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Word of Mouth
Aishwarya Kelkar
One of the most powerful form of
marketing
Definition : any business action that earns a customer
recommendation is WOM Marketing
WOM
Consists of communications where satisfied customers tell other
people about a certain business, product/service that they have
used
Why WOM ?
 Reliable
 Trustworthy
 Backed up by social pressure to conform
 Influences two-thirds of all sales of goods
 Later stages of evaluation and adoption
 Powerful when we are unfamiliar with product category
What is Opinion Leadership?
Opinion
Leader
Opinion
Receiver
Opinion
Seeker
The process by which one person (the opinion
leader) informally influences the consumption
actions or attitudes of others who may be opinion
seekers or opinion recipients.
Opinion Leaders
Characteristics of Opinion Leaders
 Highly Knowledgeable(Specific)
 Make effective recommendations
 Follow New Products
 Consumer Innovators in their Area of Expertise
 Self-confident
 Outgoing & Sociable
Examples of Opinion Leadership
 During a coffee break, a co-worker talks about
the movie he saw last night and recommends
seeing it.
 A person shows a friend photographs of his
recent Australian Outback vacation and the
friend suggests that using a polarizing filter
might produce better pictures.
Reasons for the Effectiveness of
Opinion Leadership
 Credibility
 Positive and Negative Product Information
 Information and Advice
 Opinion Leadership Is Category-Specific
 Opinion Leadership Is a Two-way Street
Measuring Opinion Leadership
 Self-Designating Method
 Sociometric Method
 Key Informant Method
 Klout Scores
SELF-DESIGNATING
METHOD
“Do you influence
other people in their
selection of
products?”
Each respondent is asked a series
of questions to determine the
degree to which he or she
perceives himself or herself to be
an opinion leader.
OPINION LEADERSHIP
MEASUREMENT METHOD
SAMPLE QUESTIONS
ASKED
DESCRIPTION OF METHOD
SOCIOMETRIC METHOD Members of a social system are
asked to identify to whom they
give advice and to whom they go
for advice.
“Whom do you
ask?”“Who asks you
for info about that
product category?”
OPINION LEADERSHIP
MEASUREMENT METHOD
SAMPLE QUESTIONS ASKEDDESCRIPTION OF METHOD
KEY INFORMANT METHOD “Who are the most
influential people in the
group?”
Carefully selected key informants in a
social system are asked to designate
opinion leaders.
KLOUT SCORES Measures people’s influence online based
on their abilities to generate engagement
and feedback to what they post.
The more influential you are, the higher
your Klout Score.The Klout Score isn't the
average of your influence across all your
networks, it's the accumulation.
Strategic Working Applications of WOM
 Social Networks
 Brand Communities
 Weblogs
 Stimulating WOM
 Viral Marketing
 Managing Negative Rumours
Diffusion of Innovation
Diffusion of innovations is a theory that seeks to
explain how, why, and at what rate new ideas and
technology spread.
The process by which the acceptance of an
innovation is spread by communication to members
of the target market over a period of time.
Diffusion Process
Innovation
Communication
Time
Social System
Adoption Process
 The stages through which an individual consumer
passes in arriving at a decision to try (or not to try),
to continue using (or discontinue using) a new
product.
Product Characteristics That Influence
Diffusion
Air travel over train travel, cordless phones
over corded telephones
Relative
Advantage
Gillette MACH3 over disposable razors,
digital telephone answering machines over
machines using tape
Compatibility
Electric shavers, instant puddingsComplexity
Trialability
Observability
Trial size jars and bottles of new products, free
trials of software, free samples, cents-off coupons
Clothing, such as a new Tommy Hilfiger jacket, a
car, wristwatches, eyeglasses,Eureka Forbes
Aquaguard
Adopter Categories
 A sequence of categories that describes how early (or late) a
consumer adopts a new product in relation to other adopters
Product Life Cycle
Presumption : i. All members of a given society would eventually adopt the innovation
ii. Society is defined – as everyone assumed to in the market for the product
shortly,or at some future time , after the introduction of an innovation.

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Word-of-Mouth

  • 2. One of the most powerful form of marketing
  • 3. Definition : any business action that earns a customer recommendation is WOM Marketing
  • 4. WOM Consists of communications where satisfied customers tell other people about a certain business, product/service that they have used
  • 5. Why WOM ?  Reliable  Trustworthy  Backed up by social pressure to conform  Influences two-thirds of all sales of goods  Later stages of evaluation and adoption  Powerful when we are unfamiliar with product category
  • 6. What is Opinion Leadership? Opinion Leader Opinion Receiver Opinion Seeker
  • 7. The process by which one person (the opinion leader) informally influences the consumption actions or attitudes of others who may be opinion seekers or opinion recipients. Opinion Leaders
  • 8. Characteristics of Opinion Leaders  Highly Knowledgeable(Specific)  Make effective recommendations  Follow New Products  Consumer Innovators in their Area of Expertise  Self-confident  Outgoing & Sociable
  • 9. Examples of Opinion Leadership  During a coffee break, a co-worker talks about the movie he saw last night and recommends seeing it.  A person shows a friend photographs of his recent Australian Outback vacation and the friend suggests that using a polarizing filter might produce better pictures.
  • 10. Reasons for the Effectiveness of Opinion Leadership  Credibility  Positive and Negative Product Information  Information and Advice  Opinion Leadership Is Category-Specific  Opinion Leadership Is a Two-way Street
  • 11. Measuring Opinion Leadership  Self-Designating Method  Sociometric Method  Key Informant Method  Klout Scores
  • 12. SELF-DESIGNATING METHOD “Do you influence other people in their selection of products?” Each respondent is asked a series of questions to determine the degree to which he or she perceives himself or herself to be an opinion leader. OPINION LEADERSHIP MEASUREMENT METHOD SAMPLE QUESTIONS ASKED DESCRIPTION OF METHOD SOCIOMETRIC METHOD Members of a social system are asked to identify to whom they give advice and to whom they go for advice. “Whom do you ask?”“Who asks you for info about that product category?”
  • 13. OPINION LEADERSHIP MEASUREMENT METHOD SAMPLE QUESTIONS ASKEDDESCRIPTION OF METHOD KEY INFORMANT METHOD “Who are the most influential people in the group?” Carefully selected key informants in a social system are asked to designate opinion leaders. KLOUT SCORES Measures people’s influence online based on their abilities to generate engagement and feedback to what they post. The more influential you are, the higher your Klout Score.The Klout Score isn't the average of your influence across all your networks, it's the accumulation.
  • 14. Strategic Working Applications of WOM  Social Networks  Brand Communities  Weblogs  Stimulating WOM  Viral Marketing  Managing Negative Rumours
  • 15.
  • 16. Diffusion of Innovation Diffusion of innovations is a theory that seeks to explain how, why, and at what rate new ideas and technology spread. The process by which the acceptance of an innovation is spread by communication to members of the target market over a period of time.
  • 18. Adoption Process  The stages through which an individual consumer passes in arriving at a decision to try (or not to try), to continue using (or discontinue using) a new product.
  • 19. Product Characteristics That Influence Diffusion Air travel over train travel, cordless phones over corded telephones Relative Advantage Gillette MACH3 over disposable razors, digital telephone answering machines over machines using tape Compatibility Electric shavers, instant puddingsComplexity Trialability Observability Trial size jars and bottles of new products, free trials of software, free samples, cents-off coupons Clothing, such as a new Tommy Hilfiger jacket, a car, wristwatches, eyeglasses,Eureka Forbes Aquaguard
  • 20. Adopter Categories  A sequence of categories that describes how early (or late) a consumer adopts a new product in relation to other adopters
  • 22. Presumption : i. All members of a given society would eventually adopt the innovation ii. Society is defined – as everyone assumed to in the market for the product shortly,or at some future time , after the introduction of an innovation.