffusion
Customer social network
Marketing strategy
Population competitive model
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Summary:To explain the competition phenomenon and results between QQ and MSN (China) in the Chinese instant messaging software market, this paper developed a new population competition model based on customer social network. The simulation results show that the firm whose product with greater network externality effect will gain more market share than its rival when the same marketing strategy is used. The firm with the advantage of time, derived from the initial scale effect will become more competitive than its rival when facing a group of common penguin customers within a social network, verifying the winner-take-all phenomenon in this case. •We develop a new population competition model based on social network.•Product with greater network externality effect will get more market share.•Initial scale will bring competitive advantage when facing common penguin customers.•The inherent customer social network will cause winner-take-all phenomenon.
ISSN:0378-4371
1873-2119
DOI:10.1016/j.physa.2016.11.110