Overall Introduction
Today the word-of-mouth is considered one of the most powerful forms of marketing communication. Consequently, there is great intensity and use of diverse strategies by companies that attempt to promote word-of-mouth. While the strategy has proven to be effective in boosting sales volumes, it can be harmful and subsequently spoil the image of a company or even a specific brand if not well used. This paper focuses on the key aspects of word-of-mouth communication. Recommendations on how to effectively use the word-of-mouth and its importance to marketers have been discussed in the paper. The cause of this marketing issue and its potential implications are equally addressed in the essay. It is crucial to mention that word of mouth as a promotional strategy bears a close relationship to the current marketing theory and practices. Before concluding the paper, viewpoints on the application of word of mouth in marketing have also been incorporated in the report.
Literature review
Wang et al. observe that the purchasing decision of consumers and product influences are greatly influenced by information cues (76). It is vital to mention that consumer perception can be enhanced through online reviews. Besides, communication among consumers can be improved through online review programs. The authors argue that uncertainty can be reduced alongside increasing awareness. Nevertheless, the aspect of Word-of-Mouth is hardly addressed by most works of literature. When it comes to experience goods, there is often a close interaction between information cues. A typical example of this type of goods is a hotel room. According to Wang et al., proxy approaches applied by past research studies may not offer accurate or precise effects of word of mouth in the sales promotion (80). Sales performance can be measured using actual statistics generated through word of mouth. Such an approach can bridge the information gap that has always existed when analyzing the importance of word of mouth in marketing.
An electronic commerce context and online word of mouth are important areas of marketing communication pointers required by business organizations. In other words, this understanding can assist industry practitioners and business researchers to appreciate the effectiveness of word of mouth in improving the volume of sales. An inextricable link exists among the following marketing parameters: service quality, consumer satisfaction, and word of mouth communication (Lang 885). Jun, Cha, and Aggarwal are emphatic that passing information through word of mouth can either be tensile or specific (265). The same scenario applies to price promotions in any given marketing environment. Hence, the word of mouth context may generate claims whether they are labeled as tensile or specific.
At this point, word of mouth in promoting sales comes in handy when marketers understand that moderating roles in well-played by information specificity. When the exchanged piece of communication is tensile in nature, the sender’s word of mouth as well as the receiver’s word of mouth does not count at all. The latter is especially feasible when tie strength and source expertise are put into consideration. A third-party website can be contemporarily used by online shoppers to share their purchasing experiences by reviewing products. Better still, individual product reviews can still be submitted by online customers bearing in mind that a number of retail websites allow the practice. Needless to say, this type of review utilizes a typical five-point scale and can be very effective as an informed word of mouth.
Online shopping behavior is on the rise. Hence, a lot of attention is being drawn on these reviews because some consumers make up purchasing decisions based on the reviews. Any type of electronic word of mouth is also bound to affect or influence the buying decision of online consumers. Social media is highly trusted than the traditional media in the contemporary marketing arena (Shen, Li, and DeMoss 23).
In spite of the impacts of word of mouth, do marketers really understand how consumers’ behaviors are impacted by online consumer reviews? After quantitative or qualitative product reviews have been posted online, it is crucial for marketers to examine the effects since either positive or negative influences can be generated by the same reviews. In the conclusive findings produced in a research study by Shen et al., prospective customers are greatly impacted by extreme ratings (24). Therefore, they are more likely to buy products that have been rated highly. Median product ratings have a lesser impact on online customers who are willing and able to buy. On the other hand, negative product reviews tend to immensely affect the purchasing decision of online shoppers compared to positive reviews.
This implies that an organization can grossly suffer from negative reviews compared to the gains it can make from positive reviews. Second, the perceived quality reliability can be precisely predicted using online word of mouth. Third, in regards to judging product quality before making purchasing decisions, marketers from across the board (whether Asians or Europeans) have the same or similar marketing tendencies or behaviors when the same product is analyzed. Customer-to-customer communication can be proactively managed by a business entity when it comes to online product reviews. Not all word of mouth strategies employed by firms is effective. Therefore, it is crucial for firms to research and apply the best word of mouth tactics that can lead to positive growth in sales volume (Godes and Mayzlin 799).
To begin with, large-scale field tests targeting both customers and those who are not customers yet can be conducted. Thereafter, an online experiment can produce invaluable data that can then be analyzed. By splitting the theoretical challenge into two, firms can begin to assess the type of word of mouth that can drive upward movement in sales. This procedure can be fuelled by past research studies. In order to drive sales for goods and services with a low degree of awareness, word of mouth has been found to be the most efficient tool. Word of mouth, through the internet, has a strong effect on consumers when processing information. Nonetheless, information overload can be disastrous when marketing products. The latter case can take place when a given product has been enriched with a lot of information. Overloading consumers with information may be counterproductive even if the reviews are positive (Liu, Dong, and Burnkant 63).
Cause of issue and potential implications
Some consumers have already visited a business entity recommended by a friend. Some have even taken a car to a repair shop with a reputation for honesty and speed. These kinds of scenarios focus on the force that drives people to buy from specific supplies. As already hinted out, word of mouth is apparently a more effective way of promoting brands and products. Prospective buyers have a tendency to seek a second opinion from friends and other acquaintances before making purchases. Word of mouth is a major favored source of information that consumers trust. Those who have already bought and used certain products share their experiences more genuinely than marketing messages broadcast by firms. The latter explains the reason why buyers would prefer recommendations from other buyers or acquaintances.
Organizations are still depending on advertising in order to popularize their business entities, brands, and even the corporate culture. Nevertheless, they have begun to notice that there are other modes of reaching out to the customers. Word of mouth is one of the most powerful forms of communication in the market today if controlled and managed correctly. Therefore, negative word of mouth is highly avoided by marketing management teams in organizations since it can lead to major losses in terms of sales.
The present age largely values and relies on information technology. This explains why there is an overwhelming quantity of information available in the targeted market. Some management teams do not even have time to explore and investigate market review information available. Noise, skepticism, and connectivity are some reasons for the increased importance of word-of-mouth.
How Issue Relates to Current Marketing Theory or Practices
The emotional Involvement that consumers have with products can be the best predictor of how many people will be told about the same experience. It is a presumption that sharing common buying experiences determines or affects the volume of sales of a given product. For example, some people have strong feelings about their cars, houses, careers and so on. As a result, they may share their enthusiasm with relatively several other people whom they know. On the other hand, when individuals purchase grocery products, they may not talk to many people about it because it is not exciting even if they encountered a terrible service.
Basically, positive experiences are expected and soon forgotten, but the unresolved negative encounters make people angry and frustrated, thereby energizing negative word-of-mouth. However, they do not tend to talk about the ordinary because they think it is boring (Godes and Mayzlin 798). Most positive word-of-mouth arises when customers’ expectations are exceeded, and most negative comments are generated when customers are disappointed by a product or service. The desire to remain confidential equally determines the frequency and total count of people who share their purchasing experiences. People may tell fewer of their friends about their experience with financial services and health care. Communication Model Theory by Chen can be used to illustrate the above hypotheses, as shown below:
Viewpoint on Current Issue
Sales communication messages are out there in thousands, and an average person receives between 1000-2000 such messages on a daily basis. The average person is exposed to about two hundred to one thousand sales communications on a regular basis. On a regular basis, the targeted market is exposed to myriads of adverts on TV, radio, and print, among other news channels. This leads to an excessive amount of marketing information. Since advertising channels are numerous with thousands of marketing news, consumers often get mixed up and unable to make purchasing decisions. While all the aforementioned channels have been effective over the decades, they are no longer viable to the modern consumer (Wang et al. 73). Nonetheless, effective use of word of mouth through electronic and other means has been proven to be viable. Prospective customers can trust people they know or are familiar with than marketing campaigns broadcasted by firms. This also explains why online product reviews are gaining popularity by the day.
Overall Conclusion and Impact
To recap it all, it is crucial to mention that word of mouth remains a very powerful tool in the contemporary marketing arena. The manner in which workers behave can also be a powerful source of the words spoken through the mouth. Workers who are positively perceived by customers are more likely to generate positive sales lead in an organization. On the other hand, consumers tend to engage in negative word-of-mouth when they think employees are rude, do not have product or service knowledge, and are discourteous. Nevertheless, the degree of satisfaction when it comes to the word of mouth marketing is yet to be firmly established. Satisfaction word of mouth relationship differs based on the nature of service encounter received by consumers.
Hence, it is vital to generate and test a theoretical model of how this type of satisfaction can be established. The most important attribute of such a communication model would be that all the past conflicting findings can be swiftly reconciled. Consumers can easily reduce their costs of searching for product information when they are overloaded with product reviews in online portals. In any case, firms should acknowledge the fact that buyers expect certain types of information regarding products. In addition, satisfaction bears a close relationship with consumers’ expectations.
Works Cited
Godes, David, and Dina Mayzlin. “Firm-Created Word-of-Mouth Communication: Evidence from a Field Test.” Marketing Science 28.4 (2009): 721-803. Print.
Jun, Sung-Youl, Taihoon Cha, and Praveen Aggarwal. “How Much Better? The Effect of Tensile Information on Word-Of-Mouth Effectiveness.” Journal of Marketing Theory and Practice 19.3 (2011): 263-276. Print.
Lang, Bodo. “How Word of Mouth Communication Varies Across Service Encounters.” Managing Service Quality 21.6 (2011): 583-898. Print.
Liu, Yan, Dahai Dong, and Robert, Burnkant. “Provide Consumers with what they Want on Word of Mouth Forums.” I – Business 5.1 (2013): 58-66. Print.
Shen, Yingtao, Shenyu Li, and Michelle DeMoss. “The Effect of Quantitative Electronic Word of Mouth On Consumer Perceived Product Quality.” International Journal of Management and Marketing Research 5.2 (2012): 19-29. Print.
Wang, Mohan, et al. “How Word-of-Mouth Moderates Room Price and Hotel Stars for Online Hotel Booking: An Empirical Investigation with Expedia Data.” Journal of Electronic Commerce Research 16.1 (2015): 72-80. Print.