word-of-mouth: a strategy or an outcome?

Positive word-of-mouth: a strategy or an outcome? • Gabriel Borges • Lancaster University • June 2007

Positive word-of-mouth: a strategy or an outcome? Research on where efforts should be concentrated to trigger customer-to-customer profitable interactions

Lancaster University • June 2007Gabriel Borges and Peter Lenney

© Gabriel Borges 2007 - Not to be copied or in any way reproduced without permission


of people’sconversationsconcern

socialissues

experiences

23

Source: DUNBAR (1996), British anthropologist

or

who is doing whatwith whom, and whetherit’s a good or bad thing;

who is in and whois out, and why.

‘small talk’

As follows, people effortlessly include conversations with referenceto products, services and brands into such small talk.

Individuals liketo share their

experiences with one another.

This oldest form ofmedia can be found on the business and marketingrealms labelled as word-of-mouth communications or simply word-of-mouth.


What is Word-of-mouth (WOM)?

definition person-to-person communication between a receiver and a communicator whom the receiver perceives as non-commercial, concerning a brand, a product, or a service.is the act of consumers providing information to other consumers.

the information transmitted by individual consumers on aninformal basis.a variety of media can convey the message: face-to-face,phone, internet and others.

format

basis ofsolicitation solicited or unsolicited basis of WOM by the receiver of the information.

valance raging from positive to negative WOM.valance ofthe message

Sources: ARNDT (1967), WOMMA (2006), SOLOMON (2002) and WOJNICKI and JIA (2007)


Representation of the Communication Flow for WOM

Sources: ARNDT (1967), WOMMA (2006), SOLOMON (2002) and WOJNICKI and JIA (2007)

solicited

wom

basis of solicitation

unsolicited

wom

solicited

wom

unsolicited

womconsumer (i)disseminator

consumer (ii)receiver

message ( brand / product related )

vala

nce

of th

e m

essa

ge positive positive

negative negative

50% of WOM communications are initiated by the disseminator and 50% is solicited by the receiver.

Throughout the literature exploring

WOM, threewaves of studies

on the subject can be recognized.


60

mid

dle

s ’

80

early

s ’

recentcorrelation of the phenomenon of

WOM and the communication

theories

relationship between customer

satisfactionand WOM

special focus on the correlation of

dissatisfaction and negative WOM

media cluttering: over and over, people are declining their attention and faith in traditional media.

the internet has been changing

the way consumers share their

opinions, enlarging the playing field in

which WOM operates

But what is the gistof all said about

word-of-mouth in the academic studies

and business literature?


Word-of-mouth plays an important role in the process of shaping consumers’ behaviour.

advertising

wom

past experience

expectation& motivation

influencers


advertising

wom

inform

legitimize,evaluate

influenceopinion

shapeopinion

Vs.

unilateral

interactive

impersonal consented

interruptivecustomized

expensive

cheap

short-lifespan

organic

reduce choices

increase amount ofchoices


The power from each influencer variesaccording to the context

advertising wompast experience

However, estimates have maintained that as much as 80% of all buying decisions are influenced by an individual's direct

recommendation.Source: KAMINS (1997)


WOM is more likely to effectconsumption when…

expectation& motivation

wom

large amount ofchoices

no past experience

strong boundinfluence

high risksinvolved


The power of WOM can effect not only consumers’ purchase,but also the growth of whole corporations.

Is word-of-mouth a strategy or an outcome?

Why a consumer will bother to talk about

your productor brand?

a researchopportunity

to understand the motivations and social arrangement on which

positive WOM is structured

to undertake reflections about how managers can

apply a powerful influence over what consumers talk

about their brands to the people they relate


Research Approach

wave one Narratives from ConsumersExplore the social context of positive WOM spreading-out

wave two Interviews with ConsumersIn-depth focus on the main issues emerged from the first wave

wave three Focus Group with MarketersCreate a framework to trigger and/or influence over what consumers talk about their products / brands to the people they relate


literaturereview narratives analysis interviews analysis findings framework

developmentcompanyfocus group

Working Plan

may june july august2007


Accreditions

This project is being taken by Gabriel Borges as partial fulfillment of the requirements of the MSc in Advanced Marketing Management degree of Lancaster University, with supervision of Dr. Peter Lenney and support of AKQA.

Gabriel BorgesGabriel has worked in Marketing for 9 years with experience across numerous disciplines. He led a team at Telemig Celular with responsibility for the management of strategies in the area of customer loyalty and retention. He was promoted internally from a position managing Value Added Services of SMS and WAP based technologies. Whilst working with Web developers Bhtec he constructed strategic plans for the implementation of online solutions for key accounts such as Fiat Auto, Alfa Romeo and GE. He has a bachelors degree in Communication Studies and more has recently undertaken a Masters in Advanced Marketing Management at Lancaster University; one of the World's premier Management Schools.

Lancaster University Management SchoolLancaster University management school is the most consistently highly rated management school in the UK, performing as one of only two UK business schools to carry the coveted 6-star rating for consistent world-class research quality in business and management. The Department of Marketing was established at the University of Lancaster in 1965 with the first Professor of Marketing in a UK university and is largely accredited for its outstanding works on business research.


Thank you.

Gabriel [email protected]

+44 789 541 9040

word-of-mouth: a strategy or an outcome?

Economy & Finance

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