Abstract
In this study we show that concept of backward bifurcation, borrowed from epidemics, can be fruitfully exploited to shed light on the mechanism underlying the occurrence of hysteresis in marketing and for the strategic planning of adequate tools for its control. We enrich the model introduced in (Gaurav et al., 2019) with the mechanism of self-information that accounts for information about the product performance basing on consumers’ experience on the recent past. We obtain conditions for which the model exhibits a forward or a backward phenomenology and evaluate the impact of self-information on both these scenarios. Our analysis suggests that, even if hysteretic dynamics in referral campaigns is intimately linked to the mechanism of referrals, an adequate level of self-information and a fairly high level of customer-satisfaction can act as strategic tools to manage hysteresis and allow the campaign to spread in more controllable conditions.
Highlights
Introduction and MotivationsIn the last century, mathematical models based on differential equations have been fruitfully applied to describe phenomena belonging to even extremely different disciplinary fields
Because they go to the heart of the phenomena, simple mechanistic qualitative models are capable to create bridges between apparently very distant worlds, making sure that models and methodologies used in a certain context could be exploited to open the way to the understanding of phenomena that are similar in their underlying mechanisms
With this study we wanted to show that the concept of backward bifurcation, borrowed from epidemics, can be fruitfully exploited to shed light on the mechanism underlying the occurrence of hysteresis in marketing as well as for the strategic planning of adequate tools for its control
Summary
Mathematical models based on differential equations have been fruitfully applied to describe phenomena belonging to even extremely different disciplinary fields. An extensive survey in reference [9] underlined that along with the viral component, a particular focus on customer behaviors should be given to ensure the relevance and survival of a newlylaunched campaign On this line, references [7,10] considered more realistic models for the viral campaign spread, where specific behavioral factors were introduced to take into account a customer’s perspective about marketing messages, i.e., inherent adversion, brand trust, remembering and reminding. Our aim is to elucidate under what conditions the interplay between ‘passive’ and ‘active’ information can strengthen or weaken the survival chances of a referral campaign On this line, we enrich the model introduced in [10] with the mechanism of self-information that accounts for information about the product performance basing on consumer’s experience on the recent past.
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