A Study On The Diffusion Process Of Financial Innovative Products With Network Effects

A great deal of related researches in the new product diffusion models have been emerged since the first public of the Bass model in 1969. These researches have amended and extended the basic assumption, structure and estimated methods of the diffusion model. Besides, the basic assumption, structure and estimating methods of the diffusion model. Besides, these also have been motivating the further researches innovation diffusion model. Meanwhile, all kinds of products featured with network effect are gradually permeating the daily life of people. Moreover, the network effects not only exist in the high-technology industries, but also the financial sector. From the recent 20 years, with the development of the whole financial industry, the speed of financial innovation is accelerating and the scope is extending. The emergence of financial innovation product has already became an important development opportunity of the financial sector. Due to the existence of the network effect, the financial innovation products expressed a special diffusion process.In this paper, the network effect and features of the financial innovation products are firstly analyzed on the basis of the literature researches related network effect. Because of the introduce of the network effect coefficient into the traditional Bass products diffusion model and the product assessment of the influence of the biggest dive volume on the diffusion process, the curve expression of the product diffusion model with network effect were achieved through the mathematical deduction. Then, take the product of xxx commercial bank, named ZhiFuTong, as the research object. The model fitting of the diffusion process of the financial innovation products were made by weeks and months respectively through using the data extracted March 2009 to October 2011. Furthermore, the results of the model fitting were estimated through the error analysis. Finally, the corresponding marketing advice was presented. According to the characteristics of the product diffusion process curve.In this research, it was discovered that the results of the products diffusion model fitting which the biggest dive volume has been considered is better than another obviously. What's more, the spreading speed of the financial innovation products with network effect is faster at the beginning stage. These products are more popular in markets. The longer these products in marketing, the better the products diffusion model fitting. The research results are conducive to the products diffusion process research of the banking administers and the marketing strategies. Besides, it is also meaningful to the researches of the diffusion process of other products with network effect.