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The multiple roles of interpersonal communication in new product growth

Author

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  • Krishnan, Trichy V.
  • Seetharaman, P.B. “Seethu”
  • Vakratsas, Demetrios

Abstract

Interpersonal Communication (IPC), which includes word of mouth, plays an important role in the adoption of new products. Despite the extensive study of the role of IPC at the category level, its role at the brand level has not received its due attention. Using quarterly data on brand-level sales and marketing variables in the SUV category over 10 years, we show that IPC among previous adopters of a brand directly influences the sales of not only the brand itself but also the product category as a whole, which, in turn, indirectly influences brand sales. Additionally, we show that category-level IPC is distinct and separate from brand-level effects. Based on a detailed model-based accounting of IPC effects, we separate the direct effect of brand-level IPC on the sales of a brand from its indirect effect through product category sales, while allowing for category-level IPC and the effects of marketing variables. We demonstrate the various effects of IPC using a numerical experiment.

Suggested Citation

  • Krishnan, Trichy V. & Seetharaman, P.B. “Seethu” & Vakratsas, Demetrios, 2012. "The multiple roles of interpersonal communication in new product growth," International Journal of Research in Marketing, Elsevier, vol. 29(3), pages 292-305.
    • Handle: RePEc:eee:ijrema:v:29:y:2012:i:3:p:292-305
    DOI: 10.1016/j.ijresmar.2012.04.003
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    References listed on IDEAS

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    1. Peres, Renana & Muller, Eitan & Mahajan, Vijay, 2010. "Innovation diffusion and new product growth models: A critical review and research directions," International Journal of Research in Marketing, Elsevier, vol. 27(2), pages 91-106.
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    1. Inyoung Chae & Andrew T. Stephen & Yakov Bart & Dai Yao, 2017. "Spillover Effects in Seeded Word-of-Mouth Marketing Campaigns," Marketing Science, INFORMS, vol. 36(1), pages 89-104, January.
    2. Young Kwark & Gene Moo Lee & Paul A. Pavlou & Liangfei Qiu, 2021. "On the Spillover Effects of Online Product Reviews on Purchases: Evidence from Clickstream Data," Information Systems Research, INFORMS, vol. 32(3), pages 895-913, September.
    3. Koray Cosguner & P. B. (Seethu) Seetharaman, 2022. "Dynamic Pricing for New Products Using a Utility-Based Generalization of the Bass Diffusion Model," Management Science, INFORMS, vol. 68(3), pages 1904-1922, March.
    4. Joaquin Sanchez & Carmen Abril & Michael Haenlein, 2020. "Competitive spillover elasticities of electronic word of mouth: an application to the soft drink industry," Journal of the Academy of Marketing Science, Springer, vol. 48(2), pages 270-287, March.
    5. Bo Tan & Zhiguo Zhu & Pan Jiang & Xiening Wang, 2023. "Modeling Multi-Generation Product Diffusion in the Context of Dual-Brand Competition and Sustainable Improvement," Sustainability, MDPI, vol. 15(17), pages 1-22, August.
    6. Hong Jun Huang & Jun Yang & Benrong Zheng, 2021. "Demand effects of product similarity network in e-commerce platform," Electronic Commerce Research, Springer, vol. 21(2), pages 297-327, June.

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