Impacts of knowledge on online brand success: an agent-based model for online market share enhancement
Authored by Guoyin Jiang, Pandu R Tadikamalla, Jennifer Shang, Ling Zhao
Date Published: 2016
DOI: 10.1016/j.ejor.2015.07.051
Sponsors:
Chinese National Natural Science Foundation
he Excellent Youth Scientific-Innovative Teams Foundation
Platforms:
NetLogo
Model Documentation:
Other Narrative
Flow charts
Mathematical description
Model Code URLs:
Model code not found
Abstract
The dynamics of brands diffusion emerge partly from heterogeneous
consumers' interaction in social e-commerce and this social interaction
influences adoption decisions. The agent-based simulation is a
methodology that is well suited for modeling collective diffusion
dynamics. Using optimal pricing mechanism and industry data, we
introduce an agent-based model to replicate the evolution process of
market share for multiple brands competing online. The proposed model
helps understand the role of knowledge in the diffusion of competitive
brands. It shows that when multiple brands face online competition, innovativeness, brand image, self-perceived utility and electronic word
of mouth (e-WOM) all have significant effect on online shoppers'
decisions and have a bearing on brands' market performance. Consumers
often derive their value (utility) of a brand based on price, quality, rating, etc. When consumers rely more on self-perceived utility, e-WOM
has more positive effects on market share. Depending on whether a firm's
competitive advantage is in innovation, price, web content, or use of
social media, different online strategies should be employed for
different brands to achieve market success. (C) 2015 Elsevier B.V. and
Association of European Operational Research Societies (EURO) within the
International Federation of Operational Research Societies (IFORS). All
rights reserved.
Tags
Word-of-mouth
Innovation Diffusion
Inventory
Sales
Cellular-automata
Consumer
Simulation approach
Product reviews
Network
externalities
Adoption process