466 / 2024-04-25 15:57:55

The optimal free trial strategy of electronic products: the impact of network effect and ocean wave effect

Free trial,Consumer network effect,Ocean wave effect,Electronic product

How to set up the operation strategy of the free trial reasonably, such as the number of lucky customers, application period and interval, needs to be solved urgently. In this paper, the ocean wave effect of information dissemination is proposed for the first time to investigate the impact of free trial application period and interval on the number of free trial participants. Subsequently, the consumer network effect utility, demand and product profit models are proposed to solve the operation strategy problem of the free trial by considering positive and negative network effects and the ocean wave effect, generating empirically testable hypotheses and related management propositions. Finally, a field experiment of the free trial is conducted in cooperation with Lenovo Mall and the experimental data obtained prove part of the hypotheses and management propositions. Moreover, the remaining hypotheses and managerial propositions are validated using real operational data from Lenovo Mall. The test and validation results show that the success of free trials depends on the accuracy of merchants' free trial product selection and identification of the most valuable consumers. The price and demand for products are significantly increased after adopting a sound operational strategy for free trials. Additionally, the optimal free trial application time period and time interval can help merchants to maximize their profits. Meanwhile, the free trial interval should be properly arranged according to the different products. These conclusions presented in this research have been adopted by Lenovo Mall and applied to the operational adjustments of the free trial.