User:Wiki Helpful Edits/Word-of-mouth marketing

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Word-of-mouth marketing (WOMM, WOM marketing, also called word-of-mouth advertising) is defined ^{citation needed} as communication between consumers about a product, service, or company in which the sources are considered independent of commercial influence. This form of interaction differs from naturally occurring word of mouth (WOM) communication, in that it is actively influenced or encouraged by organizations. While it is difficult to truly control word of mouth communication, research has shown that there are three generic avenues to 'manage' word of mouth communication for the purpose of word-of-mouth marketing, including:

• Building a strong WOM foundation (sufficient levels of satisfaction, trust, and commitment campaigns)
• Indirect WOM Management (controversial advertising, teaser campaigns, and customer membership clubs)
• Direct WOMM management (paid WOM 'agents' and "friend get friend" schemes)

The success of word-of-mouth marketing depends heavily on the nature of the rewards used. Research ^{citation needed} has shown that when companies utilize poor incentives to motivate consumers or agents to spread positive word of mouth about products or brands, the campaigns backfire on the organization.

History[edit]

In the early 1970s, psychologist George Silverman pioneered word-of-mouth marketing by creating "teleconferenced peer influence groups," aimed at engaging physicians in discussions concerning new pharmaceutical products. Through his conduction of these focus groups, Silverman noted that physicians with positive experiences regarding a particular drug could influence skeptical peers, including a dissatisfied group of ex-prescribers who had negative experiences with the drug. ^{citation needed}

The emergence of Web 2.0 brought about noteworthy changes in WOMM, with many web startups such as Facebook, YouTube, MySpace, and Digg incorporating buzz marketing into their platforms to leverage their social networks. This integration has amplified the power of word-of-mouth marketing, especially with the Internet serving as a primary research and communication platform. The Internet's role has simplified communication processes by eliminating barriers like distance and language, encouraging consumers to share their opinions readily and form thematic communities, sequentially strengthening word-of-mouth marketing.

The Ehrenberg-Bass Institute for Marketing Science emphasizes that brands must foster word-of-mouth beyond core fan groups to achieve sustained growth, cautioning against over-reliance on platforms like Facebook alone. Deloitte's research underscores that the majority of advocacy occurs offline, primarily through face-to-face interactions (75%), followed by phone conversations (15%), and online interactions (10%). However, some argue that social media interactions are intricately linked to word-of-mouth marketing.

In 2003, Fred Reichheld introduced the Net Promoter Score as a word-of-mouth marketing strategy, assessing the number of promoters recommending a brand to others. This tactic emphasizes the importance of positive customer experiences in driving organic word-of-mouth marketing.

In October 2005, the advertising watchdog group Commercial Alert demanded that the United States FTC mandate guidelines for paid word-of-mouth marketers, requiring them to disclose their relationship and compensation from the company whose product they promote. The FTC responded by committing to investigate cases where such relationships are undisclosed and could impact endorsements, pledging to take enforcement actions as necessary, including cease-and-desist orders, fines, or civil penalties. Since then, The Word of Mouth Marketing Association, a prominent US trade group representing numerous companies, has adopted an ethics code prohibiting manufacturers from offering cash to consumers in exchange for recommendations or endorsements.

In 2008, research firm PQ Media revealed that companies spent $1.54 billion on word-of-mouth marketing, indicating a significant growth trend compared to traditional advertising channels. Within this, word-of-mouth marketing expenditure increased by 14.2% in 2008, with 30% allotted to food and drink brands.

Driving WOM Factors [edit]

Within Jonah Berger's book "Contagious: Why Things Catch On," Berger outlines the STEPPS framework, which highlights six key factors that drive what people talk about and share:

• Social currency - The better something makes people look, the more likely they are to share it - meaning that people often share things that enhance their social status or make them seem knowledgeable or connected to the social sphere.
• Triggers - Things that are top of mind or easily accessible are more likely to be talked about and shared.
• Emotion - Strong emotions, especially high arousal emotions, increase the likelihood of sharing information.
• Public - The more visible or observable something is, the more likely it is to be imitated and shared.
• Practical value - People often share information that is useful, practical, or valuable to others.
• Stories - Narratives or stories are powerful tools for conveying messages and ideas. Trojan horse stories carry messages and ideas that are engaging to audiences.

Additionally, as mentioned by Sernovitz, interest plays an essential role in driving word-of-mouth communication. Interesting companies, products, and advertisements are more likely to facilitate conversations because they capture people's attention and curiosity. By understanding and utilizing these factors for driving word-of-mouth communication,  marketers and content creators create more shareable and engaging content that resonates with their target audience and encourages word-of-mouth marketing.

Models [edit]

Further research into developing the concept of word-of-mouth marketing led to the emergence of various models underlying the word-of-mouth strategy. These models include the organic inter-consumer influence model, the linear marketer influence model, and the network coproduction model.

The initial and most straightforward form of word-of-mouth marketing aligns with the organic inter-consumer influence model. In this model, organizations have no direct control over what consumers say about their products - it involves one consumer sharing their product reviews or customer service experiences with another. The primary motivation behind this model is for consumers to inform and caution potential buyers of a product out of genuine concern, not for personal gain. Termed "organic," this model occurs naturally when consumers choose to share their experiences with a specific brand or product.

As research progressed, marketers recognized the importance of "influential consumers," leading to the adoption of the linear marketer influence model. This model introduced the idea of influential customers initiating conversations with potential buyers regarding how a product benefits the consumer. It enables organizations to ensure that credible sources advocate for their brand and accurately present the value proposition to the target consumer. This can be achieved through targeted advertisements and promotions via reputable sources that review the product. Marketers found this model effective in mitigating the spread of negative opinions and attitudes about their products.

The Network Coproduction Model introduced "one-to-one seeding and communication programs," encouraging customer conversations about specific products through released product information. This word-of-mouth model primarily focuses on online activities, utilizing platforms like blogs and online communities to convey product messages. The network coproduction model allows marketers to manage and control online word-of-mouth activities. Marketers use the network coproduction model to employ word-of-mouth marketing in several ways:

• Seeding exemplifies how marketers leverage the network coproduction model of word-of-mouth marketing. Through seeding, marketers employ various techniques, including indirect methods like engineering word-of-mouth conversations and direct approaches.
• The engineering approach involves marketers orchestrating conversations to generate buzz and increase conversations about an organization's products.
• A direct seeding approach targets select consumers, allowing them to sample products and share their experiences through online communities or blogs.
• Seeding campaigns enable marketers to reach new consumer segments effectively, particularly in the early stages of a product's lifecycle, establishing and enhancing brand and product reputation.

Marketing Buzz[edit]

Marketing buzz, also known simply as "buzz," refers to the phenomenon in word-of-mouth marketing where consumers and users of a product or service contribute to amplifying the original marketing message. It can be described as a form of positive hype, excitement, or anticipation surrounding a product or service among consumers. Achieving positive buzz is often a key goal of viral marketing, public relations efforts, and advertising campaigns on Web 2.0 platforms. This term encompasses both the strategic execution of marketing techniques and the resulting positive sentiment and goodwill generated.

Notable examples of products that generated strong marketing buzz upon their introduction include Harry Potter, the Volkswagen New Beetle, Pokémon, Beanie Babies, and the Blair Witch Project. These products successfully leveraged various marketing strategies to create widespread excitement and positive associations among consumers, highlighting the power and impact of generating effective marketing buzz.

Viral effects[edit]

Viral marketing and viral advertising are buzzwords referring to marketing techniques that use pre-existing social networks to boost brand awareness or achieve marketing goals like increased product sales through self-replicating processes analogous to the spread of a virus. These methods can be amplified by word-of-mouth or enhanced through Internet network effects. Viral campaigns can manifest as various content formats such as video clips, interactive games, ebooks, brandable software, images, or text messages. Successful viral marketing aims to target individuals with high social networking potential (SNP) and create compelling messages that resonate within this group. However, it's worth noting that the term "viral marketing" can also carry negative connotations, referring to deceptive practices like stealth marketing and astroturfing to simulate organic word-of-mouth enthusiasm.

Analyzing WOMM [edit]

Consumers can promote brands through word-of-mouth based on social, functional, and emotional factors. Research has identified thirteen brand characteristics that stimulate WOM:

1. Age of the brand in the marketplace, fostering emotional connections and reliability perceptions.
2. Type of good, influencing recommendations based on the product and different usage scenarios.
3. Complexity, explaining the product's usage or effectiveness.
4. Knowledge about a brand, including the history, purpose, and future success.
5. Differentiation among similar products, utilizing consumer experiences to aid decision-making.
6. Relevance of a brand to a broad audience
7. Quality and esteem associated with a brand
8. Premium offers, including special packaging and/or seasonal deals that stimulate WOM.
9. Visibility, enhancing brand recognition and recall.
10. Excitement for new products or innovations, driving anticipation and discussion.
11. Satisfaction levels, reflecting upon positive or negative experiences shared through WOM.
12. Perceived risks, cautioning against counterfeit products or deceptive marketing.
13. Involvement of consumers in brand experiences

While social and functional play a significant role in online WOM promotion, offline WOM is primarily driven by emotional factors.

Advantages and Disadvantages[edit]

Word-of-mouth marketing plays a crucial role in amplifying the impact of an advertising campaign by effectively navigating consumers' defenses and encouraging discussions about a specific product. Many marketers value this strategy for its ability to analyze personal networks, which are typically unbiased and driven by genuine experiences rather than organizational motives.

One notable advantage of word-of-mouth marketing is its reliance on personal recommendations, fostering trust and authenticity in consumers' perceptions. Positive feedback from trusted sources can significantly boost consumers' willingness to try a product or service, enhancing overall campaign effectiveness.

However, word-of-mouth marketing also faces challenges and criticisms, particularly in today's digital landscape. Online platforms allow not only positive but also negative reviews to spread rapidly, potentially undermining brand perception and consumer attitudes. Negative word-of-mouth can have a more significant impact on purchase intentions compared to positive feedback, highlighting the delicate balance in managing brand reputation.

Another issue arises when consumers perceive manipulation or hidden agendas behind word-of-mouth recommendations. Discovering that influencers have vested interests in promoting a product can lead to skepticism and negative shifts in attitude, ultimately affecting brand reputation negatively.

Engineered word-of-mouth campaigns by internet-focused companies also face scrutiny for their perceived artificiality and invasion of privacy, further complicating the dynamics of consumer trust and perception in marketing strategies.

See also[edit]

• Business and economics portal

• Social media marketing
• Two-step flow of communication
• Evangelism marketing
• Viral marketing
• Marketing buzz
• Guerrilla marketing
• User-generated content
• Online Brand Defense - A type of consumer behavior that has been considered creating significant impact on Word-of-mouth