tailieunhanh - On Fixed-Price Marketing for Goods with Positive Network Externalities

Better measurement begins with better data. In the era of Big Data, CG companies need to identify which data provide the best insights into consumer behaviours and interactions with their brand or the product categories in which they compete (see sidebar, page 12). Then they need to ensure that the right processes and tools are in place to capture and analyse these data. Strategic partnerships will continue to play an important role as the consumer marketing efforts of CG companies mature. The nature of these relationships—with retailers, marketing services fi rms and technology providers—must evolve to accommodate new cross-channel. | On Fixed-Price Marketing for Goods with Positive Network Externalities. Vahab S. Mirrokni Sebastien Roch Mukund Sundararajan 1 Google Research New York 2 Department of Mathematics UW-Madison 3 Google Research Mountain View Abstract. In this paper we discuss marketing strategies for goods that have positive network externalities . when a buyer s value for an item is positively influenced by others owning the item. We investigate revenue-optimal strategies of a specific form where the seller gives the item for free to a set of users and then sets a fixed price for the rest. We present a 2-approximation for this problem under assumptions about the form of the externality. To do so we apply ideas from the influence maximization literature 13 and also use a recent result on non-negative submodular maximization as a blax-box 3 7 . 1 Introduction Consumer goods and services often exhibit positive network externalities a buyer s value for the good or service is influenced positively by other buyers owning the good or using the service. Such positive network externalities arise in various ways. For instance XBox Live is an online gaming service that allows users to play with each other. Thus the value of an XBox to a user increases as more of her friends also own an XBox. Popular smartphone platforms such as Android iOS or Windows Mobile actively support developer networks because developers add Applications that make the phone more useful to other users. Thus the value of a smartphone to a user increases with the size of the developer network. Many consumer goods especially those that have been newly introduced benefit from word-of-mouth effects. Prospective buyers use this word-of-mouth to judge the quality of the item while making a purchase decision. If the good or service is of good quality the word-of-mouth will cause a positive externality. Irrespective of how positive network externalities arise it is clear that they are worth paying attention to in designing a .

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