word-of-mouth: a strategy or an outcome?
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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
Positive word-of-mouth: a strategy or an outcome? • Gabriel Borges • Lancaster University • June 2007
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.
Positive word-of-mouth: a strategy or an outcome? • Gabriel Borges • Lancaster University • June 2007
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)
Positive word-of-mouth: a strategy or an outcome? • Gabriel Borges • Lancaster University • June 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.
Positive word-of-mouth: a strategy or an outcome? • Gabriel Borges • Lancaster University • June 2007
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?
Positive word-of-mouth: a strategy or an outcome? • Gabriel Borges • Lancaster University • June 2007
Word-of-mouth plays an important role in the process of shaping consumers’ behaviour.
advertising
wom
past experience
expectation& motivation
influencers
Positive word-of-mouth: a strategy or an outcome? • Gabriel Borges • Lancaster University • June 2007
advertising
wom
inform
legitimize,evaluate
influenceopinion
shapeopinion
Vs.
unilateral
interactive
impersonal consented
interruptivecustomized
expensive
cheap
short-lifespan
organic
reduce choices
increase amount ofchoices
Positive word-of-mouth: a strategy or an outcome? • Gabriel Borges • Lancaster University • June 2007
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)
Positive word-of-mouth: a strategy or an outcome? • Gabriel Borges • Lancaster University • June 2007
WOM is more likely to effectconsumption when…
expectation& motivation
wom
large amount ofchoices
no past experience
strong boundinfluence
high risksinvolved
Positive word-of-mouth: a strategy or an outcome? • Gabriel Borges • Lancaster University • June 2007
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
Positive word-of-mouth: a strategy or an outcome? • Gabriel Borges • Lancaster University • June 2007
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
Positive word-of-mouth: a strategy or an outcome? • Gabriel Borges • Lancaster University • June 2007
literaturereview narratives analysis interviews analysis findings framework
developmentcompanyfocus group
Working Plan
may june july august2007
Positive word-of-mouth: a strategy or an outcome? • Gabriel Borges • Lancaster University • June 2007
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.
Positive word-of-mouth: a strategy or an outcome? • Gabriel Borges • Lancaster University • June 2007
Thank you.
Gabriel [email protected]
+44 789 541 9040