Impact of Social Networks on Diffusion of Products

Yudai Arai; Tomoko Kajiyama; Noritomo Ouchi

doi:10.15415/jtmge.2014.51002

Authors

Yudai Arai Graduate School of Science and Engineering, Aoyama Gakuin University, Japan
Tomoko Kajiyama Department of Industrial and Systems Engineering, Collage of Science and Engineering, Aoyama Gakuin University, Japan
Noritomo Ouchi Department of Industrial and Systems Engineering, Collage of Science and Engineering, Aoyama Gakuin University, Japan

DOI:

https://doi.org/10.15415/jtmge.2014.51002

Keywords:

Social networks, diffusion strategy, consumer behaviour model, multi-agent simulation

Abstract

In light of the rapid growth of social networks around the world, this study analyses the impact of social networks on the diffusion of products and demonstrates the effective way to diffuse products in the society where social networks play an important role. We construct a consumer behaviour model by multi-agent simulation taking the movie market as an example. After validating it by using data from 13 US movies, we conduct simulations. Our simulation results show that the impact of social networks on the diffusion differs according to the customers’ expectations and evaluation for a movie. We also demonstrate the effective weekly advertising budget allocations corresponding to the types of movies. We find that the difference of weekly advertising budget allocations gives greater impact on the diffusion with the growth of social networks. This paper provides firm’s managers with important suggestions for diffusion strategy considering the impact of social networks.

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