The Research On Free Commodity Donated Based On Product Diffusion Model With Network Effect

With the continuous development of communication technology, products with network effects in people's lives, play an increasingly important role, network effects become marketing topics at the forefront of interdisciplinary research. Growing number of scholars dedicated to the research network effects, but it is more tend to be linked to product proliferation. Product Diffusion Model to the 1969 Frank M. Bass's most famous, but the model is built under the strict assumptions, later scholars constantly revised its assumptions by Adding network effect variable, derived products in line with the proliferation of network effects model, and using empirical analysis by testing the accuracy of the model. Product Diffusion with network effects model also has its limitations, model does not take into account the spread of the marketing strategy of its, In fact, this is not consistent with the actual situation.This paper based on previous studies, with network effects for the diffusion characteristics of the product, promotion strategy will be presented in the free goods with network effects of the introduction of variable product diffusion models. Derived products based on free products presented diffusion model of network effects curve expression; through the numerical simulation method, analyze the parameters of the model with network effects of the change of diffusion of the product. Some findings are obtained by numerical simulation:adding promotional product proliferation network effect variable cumulative curve is relatively steep, two prominent inflection point, the two inflexions and the S-type are clear; complimentary higher the level the faster the diffusion rate, the shorter the time to reach saturation; network effects on different products, complemented by the strength of the same free gift level, and strong network effects products can reach the critical size in advance; maximum market potential first-time buyers^ innovation coefficient and imitation coefficient to reach the critical size will affect the diffusion rate and after the time to reach market saturation. Free goods will be presented and the object located in the imitation of innovation adoption is better than those who are innovation adopters. Finally, this paper will use the number of users of branch telecommunications of Xinzhou District, Wuhan City as the object, confirmed that the network effect on marketing strategy product diffusion model fit and predictive ability is better than not joined the network marketing effect of the variable product diffusion models. The establishment of promotion strategy based on product diffusion model of network effects can help manufacturers of products with network effects of more accurate diffusion process of fitting and prediction, and thus make better marketing decisions.