This study investigates the effects of exposures to earned and owned social media activities and their interaction on brand purchase in a two-stage decision model (i.e., likelihood to purchase and the amount purchased offline). Our study is instantiated on a unique single-source dataset of 12-month home-scanned brand purchase records of a group of fast-moving consumer good brands and Facebook brand Fan Page messages related to the brands. We first find that exposures to earned and owned social media activities for brands have significant and positive impacts on consumers' likelihood to purchase the brands. Their effects are, surprisingly, suppressive on each other. Second, exposures to earned and owned social media activities have almost no impact on the amount purchased offline with presence of in-store promotions. Our study contributes to our knowledge body of social media marketing by demonstrating that social media activities for a brand can foster the consumer base of the brand, but that effort is not necessarily sales-oriented. In addition, our study is conducive to guiding marketers onto the strategic allocation of advertising dollars to online social channels featuring a mixture of earned and owned social media. > >
We consider an online market where consumers may obtain digital goods from two mutually exclusive channels: a legitimate channel consisting of many law-abiding retailers and a piracy channel consisting of many piracy services. We analyze consumer choice, retailer strategy, and piracy control using a sequential-search approach where information acquisition is costly for some consumers (nonshoppers), yet costless for others (shoppers). First, we show that a nonshopper's channel choice is determined by a simple comparison of two reservation prices. Second, we analyze how piracy threats affect in-channel pricing among retailers. If the in-channel competition intensity among retailers is high, piracy does not affect retailer pricing. If the intensity is medium, retailers respond to piracy by giving up some shoppers and, surprisingly, raising prices. If the intensity is low, the legitimate channel loses some shoppers as well as some nonshoppers to the piracy channel. Third, we consider several mechanisms for fighting piracy and analyze their effects on firm profit and consumer surplus. Reducing piracy quality and increasing piracy search costs are both effective in controlling piracy, yet they affect consumer surplus differently. Reducing the number of piracy services is less effective in controlling piracy.
Giving away trial software is a common practice for software developers to maximize the exposure of their products to potential consumers and to minimize the consumers' uncertainty about software quality. There are two types of free trials: (1) freeware, which consists of very basic features of focal software without a time lock, and (2) trialware, which has the full functionality of focal software with a time lock. In this paper, we study what factors make some free-trial software attract more potential adopters than others. Our empirical model under the traditional Bass-type diffusion examines the effects of the different types of free-trial software and ratings on consumer software sampling and reveals the dynamics of sampling over time. Using free-trial software downloading data on Download.com, we observe that the consumer software sampling process can be described by the theory of information diffusion. We find that user ratings affect sampling performance positively and that third-party ratings need to be positive to be effective. Finally, our results do not show any discernible differences between freeware and trialware with regard to their impact on sampling performance. This study contributes to the understanding of software free-trial practice from the perspective of consumer sampling growth of different types of free trials. Our findings can help design free-trial strategies to extrapolate the extent of consumer awareness of focal software and effectively convey its quality information to potential customers.