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Marketing Management

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Second Year Presentation of the Marketing Management module held on the 13th of November, 2015.

Business Management course at Roehampton University.

The starting point of the topic is the Simonson & Rosen article: What Marketers Misunderstand About Online Reviews. The importance of OR, social media comments and the general UGC in the purchase decisions of customers is increasing and companies have to consider Social Traction and O-continuum if they want to be successful.

Published in: Marketing
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Marketing Management

  1. 1. r;1". eters Misunderstand A Online Reviews , . 4 Vitor Cardoso Del Gatto, Maria Chiara Franco, Abdullahi Hassan, Sangeetha Manivannan, Derek Odoi, Olive} Waters V‘ _ _ ; Mark
  2. 2. r;1". eters Misunderstand A Online Reviews r . 4 Vitor Cardoso Del Gatto, Maria Chiara Franco, Abdullahi Hassan, Sangeetha Manivannan, Derek Odoi, Oliver Waters ii _ _ 1;’ Mark
  3. 3. J rrtzrri 1<fI. l'_, ,l<f}"lflIlftIi‘J It seems that online reviews have a fundamental influence in the buying process of consumers. A report conducted by Forrester Research has verified it, finding that around 50% of internet surfers contemplate online word-of-mouth reccomendations before purchasing movies and CDs (Duan, 2008) 3;, Price E Delivery ‘ i Support l Other ‘ l l L Otrzor What are online reviews? Why are they important?
  4. 4. Online Reviews Today customers can rely on the widely available, easily accessible and low-cost user- generated content (UGC) (Tirunillai, 2014). This gives them access to the product ABSOLUTE VALUE. However, marketers are neglecting the importance of online reviews because they think they are subjected to manipulation (Simonson & Rosen, 2014). A recent example of this fraud would be the Fiverr case (Gani, 2015). Depite this, nowadays trust is more present in horizontal relationships rather than vertical ones (Kotler, 2010). ll , - _ " ‘V. l l ''’i LT‘ ‘shall: 5, if UGC = a consumer review made publicly available through internet (Baines, 2014).
  5. 5. “L. »_ . '. _ i . t. Li . li? .l| tg; ’I_i 3,], :_ ~t. . l‘ (T l; l: r-“la r / I There are two tools that would help managers in changing strategy towards the online world: 1)The influence mix 2)The O continuum Marketing messages (M) Past experiences (P) Social traction (O) i—§ Competitive position i—§ Communication (Z) I - Market research t—l ’ Product segmentation (Simonson & Rosen, 2014) (Gregory, 2015)
  6. 6. The Influence Mix - Past experiences Past experiences (P) are one of the factors that influence consumers purchasing decision. The potential customer appeals to the, so called, internal search to recall informations about the product (Dibb, 2006). I , It includes prior preferences, beliefs and experiences (Simonson & Rosen, 2014). Adopting a Strategy If th roduct relies on priors experiences. it is m ortant to intro 2 improvements on the service so that cu mers are more likely to repurchase (MindTo0|s. 2015). : 'lé'lSla'h'dfi! For instance, loyalty cards as well as discount cards and coupons as rewards for ular customers are good ways to maintain the relationship sla (MindToo| s. 2015).
  7. 7. Adopting a Strategy If the product relies on priors experiences, it is important to introduce improvements on the service so that customers are more likely to repurchase (MindToo| s, 2015). For instance, loyalty cards as well as discount cards and coupons as rewards for regular customers are good ways to maintain the relationship stable (MindToo| s, 2015).
  8. 8. The Influence Mix - Marketing messages Marketing messages (M) are part of the external search that the consumer does in case he/ she can not recall any information about the product from memory (Dlbb’ 2006)" 9 This comes from the brand advertisement and traditional marketing Adopting a Strategy ll the product mostly ielies on the traditional iiiarketing alltl marketers inloriiiatioii, ll is inipoiizint to create its av/ ariiess so that the sense of ltlel it of the customers with the company is eiiliaiicerl (lvlintlTnn| s. 5)
  9. 9. Adopting a Strategy If the product mostly relies on the traditional marketing and marketers‘ information, it is important to create its awarness so that the sense of identity of the customers with the company is enhanced (MindToo| s, 2015). I TM (McDonald's, 2015) (Starbucks, 2015) (Apple, 2015) (Nike, 2015)
  10. 10. The Influence Mix - Social Traction The social traction (O) is another consumer external source. In this case the purchase decision is influenced by other people and information services (Simonson & Rosen, 2014). heir opinions online Word-of-mouth is spread by the Internet that produce the UGC which provides customers with more interaction and is spread also by social indivisualisation opportunities (Kotler, 2009). media Adopting a Strategy It the customers of your product heavily rely on online reviews, it would be useful to have a community of brand advocates. In fact, a weltconnected company that regularly analyze customers‘ feedback is more likely to promptly deal with ne ative comments and take care of the brand image (MiiidToo| s, 2 ). Q 3 0 USER 5 -T‘ GENERAIED 0 g. ""*~ L‘ coiiitiir 08 CT
  11. 11. Adopting a Strategy If the customers of your product heavily rely on online reviews, it would be useful to have a community of brand advocates. In fact, a well-connected company that regularly analyze customers‘ feedback is more likely to promptly deal with negative comments and take care of the brand image (MindToo| s, 2015). USER GENERATED CONTENT
  12. 12. Facebook is the leading resource of positive online reviews, whereas the online review sites are more likely to show negative comments (Gesenhues, 2013). Do you recall reading a POSITIVE/ NEGATIVE review customer service In any of the following? 195 Onlme review sale 4”. 185 l-aceboot 1 M“ (ompany site Negatwe PDKIHVP ; .— . ',‘(fil'-$.71; . '. '“lllll : ‘‘i 7‘ Almost half of the social media users purchase a product after having shared it on Facebook or Twitter (visioncritical, 2013).
  13. 13. Understanding the Mix Understanding the relation of this mix with a specific product is fundamental in order to maximise the impact of financial and intellectual resources (Gregory, 2015). Customers are shopping more / —/ for the experience than the —/ ’ / product itself, this is why they are more likely to base their Marketing purchasing decisions on their / SW own past experiences as well as the other people's (Gregory, 2015).
  14. 14. The O continuum The O continuum is the principle of understanding to what extent consumers depend on O. The closer your product is to being influenced by information services, the greater is the shift in how consumers are going to gather information from them (Simonson & Rosen, 2014). HOW MUCH DOES OPINION MATTER? The power of other people's views varies from one product category to another. The examples below show where several categories fall on the 0 continuum. Luxury goods When shopping for a , appear to buyers’ nonluxury car. many Z emotions rather consumers CO| '1dLiCt than their sense of Juswar 9Xte"5lV9 '9593'Cl‘ when consider~ In categories such as utility. so reviews ’ 0“ Site! -7 SUCH 33 CaFS- ing independent electronics. buyers are aren’t a big factor. com. They are also restaurants. likely to pay close at- lnlluellced bit ‘he consumers often tention to what previous hols, -lllvlolvelllhenl blalldls ’9PUl3ll°l"- rely on food critics adopters say before 3 llua Pu": 3595 C°"3“”‘e"5 l‘”°‘” or on sites such taking a chance on a generally alellll what to expect 3‘ 3 as Yelp lesser-known brand lflfluenced by chain restaurant. so ' ’ °the''5' °Dinions. they usually don't turn to reviews. 2 O'lNDEPENDENT O'DEPENDENT Others‘ opinions don’t affect purchase decisions Others‘ opinions guide purchase decisions V
  15. 15. There are some implications in four different fields that companies and their managers have to consider (Simonson & Rosen, 2014). - COMPETITIVE POSITION ‘TIP l’iTpi'7F‘nI'iri'- F‘ il‘r’ m-cl lull: ni‘: l Pfilnr ii Brultl ii clll u L: ue"ld l‘ldl-El ‘/ ‘L. I A: IN“ Dlr‘II1IIr‘| (I fif‘y‘IWrVlfl‘I I]Iri' I‘ Warkel iiJI llEi‘i‘ UUAIIIELLBZ I4 cur mm f iiniizin, ,mii l)Iflr1llF| S mini i‘P3il in an»: fll Trl fill‘ r. n'i lII'II>iIlIl‘“ I ii‘ii. -/ "'iIl'Il.1Iii1I'i}(II‘IIlii -. siirii-. iii . iii». II I’(‘l4I Iiiilmlu - MARKET RESEARCH I: IIMIIIHV JHIIIR [ll iieiisiiie F ii», iig -i IlIr'(| l(. l iii: » iiiiiiiiii-, i< I iii: L‘lIlII "PR 115 ’VlIIll’ lbiiilllg In iiii, Hiivii-im (’Il‘» iiii-: iiiiiI iiiii (IiVin}l‘ will/ ‘i / Sllllilllhill . t rei», --ig 7i M‘, - COMMUNICATION “.1 Coiiipaiiies should siair pioriioiiiir; ilieii uiodnicis iliiourih me lIT[PfI1P[ piaimiiii iii amiinriiii {HP}? fiilfllllri nolr. mi OITHITP lt‘(‘(ll)nr‘, k its well n<. lllf‘ cniiiiiiciiis. in IN‘ sncinl i1ir‘rlin This is lundamerilal siiice the use uuiiiiieigiiis ma product exposure ll’ an EIIZIVCIIISCVTCITI(SIIITDFISOI1 an Hoscn gum) T-ieie IS a sense iliai EZOWIIYIIIIIICBIIOIIE rake fl fi U‘ ‘ plare ai a nelfinital level T'Il< «, iiiiiy 6.. I‘ I cnii<. imir~i< alt‘ also Plfllf’ —, -uiiiiiir; in iimiciimic *’ "‘ leaving '. 'lEll cuiiimeni; and coiisideniig the (TIES ol uiiici DICVIDLIS . )UyCTS [| .’lvtl'ii: 2Li12) - PRODUCT SEGMENTATION The | UCa(IO‘7 cil a D'D(llC[ on we I: cui-iiiii. .iiii can vary LlE'D? IT[| Ii‘[| DFI CLIEICIITEIT SEWICG and on tl~-. - <uiiii: iv we Are dui xii Imsiiie-_. s Aii dLlVlLE Iui l. UfI| LJi| 'llE3 viii: ale U‘, llIIl] io IITdl‘ldualISE their 0 CDIT| ll‘LILI‘T' iocaruii 5 (0 la CII (‘Tel lT‘aIl€'[IITg strategies in (H l, llI(hIlll, l‘ . ’II I ilu: tliiliw ii «. iiii~iliiu-i . V‘l]IlI4‘Il(s i7I.1|iUl[llII II ms 'ii Iii , rIll~. l(il‘H‘(i ilmi O i-iigiii (Till igi~ iii Il>*ih! lI)'l HI ilise i: ii . xi lI NP” {SIVIIIIINUII A Rmwii, 4714)
  16. 16. 0 consider (Simonson & Rosen - COMPETITIVE POSITION As the product O-dependent grows, the importance of the brand falls and enter the market for new businesses is then easier. In an O-dependent market you can even diverisify your products more easily. LG and Samsung are two companies that have taken advantage of this (Simonson & Rosen, 2014). 4@’@ WM q
  17. 17. LI TOLL WI I IiJ*‘CJ'. I IICD C/1| ILL LI ICII I I ICJLI IICLEC COMMUI| IC, -t'I'IOII Companies should start promoting their products through the Internet platform. In addition, they should look for online feedback as well as the comments in the social media. This is fundamental since the UGC outweighs the product exposure in an advertisement (Simonson & Rosen, 2014). There is a sense that communications take i" I l I I , I1. i_i I place at a personal level. This is why I I I consumers are also more willing to participate ' ‘ leaving their comments and considering the ones of other previous buyers (Blythe, 2012). I”. ifilfif'll lf"I' ("l. —f‘liii—iIW'I'I‘IfiI
  18. 18. - MARKET RESEARCH It usually aims to measure P, trying to predict the products that consumers are more willing to buy. However, this method not always works (Simonson & Rosen, 2014). A Market Research Fail A market research concluded that american consumers would have not been interested in purchasing a device that would combine the phone features with the mp3 and camera ones (Simonson & Rosen. 2014). Then the first IPhone hit the market in June 2007 (Time, 2014). This research failed because it was based on the measurement of consumers past experiences (P), but when the IPhone came out the IE? .; Il iii [1 influence of the buying purchase shifted from P to O (Simonson & Rosen, 2014). Int 9' 0 ij. oi ‘i .34. k‘
  19. 19. A Market Research Fail A market research concluded that american consumers would have not been interested in purchasing a device that would combine the phone features with the mp3 and camera ones (Simonson & Rosen, 2014). Then the first IPhone hit the market in June 2007 (Time, 2014). This research failed because it was based on the measurement of consumers past experiences (P), but when the IPhone came out the influence of the buying purchase shifted from P to O (Simonson & Rosen, 2014).
  20. 20. Outweighing the Compromise Effect The importance of online reviews becomes even more evident when it eliminates a principle such as the compromise effect. This consists in introducing a more expensive product option to the already existing two (one cheap and one expensive), so that the initial expensive product becomes now the compromise that more consumers are willing to buy (Simonson & Rosen, 2014). Which one do you prefer? However, an experiment conducted in 2012, demonstrates that when introducing online reviews, the decision is influenced by those rather than the prices (Simonson & Rosen, 2014).
  21. 21. - PRODUCT SEGMENTATION The location of a product on the o continuum can vary depending on customer service and on the country we are doing business. An advice for companies that are trying to individualise their O continuum location is to tailor their marketing strategies in accordance with the different consumer segments. In addition, it has to be considered that O might change in relation to the context as well (Simonson & Rosen, 2014).
  22. 22. No Going Back Since consumers have the option of accessing the absolute value of the product from online reviews, it is difficult that they are going back on relying on the traditional marketing information (M) (Simonson & Rosen, 2014). 68% OF CONSUMERS GO TO SOCIAL NETWORKING SITES TO READ PRODUCT REVIEWS VOCUS (Chauhan, 2015) In addition 30% of americans begin their online purchases looking first at the Amazon reviews about the product and a Google study has found that before making a purchase, shoppers consult more than 10 different information sources (Simonson & Rosen, 2014).
  23. 23. Conclusion The importance of online reviews nowadays is evident. Consumers have the power to access the absolute value of the product and this has changed the way of how companies should address their products in the market. As the influence mix evolves the successful companies will be the ones that track the online feedback so that they can adapt to the consumers opinions (Simonson & Rosen, 2014)
  24. 24. ays ' to and ties ket. sful the the sen,
  25. 25. ,: r7r: —Ir. »tI 4/7%>°~"
  26. 26. FL Ty . r‘ _ e‘ re‘ re: r ii"e‘<‘ Apple, (2015) Home Page, Available at: (Accessed: 4/11/15). Baines, P. . Fill, C. , Page, K. , (2014), Marketing. Oxford: Oxford University Press. Blythe, J. (2012), Essentials of Marketing, Essex: Pearson Education Limited. Chauhan, V. . (2015) Consumers Trust Online Reviews As Much As Personal Recommendations. Bui/ dRepo. Available at: Dibb, 8., Simkin, L. , Pride, W. M., Ferrell, 0.0, (2006) Marketing Concepts and Strategies, Boston: Houghton Mifflin. Duan. W. . Gu. B. . Whinston, AB, (2008) ‘Do online reviews matter? - An empirical investigation of panel data’, in Elsevier, 45 (4) 1007 - 1016. DOI: 10.1016/j. dss.2008.04.001 Gani, A. (18th October, 2015) Amazon sues 1,000 ‘fake reviewers‘. The Guardian. Available from: [E -3 HS “missed. 2!” 2915} Gesenhues, A. , (9th April. 2013) Survey: 90% Of Custo -n I IIAIII - , . mers Say Buying Decisions Are Influenced By Online Reviews. Marketing Land. Availabe at: l Gregory, Y. , (2015) Go—To-Market Strategies in the Age of the Social Customer. Customer Experience /0. Available at: Kotler, P, Keller, K. L. , Brady, M. , Goodman M. , & Hansen, T. , (2009), Marketing Management, Essex: Pearson Education Limited. Kotler, P, Kartajaya, H. , Setiawan, I. , (2010) From products to Customers to the Humn Spirit Marketing 3.0, New Jersey: Wiley & Sons. McDonald's. (2015) Home Page. Available at: &fl MindToo| s, (2015) Simonson and Rosen's Influence Mix: Learn What Influences Customer Purchases, Available at: mm Nike. (2015) Home Page. Available at: Marketers Misunderstand . "- Harvard Busine Simonson, I. , Ros ' - ‘ = I. I = I Ill -t In "A ss Review 2 (1/2) 23 — 25. Available at: &hQw ; - - - 9 Starbucks, (2015) Home Page, Available at: (Accessed: 1/1.1/15). Time, (2014) 8 Years of the IPhone: An Interactive 7'imeIIne, Available at: Tirullinai, S. ,Tel| is, G. J., (2014) ‘Mining Marketing Meaning from Online Chatter: Strategic Brand Analysis of Big Data Using Latent Dirichlet Allocation‘, in Journal of Marketing Research Ll 463 — 479. Available at: my: //w hQ3flm/ eho_5_t[p_df/ iewer/ p_dfvieweI’? sid=2c_5_0_9_&e7-f174-45_c7-b_i1e1-325355237b_8_6%4Qs_essionmgr112&vicl=7&hid=101 fiixesseg: 29/19115). l t’ In‘ ' ’-Cl uc AI iii‘. 3) How Does Social Media Trans/ ate Into SaIes? , Available at: /15i.
  27. 27. r;1". eters Misunderstand A Online Reviews . . 4 Vitor Cardoso Del Gatto, Maria Chiara Franco, Abdullahi Hassan. Sangeetha Manivannan, Derek Odoi, Oliver Waters I _ _ , Mark

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