Analyzing the Effect of New Product Development Using an Agent Based Consumer Behavior Model - An Application to the Sanitary Products Market in Japan

When new products are launched in the marketplace, companies try to alter market conditions in their favor through various marketing activities. Such activities will cause several phenomena in the marketplace. Word-of-mouth communication is one of such phenomena. Word-of-mouth communication attracts wide attention from researchers and practitioners because of its potential influence in consumers purchasing decision process. We have chosen sanitary products because of unique characteristics of the product and consumers’ purchasing behavior. We have employed agent based approach to develop a simulation model with which we can analyze several dimensions of word-of-mouth communication. Our computer simulation indicated that word-of-mouth communication has several functionalities, such as amplifying and sustaining capabilities of promotion effects. After the discussion of consumers’ purchasing behavior and marketing communication activities, categorization of consumer behavior in word-of-mouth communication will be presented. The categorization has four types of consumer behavior: 1) Socially Integrated, 2) Socially Independent, 3) Socially Dependent, and 4) Socially Isolated. The categorization was used as a basis in developing our simulation model. Description of our simulation model and discussion of simulation results will follow. After some other findings through our study are discussed, we will conclude our study by stating future development.The original publication is available at JAIST Press http://www.jaist.ac.jp/library/jaist-press/index.htmlIFSR 2005 : Proceedings of the First World Congress of the International Federation for Systems Research : The New Roles of Systems Sciences For a Knowledge-based Society : Nov. 14-17, 2087, Kobe, JapanSymposium 2, Session 6 : Creation of Agent-Based Social Systems Sciences Agent-based Applications (1