“If you have an unhappy customer on the internet, he doesn’t tell his 6 friends, he tells his 6,000 friends”
Jeff Bezos, President of Amazon. (Baldacci, 2013)
What Is Electronic word-of-mouth eWOM marketing?
Hennig-Thurau et al., (2004) stated that eWOM was;
“Using consumer communication as a means of multiplying a brand’s popularity through customers spreading the brand name of a product or name of a company”
Stauss (2000) illustrated eWOM to be;
“Any positive or negative statement made by potential, actual, or former customers about a product or company, which is made available to a multitude of people and institutions”
These two definitions provide a different approach to eWOM. Hennig-Thurau et al., adopts a narrow approach, and only places its emphasis on current customers. Conversely, Stauss (2000) broadens the scope of eWOM to negative eWOM, which is a valid point because negative eWOM is something which all businesses should not ignore, and also potential customers. Potential customers can create a buzz around upcoming products and its features, for example, before the Apple Watch was released, there was a number of blogs, forums and discussions online debating about the features of the watch. This has a significant impact on the perceived value and popularity of the brand.
Where does eWOM happen?
Well, to put it simply, eWOM can occur anywhere online. The most common channels for sellers and consumers is, blogs, social media, chat rooms, user reviews, forums, news groups, as you can see there is an abundance of channels which one can discuss a brand or product.
Why do people engage in WOM communication?
It should be noted first of all, that much of the literature in this area is debatable and is regarding the theories of motivations of consumers, thus, there can be no right or wrong answer within this section as it is dependent on the social, psychological, economical etc. of the individual. Although, academics can debate the area, their is no conclusive answer.
Hennig-Thurau et al., (2004) suggest that the motivations of traditional word-of-mouth and electronic word-of-moth do not differ significantly, thus the literature of traditional WOM will be analysed as well.Anderson (1998) suggested that the reason for WOM is when a consumers expectations are dis-confirmed, i.e. when one’s expectations are not met.
Dicther (1966), performed a study regarding WOM, in doing so Dicther identified four categories which motivate an individual to engage in positive WOM communication. These included; product-involvement, self involvement, other-involvement, and message-involvement. The first category suggest that the key motivational factors is where the customers has strong feelings regarding the product and wants to discuss the product. The second is where the individual can gratify certain emotional needs through the product. The penultimate category is where the individual feels the need to give something to the receiver and the final category refers to discussion which is stimulated by adverts and the like. Engel, Blackwell, and Miniard (1993) effectively identified the same categories, however, the renamed them, and introduced another motive, dissonance reduction, which they saw as a motivational for negative WOM communication. Another key piece of research performed by Sundaram, Mitra and Webster (1998). Sundaram et al., carried out 390 critical-incident for interviews, they identified eight motives for consumers to engage in WOM communication. Sundaram outlined four identical categories as Ditcher (1966) and Engel, Blackwell, and Miniard (1993) explaining positive motivations to engage in WOM communication. Conversely, the other four categories identified by Sundaram showed negative motives to engage in WOM communication i.e., altruism, anxiety reduction, vengeance, and advice seeking.
What is the Effect of eWOM?
Subsequent to the discussion regarding what eWOM is, where it happens and the motivational factors of why people engage in eWOM, it is necessary to discuss the effect of eWOM on a brand image.
WOM communication has been the talking point for a number of years, the academics referenced (Chatterjee, 2001; Chevalier and Mayzlin, 2006; Herr et al., 1991; Kiecker and Cowles, 2001; Sen and Lerman, 2007; Smith and Vogt, 1995; Weinberger and Dillon, 1980; Xia and Bechwati, 2008) acknowledge that WOM has a significant influencing factor in forming a consumers attitude and behavioural intentions. Bickart and Schindler (2001) outlined that WOM communication is more influential than other communication through other sources such as adverts and editorial, a reason for this was outlined by Gruen et al., (2006), which outlined that it is perceived to be reliable information. Consequently, it can be observed that eWOM has a significant impact on a business, as it has great persuasiveness and is perceived to be more credible, this is supported by Chatterjee (2001) who outlined that it is even more effective than offline WOM communication due to its ability to be accessed by the millions.
Kelly (1993) outlined that the brand image of a company is based on the perceptions held in the consumers memory, and that brand image stems from all of a consumers consumption experiences. Following this Ayden and Ozer (2005) outlined that the customer perceptions about service quality directly affects brand image. Therefore, outlining how customers are more dependent on the interpersonal influence of eWOM (Lewis and Chambers, 2000).
Conclusion
Subsequent to the discussion regarding the motivational factors and effect of eWOM it is something which businesses should approach with caution and take into consideration. It is clear that the effect of eWOM has significant implications upon the decision making of others.
References
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