Conclusions

This chapter has advocated for an Interactive Marketing Communication Model which combines the Internet re-configured mass media and word-of-mouth. Using this new model, I have hypothesized that by adding the new medium, new-product diffusion would become faster with more adopters. I conducted a study of the sales of DVD players and found that in the post-Internet, new-product diffusion process, the increase in imitation effect is much larger than the increase in innovation effect.

Contribution

This chapter's theoretical framework adds knowledge to the new-product diffusion literature in two ways. First, in the process of consolidating multiple theories to explain why the Internet medium should enhance new-product diffusion, it has advanced the underlying assumption of the traditional marketing communications theory to an Inter- active Marketing Communication model. Second, it extended the much anticipated, theoretical postulation of the Internet network effect by empirically testing such effect within the coefficients of the Bass Diffusion Model.

Limitations

Although the Interactive Marketing Communication Model has comprehensively included business-to-consumer and consumer-to-consumer communications in various settings, this chapter neglects the dialogues generated by the computer, such as Artificial Intelligence embedded in vendors ' sites such as Dell computers. I have yet to discuss the effect of consumer-to-business (c2b) communications in their ability to influence word-of-mouth (Bowman and Narayandas, 2001). Further, I have not addressed the efficiency issue of marketing communication (Wernerfelt, 1996) or the role of online opinion leaders generated by Artificial Intelligence in new-product diffusion. Further theoretical and empirical enquiries are required to remedy these limitations.

Managerial Implications

The managerial implication of this study is a strategic focus on how to optimize the use of the Internet to get closer to the consumers, as Coca-Cola's president Heyer suggested. This chapter has demonstrated the increasing importance of the network effect associated with the Internet-enabled interactive marketing communications. The matrix in Table 13-1 categorizes the b2c and c2c communications that take place in the interactive marketing environment. Managers can use this as a guideline to manage the many-to- many conversations. By following some cells in the matrix, managers should be able to uncover the wealth of information from consumers and be able to utilize them as signals for new-product management.

The interactive new medium should be used as an enabler to allow managers to communicate with consumers more efficiently by: (1) making it cheaper for customers to acquire information, (2) consumers who should be informed about more, rather than less, important attributes, and (3) information that should be communicated in the simplest form (Wernerfelt, 1996). More importantly, managers should follow the new-product diffusion process by listening to consumers' experiences that are documented in rich online discussions. By interpreting the meanings of their shared experiences, marketers can use them as signals to calibrate, promote and launch new products.

Future Research

In recognizing the Internet as a catalyst that advances media marketing communications to interactive B2C and C2C conversations, future new-product diffusion research in the following areas can fast-forward knowledge to the marketing community:

• The study of the impact of the new medium in online versus off-line consumer durables diffusion.

• Within online new products, the study of the diffusion of digital versus non-digital goods.

• The comparative investigation of recent new-product diffusion in developing countries which have 'leap-frogged' and become more e-Ready than developed countries such as Czech Republic, South Korea, and Poland, and developed countries such as Spain and Greece which lag behind in their rollout of the Internet medium.

• Recent new products that fail to diffuse, and their relationship with the Interactive Marketing Communication Model. A study to understand if online communications are too ' noisy ' can be of interest.