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|Title:||Customer influence value and purchase acceleration in new product diffusion|
|Authors:||Ho, T. |
New product diffusion
|Citation:||Ho, T., Li, S., Park, S., Shen, Z.M. (2012). Customer influence value and purchase acceleration in new product diffusion. Marketing Science 31 (2) : 236-256. ScholarBank@NUS Repository. https://doi.org/10.1287/mksc.1110.0701|
|Abstract:||When social influence plays a key role in the diffusion of new product, the value of a customer often goes beyond her own product purchase. We posit that a customer's value (CV) comes not only from her purchase value (PV) but also from her influence value (IV) (i.e., CV = PV + IV). Therefore, a customer's value can be far greater than her purchase value if she exerts a considerable influence on others. Building on a two-segment influential-imitator asymmetric influence model, we develop a model framework to derive closed-form expressions for PV, IV, and CV by customer segment as well as time of adoption, and we examine their comparative statics with respect to the diffusion parameters. A key parameter of our model framework is the social apportioning parameter, δ, which determines the credit a customer receives by influencing other potential adopters. We develop an endogenous method for determining δ as a function of the new product diffusion parameters. Our model framework allows us to investigate how a firm might accelerate product purchases by providing introductory discount offers to a targeted group of potential adopters at product launch. We find that purchase acceleration frequently leads to a significant increase in total customer value. © 2012 INFORMS.|
|Source Title:||Marketing Science|
|Appears in Collections:||Staff Publications|
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