Management Review

›› 2020, Vol. 32 ›› Issue (2): 197-204.

• Marketing • Previous Articles     Next Articles

Managerial Strategy of Choosing the Key Consumers by Considering Network Externality

Liu Xin1, Li Yongli1,2, Zhang Jie3   

  1. 1. School of Management, Harbin Institute of Technology, Harbin 150001;
    2. School of Business Administration, Northeastern University, Shenyang 100169;
    3. Institute of Economics, Nankai University, Tianjin 300071
  • Received:2017-05-08 Online:2020-02-29 Published:2020-03-07

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Abstract:

In the era of "Internet +", the ability of identifying the key consumers has become an important factor that affects the manufacturer's profit. The paper adopts the utility function with network externality to analyze how the monopolistic manufacturer chooses the key consumers by maximizing their own interests. In the market structure of complete monopoly, the paper constructs a multi-stage game process to derive the feature function of reflecting the consumers' importance, under two cases:with and without considering the first consumer movers. Finally, the complexity of the algorithm is tested by a series of simulations and this model is applied in the specific real scenario that shows how the mobile phone communication provider chooses the key consumers. The above analyses show that the strategies of choosing key consumers proposed by the paper are feasible and effective, which can significantly improve the profit of monopolistic manufacturer. In all, the proposed model and the achieved strategy has a certain application value in solving specific management problems.

Key words: key consumers, network externality, first consumer movers, utility function