Michael Scholz, TH Deggendorf

Abstract

Viral marketing is a type of advertising where information about a product is passed from one consumer to another via any channel that supports communication among consumers. A viral marketing campaign consists of two major phases: seeding and propagation. Seeding describes how many and which consumers are initially informed about a product by the firm whereas propagation describes how product information percolates through a social network. In this presentation, we will discuss several seeding strategies and their impact on a firm’s profit. We furthermore will consider two models for estimating the number of consumers that will be informed about a product by other consumers. Finally, we will discuss a model for calculating profit-maximizing prices in viral marketing campaigns and use this model to study the impact of consumers‘ willingness to participate in marketing communication of economic figures.