2021ComplexityOpen access

Maximize Expected Profits by Dynamic After‐Sales Service Investment Strategy Based on Word‐of‐Mouth Marketing in Social Network Shopping

Ying Yu, Jiaomin Liu, Jiadong Ren, Qian Wang, Cuiyi Xiao

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Abstract

This paper discusses how word‐of‐mouth marketing affects the profits of product sales in social network‐based shopping under good after‐sales service. First, a new word‐of‐mouth communication model based on silent evaluation, positive evaluation, and negative evaluation is proposed. Second, we use the way of increasing after‐sales service to achieve high praise and thereby maximize the expected profits. Thus, the proportion control problem of after‐sales service investment is modeled as an optimal control problem. Third, the existence of optimal control is proved, and an optimal control strategy for dynamic proportion of after‐sales service investment is proposed. Fourth, through data simulation of different real‐world networks, it is verified that the expected profits under the dynamic after‐sales service strategy is higher than that under any uniform control strategy. Finally, sensitivity analysis is performed to explore how different parameters affect the expected profits.

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What this paper is about

This paper discusses how word‐of‐mouth marketing affects the profits of product sales in social network‐based shopping under good after‐sales service. First, a new word‐of‐mouth communication model based on silent evaluation, positive evaluation, and negative evaluation is proposed. Second, we use the way of increasing after‐sales service to achieve high praise and thereby maximize the expected profits. Thus, the proportion control problem of after‐sales service investment is modeled as an optimal control problem. Third, the existence of optimal control is proved, and an optimal control strategy for dynamic proportion of after‐sales service investment is proposed. Fourth, through data simulation of different real‐world networks, it is verified that the expected profits under the dynamic after‐sales service strategy is higher than that under any uniform control strategy. Finally, sensitivity analysis is performed to explore how different parameters affect the expected profits.

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Available abstract

This paper discusses how word‐of‐mouth marketing affects the profits of product sales in social network‐based shopping under good after‐sales service. First, a new word‐of‐mouth communication model based on silent evaluation, positive evaluation, and negative evaluation is proposed. Second, we use the way of increasing after‐sales service to achieve high praise and thereby maximize the expected profits. Thus, the proportion control problem of after‐sales service investment is modeled as an optimal control problem. Third, the existence of optimal control is proved, and an optimal control strategy for dynamic proportion of after‐sales service investment is proposed. Fourth, through data simulation of different real‐world networks, it is verified that the expected profits under the dynamic after‐sales service strategy is higher than that under any uniform control strategy. Finally, sensitivity analysis is performed to explore how different parameters affect the expected profits.

Key concepts: Word of mouth, Service (business), Control (management), Marketing, Investment (military), Praise, Product (mathematics), Business

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