Chapter 8- WOM & Satisfaction

Question 1

Defining WOM

Answer 1

Informal communication directed at other consumers about the ownership, usage, or characteristics of particular goods and services (brands), and/or the seller

Question 2

Why is WOM powerful?

Answer 2

๏ Involved 80% of all brand decisions
๏ 50% of service provider replacements occur due to WOM
๏ MORE powerful than print ads, personal selling and advertising

Question 3

What makes it different?

Answer 3

✓ Interactive & fast
✓ Evidence based
✓ Perceived to be non-commercial
✓ Felt pressure to conform
✓ Associated social risks

Question 4

This means that WOM is…

Answer 4

๏ Positive WOM is good and we want more of it

๏ Negative WOM is bad and we need to stop it

Question 5

The Giver

Answer 5

• Propensity to give WOM

Question 6

The Receiver

Answer 6

• Opportunities to receive WOM • Impact of WOM

Question 7

Internal Triggers- Positive WOM

Answer 7

Personal interest in the product
Self enhancement
Help the company Altruism

Question 8

Internal Triggers-Negative WOM

Answer 8

Vengeance Anxiety reduction Seek advice Altruism

Question 9

External Triggers

Positive & Negative WOM

Answer 9

Coincidental conversation
To stimulate discussion
On being asked Newsworthy product experience
Advertising

Question 10

Past history with the brand - PWOM

Answer 10

Most PWOM is given about the brand currently used

Question 11

Past history with the brand - NWOM

Answer 11

Most NWOM is given by non-users of the brand

Question 12

WOM and Market share

Answer 12

Bigger brands get more positive and negative WOM

Question 13

Who is talking about you?

Answer 13

• Tends to be new customers

* longer the customer tenure, the less likely they are to recommend

Question 14

Perceived usefulness of the information to the intended recipients

Answer 14

• Up to 50% of WOM given due to altruism, or to help the information receiver (Mangold et al, 1998)
• However, this means the giver needs to perceive it to be useful

Question 15

Opportunities available to give WOM

Answer 15

• Have the opening to make a comment, i.e., how often the category comes up in conversation
• Incidence varies greatly across categories
• Contrary to popular belief, PWOM is typically more common than NWOM

Question 16

Is PWOM more common because it is given more often or by more people??

Answer 16

A: No- Positive WOM is more common because more people give it

Question 17

Why less NWOM?

Answer 17

1. “Out of market” effect 2. Lack of reinforcement 3. Not very useful

Question 18

Giving WOM by Age

Answer 18

• The key difference by age is that WOM tapers off after age 45
• Younger people (under 35 years) are often more likely to have received WOM than other age groups
• There is a clearer relationship between receiving WOM and age

Question 19

What are the factors that impact on the receiver’s propensity to act on WOM?

Answer 19

• Probably the most important thing is that they are listening….
  Some evidence to suggest that PWOM from close ties has more impact than non-close ties, But not for NWOM

Question 20

The two factors that have the biggest influence on the impact of WOM are:

Answer 20

The initial purchase probability of the receiver; and

The valence of the comment

Question 21

Bigger brands get more PWOM and NWOM

Answer 21

as there more people using the brand and more opportunity for people to say something about the brand. Whereas, smaller brands get less PWOM and NWOM, as there are fewer people using the brand and less opportunity for people to say something