Introduction Strategy for New Products with Positive and Negative Word-of-Mouth

Abstract

Existing innovation diffusion models assume that individual experience with the product is always communicated positively through word-of-mouth. For certain innovations, however, this assumption is tenuous since communicators of the product experience may transfer favorable, unfavorable, or indifferent messages through word-of-mouth. This paper examines a diffusion model for products in which negative information plays a dominant role, discusses its implications for optimal advertising timing policy and presents an application to forecast attendance for the movie Gandhi in the Dallas area.