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A discount strategy in word-of-mouth marketing

Tianrui Zhang,Pengdeng Li,Luxing Yang,Xiaofan Yang,Y. Tang,Yingbo Wu

Published 2019 in Communications in nonlinear science & numerical simulation

ABSTRACT

Abstract This paper addresses the issue of discount pricing in word-of-mouth (WOM) marketing. First, we propose a novel discount strategy we refer to as the Influence-Based Discount (IBD) strategy, in which each buyer would enjoy a discount that is linearly proportional to his/her influence in the WOM network. For the purpose of evaluating the performance of an IBD strategy, we model the associated WOM spreading process as a higher-dimensional nonlinear differential dynamical system we refer to as the Dormant-Potential-Adopting (DPA) model. Next, we examine the dynamics of a DPA model through computer experiments. Thereby, we estimate the expected net profit of an IBD strategy and inspect how different factors influence this profit through numerical experiments. On this basis, we suggest some feasible promotional measures.

PUBLICATION RECORD

  • Publication year

    2019

  • Venue

    Communications in nonlinear science & numerical simulation

  • Publication date

    2019-07-01

  • Fields of study

    Business, Computer Science

  • Identifiers
    DOI 10.1016/J.CNSNS.2019.03.015
  • External record

    Open on Semantic Scholar

  • Source metadata

    Semantic Scholar

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CLAIMS

  • No claims are published for this paper.

CONCEPTS

  • No concepts are published for this paper.

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