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


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Title: Word-of-Mouth Marketing
Speaker: Aung Chit Khin MABE, ACIM, Founding Member of (MMktA)

Myanmar Marketing Association Monthly Symposium(6/03), 2 August 2009, Sunday (9:30AM - 11:30 AM), Traders Hotel, Yangon Myanmar.

Published in: Business, Technology
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Word-of-Mouth Marketing - Aung Chit Khin (MMktA)

  1. 1.
  2. 2. www.mmkta.org<br />Word-of-mouth communication <br />Positive Vs. Negative WOM<br />WOM Marketing<br />Customer Advocacy & Evangelism<br />WOMM Framework<br />Marketing Mix, IMC & WOM<br />Buzz Marketing<br />Online Communities<br />overview<br />
  3. 3. Word-of-Mouth (WOM)<br />
  4. 4. www.mmkta.org<br />Marketing Communications <br />b2c – traditional marketing communication<br />c2c – word-of-mouth<br />c2b - feedback<br />Communication<br />
  5. 5. www.mmkta.org<br />Word of Mouth (WOM)<br />The product information individuals transmit to other individuals. <br />(Solomon, 2009)<br />The act of consumers providing information to other consumers.<br />(Word of Mouth Marketing Association WOMMA,2009)<br />Interpersonal communication amongst consumers regarding product and service performances.<br />(Richins, 1983) (Kaplanidou and Vogt, 2003)<br />Personal communication about a product between target buyers and neighbours, friends, family members and associates. <br />(Kotler & Armstrong, 2009)<br />Definitions<br />
  6. 6. www.mmkta.org<br />Passing it along to <br />Family, friends, relatives<br />eWOM<br />Communication patterns<br />http://www.pandemiclabs.com/blog/viral-marketing/how-does-viral-marketing-work/<br />
  7. 7. www.mmkta.org<br />People talk about exciting products, innovative products, services, experiences, high involvement products and personal activities. <br />People also observe and talk about the products others are using. <br />(Kaplanidou and Vogt, 2003)<br />Important in customers’ formation of attitudes, risk reduction, decision making<br />(Bone, 1995) (Bansal and Voyer, 2000) (Murray, 1991)<br />Critical for services which are intangible and experiential <br />(Berry and Parasuraman, 1991)<br />WOM Facts<br />Wangenheim and Bayón (2004)<br />
  8. 8. www.mmkta.org<br /><ul><li>WOM is a “natural” phenomenon
  9. 9. People like to talk, when something is Talk-Worthy.
  10. 10. WOM comes with social pressure to conform.
  11. 11. Sometimes, others’ opinions matter more than own perceptions.
  12. 12. 2/3 of all consumer-goods sales are influenced by WOM</li></ul>% of buyers relying on WOM for purchases<br />69% for restaurant<br />36% for computer hardware and software<br />22% for travel and vacation<br />WOM Facts<br />Solomon (2009)<br />
  13. 13. www.mmkta.org<br />Viral Infection = WOM<br />WOM message = virus<br />Infectious spread from hosts/ vectors<br />Level of contagiousness depends on the potency/DNA of WOM-unit<br />Some can only be transmitted in specific way<br />“High-risk” populations (High Social Networking Potential –SNP)<br />Some make a purchase, some don’t<br />Message mutates just like the virus depending on the host<br /> Viral<br />http://www.pandemiclabs.com/blog/viral-marketing/how-does-viral-marketing-work/<br />
  14. 14. www.mmkta.org<br /> Viral<br />http://www.arisey.com/images/viral_work.jpg<br />
  15. 15. http://ericsusch.com/blog/wp-content/uploads/2008/12/050905wom_n.jpg<br />
  16. 16. Positive vs. Negative WOM<br />
  17. 17. www.mmkta.org<br />Remarkable<br />Positive Experience<br />Big<br />NegativeExperience<br />Loyalty<br />+WOM<br />Switching<br />-WOM<br />Positive or Negative<br />Customer<br />Acquisition & Growth<br />Customer<br />Retention<br />Loss of other customers<br />& potential<br />customers<br />Customer<br />Defection<br />
  18. 18. www.mmkta.org<br />Company’s efforts<br />The Marketing Mix<br />Place<br />Process<br />People<br />Competitors’<br />Efforts<br />Product<br />Price<br />Competitors’<br />Efforts<br />Promotion<br /> WOM <br />person<br />person<br />person<br />person<br />person<br />person<br />person<br />person<br />Competitors’ Brand<br />Community<br />Brand<br />Community<br />Potential Customers/<br />Non-Users<br />person<br />person<br />person<br />person<br />
  19. 19. www.mmkta.org<br /> Negativity Bias in WOM<br />“Customers who have had bad experiences <br />tell approximately 11 people about it; <br />those with good experiences tell just 6”<br />Hart et al. (1990, p. 153)<br />A satisfied customer tells 8 other people.<br />A dissatisfied one tells 20.<br />(Fortune, 1995)<br />Positivity Bias in Feedback<br /> Bias<br />cited in Söderlund (1998)<br />
  20. 20. Word of Mouth Marketing (WOMM)<br />Sernovitz (2006) http://www.wordofmouthbook.com/free/, WOMMA (2009)<br />
  21. 21. www.mmkta.org<br />Word of Mouth Marketing<br />giving people a reason to talk about you<br />motivating people to talk about you<br />making it easier for the conversation to take place<br /> WOMM<br />Sernovitz (2006) http://www.wordofmouthbook.com/free/, WOMMA (2009)<br />
  22. 22. www.mmkta.org<br />Word of Mouth Marketing <br />Start , Support, Simplify Sharing<br /> WOMM<br />Sernovitz (2006) http://www.wordofmouthbook.com/free/, WOMMA (2009)<br />
  23. 23. www.mmkta.org<br />Benefits<br /><ul><li> Third-party credibility
  24. 24. Cost effective
  25. 25. Relatively Easy
  26. 26. Enhance the impact of other communication tools
  27. 27. WOM keeps on going and going and going</li></ul> WOMM<br />
  28. 28. www.mmkta.org<br />Why WOMM is becoming important<br /><ul><li>Consumers are in control
  29. 29. Fragmentation of markets
  30. 30. Growing distrust of advertising
  31. 31. Growth of Internet and virtual communities
  32. 32. Media fragmentation
  33. 33. Some products/ services cannot be advertised</li></ul> WOMM<br />
  34. 34. www.mmkta.org<br />WOMM Guidelines<br /><ul><li> Be talk worthy
  35. 35. Delight the customers – Offer more
  36. 36. Rewards and recognition
  37. 37. Target the influencers
  38. 38. Staff development
  39. 39. Causes – CSR, Sponsorships
  40. 40. Reciprocal referral (B2b context)
  41. 41. Leverage existing social networks/ micro markets
  42. 42. Be truthful</li></ul> WOMM Guidelines<br />Sernovitz (2006) http://www.wordofmouthbook.com/free/<br />
  43. 43. Customer Advocacy & Evangelism<br />
  44. 44. www.mmkta.org<br />Happy customers advertise for you<br />Free of charge<br />Customer Advocacy & Evangelism<br />cited in Söderlund (1998)<br />
  45. 45. www.mmkta.org<br />Customer Advocacy & Evangelism<br />http://localadlink5star.files.wordpress.com/2009/01/word-of-mouth.jpg<br />
  46. 46. www.mmkta.org<br />Customer Satisfaction, loyalty and Word-of-mouth<br />Customer Advocacy & Evangelism<br />Cited in Chakrabarty (2009)<br />
  47. 47. www.mmkta.org<br />Company<br />Other Key Opinion Leaders<br />Other Key Opinion Leaders<br />Opinion Leaders/<br />Key Influencers<br />Customer Advocacy & Evangelism<br />Opinion seekers/ followers<br />Opinion seekers/ followers<br />person<br />person<br />person<br />person<br />
  48. 48. www.mmkta.org<br />Customer Advocacy & Evangelism<br />WOMMA (2009)<br />
  49. 49. www.mmkta.org<br />Diffusion of Innovation<br />cited in Söderlund (1998)<br />
  50. 50. www.mmkta.org<br />Customer Evangelists<br /><ul><li>Evangelism in Religious context – attempting to convert people to a religion
  51. 51. Evangelism in Marketing – trying to convert a non-user or a competitors’ customers into customers
  52. 52. Customer Evangelists – customers who spread the words about the products they love
  53. 53. Apple’s evangelists - Mike Boich, Guy Kawasaki
  54. 54. Build community, share knowledge, create a cause, find the right people,</li></ul>Customer Advocacy & Evangelism<br />
  55. 55. www.mmkta.org<br />Profit from price<br />premium<br />Profit from references<br />Profit from reduced<br />op. costs<br />Profit from increased<br />usage<br />Base Profit<br />1<br />2<br />3<br />4<br />5<br />6<br />7<br />Year<br />Reichheldand Sasser, cited in Chakrabarty (2009)<br />
  56. 56. WOMM Framework<br />
  57. 57. www.mmkta.org<br />WOMM Planning Frame work<br />www.wordofmouthbook.com<br />
  58. 58. www.mmkta.org<br />WOM Episode Framework<br />WOMMA<br />http://womma.org/terminology/terminology.pdf<br />
  59. 59. www.mmkta.org<br />Who: Participants — Creator, Sender, Receiver<br />Individuals whose actions make up a WOM Episode. Participants may serve multiple roles.<br />How: Action<br />What participants do to create, pass along, or respond to a WOMUnit.<br />What: WOMUnit<br />A single unit of marketing-relevant information shared by a consumer.<br />Where: Venue<br />The medium or physical location where the communication takes place.<br /> Objects<br />http://www.pandemiclabs.com/blog/viral-marketing/how-does-viral-marketing-work/<br />
  60. 60. www.mmkta.org<br />Who<br />Propensity: The likeliness of a consumer to take an action.<br />Demographics: Descriptive data such as age, gender, location, etc.<br />Credibility: Ability to impact the behavior or opinions of others.<br />Reach: A Participant&apos;s potential audience size.<br />___________________<br />How<br />Velocity: The speed at which a WOMUnit moves<br />Distribution Spread: The number of Receivers reached by a Sender.<br />Source Diversity: The number of different Senders that send a WOMUnit to a Receiver.<br /> Qualities<br />http://www.pandemiclabs.com/blog/viral-marketing/how-does-viral-marketing-work/<br />
  61. 61. www.mmkta.org<br />What<br />Topicality: Degree that the marketing message is contained in the WOMUnit.<br />Timeliness: Whether the WOMUnit arrives in time to be relevant to a campaign.<br />Polarity: Whether the message content is positive or negative.<br />Clarity: Whether the message is understood by the receiver.<br />Depth: The aspects and/or qualities that increase persuasiveness.<br />___________________<br />Where<br />Population: Total possible audience for a WOMUnit in a Venue.<br />Audience: Number of Receivers that actually get the WOMUnit.<br />Rules: Whether a WOMUnit complies with policies set by a Venue.<br /> Qualities<br />http://www.pandemiclabs.com/blog/viral-marketing/how-does-viral-marketing-work/<br />
  62. 62. www.mmkta.org<br />Consumption<br />The Receiver directly consumes the WOMUnit but takes no further action. <br />Inquiries<br />The Receiver seeks more information after consuming the WOMUnit. <br />Conversions<br />The Receiver completes a desired action after consuming the WOMUnit.<br />Relays<br />The Receiver re-distributes the WOMUnit<br />Re-creations<br />The Receiver creates a new WOMUnit after consuming the WOMUnit.<br /> Outcomes<br />http://www.pandemiclabs.com/blog/viral-marketing/how-does-viral-marketing-work/<br />
  63. 63. www.mmkta.org<br />Conversions (e.g., clickthroughs, trials, purchases)<br />Advocacy<br />Market Share<br />Shifts in awareness, image, brand equities, etc.<br />Cost per conversion<br />Quality of Advocacy<br />Measuring Performance<br />http://www.pandemiclabs.com/blog/viral-marketing/how-does-viral-marketing-work/<br />
  64. 64. Marketing Mix,<br />IMC & WOM<br />
  65. 65. http://blogue.us/2009/05/13/united-hearts-of-benetton/<br />The shocker: Benetton<br />
  66. 66. http://hollywooddame.com/wp-content/uploads/2009/06/calvin-klein-threesome-billboard-photo.jpg<br />Controversial Ads – Calvin Klein<br />SoHo, Downtown Manhattan, NYC <br />June 15 to 26, 2009<br />
  67. 67.
  68. 68. Buzz Marketing<br />
  69. 69. www.mmkta.org<br />Buzz Marketing<br />- A type of WOMM<br /><ul><li> involves cultivating opinion leaders and getting them to spread information about a product or service to others in their communities.
  70. 70. Blogs, chat rooms, product giveaways
  71. 71. Companies also hire “buzz agents” to imitate real-life WOM experience </li></ul>- Create “unique”, “spontaneous”, “personal”, “exclusive” conversations<br /> Buzz<br />http://www.pandemiclabs.com/blog/viral-marketing/how-does-viral-marketing-work/<br />
  72. 72. www.mmkta.org<br />Buzz Marketing<br /><ul><li>Vesper’s scooters in LA
  73. 73. BzzAgent
  74. 74. Harry Potter</li></ul> Buzz<br />http://www.pandemiclabs.com/blog/viral-marketing/how-does-viral-marketing-work/<br />
  75. 75. eWOM Campaign in Online Communities<br />Cirque du Soleil ‘s The Beatles Love<br /><ul><li>Beatles songs and biography performed as circus musical at The Mirage in Las Vegas started in 2006
  76. 76. Needed to generate pre-show awareness + excitement
  77. 77. Materials were held up due to long approval process
  78. 78. Hired agency DEI Worldwide for an “Influencer Word-of-Mouth Campaign.
  79. 79. Marketers engaged in conversations with people in chat-rooms and message boards
  80. 80. provided information and collected intelligence
  81. 81. 42% indicated intention to buy</li></ul>http://www.cirquedusoleil.com/en/shows/love/default.aspx<br />
  82. 82. Viral Marketing<br />
  83. 83. www.mmkta.org<br />Viral Marketing<br /><ul><li>“network-enhanced word-of-mouth.” (Jurvetson , 1997)
  84. 84. 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.
  85. 85. Could be passive or active
  86. 86. For active Viral, create something people want to share
  87. 87. 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.
  88. 88. Forwarded e-mails, internet referrals, YouTube
  89. 89. “word-of-mouse”</li></ul> Viral<br />http://www.pandemiclabs.com/blog/viral-marketing/how-does-viral-marketing-work/<br />
  90. 90. www.mmkta.org<br /> Viral<br />http://fb4wineries.files.wordpress.com/2009/06/viral_marketing1.jpg<br />
  91. 91. www.mmkta.org<br /> Viral<br />http://www.emtactics.com/images/viral-marketing.jpg<br />
  92. 92. www.mmkta.org<br /> Viral<br />http://viraltheshow.com/wp-content/uploads/2008/01/logistic-curve-viral-marketing.GIF<br />
  93. 93. www.mmkta.org<br /> Viral<br />http://www.pandemiclabs.com/blog/viral-marketing/how-does-viral-marketing-work/<br />
  94. 94. www.mmkta.org<br />Burger King’s “Simsponize Me”<br /> Viral<br />http://www.bk.com/en/us/campaigns/simpsonize-me.html<br />
  95. 95. www.mmkta.org<br />Burger King’s “Simsponize Me”<br /> Viral<br />http://www.bk.com/en/us/campaigns/simpsonize-me.html<br />
  96. 96. Online Communities<br />
  97. 97.
  98. 98.
  99. 99.
  100. 100.
  101. 101. www.mmkta.org<br />Word-of-mouth communication <br />Positive Vs. Negative WOM<br />WOM Marketing<br />Customer Advocacy & Evangelism<br />WOMM Framework<br />Marketing Mix, IMC & WOM<br />Buzz Marketing<br />Online Communities<br />overview<br />
  102. 102. www.mmkta.org<br />Take-Away List<br />Delight your customers<br />People like to talk about you<br />Give them something worthy and positive to talk about<br />Consider WOM value in everything you do<br /> Find the right target<br />Nurture passionate hard-core fans - the evangelists<br />Facilitate – rewards<br />Join in the talk – conversation – buzz marketing<br />Tap into the social media, online communities<br />Measure<br /> Take-Away List<br />
  103. 103. www.mmkta.org<br />References<br />Kotler, P. and Armstrong, G. 2009, Principles of Marketing, 13th edn, Prentice Hall.<br />WOMMA, 2009, Word-of-Mouth Marketing Association Website, viewed, 1 August 2009, &lt;http://www.womma.org/&gt;<br />www.subservientchicken.com<br />http://www.cirquedusoleil.com/en/shows/love/default.aspx<br />www.wordofmouthbook.com<br />http://www.pandemiclabs.com/blog/viral-marketing/how-does-viral-marketing-work/<br />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<br />http://www.arisey.com/images/viral_work.jpg<br />http://www.bk.com/en/us/campaigns/simpsonize-me.html<br />Solomon, M. 2009, Consumer Behavior, 8th edn, Prentice Hall<br />Chakrabarty, A. 2009, Services Marketing: Course Notes, Nottingham University Business School<br />
  104. 104. proudly sponsored by<br />www.nottingham.edu.my<br />
  105. 105. Thank you!<br />