System Dynamics Simulation for Internet Marketing

Not only does the cyberspace update rapidly, but the new network technology also develops immediately. This trend does not conform to the former cyber-law so that its future development is boundless and unpredictable. Since the connection between the entrepreneurial management and information technology is gradually close and significant, based on the information feedback, the managers are able to improve their marketing strategies, as helps the enterprise to fit in with the latest business circumstance and to operate sustainably. An online shopping store is chosen as the study object, and the simulation model is built to help the manager to make decisions that distribution of the capital and use of internet marketing. So, we combine web chain with system dynamics to apply the decision on capital. And this research uses the system dynamic model as a policy laboratory to test a lot of policies and evolve the appropriate strategy in order to reduce cost and increase revenue. According to the simulation of the model: first, we have to improve the three key parameters, included price, network advertisement memory length and customer sales effectiveness in order to increase the performance of the site´s revenue. Second, we make capital investment ratio evenly distributed and not focus on enhancing web-popularity.