Word-of-Mouth Marketing - Aung Chit Khin (MMktA)

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    Word-of-Mouth Marketing - Aung Chit Khin (MMktA) - Presentation Transcript

    1. www.mmkta.org
      Word-of-mouth communication
      Positive Vs. Negative WOM
      WOM Marketing
      Customer Advocacy & Evangelism
      WOMM Framework
      Marketing Mix, IMC & WOM
      Buzz Marketing
      Online Communities
      overview
    2. Word-of-Mouth (WOM)
    3. www.mmkta.org
      Marketing Communications
      b2c – traditional marketing communication
      c2c – word-of-mouth
      c2b - feedback
      Communication
    4. www.mmkta.org
      Word of Mouth (WOM)
      The product information individuals transmit to other individuals.
      (Solomon, 2009)
      The act of consumers providing information to other consumers.
      (Word of Mouth Marketing Association WOMMA,2009)
      Interpersonal communication amongst consumers regarding product and service performances.
      (Richins, 1983) (Kaplanidou and Vogt, 2003)
      Personal communication about a product between target buyers and neighbours, friends, family members and associates.
      (Kotler & Armstrong, 2009)
      Definitions
    5. www.mmkta.org
      Passing it along to
      Family, friends, relatives
      eWOM
      Communication patterns
      http://www.pandemiclabs.com/blog/viral-marketing/how-does-viral-marketing-work/
    6. www.mmkta.org
      People talk about exciting products, innovative products, services, experiences, high involvement products and personal activities.
      People also observe and talk about the products others are using.
      (Kaplanidou and Vogt, 2003)
      Important in customers’ formation of attitudes, risk reduction, decision making
      (Bone, 1995) (Bansal and Voyer, 2000) (Murray, 1991)
      Critical for services which are intangible and experiential
      (Berry and Parasuraman, 1991)
      WOM Facts
      Wangenheim and Bayón (2004)
    7. www.mmkta.org
      • WOM is a “natural” phenomenon
      • People like to talk, when something is Talk-Worthy.
      • WOM comes with social pressure to conform.
      • Sometimes, others’ opinions matter more than own perceptions.
      • 2/3 of all consumer-goods sales are influenced by WOM
      % of buyers relying on WOM for purchases
      69% for restaurant
      36% for computer hardware and software
      22% for travel and vacation
      WOM Facts
      Solomon (2009)
    8. www.mmkta.org
      Viral Infection = WOM
      WOM message = virus
      Infectious spread from hosts/ vectors
      Level of contagiousness depends on the potency/DNA of WOM-unit
      Some can only be transmitted in specific way
      “High-risk” populations (High Social Networking Potential –SNP)
      Some make a purchase, some don’t
      Message mutates just like the virus depending on the host
      Viral
      http://www.pandemiclabs.com/blog/viral-marketing/how-does-viral-marketing-work/
    9. www.mmkta.org
      Viral
      http://www.arisey.com/images/viral_work.jpg
    10. http://ericsusch.com/blog/wp-content/uploads/2008/12/050905wom_n.jpg
    11. Positive vs. Negative WOM
    12. www.mmkta.org
      Remarkable
      Positive Experience
      Big
      NegativeExperience
      Loyalty
      +WOM
      Switching
      -WOM
      Positive or Negative
      Customer
      Acquisition & Growth
      Customer
      Retention
      Loss of other customers
      & potential
      customers
      Customer
      Defection
    13. www.mmkta.org
      Company’s efforts
      The Marketing Mix
      Place
      Process
      People
      Competitors’
      Efforts
      Product
      Price
      Competitors’
      Efforts
      Promotion
      WOM
      person
      person
      person
      person
      person
      person
      person
      person
      Competitors’ Brand
      Community
      Brand
      Community
      Potential Customers/
      Non-Users
      person
      person
      person
      person
    14. www.mmkta.org
      Negativity Bias in WOM
      “Customers who have had bad experiences
      tell approximately 11 people about it;
      those with good experiences tell just 6”
      Hart et al. (1990, p. 153)
      A satisfied customer tells 8 other people.
      A dissatisfied one tells 20.
      (Fortune, 1995)
      Positivity Bias in Feedback
      Bias
      cited in Söderlund (1998)
    15. Word of Mouth Marketing (WOMM)
      Sernovitz (2006) http://www.wordofmouthbook.com/free/, WOMMA (2009)
    16. www.mmkta.org
      Word of Mouth Marketing
      giving people a reason to talk about you
      motivating people to talk about you
      making it easier for the conversation to take place
      WOMM
      Sernovitz (2006) http://www.wordofmouthbook.com/free/, WOMMA (2009)
    17. www.mmkta.org
      Word of Mouth Marketing
      Start , Support, Simplify Sharing
      WOMM
      Sernovitz (2006) http://www.wordofmouthbook.com/free/, WOMMA (2009)
    18. www.mmkta.org
      Benefits
      • Third-party credibility
      • Cost effective
      • Relatively Easy
      • Enhance the impact of other communication tools
      • WOM keeps on going and going and going
      WOMM
    19. www.mmkta.org
      Why WOMM is becoming important
      • Consumers are in control
      • Fragmentation of markets
      • Growing distrust of advertising
      • Growth of Internet and virtual communities
      • Media fragmentation
      • Some products/ services cannot be advertised
      WOMM
    20. www.mmkta.org
      WOMM Guidelines
      • Be talk worthy
      • Delight the customers – Offer more
      • Rewards and recognition
      • Target the influencers
      • Staff development
      • Causes – CSR, Sponsorships
      • Reciprocal referral (B2b context)
      • Leverage existing social networks/ micro markets
      • Be truthful
      WOMM Guidelines
      Sernovitz (2006) http://www.wordofmouthbook.com/free/
    21. Customer Advocacy & Evangelism
    22. www.mmkta.org
      Happy customers advertise for you
      Free of charge
      Customer Advocacy & Evangelism
      cited in Söderlund (1998)
    23. www.mmkta.org
      Customer Advocacy & Evangelism
      http://localadlink5star.files.wordpress.com/2009/01/word-of-mouth.jpg
    24. www.mmkta.org
      Customer Satisfaction, loyalty and Word-of-mouth
      Customer Advocacy & Evangelism
      Cited in Chakrabarty (2009)
    25. www.mmkta.org
      Company
      Other Key Opinion Leaders
      Other Key Opinion Leaders
      Opinion Leaders/
      Key Influencers
      Customer Advocacy & Evangelism
      Opinion seekers/ followers
      Opinion seekers/ followers
      person
      person
      person
      person
    26. www.mmkta.org
      Customer Advocacy & Evangelism
      WOMMA (2009)
    27. www.mmkta.org
      Diffusion of Innovation
      cited in Söderlund (1998)
    28. www.mmkta.org
      Customer Evangelists
      • Evangelism in Religious context – attempting to convert people to a religion
      • Evangelism in Marketing – trying to convert a non-user or a competitors’ customers into customers
      • Customer Evangelists – customers who spread the words about the products they love
      • Apple’s evangelists - Mike Boich, Guy Kawasaki
      • Build community, share knowledge, create a cause, find the right people,
      Customer Advocacy & Evangelism
    29. www.mmkta.org
      Profit from price
      premium
      Profit from references
      Profit from reduced
      op. costs
      Profit from increased
      usage
      Base Profit
      1
      2
      3
      4
      5
      6
      7
      Year
      Reichheldand Sasser, cited in Chakrabarty (2009)
    30. WOMM Framework
    31. www.mmkta.org
      WOMM Planning Frame work
      www.wordofmouthbook.com
    32. www.mmkta.org
      WOM Episode Framework
      WOMMA
      http://womma.org/terminology/terminology.pdf
    33. www.mmkta.org
      Who: Participants — Creator, Sender, Receiver
      Individuals whose actions make up a WOM Episode. Participants may serve multiple roles.
      How: Action
      What participants do to create, pass along, or respond to a WOMUnit.
      What: WOMUnit
      A single unit of marketing-relevant information shared by a consumer.
      Where: Venue
      The medium or physical location where the communication takes place.
      Objects
      http://www.pandemiclabs.com/blog/viral-marketing/how-does-viral-marketing-work/
    34. www.mmkta.org
      Who
      Propensity: The likeliness of a consumer to take an action.
      Demographics: Descriptive data such as age, gender, location, etc.
      Credibility: Ability to impact the behavior or opinions of others.
      Reach: A Participant's potential audience size.
      ___________________
      How
      Velocity: The speed at which a WOMUnit moves
      Distribution Spread: The number of Receivers reached by a Sender.
      Source Diversity: The number of different Senders that send a WOMUnit to a Receiver.
      Qualities
      http://www.pandemiclabs.com/blog/viral-marketing/how-does-viral-marketing-work/
    35. www.mmkta.org
      What
      Topicality: Degree that the marketing message is contained in the WOMUnit.
      Timeliness: Whether the WOMUnit arrives in time to be relevant to a campaign.
      Polarity: Whether the message content is positive or negative.
      Clarity: Whether the message is understood by the receiver.
      Depth: The aspects and/or qualities that increase persuasiveness.
      ___________________
      Where
      Population: Total possible audience for a WOMUnit in a Venue.
      Audience: Number of Receivers that actually get the WOMUnit.
      Rules: Whether a WOMUnit complies with policies set by a Venue.
      Qualities
      http://www.pandemiclabs.com/blog/viral-marketing/how-does-viral-marketing-work/
    36. www.mmkta.org
      Consumption
      The Receiver directly consumes the WOMUnit but takes no further action.
      Inquiries
      The Receiver seeks more information after consuming the WOMUnit.
      Conversions
      The Receiver completes a desired action after consuming the WOMUnit.
      Relays
      The Receiver re-distributes the WOMUnit
      Re-creations
      The Receiver creates a new WOMUnit after consuming the WOMUnit.
      Outcomes
      http://www.pandemiclabs.com/blog/viral-marketing/how-does-viral-marketing-work/
    37. www.mmkta.org
      Conversions (e.g., clickthroughs, trials, purchases)
      Advocacy
      Market Share
      Shifts in awareness, image, brand equities, etc.
      Cost per conversion
      Quality of Advocacy
      Measuring Performance
      http://www.pandemiclabs.com/blog/viral-marketing/how-does-viral-marketing-work/
    38. Marketing Mix,
      IMC & WOM
    39. http://blogue.us/2009/05/13/united-hearts-of-benetton/
      The shocker: Benetton
    40. http://hollywooddame.com/wp-content/uploads/2009/06/calvin-klein-threesome-billboard-photo.jpg
      Controversial Ads – Calvin Klein
      SoHo, Downtown Manhattan, NYC
      June 15 to 26, 2009
    41. Buzz Marketing
    42. www.mmkta.org
      Buzz Marketing
      - A type of WOMM
      • involves cultivating opinion leaders and getting them to spread information about a product or service to others in their communities.
      • Blogs, chat rooms, product giveaways
      • Companies also hire “buzz agents” to imitate real-life WOM experience
      - Create “unique”, “spontaneous”, “personal”, “exclusive” conversations
      Buzz
      http://www.pandemiclabs.com/blog/viral-marketing/how-does-viral-marketing-work/
    43. www.mmkta.org
      Buzz Marketing
      • Vesper’s scooters in LA
      • BzzAgent
      • Harry Potter
      Buzz
      http://www.pandemiclabs.com/blog/viral-marketing/how-does-viral-marketing-work/
    44. eWOM Campaign in Online Communities
      Cirque du Soleil ‘s The Beatles Love
      • Beatles songs and biography performed as circus musical at The Mirage in Las Vegas started in 2006
      • Needed to generate pre-show awareness + excitement
      • Materials were held up due to long approval process
      • Hired agency DEI Worldwide for an “Influencer Word-of-Mouth Campaign.
      • Marketers engaged in conversations with people in chat-rooms and message boards
      • provided information and collected intelligence
      • 42% indicated intention to buy
      http://www.cirquedusoleil.com/en/shows/love/default.aspx
    45. Viral Marketing
    46. www.mmkta.org
      Viral Marketing
      • “network-enhanced word-of-mouth.” (Jurvetson , 1997)
      • Marketing technique that seeks to exploit pre-existing social networks to produce exponential increase in brand awareness through viral processes similar to the spread of an epidemic.
      • Could be passive or active
      • For active Viral, create something people want to share
      • Hotmail to append promotional URLs to all the e-mail messages sent by the users. 12 million users signed up for Hotmail accounts in 18 months.
      • Forwarded e-mails, internet referrals, YouTube
      • “word-of-mouse”
      Viral
      http://www.pandemiclabs.com/blog/viral-marketing/how-does-viral-marketing-work/
    47. www.mmkta.org
      Viral
      http://fb4wineries.files.wordpress.com/2009/06/viral_marketing1.jpg
    48. www.mmkta.org
      Viral
      http://www.emtactics.com/images/viral-marketing.jpg
    49. www.mmkta.org
      Viral
      http://viraltheshow.com/wp-content/uploads/2008/01/logistic-curve-viral-marketing.GIF
    50. www.mmkta.org
      Viral
      http://www.pandemiclabs.com/blog/viral-marketing/how-does-viral-marketing-work/
    51. www.mmkta.org
      Burger King’s “Simsponize Me”
      Viral
      http://www.bk.com/en/us/campaigns/simpsonize-me.html
    52. www.mmkta.org
      Burger King’s “Simsponize Me”
      Viral
      http://www.bk.com/en/us/campaigns/simpsonize-me.html
    53. Online Communities
    54. www.mmkta.org
      Word-of-mouth communication
      Positive Vs. Negative WOM
      WOM Marketing
      Customer Advocacy & Evangelism
      WOMM Framework
      Marketing Mix, IMC & WOM
      Buzz Marketing
      Online Communities
      overview
    55. www.mmkta.org
      Take-Away List
      Delight your customers
      People like to talk about you
      Give them something worthy and positive to talk about
      Consider WOM value in everything you do
      Find the right target
      Nurture passionate hard-core fans - the evangelists
      Facilitate – rewards
      Join in the talk – conversation – buzz marketing
      Tap into the social media, online communities
      Measure
      Take-Away List
    56. www.mmkta.org
      References
      Kotler, P. and Armstrong, G. 2009, Principles of Marketing, 13th edn, Prentice Hall.
      WOMMA, 2009, Word-of-Mouth Marketing Association Website, viewed, 1 August 2009, <http://www.womma.org/>
      www.subservientchicken.com
      http://www.cirquedusoleil.com/en/shows/love/default.aspx
      www.wordofmouthbook.com
      http://www.pandemiclabs.com/blog/viral-marketing/how-does-viral-marketing-work/
      Wangenheim, F. and Bayón, T. 2004, ‘The effect of word of mouth on services switching: Measurement and moderating variables’, European Journal of Marketing, vol. 38, no. 9/10, pp: 1173 – 1185
      http://www.arisey.com/images/viral_work.jpg
      http://www.bk.com/en/us/campaigns/simpsonize-me.html
      Solomon, M. 2009, Consumer Behavior, 8th edn, Prentice Hall
      Chakrabarty, A. 2009, Services Marketing: Course Notes, Nottingham University Business School
    57. proudly sponsored by
      www.nottingham.edu.my
    58. Thank you!

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