The Demand Analysis With Positive Social Interactions In Online Communities

The online community is not only a good communicating platform for online consumers, but also gradually developing into a vast online consuming market. Community consumers exchange product and service information through online community, so social interactions between them may affect their consumption value directly or indirectly. Moreover, the positive interactions could result in positive feedback effects. However, mostly existing literatures research social interactions between community members and their consume behaviors from sociological or psychological point of view and, but researches carried out from an economic point of view are seldom. Therefore, the purpose of this paper is to research members’ consume value with the positive social interactions and the form and natures of demand function in transactional online communities, then present feasible method and advice which community operators and marketers could make use of forecasting product demand in different period. The main research contents and results are as follows.Firstly, we study the mechanism of how social interactions in online community affect the consumers’ product value. Based on the social interaction theory, we provide a mechanism that the influences of interactions on community members’ consumption value are achieved through the information dissemination between consumers from the perspective of information dissemination. Then, we analyze the consumption value of community users and divide the value into self value and interactive value which is the social interaction influence the member obtain in the community.Secondly, on the basis of interaction influence mechanism in the first part, a quantitative method measuring the social interactions in online communities is studied. We present an interaction model in which the online community is abstracted as the small world network. Respectively, each community member is taken as a node of the network, and interactions between members are denoted by the information dissemination between network nodes. Based on this model, we present a method, which puts forth the members’ community social attribute--active degree, social relation and interaction frequency—to measure social interaction influence in online communities, and verify the validity and stability of the method by simulating with the experiment data. At last, we illustrate that the method can be used to help community marketers to make effective marketing strategies. Finally, we study the community demand with positive social interactions. Based on the inclusions in the first and the second parts, we present a utility function of community members, and deduce a demand function of online communities. Then we analyze the characteristics of the community demand function respectively when parameters change such as time, price, social interaction strength and the income distribute of community members. The results show that, different from the traditional market demand function, the demand shows S-shaped growth and strong positive feedback effect when there are positive social interactions between community users.In different product life cycle, characteristics of the community demand are different as product price, interaction strength as well as the income gap of members change respectively. Therefore, marketers can take optimal product or marketing programs according to the demand characteristics in different period.