Studying the Effectiveness of Marketing Techniques In the Presence of Wom: The Impact of Social Interactions and Opinion Leaders on Marketing Strategies

Abstract

Traditional market models generally concentrate on single individualsrather than taking social interactions into account. However, individuals aretied to one another with invisible bonds and the influence an individualreceives from others, affects her purchasing decision. In this process, somepeople have greater influence on other consumers’ buying decisions that areknown as opinion leaders. In this paper, we aim to build an agent-based simulation model for atechnological product in a monopolistic artificial market. In particular, wewill try to assess the efficiency and profitability of different marketingstrategies consisting of different price, promotion, quality levels anddifferent number of targeted opinion leaders where consumers are subject to WOMeffects. In the presence of WOM, product’s quality is found to be the mostsignificant factor affecting the profit of the company due to the positive WOMeffect disseminated by the consumers.