Pre-Release Buzz Evolution Patterns and New Product Performance

Forthcoming in Marketing Science

42 Pages Posted: 27 Jan 2014 Last revised: 22 Jun 2014

See all articles by Guiyang Xiong

Guiyang Xiong

University of Georgia

Sundar G. Bharadwaj

University of Georgia--Terry School of Business; University of Georgia - C. Herman and Mary Virginia Terry College of Business

Date Written: October 1, 2013

Abstract

This study examines the dynamics of online buzz over time before product release. Employing functional data analysis, we treat the curve of prerelease buzz evolution trajectory as the unit of analysis and find that the shape of the curve significantly adds power in predicting new product performance compared with using product characteristics and firm advertising alone. Moreover, daily prerelease buzz evolution data enable accurate sales forecasting long before product release, which allows sufficient time for managers to adjust product design and/or marketing strategy. For example, the forecasting accuracy using an early buzz evolution curve ending on the 61st day before product release is not only higher than that using accumulated buzz volume until then but also higher than that using the total volume of all buzz up until product release. Beyond the sales outcome, we find that prerelease buzz is quickly reflected in firm stock returns before product release and reduces the absolute amount of postrelease stock price correction. The model accounts for endogeneity, and the results are robust after controlling for buzz sentiment. We also explore the factors influencing prerelease buzz evolution patterns, thus generating insights into how to manage prerelease buzz dynamics to enhance new product performance.

Keywords: Pre-release buzz dynamics, evolution pattern, functional data analysis, forecasting, new product sales, and stock market value

JEL Classification: C14, C12, D83, G14, L82, M31, M37

Suggested Citation

Xiong, Guiyang and Bharadwaj, Sundar G., Pre-Release Buzz Evolution Patterns and New Product Performance (October 1, 2013). Forthcoming in Marketing Science, Available at SSRN: https://ssrn.com/abstract=2385252

Guiyang Xiong (Contact Author)

University of Georgia ( email )

Department of Marketing and Distribution
148 Brooks Hall, Terry College of Business
Athens, GA Athens 30602-6254
United States

Sundar G. Bharadwaj

University of Georgia--Terry School of Business ( email )

105 Brooks Hall
Athens, GA 30602
United States

University of Georgia - C. Herman and Mary Virginia Terry College of Business ( email )

Brooks Hall
Athens, GA 30602-6254
United States

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