DUCKHYUN ANEUDDEUM CHUNG

JUAN FRANCISCO EGURENLOU IS

YASMIN KHALFALLAHJIN LEE

SUMIN NAM

Group 6

Its not only what you hear, but who you hear it from …

Talk of the Network: A Complex Systems Look at the Process of Word-of-Mouth Underlying

Strong & Weak ties

Stochastic Cellular Automata Complex systems modeling technique

- Simulations of aggregate consequences based on local in-teractions between individual members of a population

- Measures the impact of word of mouth, strong and weak ties, and advertisement on human behavior

- Tracking the changing state of each individual

1) Weak ties

2) Beyond a relatively early stage of the process, the effect of external marketing efforts quickly diminishes and strong and weak ties become the main forces propelling the process

3) The effect of strong ties on the speed of information dissemination di-minishes as personal network size decreases4) As the number of weak ties contacts increases, the effect of strong ties

decreases while the effect of weak ties increases$

5) As the level of advertising increases, the effect of strong ties increases while the effect of weak ties decreases

Dettol’s WOM Cam-paign

in China

What were the results?

Reached Tar-get Audience

Sales In-creased

1. The largest fashion retailer in the world

2. ZARA barely does advertising 3%

1. APPs on smartphone

2. Online Shopping

3. E-magazine

Digital WOM

1. New items every two weeks

2. ZARA chooses the best location

11,000 items

Real World WOM

Managerial Impact Technique suited for

- Usually under-researched marketing phenomena- Analysis of interpersonal based processes Ability to deeply explore real life occurances

Examples of use: - Explore web-based information dissemination and vi-

ral marketing which use WOM channels

Managerial Impact

Examples of use:– Time-based changes of the marketing mix– Analysis of optimal marketing in the presence of net-

work externalities

WOM – Marketing–Recognition of the significance -> upward trend–“Direct” instead of “manage” WOM-effects

Conclusion

Weak Ties > Strong Ties

• Small Net work size• Numerous Weak Ties

• Weak Ads effectStrong Ties > Weak Ties

• Large Net work size• Few Weak Ties• Strong Ads effect

Conclusion

Advertisement >WOM

More desirable state for WOM

Types of Industry & Products &

Brand

ConclusionPersonal Critique

• Analysis based on a number of assumptions

• Informed ≠ influenced

•Does not consider:

Subjectivity of human evaluation

Cultural paradigms, morality and ethics

Family linksAuthorityCelebrity power

ConclusionPersonal Critique

•Does not consider:Personal judgement

Nature of the product or service

Nature of consumption of the product or service

Trust of each individual regardless of the nature of the tie

Similarity of individual’s values, beliefs and opinions to one’s own

Past experiences

ConclusionProfessional Critique

Novel information is found in strong ties

• Rapidly changing environment

New information from same source

• Breadth of knowledgeEnables indefinite

education from same source

• If the whole population knows the same thing, human diversity doesn’t influence novelty

Marshall Van Alstyne BA (Yale) , MS & PhD (MIT)