1-to-1 personalized consumer-product marketing in real-life environment with critical word-of-mouth (WOM) impacts

Issue title: Statistical Modeling in Marketing and Advertising Research

Article type: Research Article

Authors: Kuznetsov, Dmitri V.

Affiliations: Intellidyn, 175 Derby St., Suite 40, Hingham, MA 02043, USA. E-mail: dkuznetsov@intellidyn.com

Abstract: Word of mouth (including on-line opinion exchange) is not only one of the key factors for marketing, it is the factor which transforms effects of other (advertising and economic) factors making them less or more significant, or even critical for abrupt transitions to a new market share or product/service demand. Such effects cannot be estimated using typical statistical techniques like, for example, a regression dependency between factors and target value. Using our statistical mediaphysics methodology we were able to uncover many challenging but hidden marketing issues and propose ways how they can be put under control to a better marketing performance. The optimized advertising-amount allocation across marketing of different products including the 1-to-1 personalized consumer-product marketing can appropriately treat many critical phenomena inspired by WOM in a real-life fight between organizing (competitive advertising, WOM, economic, etc.) and disorganizing (entropic) factors. Some of the critical issues that have to be targeted by the marketing are: jumps in population-opinions distributions in response to sometimes even very small changes of advertising factors; hysteresis-type (overheated or overcooled market) effects for strong enough WOM for specific products; and complex non-equilibrium dynamics of opinions.

Keywords: One-to-one marketing, word of mouth, sociophysics, mediaphysics, phase transition

DOI: 10.3233/MAS-2009-0121

Journal: Model Assisted Statistics and Applications, vol. 4, no. 3, pp. 159-169, 2009