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A universal model for growth of user population of products and services

Published online by Cambridge University Press:  07 December 2016

CHOUJUN ZHAN  and
CHI K. TSE
CHOUJUN ZHAN
Affiliation:
The Hong Kong Polytechnic University, Kowloon, Hong Kong (e-mail: zchoujun2@gmail.com, michael.tse@polyu.edu.hk)
CHI K. TSE
Affiliation:
The Hong Kong Polytechnic University, Kowloon, Hong Kong (e-mail: zchoujun2@gmail.com, michael.tse@polyu.edu.hk)
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Abstract

We consider a network of interacting individuals, whose actions or transitions are determined by the states (behavior) of their neighbors as well as their own personal decisions. Specifically, we develop a model according to two simple decision-making rules that can describe the growth of the user population of a newly launched product or service. We analyze 22 sets of real-world historical growth data of a variety of products and services, and show that they all follow the growth equation. The numerical procedure for finding the model parameters allows the market size, and the relative effectiveness of customer service and promotional efforts to be estimated from the available historical growth data. We study the growth profiles of products and find that for a product or service to reach a mature stage within a reasonably short time in its user growth profile, the user growth rate corresponding to influenced transitions must exceed a certain threshold. Furthermore, results show that individuals in the group of celebrities having numerous friends become users of a new product or service at a much faster rate than those connected to ordinary individuals having fewer friends.

Keywords

growth modelnetwork modeldecision makingordinary differential equationmarket growthsales data
Type
Research Article
Information
Network Science , Volume 4 , Issue 4 , December 2016 , pp. 491 - 507
Copyright
Copyright © Cambridge University Press 2016 

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