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Talk of the Network: A Complex Systems Look at the Process of Word-of-Mouth Underlying. Group 6. Its not only what you hear, but who you hear it from …. DUCKHYUN AN EUDDEUM CHUNG JUAN FRANCISCO EGUREN LOU IS YASMIN KHALFALLAH JIN LEE SUMIN NAM. Strong & Weak ties.
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Talk of the Network: A Complex Systems Look at the Process of Word-of-Mouth Underlying Group 6 Its not only what you hear, but who you hear it from … DUCKHYUN AN EUDDEUM CHUNG JUAN FRANCISCO EGUREN LOU IS YASMIN KHALFALLAH JIN LEE SUMIN NAM
Stochastic Cellular Automata • Complex systems modeling technique • Simulations of aggregate consequences based on local interactions between individual members of a population • Measures the impact of word of mouth, strong and weak ties, and advertisement on human behavior • Tracking the changing state of each individual
1) Weak ties 2) Beyond a relatively early stage of the process, the effect of external marketing efforts quickly diminishes and strong and weak ties become the main forces propelling the process
3) The effect of strong ties on the speed of information dissemination diminishes as personal network size decreases 4) As the number of weak ties contacts increases, the effect of strong ties decreases while the effect of weak ties increases$
5) As the level of advertising increases, the effect of strong ties increases while the effect of weak ties decreases
What were the results? Reached Target Audience Sales Increased
The largest fashion retailer in the world ZARA barely does advertising 3%
Digital WOM APPs on smartphone Online Shopping E-magazine
Real World WOM New items every two weeks ZARA chooses the best location 11,000items
Technique suited for - Usually under-researched marketing phenomena - Analysis of interpersonal based processesAbility to deeply explore real life occurances Examples of use: - Explore web-based information dissemination and viral marketing which use WOM channels Managerial Impact
Managerial Impact • Examples of use: • Time-based changes of the marketing mix • Analysis of optimal marketing in the presence of network externalities • WOM – Marketing • Recognition of the significance -> upward trend • “Direct” instead of “manage” WOM-effects
Conclusion Types of Industry & Products & Brand More desirable state for WOM Advertisement >WOM
ConclusionPersonal Critique • Analysis based on a number of assumptions • Informed ≠ influenced • Does not consider: • Subjectivity of human evaluation • Cultural paradigms, morality and ethics • Family links • Authority • Celebrity power
ConclusionPersonal Critique • Doesnotconsider: • Personal judgement • Nature of the product or service • Nature of consumption of the product or service • Trust of each individual regardless of the nature of the tie • Similarity of individual’s values, beliefs and opinions to one’s own • Past experiences
ConclusionProfessional Critique • Novel information is found in strong ties • Rapidly changing environment • New information from same source • Breadth of knowledge • Enables indefinite education from same source • If the whole population knows the same thing, human diversity doesn’t influence novelty Marshall Van Alstyne BA (Yale) , MS & PhD (MIT)