Ewom Communication and Brand Trust Term Paper

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The corporation or seller could benefit by developing marketing strategies prior to consumer reviews being available online.

Seller Response to Novice and Expert Consumers

Before allowing consumers to post product reviews on a corporations or sellers website, the seller should consider the size of the segments of expert consumers and novice consumers. For example, the seller may benefit from selling certain products if a significant number of expert consumers exist, especially for technology driven products. On the other hand, the seller may damage sales if the expert consumers' segment overshadows that of the novice consumers.

Unknown or Less Popular Stores Online Seller Response

Relatively unknown corporations should be overly cautious when allowing consumers to post comments on their websites. If brand marketers fail to attract enough consumers to post reviews, the corporation may damage its reputation. these corporations might consider hiring a well-known, popular third-party source to handle consumer reviews.

Seller Should Consider the Timing of Consumer Reviews on Websites

Timing for the introduction of a product on a website may be a crucial factor for a corporation or seller. When introducing a certain product, the seller should consider whether or not to delay consumer reviews for that particular product. If the segment containing the expert consumer is rather large and the product cost is low, delaying online reviews may prove beneficial for the corporation or the seller.

David Godes, Associate Professor in the Graduate School of Business Administration, Harvard University, and Dina Mayzlin (2007), Associate Professor in the School of Management, Yale University, assert in the journal article, "Firm-Created Word-of-Mouth Communication: Evidence from a Field Test," as with other media, a WOM campaign might impact outcomes by affecting either (a) awareness and/or (b) preference. That is, exposure to a WOM episode might make someone aware of a product they had not been aware of before or it might persuade them by changing the expected utility they had assigned to that product. Interestingly, there may be an inherent tension between achieving these two objectives. Those disseminators that may be most persuasive may not be the ones that will help the firm achieve maximal awareness. The literature on influence has strong predictions on how decision makers are affected by their peers. For example, Reingen et al. (1984) show that consumers' brand choices within a social group are often congruent (p. 4).

However, the characteristics of WOM that are typically associated with higher persuasiveness may, on the other hand, be associated ultimately with less breadth of awareness of the message. Granovetter (1973) showed that it is essential to distinguish between "strong ties" and "weak ties" in understanding the flow of interpersonal information. An important argument in this work is that weak ties form the bridges between otherwise isolated strong-tie networks. Since those in the same social networks are likely to have similar information, it is often information communicated via a weak tie that results in a greater increase in the number of new people that are informed. Goldenberg et al. (2001) use cellular automata to investigate the relative macro-level impact of strong and weak ties and find that the latter may have a bigger impact even though the former are activated more frequently. A fundamental implication of this research is that information transmitted between acquaintances or strangers should ultimately reach more people -- i.e., lead to higher awareness -- than if it had been transmitted between friends or relatives. While the effectiveness of WOM may depend on the strength of the tie across which a message is communicated, this is not easily managed by the firm within the context of a WOM marketing campaign. However, the same critical dimension -- the extent to which WOM reaches previously-uninformed customers -- may also be related to more-easily identifiable customer characteristics as well (Godes & Mayzlin 2007, p. 5). Table 2 depicts several example of companies utilizing WOM and how their campaigns helped or hurt their corporations.

Table 2: Comparison of WOM Campaigns (adapted from Godes & Mayzlin 2007, p. 5).

Corporation and Date

Campaign utilizing WOM

Outcome of Campaign

In September 2005, NBC launched the second season of its reality show about weight loss, "The Biggest Loser."

In preparation for the new season, NBC ran ads in early August asking viewers to fill out a survey at a Web site.

NBC used self-reporting.

Out of all the applicants, 1,000 "biggest" fans were chosen to throw parties during an advanced screening of the show's premiere. The hope was that this, along with the resulting word of mouth (WOM), would generate interest in the show.

In 2001, Lee Dungarees wanted to improve its image with teen boys.

Their agency identified 200,000 "influential's" from online communities devoted to video games. The firm then emailed each a series of short films from unknown characters who turned out to be protagonists in a video game commissioned by the firm.

Lee Dungarees used observational methods. On average, these films were forwarded to about six people each. To play the game, however, one had to go to a retail store and get a code from a pair of Lee jeans.

In March of 2006, WD-40 hired Proctor and Gamble to promote their new product extension, the "No-Mess" pen.

The product was promoted through P&G's Vocal point, a panel of influential moms who were pre-selected via a survey based on their ability to be "connectors."

WD-40 found a fit between their product and the Vocalpoint panel.

Hasbro in 2001 launched a new handheld video game called POX.

To do so, they ran surveys in Chicago area elementary schools to find the "coolest" kids in each school. Once 1,600 kids were chosen, they were each armed with a backpack filled with samples of the game to be handed out to their friends.

Hasbro used a combination of sociometry and self-reporting.

There are several common threads among these examples. First, the firms in these cases tried to "engineer" WOM among their customers. That is, rather than hoping that satisfied customers would tell people about their products, these firms took actions to increase the number of conversations that were taking place. Second, they each attempted to identify who the "key influencers" would be in their respective situations.

For each firm, the implementation of their WOM campaign played a primary role in their marketing effort during the respective time period. One notable difference is in the approaches undertaken by the marketers of the two mature products, NBC and Lee Dungarees. While NBC recruited the most loyal users for its campaign, Lee Dungarees instead focused its efforts on influential's, regardless of their existing relationship to the product. The past several years have witnessed a marked increase in attention paid to "buzz" in the popular and managerial press. Moreover, marketing managers are increasingly interested in taking actions in order to influence, directly or indirectly, WOM. Hence, we can think of firm-created WOM as a hybrid between traditional advertising and consumer word of mouth in that the former is firm-initiated and firm-implemented while the latter is customer-initiated and customer-implemented. WOM marketing, on the other hand, may be characterized as being firm-initiated but customer implemented. (Godes & Mayzlin 2007, p. 5)

This article discusses WOM on and off line

The journal article, "Word-of-mouth marketing will change your business: Word-of-mouth (WOM) marketing is no longer merely "nice to have." The convergence of communication speed with the vast array of social media options is making WOM a driving force behind every brand," written by Sarah Chung, CEO of Periscope Solutions and Tina Hedges (2009), co-president of TWIST new.brand. venture, explain undoubtedly, word-of-mouth (WOM) marketing gives brands a powerful and influential way to engage their target audience -- many of whom are already VIP members of vast information sharing, brand advocate-building communities. For those who began their career on the beauty retail floor, it is has long been known that consumers are vocal with their opinions, but now more than ever, consumers are opinion-publishing moguls -- increasingly broadcasting their point-of-view across numerous mediums and finding enjoyment in being the self-appointed "expert" doling out advice and converting their friends and family along the way (¶ 1).

A projected 72 million U.S. adults will regularly give WOM advice about products or services in 2011, up from 65 million in 2006, according to eMarketer. There are 3.5 billion WOM conversations occurring daily in the U.S., according to the Keller Fay Group, the vast majority (92%) of which are off-line, specifically 75% face-to-face and 17% by phone. Yet another researcher, Nielsen, showed that 78% of consumers said they trust word-of-mouth recommendations from other consumers, while only 26% trust banner ads. These figures point solidly to the advantage of a personal recommendation over blogs and ads. "Over the fence, backyard selling" still carries the most weight with consumers, which must account for the continued dominance of direct sales companies, notably Mary Kay and Avon (Chung & Hedges…[continue]

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