Chapter 8- WOM & Satisfaction Flashcards
Defining WOM
Informal communication directed at other consumers about the ownership, usage, or characteristics of particular goods and services (brands), and/or the seller
Why is WOM powerful?
๏ Involved 80% of all brand decisions
๏ 50% of service provider replacements occur due to WOM
๏ MORE powerful than print ads, personal selling and advertising
What makes it different?
✓ Interactive & fast ✓ Evidence based ✓ Perceived to be non-commercial ✓ Felt pressure to conform ✓ Associated social risks
This means that WOM is…
๏ Positive WOM is good and we want more of it
๏ Negative WOM is bad and we need to stop it
The Giver
• Propensity to give WOM
The Receiver
• Opportunities to receive WOM • Impact of WOM
Internal Triggers- Positive WOM
Personal interest in the product
Self enhancement
Help the company Altruism
Internal Triggers-Negative WOM
Vengeance Anxiety reduction Seek advice Altruism
External Triggers
Positive & Negative WOM
Coincidental conversation
To stimulate discussion
On being asked Newsworthy product experience
Advertising
Past history with the brand - PWOM
Most PWOM is given about the brand currently used
Past history with the brand - NWOM
Most NWOM is given by non-users of the brand
WOM and Market share
Bigger brands get more positive and negative WOM
Who is talking about you?
- Tends to be new customers
* longer the customer tenure, the less likely they are to recommend
Perceived usefulness of the information to the intended recipients
- 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
Opportunities available to give WOM
- 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
Is PWOM more common because it is given more often or by more people??
A: No- Positive WOM is more common because more people give it
Why less NWOM?
- “Out of market” effect 2. Lack of reinforcement 3. Not very useful
Giving WOM by Age
- 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
What are the factors that impact on the receiver’s propensity to act on WOM?
- 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
The two factors that have the biggest influence on the impact of WOM are:
The initial purchase probability of the receiver; and
The valence of the comment
Bigger brands get more PWOM and NWOM
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
