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Word of mouth: Understanding and managing referral marketing


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Marketing practitioners and theorists routinely cite the power of the personal referral on customer behaviour. However, relatively few companies have tried to harness the power of word of mouth (WOM). Scholars have been pondering WOM over 2400 years, although modern marketing research into WOM started only relatively recently, in the post-war 1940s. WOM can be characterized by valence, focus, timing, solicitation and degree of management intervention. Most recent WOM research has been conducted from a customer-to-customer perspective, even though WOM is found in other contexts such as influence, employee and recruitment markets. Marketing research into WOM has attempted to answer two questions. What are the antecedents of WOM? What are the consequences of WOM? This paper integrates that research into a contingency model and attempts to identify researchable gaps in our knowledge.
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Word of mouth: understanding and
ma naging referral marketing
Manchester Business School, Booth St. West, Manchester, M15 6PB, UK
Marketing practitioners and theorists routinely cite the power of the personal referral
o n custom er behaviour. Ho wever, relatively few companies have tried to harness the
p ower of word of mouth (WOM). Scholars have b een pondering WOM over 2400
y ears, although modern marketing research i nto WOM started only relatively
r ecently, in the post-war 1940s. WOM can b e characterized by valence, focus, timing,
so licitatio n and degree of m anagem ent intervention. Most recent WOM research has
b een conducted fro m a custom er-to-cu stom er perspective, even though W OM is
fou nd in other contexts such as influence, employee and recruitment markets.
Marketing research into WOM has attem pted to answer two questions. What are the
antecedents of WOM? What are the consequences of WOM? This paper integrates
t hat research into a contingency model and attempts to identify researchable gaps in
o ur knowledge.
KEYWOR DS: Referral marketing; relationship marketing; word of mouth
W ord of mouth (WOM) has been acknowledged for many years as a major influence on
what people know, feel and do. Work on interpersonal influence has ancient origins. Aristotle
produced what has been called ‘the most important single work in the history of speechcraft’
(Thonssen and Beard, 1948, p. 63) in the fourth century BC
. The book Rhetoric (Aristotle,
trans. Roberts, 1924) emphasized the persuasive significance of three artistic proofs controlled
by a speaker: ethos, pathos and logos. Ethos, the ethical and personal appeals of a speaker,
includes all the ways the speaker projects personal qualities so as to elicit belief on the part of
the listener. Pathos comprises the emotional appeals of the speaker. Logos or logical appeals in
the form of examples and enthymemes were regarded by Aristotle as the basis of reasoned
discourse. Some 23 centuries later there now exists an immense literature on interpersonal
communication (Littlejohn, 1990). Britt’s (1966) seminal review of the derivative relationship
between consumer behaviour theory and the social sciences pointed out the impact of WOM
on consumers. Among the research reported were the experiments in which Asch (1955) and
a group of confederates conspired through WOM to convince unaware experimental subjects,
despite clearly visible evidence to the contrary, that one of three lines marked on card A was
a length match for another line drawn on card B. The earliest edition of Kotler’s (1967,
p. 456) marketing management textbook acknowledged that ‘advertising is one of several
influences on a person’s behaviour and probably less important because it is known to be
self-serving than such influence s as peers and personal observation’. The foundation of
0965254X # 1998 R outledge
W OM’s alleged powers is not expressed here in terms of Aristotle’s three proofs, but of the
speaker’s independence. Aristotle, however, would have recognized this as an ethical appeal.
T hirty years later, in the late 1990s, marketers, particularly those who espouse the emergent
relational paradigm, are keen to harness the power of WOM.
Research generally supports the claim that WOM is more influential on behaviour than other
marketer-controlled sources. Indeed, it has been observed that WOM can be more influential
than neutral print sources such as Which and Consumer Reports (Herr et al., 1991). WOM has
been shown to influence a variety of conditions: awareness, expectations, perceptions,
attitudes, behavioural intentions and behaviour. Sheth (1971) concluded that WOM was more
important than advertising in raising awareness of an innovation and in securing the decision
to try the product. Day (1971) inferred that this was due to source reliability and the
flexibility of interpersonal communication. He computed that WOM was nine times as
effective as advertising at converting unfavourable or neutral predispositions into positive
attitudes. Mangolds (1987) review of the impact of WOM in the professional services context
concluded that WOM has a more emphatic influence on the purchasing decision than other
sources of influence. This is perhaps because personal sources are viewed as more trustworthy
(Murray, 1991). In the industrial purchasing context, WOM influences expectations and
perceptions during the information search phase of the buying process and influences attitude
during the pre-choice evaluation of alternative service providers (Lynn, 1987; Stock and
Zinsner, 1987; Woodside et al., 1992). The influence of WOM on expectations has been
reported by Webster (1991) and Zeithaml et al. (1993).
WOM can influence decisions either positively (Engel et al., 1969; Richins, 1983) or
negatively (Tybout et al., 1981; Bolfing, 1989). It does appear that negative WOM has a
more powerful impact than positive WOM (Arndt, 1967). Technical Assistance Research
P rogram (1986, p. 4), for example, reported that dissatisfied customers are likely to tell twice
as many people as satisfied customers. Desatnick (1987), citing research conducted for the
W hite House Office of Consumer Affairs asserted that ‘90%or more who are dissatisfied with
the service they receive will not buy again or come back. Worse still, each of those unhappy
customers will tell his or her story to at least 9 other people, and 13% of those unhappy
former customers will tell their stories to more than 20 people’. It is not reported to how
many these WOM recipients retell the story.
Arndt (1967) was one of the earliest researchers into the influence of WOM on consumer
behaviour. He characterized WOM as oral, person-to-person communication between a
receiver and a communicator whom the receiver perceives as non-commercial, regarding a
brand, product or service (Arndt, 1967). This was an attempt to identify the domain of
W OM research. More recently, Stern (1994) defined WOM by drawing on its distinctiveness
from advertising. She wrote that ‘WOM differs from [advertising
. . .
] in its lack of boundaries.
. . .
WOM involves the exchange of ephemeral oral or spoken messages between a contiguous
source and a recipient who communicate directly in real life
. . .
Consumers are not assumed
to create, revise and record pre-written conversational exchanges about products and services.
Nor do they ordinarily use poetry or song to discuss consumption. Finally, WOM
communication vanishes as soon as it is uttered, for it occurs in a spontaneous manner and
then disappears (Stern, 1994, p. 7).
WOM, however, need not necessarily be brand, product or service focused. It may be
organization focused. Neither in this electronic age need WOM be face to face, direct, oral
or ephemeral. There is some evidence that virtual WOM through electronic bulletin boards
functions analogously to face-to-face WOM. For example, Cobra Golf Inc., the golf
e quipment manufacturer, has created a bulletin board site on which surfers post unedited
messages about Cobra’s own and competitors equipment (Hagel and Armstrong, 1997).
T here is a Web site dedicated to negative WOM about United Airlines (
P assengers can report how they have experienced United’s execrable service in the ‘unfriendly
skies. The electronic community in effect generates virtual WOM which is not face to face,
direct, oral and ephemeral. The history of electronic WOM is traceable through archival
W OM is mischievously nicknamed free advertising. If advertising can be defined as any paid
form of nonpersonal presentation of ideas, goods or services by an identified sponsor’
(Alexander, 1964), then most WOM is not. Advertising, by this definition, is paid, non-
personal, transparently sponsored communication. These distinguishing characteristics of
W OM are being eroded. Some WOM is incentivized and rewarded, while other WOM is
produced electronically. Perhaps all that distinguishes WOM is that it is uttered by sources
who are assumed by receivers to be independent of corporate influence. WOM can be
characterized by valence, focus, timing, solicitation and intervention.
From a marketing perspective, WOM can be either positive or negative. Positive WOM
occurs when good news testimonials and endorsements desired by the company are uttered.
Negative WOM is the mirror image. It is worth noting that what is negative from a
corporate viewpoint may be regarded as extremely positive from a consumer viewpoint.
According to File et al. (1994) not only the valence but also the volume of post-purchase
W OM can be affected by management efforts. These authors cited evidence that the
measured impacts of complaints management processes, service re covery programmes and
unconditional service guarantees on post-purchase WOM is clear evidence that management
can influence the frequency and direction of WOM.
W e have assumed thus far that management’s focus is only on WOM between consumers.
T his need not be so. Relationship marketing’s six-markets model (Fig. 1) points out that
marketers are concerned with building and maintaining mutually beneficial relationships in a
variety of domains: customers (which may be end users or intermediaries), suppliers
e mployees, influentials, recruitment and referral markets (Christopher et al., 1991).
T he clear focus of most management writings on WOM is that of the satisfied customer
communicating with a prospect. Put another way, the assumption is that WOM functions to
draw customers onto the loyalty ladder (Fig. 2), thereby converting a prospect into a
customer (Christopher et al., 1991). Indeed, evidence of a powerful role for WOM in the
diffusion of innovations is well documented (Mahajan et al., 1990). However, whilst it is
conceivable that some WOM functions to migrate a customer up company X’s loyalty ladder,
other WOM may equally promote defection off company Xs loyalty ladder.
Although research is thin, it seems self-evident that WOM can operate in the other five
markets. For example, WOM can influence investment decisions (influence markets). WOM
is also an important source of information in the recruitment market. One engineering
company, for example, estimates that 80% of its employees are recruited following personal
referrals. Indeed, some companies reward their employees for recruiting suitable people.
Rewards ranging from $50 to $2000 have been paid (Tyler, 1996). WOM is also the primary
form of action in which organizational culture is expressed and reconstituted, therefore having
a considerable impact on the behaviour of employees.
influencer recruitment
FIGURE 1. The six-markets model.
FIGURE 2. The loyalty ladder.
Tim ing
Referral WOM might be uttered either before or after a purchase. WOM can operate as an
important source of pre-purchase information. This is known as input WOM. Customers may
also utter WOM after the purchase or consumption experience. This is known as output WOM.
Not all WOM communication originates from customers. Indeed, WOM may be offered
with or without solicitation; it may or may not be sought. However, when authoritative
information is sought, the listener might seek the input of an opinion leader or influential.
Although WOM can be spontaneously generated, an increasing number of companies are
pro-actively intervening in an effort to stimulate and manage WOM activity. Managed WOM
may operate at an individual or organizational level. Individuals may be sought who
themselves actively deliver WOM or who serve as role models for those who would follow.
C ompanies are alert to the potential problems associated with celebrity endorsements.
C elebrities can become unfashionable or attract bad publicity. Michael Jackson, O.J. Simpson
and Eric Cantona are cases in point.
A.F.T. Payne (unpublished) developed a taxonomy of referral types, broadly split into two
groups: customer referrals and non-customer referrals. Customer referrals may be either
customer initiated or company initiated. Customer-initiated referrals originate from current or
former customers who have been satisfied or delighted with their experiences. They act as
unpaid advocates (see Fig. 1). A number of companies are attempting to harness the power of
W OM by giving customers incentives to refer their friends and family: American Express,
British Telecom and Freemans Home Shopping are examples. In addition to these customer
referrals, companies may benefit from a number of other referral sources. Reciprocal referrals
occur when two or more organizations agree to cross-refer customers to each other. This is
commonplace in professional services marketing; law firms, estate agents and building
societies, for example, often develop a referral network. Some referral activities may be
unidirectional: a doctor may recommend a consultant or an architect may specify a particular
contractor. Internal referrals within an organization may be fruitful. Divisionalized
organizations, such as accounting firms, may cross-refer clients between divisions, for
e xample audit customers might be targeted for consultancy services. Referrals from current or
past employees may also benefit a company.
T his inclusive model of WOM (Fig. 3) contains two sets of variables.
(1) Intrapersonal variables: these are states or processes which are associated either with
seeking input WOM or precipitating output WOM.
(2) Extrapersonal variables: these are contextual conditions which influence the seeking of
input WOM or the production of output WOM.
Intrapersonal variables
T he production of output WOM is widely thought to be an outcome of customer
experiences with a product or service. The disconfirmation paradigm of customer
dissatisfaction predicts that in most commercial contexts when a customer’s
expectations are met satisfaction will be experienced, when expectations are underperformed
there will be dissatisfaction and when expectations are exceeded there will be customer
delight (Oliver, 1997). Satisfaction and delight, it is believed, motivate positive WOM. There
is some evidence from the service sector that delight is less likely to be associated with ‘right
first time service delivery than it is with excellent recovery following service failure (TARP,
1986) and it has been estimated that it is generally cost-effective for management to invest
twice the profit margin associated with a sale to recover a dissatisfied customer (Fornell and
W ernerfelt, 1986). Similarly, negative WOM can be conceptualized as an outcome of an
unsatisfactory imbalance between expectations and perceptions.
Several researchers have investigated the possibility of there being a hierarchy of
expectations. The Yale Communication and Attitude Change Program, which prolifically
researched the relationship between mediated communication and attitude during the 1950s,
wrote of a latitude of acceptance (Hovland et al., 1957). Miller (1977) wrote of four levels of
expectations ranging from ideal to lowest acceptable. He referred to these as the ‘can be,
‘will be’, ‘must be and ‘should (or ought to) be levels of expectation. Parasuraman et al.
FIGURE 3. Word-of-mouth model.
Expectation: Perception
satisfaction dissatisfaction
(1991) wrote of expectations being bounded by adequate (minimum) and desired levels.
T hese form a zone of tolerance for consumers. Woodruff et al. (1983) have conceptualized a
narrower band of reasonable expectation they dubbed the zone of indifference. More
recently, Strandvik (1994) reviewed the literature on tolerance zones and Oliver (1997)
produced an integrated conceptualization of expectations research (see Fig. 4).
It seems plausible to infer that positive WOM is associated with performance above that
which was predicted and negative WOM with performance below that which was wanted.
W estbrook (1987) reported that WOM is mediated by satisfaction levels. Swan and Oliver
(1989) reported that (positive) WOM increases as satisfaction increases. Engel et al. (1969),
however, contended that emotional response to product
service performance evokes WOM
T here is some early evidence that WOM is driven not only by product
performance but by dis
satisfaction with the purchasing process (Tanner, 1996).
Hartline and Jones (1996) concluded that intention to utter WOM is correlated with the
customer’s perceptions of value and quality. The higher those perceptions the stronger the
intention of uttering positive WOM. The stronger of the two correlates is value. Given that
certain components of the service delivery process signal ‘value to customers, it makes sense
for management to isolate these dimensions and develop them to promote referrals. There is
e vidence that customers who perceive that they are offered social support in a service
e ncounter are more prepared to recommend the service (Adelman and Ahuvia, 1995). Social
support is found when service providers verbal or non-verbal communication increases the
customer’s sense of control by reducing their uncertainty, improves customer self-esteem or
e nhances the customer’s sense of social connection to others (Adelman et al., 1993). Social
support is particularly found within strong- tie relationships. We experience everyday weak-tie
support in relationships with strangers, casual acquaintances and service providers. Where
service providers are able to strengthen the tie by providing social support, there is a greater
propensity to utter positive WOM. Social support in the professional services environment
(e.g. lawye rs and GPs) is strongly correlated with client satisfaction.
Minimum Tolerable
Tolerance zone
Zone of indifference
FIGURE 4. Expectations according to level o f desirability.
Negative valent output WOM has been researched in several purchasing contexts including
cars (Swan and Oliver, 1989) and hotel accommodation (Cadotte and Turgeon, 1988), as well
as in the not-for-profit context (Cermak et al., 1991). Just as positive WOM has been linked
to satisfaction, so has negative WOM been linked to dissatisfaction (Singh and Pandya, 1991).
Negative output WOM is thought to be one form of customer complaining behaviour
(CCB). Hirschman (1970) proposed that customers have two options when faced with unmet
expectations: voice their dissatisfaction or exit the relationship. Theoreticians have more
recently conceptualized three forms of punitive action that a dissatisfied customer could take:
exit the relationship, voice dissatisfaction to the supplier and utter negative WOM to a social
network. Singh (1988) applied cluster analysis to complaints data and found evidence of a
tripartite taxonomy of complaint style: voice responses (complain to and seek redress from the
supplier), private responses (negative personal WOM) and third party responses (e.g. write to
a consumer affairs programme or consult a solicitor).
T here is general support for the contention that customers dissatisfied with durables will
exhibit higher levels of voice and lower levels of exit than for non-durables (Watkins and Liu,
1996). Singh (1990) explained this phenomenon in terms of the relative investment of the
customer in the product
service and, thus, the value of any redress. Different conditions may
be associated with the utterance of negative and positive WOM. In a health service context,
the service characteristics of reliability and dependability are most closely associated with the
utterance of positive WOM and appearance and presentation with the utterance of negative
W OM (Headley and Miller, 1993).
As already noted, after purchases are made, consumers will often make comparisons
between their expectations and the product performance they experience. If performance is
below expectation, the customer might sense dissonance. Cognitive dissonance theory has a
40 year old tradition in marketing thought (Festinger, 1957). Cognitive dissonance is definable
as an imbalance in a cognitive system. Two elements in such a system are expectations and
perceptions of product perform ance. One available strategy for customers who experience
discomfort from cognitive dissonance is to seek WOM from sources which can reduce the
discomfort. However, not all customers feel discomfort.
Until the 1940s, marketing communication thought was dominated by the magic bullet or
‘inoculation theory of mass communication. It had been assumed that mass media messages
impacted directly upon all audience members. In the late 1940s, however, Lazarsfeld et al.s
(1948) study of voting behaviour indicated that mass media messages were intercepted and
distributed by strategically situated individuals they called opinion leaders. The two-step flow
hypothesis suggests that marketer-controlled communication flows to opinion leaders who in
turn communicate it through WOM to their peers, thereby influencing their attitudes and
behaviours. In this theory, opinion leaders are distributed at all levels and in all groupings of
society and may be influential on just one or several topics. Katz and Lazarsfeld (1955), for
example, profiled different attributes for food opinion leaders, fashion opinion leaders, public
affairs opinion leaders and film-going opinion leaders. Rogers (1962), however, claimed to
have identified three traits which broadly typified all opinion leaders: social participation,
social status and cosmopolitanism. Robertson (1971), in turn, claimed that in terms of
cosmopolitanism, leaders were barely distinguishable from followers, but that they were more
gregarious, more knowledgeable (for the area of expertise) and more innovative. Knowledge
is commonly assumed to be a determinant of personal influence (Solomon, 1992).
Engel et al. (1993) preferred to call these persons influentials rather than opinion leaders.
T hey noted that influentials demographic characteristics vary between products, but that they
are generally more gregarious, fashion conscious, independent, innovative and active in
information search. Opinion leadership theory has been subjected to much critical research
and a multistep theory of communication effects is now coming into broader acceptance. In
the multistep world, both opinion leaders and followers are legitimate targets for differentiated
messages. Followers, for example, may be motivated to seek information. Recent work by
Yale and Gilly (1995) suggested that information seekers do not necessarily select information
sources matching the common profile for opinion leadership as deployed in the marketing
literature, but will select persons whom they believe to be high in product knowledge. Both
the information seeker and the source perceive the source to be more knowledgeable than
the recipient in the area of consultation (Yale and Gilly, 1995).
In the 1980s, the concept of the ‘market maven’ was developed. This is a person who
e njoys advising friends of new products
services and places to shop (Feick and Price, 1987;
Higie et al ., 1987). It is the social integration of the maven rather than any product- related
e xpertise that gives them their power. Market mavens are largely women but indistinguishable
in other ways (Bayus et al., 1985; Higie et al., 1987). Gelb and Johnson (1995, p. 56) noted
that ‘not only does the market maven prompt word of mouth, but those with links to such
individuals are disproportionately likely to act on what they are told’.
Extrapersonal variables
Although WOM is undoubtedly a universal phenomenon, most published English-language
research has been undertaken in Western economies. In Western culture the person is viewed as
a self-contained, autonomous individual. According to Markus and Kitayama (1991, p. 224)
‘the Western view of the individual as a self-contained, autonomous entity who (a) comprises a
unique configuration of internal attributes (e.g. traits, abilities, motives, values), and (b) behaves
primarily as a consequence of these internal attributes has dominated the scientific literature.
However, not all cultures view the person as independent. At the opposite end of the spectrum,
there are cultures which take an interdependent view of personhood. According to Markus and
Kitayama (1991, p. 227) ‘experiencing interdependence entails seeing oneself as part of an
e ncompassing social relation and recognizing that one’s behavior is determined, contingent on,
and to a large extent, organized by what the actor perceives to be the thoughts, feeling and
actions of others in the relationship’. This paper’s review of WOM research has captured only
that conducted at the individualist end of the individualist
collectivist spectrum. The relevance
of this re search in Asian, African, Mediterranean, Middle Eastern and Latin American cultures is
questionable. If persons in collectivist cultures subordinate their individuality to the collective,
this may well have relevance to WOM activity, whethe r seeking or giving and whether positive
or negative. For example, in a collectivist culture negative WOM about a personally
unsatisfactory experience may not be uttered if the collective view is generally favourable.
C ollectivists may be more likely to develop strong emotional ties to products and services when
they are signs of group membership and to want to develop strong, trusting relationships with
suppliers. Some researchers have begun investigating cultural differences in attitudes towards
complaining (Arndt et al., 1982; Thorelli, 1983; Richins and Verhage, 1985). W atkins and Liu
(1996) discussed the cultural limitations of WOM research. It does appear that culture is an
e xtrapersonal condition which impacts upon WOM behaviours.
T he culturally situated extant research does, however, indicate that a number of other
e xtrapersonal conditions impact upon WOM seeking and WOM utterance. The seeking of
input WOM may be particularly significant for high risk or intangible-dominant products
(File et al., 1994). Many consumers experience perceived risk in new product-purchasing
contexts. This risk can take several forms physical, performance, financial, social,
psychological or time loss (Mitchell and Hogg, 1996). Reference to WOM is a risk reduction
strategy which can do much to reduce or eliminate the uncomfortable feeling of risk
WOM is a more important input to the decision process when purchasing services, rather
than goods. Murray (1991) found that service consumers prefer to seek information from
family, friends and peers rather than sponsored promotional sources. Services are high in
credence properties which are difficult to evaluate prior to consumption. Service intangibility
and the potential for heterogeneous performance drive WOM seeking. Gombeski et al.s
(1988) review of patient questionnaires found that 50% of new patients reported that peer
referral to a health centre had the most influence on the patronage decision. The limitations
of WOM are illustrated by Johnson and Meischke’s (1991) finding that patients preferred to
receive information about cancer treatment from doctors than from family and friends. In the
professional services context, buyers are known to seek input from other customers. This is
weighted very highly in the buying decision (Kotler and Bloom, 1984; Gould, 1988). A
survey of 324 chief executive officers (CEOs) in six industries identified ‘a personal
endorsement of the professional service firm from a business associate (File et al., 1994,
p. 308) as very important in the service provider selection decision.
Output WOM has also been associated with price. Richins (1983, 1987) found that the
higher the price the greater the likelihood of negative WOM being uttered if the product
fails to satisfy. This again can be accounted for by the relative consumer investment in the
service. All forms of CCB increase with the perceived importance of the problem
(Folkes et al., 1987).
Output WOM has also been associated with conditions in the business environment. Voice
and exit behaviours vary inversely with the level of concentration in an industry. The more
concentrated, the fewer alternatives the customer has in the face of dissatisfaction (Fornell and
Didow, 1980). As the difficulty or cost of expressing dissatisfaction rises, the expression of
voice response declines, but the incidence of exit increases. The more receptive a supplier is
thought to be to customer complaint the lower the incidence of exit and voice behaviours
(Richins, 1983, 1987). Attribution theory suggests that when the supplier is held accountable
for dissatisfaction, all three forms of CCB increase (Folkes et al., 1987).
Researchers have identified a number of specific contexts which evoke consumer WOM.
Bayus (1985) observed that frequent repetitive advertising can increase WOM, particularly in
the absence of other information sources. Ambiguity in advertising matter may also provoke
comment (King and Tinkhan, 1990). These findings are in keeping with the advertising axiom
that it is vital to create advertisements high in ‘conversational value and consistent with the
evidence that, if an advertising message generates uncertainty about a product
consumers will seek WOM in order to reduce perceived risk.
Several research questions emerge from this review.
(1) Which is better at predicting intention to utter WOM or actual behaviour: the
disconfirmation or attitudinal paradigm?
(2) Does WOM covary more directly with perception or disconfirmation of value,
satisfaction or quality? Under what contextual conditions?
(3) Which antecedent marketing conditions are most closely associated with WOM? In the
service sector, which of the 7Ps product, price, place, promotion, people, process
and physical evidence has the greatest impact on WOM? Under what contextual
(4) How is intention to utter WOM connected to actual performance? What conditions, if
any, enable or constrain pe rformance?
Researchers could also extend the focus of WOM investigation.
(5) How can we better understand the effects of WOM in influence, recruitment and
internal markets?
Since companies are beginning to invest in formal referral marketing programmes, a number
of questions could be addressed.
(6) How effective are existing referral programmes in generating enquiries, trial, retention
and switching behaviours?
(7) What is the attitude of the referring customer and the referred customer to these
programmes and to the companies sponsoring the programmes?
Finally, since most of the research published in the English language has been undertaken in
W estern economies, there are a number of unanswered cross-cultural issues of interest to
managers in multinational companies (MNCs) and theoreticians.
(8) How does WOM operate in cultures other than Western?
(9) What do MNC managers need to do differently to promote positive output WOM?
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... Based on numerous studies on the attributes of WOM, WOM appears to be characterized by volume, valence, focus, timing, solicitation, diffusion mode, the affluence of message content, and the intensity of advocacy [5][6][7][8][9]. ...
... In Buttle's eyes, the focus is not restricted to customers, but reaches to employees, suppliers, influencers, and the referral market [5]. ...
... The timing falls into two categories, pre-purchase, and post-purchase. Input WOM occurs when WOM is uttered before a purchase operating as a source of pre-buying information, while output WOM occurs when WOM is uttered after a purchase [5]. ...
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Although numerous studies explore word of mouth (WOM), the lack of or the paucity of review papers concerning the characteristics, antecedents, and consequences of WOM gives rise to a fragmented comprehension of word-of-mouth communication. Therefore, this review not only aims to consolidate where the previous and current studies stand on the characteristics, antecedents, and consequences of WOM, but it also aims to highlight where WOM is heading. Based on the concept-driven review methodology, this paper conducts a concise review and synthesis of WOM's characteristics, antecedents, and consequences. It also discusses several potential aspects worthy of further investigation, which provides related marketing researchers and practitioners highly interested in WOM with some directions for further explorations in WOM.
... The Word of Mouth Communication(WOM) is considered to be the most effective and strongest communication process in the market place (Silverman, 1997).The prime reason behind this strength of word of mouth is that consumers often trust more on the familiar and casual sources of communication while making any sort of decisions particularly the purchase decisions over the formal methods of communication e.g. advertising (Bansal & Voyer, 2000).According to Buttle (2000) word of mouth has the potential to influence diverse situations such as consumer's awareness, opinions, expectations and particularly the attitude and intentions behind performing any behavior. WOM is found to be an ancient way of delivering information (Dellarocas, 2003).WOM is defined as an important pillar in determining the consumers attitudes and behaviors towards the products, services and brands Katz and Lazarsfeld (1966).Among the highly acknowledged definitions of WOM (Arndt, 1967) has explained WOM a verbal, face to face communication among receiver (noncommercial)and sender where receiver receives the personal message related to products and services. ...
... Bahria University Journal of Humanities & Social Sciences (BUJHSS) highlights the significance of the knowledge provided by the sender of the information in word of mouth communication. The sources of WOM could be the individual or other platforms but the degree of knowledge source has about the product or service, increases the reliability of the WOM communication (Buttle, 2000).Two ways are used to generate the word of mouth communication, i.e. consumer generated WOM and market generated WOM. Among both, consumers rely more on the former method because they found it noncommercial and f ree of any interest (Arndt, 1967).Similar to other mode of communication, WOM also carries few unfavorable aspect for consumers as it cannot be fully controlled due to the inherent structure of WOM (Nyilasy, 2006). ...
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The proliferation of internet has bought an irreversible shift in the mode of communication by influencing consumers to move from orthodox means of communication to newer version of online communication. However, means of communication can vary and so is their impact. The purpose of this study is to provide a systematic review of newly introduced communication mode known as electronic word of mouth (eWOM) which is an extended version of word of mouth (WOM). This study uncovered some important dimensions in which Internet-based feedback mechanisms differ f rom traditional word-of-mouth networks and surveys the most important issues related to their design, evaluation, and use. It was found that among all platforms, SNS (social networking sites) are considered the utmost influential base. A total of 35 research paper were identified initially out of which 31 were selected after initial screening. Articles were selected pertaining to period 2000-2020 .The result of the study illustrates that eWOM platforms are very effective in building customer relationship whereas, social networking sites are considered most influential of all as they create a buzz among present and prospective customers.
... It is also proved that word-ofmouth (WOM) was nine times as influential as advertising, and it appeared that negative WOM has a greater impact than positive WOM (Day, 1997). Finally, researchers observed that frequent advertising also increases WOM, particularly in the absence of other information sources, so when consumers who are open to trial for new products will be their main advertising agents by reviewing that product (Buttle, 1998). ...
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Emotions are important in purchase decisions. Rational and emotional aspects together influence choices and decisions, both in social and business events. This paper is about how emotional marketing affects consumer behaviour and how emotions will affect the decision-making process of the consumers. To know the consumers’ response to different kinds of emotions, 150 samples were collected randomly using a questionnaire. The questions included how emotions affect them in various situations, which type of emotions they feel often, and how they feel after purchasing a product. According to the estimated results, it was found that emotions play a major role in consumer behaviour; further, it depends on their current mood and past experiences. Though it was proved that emotions affect consumer behaviour, it was completely subjective in nature as every individual has a variety of emotions based on their experiences in life. It is practically not possible to satisfy every customer’s emotional needs. Future research can focus on various emotions and the behavioural aspects that can have an impact, and a cross-sectional study can be conducted. Rather than depending on the consumer mindset at the time of buying, it would better to influence consumers’ emotions using advertisements and brand image.
... However, previous studies have found con icting results regarding valence. While some researchers have concluded that valence can play a signi cant role in the receiver's behaviour (Buttle, 1998;Anderson & Salisbury, 2003;Rezvani, 2012), others have indicated that WOM valence does not impact a rm's sales (Davis & Khazanchi, 2008). Furthermore, the perceived usefulness of the message depends on qualitative variables such as the persuasive language used and quantitative factors such as the number of communicators (Casielles et al., 2013;Virvilaite et al., 2015). ...
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With the number of existing studies and the contradiction of their conclusions about the word-of-mouth (WOM) phenomenon, there is a need to develop an all-embracing model capable of integrating prior findings and identifying future postulates. Therefore, this study explores the impact of WOM communication on students’ choice of university and satisfaction. The following work discusses the effect of WOM on students’ decision-making in the context of the likelihood elaboration model (ELM). Data was collected from the general population of 160000 students from different Georgia universities. We utilised deductive reasoning and quantitative and qualitative strategies such as focus groups followed by larger-scale surveys. We found that students are more inclined to choose the university when they are sure about WOM message source credibility and the quality of the message being transmitted. On the contrary, the mentioned WOM features do not persuade them to form a strong reputation for the university.
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The discrete- and continuous-time network models of opinions control and resource allocation in marketing are considered. Three cases of interaction of economic agents are studied: independent behavior, cooperation, and hierarchical control by the resource-owning Principal. The corresponding dynamic games are analytically solved. The agents’ payoffs in these cases are compared. Two concepts, “enough resources” and “a lack of resources,” are introduced and investigated. The theoretical results are illustrated by a numerical example.
Resistance to chatbots is a real challenge that companies must overcome, although they (i.e., chatbots) have several advantages. Based on the stereotype content model, this research seeks to understand customer reactions in the context of human-chatbot interactions by integrating the concept of uniqueness neglect as a moderator of customer reactions to the competence of bank chatbots. A sample of 378 respondents was collected in France using the snowball sampling technique, and hypotheses were tested using SmartPLS. We find that chatbot competence does influence customer satisfaction, the latter of which in turn affects both recommendation intention and continuance intention. Further, we find that uniqueness neglect moderates the effect of chatbot competence on satisfaction such that the effect is stronger (weaker) when uniqueness neglect is low (high). We find that warmth does not have a significant moderating effect. This study is among the first attempts to understand customer reactions to interactions with bank chatbots and offers insightful theoretical and managerial implications of use to both academics and practitioners alike.
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Word of mouth is a process by which a person shares his knowledge about a particulars product or service with another person. Usually the person talks positively about the product or service and encourage the other person to try the same. Customer satisfaction plays a very important role in formation of positive word of mouth. Word of mouth plays a very important role in information search and decision making process of consumers in the field of marketing. The concept of word of mouth is gaining popularity in academic field also for the selection of universities, colleges and specific programmes. This study used an online questionnaire to survey 330 undergraduate students in Mumbai to determine the influence of traditional word of mouth on college search and choice. In addition, electronic word of mouth (ewom) influence was examined during the process of college search and choice when consumed across various form of social media. The paper also aims to identify various factors influencing decision to attend a specific college. Nowadays, industry-academic collaboration has become an important factor influencing student's choice of college. Many colleges are providing campus placement as well as internship opportunities to students along with various add on courses in collaboration with companies.
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The authors propose to modify the basic confirmation/disconfirmation paradigm in two ways. First, expectations are replaced with experience-based norms as the standard for comparison of a brand's performance. Second, a zone of indifference is postulated as a mediator between confirmation/disconfirmation and satisfaction. Implications for future research are also presented.