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Word of Mouth

MKTG1203 state of the art presentation
by

Saalem Sadeque

on 20 March 2013

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Transcript of Word of Mouth

What is WOM and why is it important? Senders'
perspectives Receivers' perspectives The informal communication between private parties concerning evaluation of products or services. What is WOM? Why is WOM important? (1) The person giving the WOM is seen as neutral and not having vested interest.
WOM is seen as nine times more effective compared to traditional advertising. WOM examples People provide WOM to someone in need of information
Wish to help the service provider because of outstanding service
WOM giver considers riskiness of purchase when providing WOM Positive WOM provides the receiver with confidence, a sense of relief and improves the image of the firm in the receiver’s eyes.
Negative WOM leads to empathy with the WOM provider and leads to anger toward and poorer image of the firm. WOM message
characteristics It’s generally a pretty vivid description of the place and the ambience and the atmosphere.
They do tend to use quite elaborate language—it was “absolutely” fantastic or it was “absolutely” revolting—they will use colorful language—it is almost very black and white.
It is the word people use “fantastic, or outrageous”, it is the content and the words.
I was excited…I gave all the details [about a hairdresser I had used for some years] to my girlfriends. I was firm and assertive, filled with anger. There were a few swear words in it too. (CIT, restaurant)
The adjectives were quite negative and the person was quite insistent and persistent in her description. (CIT, retail outlet)
If you really rave about the experience, at the restaurant for example, you don’t do it unless it is really, really fantastic.… Otherwise, they would just say, “oh, yeah, it was good.”
I was furious at the way I had been treated - A friend and I had weekly tutorials at the café and always bought a drink and usually a pastry …. (CIT, café) People resist NWOM on brands they are likely to use, and resist PWOM on brands they are unlikely to use. Why WOM is important? (2)
Customers acquired via WOM bring in nearly twice as many new customers compared to those recruited via regular marketing.
Marketing induced customers add more short-term value but WOM induced customers add more long-term value to the firm. Valence
Richness of the message Strength of advocacy Customers' Role Customers have moved out of the audience and onto the stage. They are now co-creators of value, they are collaborators and co-developers of the product (e.g. a car, software, clothing, and may also be competitors – e.g. DIY such as lawn mowing). WOM is partly a result of the customer’s power. Other examples of WOM Harry Potter
Kiehl brand by L'Oreal
The movie 'Blair Witch Project'
Pokemon
Beanie Babies
Hard Candy nail-polish WOM Agency - Korea Customer satisfaction and WOM (1) Relation of WOM to satisfaction - an inverse U-shaped relationship and that the level of WOM is higher for extremely dissatisfied than extremely satisfied. Customer satisfaction and WOM (2) Someone giving positive WOM has the same likelihood of giving it multiple times (2.4 in 6 months) than someone giving negative WOM. However, positive WOM more common as 3 times more people give positive WOM than negative WOM. eWOM Exposure to online discussions such as Internet forums, generates more product category interest than does exposure to online marketer generated sources of information (corporate webpages). Net Promoter Score
“How Likely it is that you would Recommend X to a Colleague” on a scale of 0-10. Promoters are those responding 9 and 10, detractors 0-6.
Considered a very high profile measure of marketing success often compared to satisfaction. The End!
Thanks for listening.
Questions? Measuring WOM Word of Mouth
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