IDEAS home Printed from https://ideas.repec.org/a/plo/pone00/0208738.html
   My bibliography  Save this article

A dynamic discount pricing strategy for viral marketing

Author

Listed:
  • Xiang Zhong
  • Juan Zhao
  • Lu-Xing Yang
  • Xiaofan Yang
  • Yingbo Wu
  • Yuan Yan Tang

Abstract

Viral marketing has been one of the main marketing modes. However, theoretical study of viral marketing is still lacking. This paper focuses on the problem of developing a cost-effective dynamic discount pricing strategy for a viral marketing campaign. First, based on a novel word-of-mouth propagation model, we model the original problem as an optimal control problem. Second, we show that the optimal control problem admits an optimal control and present the optimality system for solving the optimal control problem. Next, we solve some optimal control models to get their respective optimal dynamic discount pricing strategies. Finally, we examine the effect of some factors on the maximum marketing profit. These results contribute to gaining insight into viral marketing.

Suggested Citation

  • Xiang Zhong & Juan Zhao & Lu-Xing Yang & Xiaofan Yang & Yingbo Wu & Yuan Yan Tang, 2018. "A dynamic discount pricing strategy for viral marketing," PLOS ONE, Public Library of Science, vol. 13(12), pages 1-19, December.
    • Handle: RePEc:plo:pone00:0208738
    DOI: 10.1371/journal.pone.0208738
    as

    Download full text from publisher

    File URL: https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0208738
    Download Restriction: no
    File URL: https://journals.plos.org/plosone/article/file?id=10.1371/journal.pone.0208738&type=printable
    Download Restriction: no
    File URL: https://libkey.io/10.1371/journal.pone.0208738?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Phelps, Joseph E. & Lewis, Regina & Mobilio, Lynne & Perry, David & Raman, Niranjan, 2004. "Viral Marketing or Electronic Word-of-Mouth Advertising: Examining Consumer Responses and Motivations to Pass Along Email," Journal of Advertising Research, Cambridge University Press, vol. 44(4), pages 333-348, December.
    2. Shuping Li & Zhen Jin, 2013. "Global Dynamics Analysis of Homogeneous New Products Diffusion Model," Discrete Dynamics in Nature and Society, Hindawi, vol. 2013, pages 1-6, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Chen, Jian & Yang, Lu-Xing & Yang, Xiaofan & Tang, Yuan Yan, 2020. "Cost-effective anti-rumor message-pushing schemes," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 540(C).
    2. Tavasoli, Ali & Fazli, Mehrdad & Ardjmand, Ehsan & Young, William A. & Shakeri, Heman, 2023. "Competitive pricing under local network effects," European Journal of Operational Research, Elsevier, vol. 311(2), pages 545-566.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jong Yoon Lee & Jae Hee Park & Jong Woo Jun, 2019. "Brand Webtoon as Sustainable Advertising in Korean Consumers: A Focus on Hierarchical Relationships," Sustainability, MDPI, vol. 11(5), pages 1-10, March.
    2. Jie Zhang & Yongjun Sung & Wei‐Na Lee, 2010. "To Play or Not to Play: An Exploratory Content Analysis of Branded Entertainment in Facebook," American Journal of Business, Emerald Group Publishing Limited, vol. 25(1), pages 53-64, April.
    3. Ramezani, Mohsen & Moradi, Parham & Akhlaghian, Fardin, 2014. "A pattern mining approach to enhance the accuracy of collaborative filtering in sparse data domains," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 408(C), pages 72-84.
    4. Rodriguez, Virginie & Sangle-Ferriere, Marion, 2023. "Do supermarkets’ emails have any value for their customers? The effect of emails’ content and interestingness on customers’ attitude and engagement," Journal of Retailing and Consumer Services, Elsevier, vol. 75(C).
    5. Nguyen-Phuoc, Duy Quy & Vo, Nguyen S. & Su, Diep Ngoc & Nguyen, Vinh Hoang & Oviedo-Trespalacios, Oscar, 2021. "What makes passengers continue using and talking positively about ride-hailing services? The role of the booking app and post-booking service quality," Transportation Research Part A: Policy and Practice, Elsevier, vol. 150(C), pages 367-384.
    6. Li, Feng & Du, Timon C. & Wei, Ying, 2020. "Enhancing supply chain decisions with consumers’ behavioral factors: An illustration of decoy effect," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 144(C).
    7. Bosio, Birgit & Haselwanter, Stefanie & Ceipek, Michael, 2018. "The Utilization of Social Media Marketing in Destination Management Organizations," 6th International OFEL Conference on Governance, Management and Entrepreneurship. New Business Models and Institutional Entrepreneurs: Leading Disruptive Change (Dubrovnik, 2018), in: 6th International OFEL Conference on Governance, Management and Entrepreneurship. New Business Models and Institutional Entrepreneurs: Leading Disrupt, pages 249-268, Governance Research and Development Centre (CIRU), Zagreb.
    8. Gilles Séré de Lanauze & Béatrice Siadou-Martin, 2015. "La marque 2.0: l'humilité comme condition nécessaire de la relation marque consommateur?," Post-Print hal-01697924, HAL.
    9. Kim, Juran & Kang, Seungmook & Lee, Ki Hoon, 2021. "Evolution of digital marketing communication: Bibliometric analysis and network visualization from key articles," Journal of Business Research, Elsevier, vol. 130(C), pages 552-563.
    10. Ketelaar, Paul E. & Janssen, Loes & Vergeer, Maurice & van Reijmersdal, Eva A. & Crutzen, Rik & van ‘t Riet, Jonathan, 2016. "The success of viral ads: Social and attitudinal predictors of consumer pass-on behavior on social network sites," Journal of Business Research, Elsevier, vol. 69(7), pages 2603-2613.
    11. Korgaonkar, Pradeep & Petrescu, Maria & Gironda, John, 2016. "Hispanics and viral advertising," Journal of Retailing and Consumer Services, Elsevier, vol. 32(C), pages 46-59.
    12. Roberta De Michele & Gianluca Marchi, 2018. "Influencer identification and selection on social networking sites: An analysis on Instagram," MERCATI & COMPETITIVIT?, FrancoAngeli Editore, vol. 2018(4), pages 129-153.
    13. Rishikesh Bhaiswar & N. Meenakshi & Deepak Chawla, 2021. "Evolution of Electronic Word of Mouth: A Systematic Literature Review Using Bibliometric Analysis of 20 Years (2000–2020)," FIIB Business Review, , vol. 10(3), pages 215-231, September.
    14. Izabela Kolaszewska & Agnieszka Kacprzak, 2022. "The Attitude of Children and Parents Towards Children Influencers," Journal of Marketing and Consumer Behaviour in Emerging Markets, University of Warsaw, Faculty of Management, vol. 2(15), pages 4-23.
    15. Abeer A. Mahrous & Rania S. Hussein, 2012. "Levels Of Facebook Use: Evidence From Egypt," International Journal of Management and Marketing Research, The Institute for Business and Finance Research, vol. 5(3), pages 43-55.
    16. Foued Sabbagh, 2021. "Email Marketing: The Most Important Advantages and Disadvantages," Business, Management and Economics Research, Academic Research Publishing Group, vol. 7(1), pages 1-8, 03-2021.
    17. Roma, Paolo & Aloini, Davide, 2019. "How does brand-related user-generated content differ across social media? Evidence reloaded," Journal of Business Research, Elsevier, vol. 96(C), pages 322-339.
    18. Hayes, Jameson L. & King, Karen Whitehill & Ramirez, Artemio, 2016. "Brands, Friends, & Viral Advertising: A Social Exchange Perspective on the Ad Referral Processes," Journal of Interactive Marketing, Elsevier, vol. 36(C), pages 31-45.
    19. Pescher, Christian & Reichhart, Philipp & Spann, Martin, 2014. "Consumer Decision-making Processes in Mobile Viral Marketing Campaigns," Journal of Interactive Marketing, Elsevier, vol. 28(1), pages 43-54.
    20. Daphne M. Simmonds & Katia Campbell & Joseph Hasley, 2021. "Viral diffusion of technology products: a comprehensive stage framework," Information Systems and e-Business Management, Springer, vol. 19(2), pages 597-619, June.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:plo:pone00:0208738. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: plosone (email available below). General contact details of provider: https://journals.plos.org/plosone/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.