Market Share Dynamics Based on the Emergence and Collapse of Brand Values: Simulations Focusing on Communications between Consumers

Prior research on brand equity or brand value has assumed that all products are the same in their functions but different in their marketing activities of firms. However, although we can assume that products are the same in not only their functions but also their marketing activities, prior research has paid little attention on this assumption. So, this paper aims to explore how the emergence and collapse of products' brand values when all products are same in all aspects. At first, we base on Niklas Luhmann's social system theory to explain the emergence and collapse of brand values. The social system theory suggests that the brand value as the structure of consumption system can emerge and collapse without assuming different marketing activities. Then, to understand these phenomena, we conduct experiments using multi-agent simulation model. As a result, market share of a product which is based on its brand value usually shows dynamics because of consumers' communications. This is the way we imply the frontiers of brand research by suggesting that the social system theory is useful in analyzing the emergence and collapse of brand value.