Study Of Word-of-Mouth Effects Based On Small-World Network

In today's customer-focused marketplace,the co-creation of value by customers and the enterprise becomes the main form of value creation. It is important to consider the role of customer-to-customer interactions during the value creation process. Word-of-mouth interaction between customers is an important factor in this process. With the advent of the Internet era and the information age, customers may well be confused by the large amount of available information when making purchasing decisions. Information provided them by other customers may therefore be an important, reliable source. Hence, word-of-mouth plays an increasingly important role in the decision-making process for customers. However, in current research on customer-to-customer relations, word-of-mouth interaction between customers has received limited attention.An extensive overview of word-of-mouth theory has been adduced to define mechanisms and effects of the spread of word-of-mouth. Based upon this, a customer network structure is established which has the character of a small-world network. A model of word-of-mouth spread dynamics is proposed. The parameters of the model which determine the effects on the spread of word-of-mouth are defined and discussed. Based upon the model proposed in this paper, suggestions are provided for word-of-mouth marketing practice.