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This paper presents a theoretical review of Word-of-mouth communication by describing its concept history, definitions, its importance in services, the three streams of literature review focused on Word-of-mouth, the roles of tie strengths, homophily and source credibility in determining Word-of-mouth conversation.
Маркетинг і менеджмент інновацій, 2012, № 1
УДК 338.139
Gheorghe Iuliana-Raluca,
PhD student of Marketing Faculty at Academy of Economic Studies (Bucharest, Romania)
This paper presents a theoretical review of Word-of-mouth communication by describing its concept
history, definitions, its importance in services, the three streams of literature review focused on Word-of-
mouth, the roles of tie strengths, homophily and source credibility in determining Word-of-mouth
Keywords: WOM word of mouth, services, risk, tie strength, source credibility, homophily, word
of mouth conversation.
Introduction. The WOM communication in Marketing is an actual topic especially
nowadays when the consumer’sbehaviour is strongly changing and becomes more immune to
traditional means of marketing communications such as advertising. In order to adopt the
proper strategy, marketers should first understand why WOM plays such an important role
when consumers make a decision purchase and, at the same time, understand which elements
make WOM conversation the most attractive form of communication.
Formulation of the general problem. Understanding WOM communication is essential
in marketing communication because of the shift that took place in consumer’s behaviour that
is, building a shield against traditional methods of marketing communications.
The aim of this article encompasses a description of the WOM construct from a
theoretical perspective. The author’s theoretical perspectives on WOM have been selected
from an outstanding literature based on personal choices.
Basic material. Over the past decade, WOM became a topic to be studied most frequently
in the field of marketing. Researchers have associated this concept with personal
recommendations [2], interpersonal relationships [2], interpersonal communication [28],
informal communication [64], personal and interpersonal influence [2, 13] and even with an
informal form of advertising [2].
Nevertheless, there is no doubt that consumer-to-consumer communication using WOM
has a strong influence on their buying decision process of goods and services [27, 46, 59, 68].
Moreover, in the Consumer Behaviour field it was concluded that WOM communication plays
an important role and that it has a huge impact during the consumers’ shaping process of
attitudes [11] and, at the same time, their behaviours [13, 4].
At first, WOM occurred mostly only among neighbours exchanging news regarding the
offerings of neighbourhood stores [71]. In 1955, Katz and Lazarsfeld [37] found that WOM
was seven times more effective than newspaper and magazine advertising, four times more
effective than personal selling, and twice as effective as radio advertising in influencing
consumers in a phase of brand switching. More recently, Day [19] estimated that WOM was
nine times more effective than advertising in converting negative or neutral attitudes of
consumers into positive ones, whereas Morin [51, p. 30] showed that “other people’s
recommendations” were three times more effective in stimulating purchases of over
600 different products compared to advertising.
In a nutshell, the importance of WOM communication was proved with the help of both
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experiments and their results showing the powerful intensity of the WOM concept.
In fact, the vast majority of researchers suggested that favorable WOM is considered to be
a product success factor [19, 37, 36, 40, 52] and is the most efficient way of attracting and
make customers become loyal [22].
As such, one might conclude that it is the world’s most effective but the least understood
marketing strategy [47], even if it was studied several times in different backgrounds.
Marketers are particularly becoming more interested in understanding WOM because, as it
was shown before, traditional forms of communication appear to be losing ground.
WOM concept was defined several times as being an informal and non-commercial form
of person-to-person conversation between a communicator and a receiver regarding a brand, a
product, an organization, or a service [1, 3, 16] or/and between the actual or potential
consumer and other people such as product/service providers, independent experts, family and
friends [34] as shown in Table 1 and occasionally, as a post-purchase cause. The term
informal suggests that the WOM communication is not a form of manipulation and, at the
same time, independent of certain organizations [64] and, in addition, is not organized in an
official manner [58]. Still, there is a single author [33] who considered WOM a formal method
of communication.
WOM communication usually takes the shape of face-to-face or by phone methods of
communications [64] and, respectively, is classified depending on the means the consumers
are using, into impersonal and personal sources. Friends, family, acquaintances, colleagues are
considered to be personal sources of recommendations [13, 22] while, columns, articles and
commentary made by journalists, columnists, consumers, experts found in newspapers,
magazines, on-topic publications, online discussion forums and expert systems [63] are
recognized as being impersonal sources of recommendations.
Table 1 – Definitions of WOM communication
Author/ Researcher
Arndt, 1967 [2, p.3]
[WOM] is defined as oral, 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
Richins, 1983 [59, p.17]
the WOM communication was defined as the act of telling at least one
friend or acquaintance about the dissatisfaction
Brown and Reingen, 1987
[13, p.350]
the WOM exists at the macro level of inquiry (flows of communication
across groups) as well as the micro level (flows within dyads or small
Higie et al., 1987 [35, p. 459]
“conversations motivated by salient experiences are likely to be an
important part of information diffusion”
Singh, 1990 [65, p. 1]
telling others about the unsatisfactory experience (that is, negative WOM)
Bone, 1992 [10, p. 579]
WOM communication is conceptualized herein as a group phenomenon
an exchange of comments, thoughts, and ideas among two or more
individuals in which none of the individuals represent a marketing source
Despite the fact that the vast majority of studies regarding WOM communication were
conducted in the environment of goods, in the author’s perspective, WOM is more important
and relevant for service consumers [4, 24, 44] because services are difficult to evaluate prior
to purchase [72] and are perceived as being highly risky [30, 52]. Consumers will engage in
WOM conversation with the purpose of gaining more information that will eventually reduce
the risk and help them understand the service prior to consumption [12]. Murray [52] actually
Ю.-Р. Георге. Усна комунікація: теоретичний огляд
Маркетинг і менеджмент інновацій, 2012, № 1
confirms that service consumers, first think of asking for an opinion before making the service
purchase decisions. However, Roselius [61] mentioned that consumers find WOM
communications as a useful strategy in reducing most types of risk. As a consequence, service
consumers rely on the opinions of other consumers when forming expectations and evaluate
the service [4, 54].
For example, in the services industry, due to the characteristics of services, consumers
make evaluations using three criteria. Nelson [53], on one hand, proposed the search qualities
of the service as a first criterion to be taken into account. The search qualities of a service are
described by the attributes of the service that can be determined prior to purchase. And, on the
other hand, Nelson [53] mentioned the experience qualities of the service which encompass
the attributes of the service that can be ascertained during the consumption after the
acquisition. Darby and Karni [18] considered a third criterion, the credence qualities which are
very hard to evaluate. Even if the consumers cannot easily evaluate the credence qualities of a
service, they turn to the reputation criterion [7]. Harrison-Walker [31, p.62] labeled services
that are both high in experience and credence qualities as being “natural candidates for WOM
communication among consumers”.
For instance, in the case of professional services, many providers rely on informal
information channels such as WOM [57] because they are high in experience and
credence [1]. Professional service providers such as physicians, lawyers, certified public
accountants are believed to win their clients through WOM referrals [13] due to their highly
customized service delivery and the high degree of judgments when satisfying customer
needs [43, p. 30]. Given the service requirements, it would not be clear what the outcomes
might be.
Some studies conducted on WOM effectiveness suggested that strong and positive WOM
is associated with client’s level of trust [6] with service quality [55], satisfaction [1], perceived
value [32], relationship quality [9] and ultimately, with clients’ intention to purchase [17].
Other studies focused on the effectiveness of WOM but from a change in others’
expectations [70, 72] and attitudes perspectives [19, 67].
Actually, the existing literature concentrates on better understanding the antecedents and
consequences that determined WOM, while defining three streams [20]:
quences that determined WOM, while defining three streams [20]:
the first stream concentrates on the reasons why consumers actively spread the word
about certain services or products they have experienced linked to satisfaction or
dissatisfaction [1; 59];
the second stream focuses on understanding in depth more the information-seeking
behaviors of the consumers when they rely only on WOM communications more than on other
sources of information and under what circumstances. Research made in this area emphasized
that consumers with little or no expertise in a product category [26, 27], who perceive [4, 40]
and are deeply involved in decision-making and purchase [5] are supposed to seek for others’
opinions more frequently;
the third stream analyzed the reasons why certain personal sources of information are
more likely to exert more influence than others. Researchers have identified the following
factors that have influenced WOM communications: tie strength [13, 25], demographic
similarity or homophily [13] or perceptual affinity [27] a nd source expertise or source
credence [4, 27].
Tie strength
WOM communication usually takes place within a social relationship context that might
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be characterized by the closeness of the relationship established between the information
seeker and the source named “tie strength [50, 22, 12]. Tie strength is considered to be a
multidimensional construct representing “the strength of the dyadic interpersonal relationships
in the context of social networks” structures [50, p. 79]. Furthermore, the concept of the tie
strength can be characterized by the closeness, intimacy, the association and support in a
relationship [25]. As a consequence, the tie may range from strong to weak depending on
several other aspects such as the types of resources, the persons in the dyad exchange, the
frequency and the intimacy of the exchanges [45].
The author considers that tie strength influence the information flows: strong ties that bind
individuals make them interact more frequently and exchange more information [13] and have
greater influence on the receiver due to the frequency of social contacts among strong tied
individuals [4]. However, strong ties are perceived to have a positive impact on the decision
making within a dyad [42].
In brief, strong ties are characterized by [69, p. 57]:
a) “a sense that the relationship is intimate and special, with a voluntary investment in the
tie and a desire for companionship with the partner;
b) an interest in frequent interactions in multiple contexts;
c) a sense of mutuality of the relationship, with the partner’s needs known and
Homophily or demographic similarity
Homophily [13] is the concept that describes the composition of a group regarding issues
such as to what extent pairs of individuals are similar when analyzed from age, gender,
education or lifestyle perspectives [60].
Moreover, people who are alike [48] have the tendency to interact more often and
communicate more easily with persons closer to them in age, sex and social status [13]. This
alike principle, known actually as the “like me” principle [41], facilitates the flow in
information and push individuals to greater interpersonal attraction, trust and understanding
towards other similar individuals like them. Thus, individuals affiliate with others who are
sharing similar interests and face similar situations [62]. The stronger the social tie connecting
two individuals, the more is increased the similarity between them [49; 29].
Despite homophiles connections, heterophilus communicationshappening between
nonsimilar individuals such as acquaintances may facilitate the flow of information between
diverse segments of individuals in a social system [60]. Thus, the author concluded that, in
certain situations, individuals prefer to receive advice from other individuals that are outside
their immediate social circle due to the fact that these sources of information are exposed to a
wider area of expertise.
Source credibility
Source credibility is composed by two constructs: source expertise and source bias [14, 8].
Source expertise is the perception upon the competence of the source that provides the
information. Source bias refers to the possible incentives that can be observed in the source’s
information [23, 56, 21]. A source is considered credible and perceived as such when it
possesses greater expertise and is less biased.
The individuals who present positive homophily and tie strength are assumed to be more
persuasive when communicating a message [23]. When faced with a message, consumers will
try to discover whether the message is accurate in representation and credible [15, 38, 39].
Conclusions and further research. Even if WOM is known to be a powerful force in the
Ю.-Р. Георге. Усна комунікація: теоретичний огляд
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Marketing field and many studies have been conducted on this topic, still there are unclear
points that need to be analyzed regarding WOM communication. Apart from the history and
the factors that influence WOM, it is required to go deeper into the issue.
The Internet, as well as the advanced technology, contributed to the changes that took
place in consumer’s behavior that used to spread offline WOM. Hence, a new concept evolved
and was adopted; electronic WOM which is similar to offline WOM but the chosen means of
communication are the electronic ones.
Further research should focus on electronic WOM which, in the author’s opinion, might be
analyzed easily using social media networks such as Facebook, because they have similar
characteristics with the offline WOM process: spreading the word to a known circle of friends,
posting reviews and comments or replies within the circle of friends, discuss issues
encountered while acquiring a service/product, recommend and even share post-purchase
online impressions.
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Ю.-Р. Георге
Усна комунікація: теоретичний огляд
У цій статті представлений теоретичний огляд усної комунікації шляхом розгляду історії її
розвитку, визначення сутності цього поняття і важливості в сфері послуг, а також
дослідження трьох точок зору на розуміння усної комунікації, що виділяються в літературі, та
значення сили міжособистісного зв’язку, демографічної подібність і достовірності джерела при
усній комунікації.
Ключові слова: з вуст у вуста, послуги, ризик, сила міжособистісного зв’язку, достовірність
джерела, демографічна подібність, усна комунікація.
Ю.-Р. Георге
Устная коммуникация: теоретический обзор
В этой статье представлен теоретический обзор устной коммуникации путем
рассмотрения истории ее развития, определение сущности этого понятия и важности в сфере
услуг, а также исследования трех точек зрения на понимание устной коммуникации, выделяемых
в литературе, и значение силы межличностной связи, демографического сходства и
достоверности источника при устной коммуникации.
Ключевые слова: из уст в уста, услуги, риск, сила межличностной связи, достоверность
источника, демографическое сходство, устная коммуникация.
Отримано 18.01.2012 р.
... Online consumer reviews, unlike third-party reviews, are written by users based on their own personal experiences, which are influenced by their taste preferences and usage scenarios [7]. As a result, customer reviews are more likely to focus on whether or not a product suits a certain person's preferences and usage conditions [8]. ...
Customer online product reviews are an emerging market phenomena that is playing an increasingly crucial part in customers' buying decisions as a novel type of word-of-mouth knowledge. This authors argue that online consumer reviews, a sort of product details created by users depending on individual usage experience, can serve as a new variant in the marketing communications mix, acting as free "sales assistants" to assist consumers in identifying products that best suit their unique usage conditions. This study proposes a normative methodology to solve a number of critical strategic concerns about customer evaluations. First, we explain when and how a seller's marketing communication plan should be adjusted in response to customer feedback. Our findings show that if review information is sufficiently useful, the two types of product information, namely seller-created positive product data and buyer-created literature review, will communicate. When the product price is minimal and/or there are enough expert (more intelligent) users, for example, the two types of information are complementary, and the seller's best reply is to boost the number of product attribute message provided via marketing communications after the reviews are accessible. When the product cost is high and there are a large number of rookie (less sophisticated) product users, the two types of information are substitutes, and the seller's best reaction is to minimize the quantity of product attribute information it contains, even if it is free.
... For the modern consumer, the role of sources of information acquires even greater significance and this is even true for products belonging to the category of experience goods, i.e., those that cannot be appreciated before the act of consumption, or even for convenience goods, i.e., products for which the consumer may not appreciate the quality even after consumption [24]. In these cases, in fact, the consumer faces an increased risk of making incorrect purchase choices, which means that, in situations where it is difficult to appreciate the characteristics of the product ex ante, there is an increase in the need for information to decrease the perceived risk [25]. ...
This research analyzes consumers' different purchasing attitudes in traditional and on-line markets. Italy's on-line direct selling process for organic farm products is still in its formative phase, and the prospective developments mark an interesting research area, not least because it may represent a tool to integrate the relationship with customers and improve companies' marketing strategies. The research carried out on the direct selling on-line channels allowed the authors to prove a direct and indirect utility for the choice of organic food products. Information obtained with word-of-mouth among consumers seems to be playing an increasingly relevant role in the purchasing process of the virtual community, representing a strong generator of messages and experiences both in virtual and traditional markets. This paper analyzes the behavior of consumers to understand whether it is conditioned more by off-line than on-line channels and which parameters condition the purchasing process. The research confirms that off-line channels for organic products condition the consumers' choices, linked to traditional word-of-mouth as well as to experiential and sensory direct marketing contact with the producer. An inverse behavior was observed with positive conditions that mostly emanate from on-line channels in the process of buying organic products. The on-line purchasing process involves the system of information linked to the product, i.e., the e-community, which allows the product to be shown together with the comments, evaluations, and recommendations of consumers on the net, reducing the effects generated by the packaging and the brand.
... Researches on word-of-mouth have proven that its effectiveness is based on the overpowering impact it has on consumer behavior. Day [In 18] estimated that word-of-mouth was nine times more effective than advertising in changing consumer attitudes, whereas [28] as cited in [22] showed that "other people's recommendations" were three times more effective in terms of stimulating purchases of over 60 different products than was advertising. ...
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The study quantified the usage of and range of word-of-mouth (WOM) marketing, and analyzed the present state and satisfaction with WOM marketing tactics of selected micro businesses, small and medium enterprises in Malolos City, Bulacan.-72 Purposive and convenience sampling were employed on marketers and owners who were available and who were willing to participate in the study using structured interview questions. 125 companies situated only in Malolos City proper and proximate places were selected. Results revealed that a significant number of selected micro, small and medium businesses in Malolos considered using WOM marketing/social media as well as increasing budget allocation for such. Albeit majority are in agreement that WOM is more effective than traditional marketing, customer service was still considered a major spending item.
Experiment Findings
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Though many marketers—particularly those in the service sector—depend on word of mouth (WOM) for referrals, the traditional sample survey methodology used in previous WOM research does not explicate the interpersonal nature of informal communication. The authors propose network analysis as an alternative method for research on referral behavior. The sampling, data-gathering, and analytic aspects of referral network analysis are described in general terms and illustrated with a case study which, in addition to yielding interesting descriptive information about a service marketer's referral network, affords a test of the strength-of-ties hypothesis in influencing referral flows.
In this study, the authors examine how national culture affects referral behavior for industrial services such as advertising, banking, and accounting. The authors collected data using interviews with managers of small- and medium-sized companies in the United States and Japan. The results show that national culture has a strong effect on the number of referral sources consulted and that Japanese companies use more than comparable American companies do.
The author explores the information needs of service consumers. In the purchase decision process, search behavior is motivated in part by perceived risk and the consumer's ability to acquire relevant information with which purchase uncertainty can be addressed. Marketing theory suggests that consumers use information sources in a distinctive way to reduce the uncertainty associated with services. Hence, six hypotheses are developed to test the information acquisition of service buyers. An experimental approach is employed to compare, in a prepurchase context, the information sources used by consumers of services and those used by consumers of goods. The resulting data support the predictions offered and extend marketing theory.
The study examines the impact of different amounts and types of infomation on individuals' perception of attorneys. Utilizing the concept of perceived risk, an experiment was conducted to test various communication strategies. The results, in part, confirm the "word-of-mouth is best strategy adhered to by many attorneys. The study also sheds light on the impact of legal service advertising on indivduals.
When a buyer perceives risk in a purchase he can pursue different strategies of risk resolution. This article presents research findings which indicate that consumers have preferences for different methods of risk reduction associated with various types of loss.