Word of Mouth Communication and Its Impact on Consumer Behavior

Merits and demerits of Word-of-Mouth (WOM) Communication

The human voice is the most powerful form of communication. In the current world where people are bombarded with all kinds of messages from every sort of media, most get lost, but in most cases, people will listen to other people, especially those they know and trust.

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World of mouth communication plays a crucial role when it comes to providing the necessary information to consumers. One key merit of this method of communication is that it forms the foundation of interpersonal communication and it considerably influences consumer behavior when it comes to the evaluations they make on products and purchasing decisions they make. Information that is presented through face to face has significant impact on product judgment. “Word of mouth communication creates impressions that are easy to interpret, and hence influence encoding and retrieval processes in such a way as to reduce the correspondence between objective and perceived biasness.” The communication allows for immediate feedback and each party has the opportunity to ask questions and seek for clarifications in good time. The communication process has the attribute of vividness in that it easy emotionally interesting, it is concrete and evokes images in the mind of the recipient and hence it attracts information, creates lasting attention and internalization of messages by consumers. Communication exerts a strong influence on the purchasing power of consumers and their overall behavior towards a certain market orientation. The other advantage of WOM communication is that the possibility of information being distorted is minimized because it involves one channel and that it is more personalized. It is also cheap when compared to other traditional marketing campaigns based on advertising through mass communication channels.

However, the WOM have several their own demerits. One is that the benefits of WOM are mostly realized in the long run. Therefore, measuring the success of WOM in the short run is hard and therefore this method of communication is ineffective in achieving short term or immediate results. Also, because of the nature of this kind of communication, it is very challenging to integrate these WOM approaches in traditional marketing campaigns. The reason being that the concept of WOM is to some extent indefinite and its supporters are uncomfortable with traditional communication campaigns (Peterson, 2005). In addition to the above, word of mouth communication can lead to misunderstanding due to the messages being presented in a poor way.

The strategic application of WOM communication

WOM communication can be applied to many social and business segments. The social marketing environment finds great application of this form of communication. Traditional media outlets and media based activities are becoming more expensive to use and many firms are using WOM approaches to carry out advertising and marketing campaigns. Furthermore, WOM are important in building an organization’s brand. By talking and sharing information, an organization can generate positive appraisals. Through personal recommendations through the mouth a company’s brand is tested through success stories, compliments and other information that can help elevate an organization’s status. Also, word of mouth communication is useful in settings where direct attention is needed because there is a higher chance of sharing information. Customers being told about planned product changes, special events, and their opinions will help in positioning an organization to compete effectively with others.

Strategic application of the diffusion theory

Diffusion theory is a situation whereby innovation are gains acceptance and adoption by different settings and cultures across time. There are several factors that influence this process with the way information is communicated being the key factor. Also, the cultural and social orientation of a particular group of people influences this process. Diffusion investigates how these factors interrelate to promote or hinder the adoption of products in the market (Rogers, 1995). The theory finds important applications in marketing advertising. Knowledge of products can spread through several networks depending on the effect the product had on the first person to have knowledge about the product. In most cases, if a marketing innovation proved to be effective with one group of people, then it will more likely be adopted by those contacted later by the first person. These could be friends, relatives or just other acquaintances.

Market Segmentation and Micromarketing

Market segmentation has to do with dividing an overall market into key customer sub categories. The customers are segmented into groups that have same characteristics and needs. Small businesses are the ones that derive immense benefits from marketing segmentation. Suppliers in the market who produce specific products find useful application of this process of segmentation. The key focus of the segmentation is to focus specific clients and providing high quality and personalized services which cannot be achieved from larger competitors. It is common knowledge that many people are willing to pay extra money to ensure they get optimum and high quality service. Marketing segmentation involves several steps. The first step is for a business to have knowledge of the boundaries that the business operates in. This could be done through developing a formal business plan that will assist in developing the definition of the business activities. Secondly, the key variables to use are formulated. It is recommended that “marketers should apply the knowledge they have to come up with several variables before gaining a foray into a specific market.” The third step involves the actual data collection and analysis through application of tools used in market research. The aim of doing this to know market segments that are internally standardized and yet are varied with respect to other segments in the market. Then, detailed profiling of different market segments is done on an individual basis in relation different consumer needs. The fifth step is deciding the segment to serve.

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The process of Marketing Communication

The process of marketing communication involves passing media related messages through various ways to target different market segments and are used to pass information to the market. Marketing communication focuses on the creation of printed marketing collateral. Many developments in businesses are credited to marketing communication. Examples including changing from focusing on customer service to customer relations, evolution from human resources to human solutions and the increasing utilization of internet communication channels like email and blogs. Emphasis here is on products and services and is distinguished from corporate communications which focuses on the organization itself.

Societal implications of Marketing Communications

Marketing communication plays a very important role in the society through the convenient conveyance of information to a wide audience of people. Marketing communication serves as a link between an organization’s management and the targeted markets. Marketing communication ensures that the society is updated with regards to a company’s new developments in terms of products and services. People also have more choices because these choices are made out of informed decision making after analyzing and comparing companies credentials as espoused in marketing communications campaigns.

Importance of positioning the products to consumers’ targets

Product positioning deals with tailoring an entire marketing programme to meet the needs of consumers in the best way possible. Therefore, a company’s characteristics, image, price on service and goods produced, packaging and distribution are all focused into one programme to effectively achieve the needs of those served by a company. Product positioning is meant to achieve the general objective of segmentation, although on a narrow focus. “Whereas segmentation assists us in knowing how the market is defined positioning focuses on a target market segment and informs us the best way to deal with competition in a market segment.”(Wagner, 1994). Product positioning helps small business managers make important decisions with regard to purchases and help them understand the behavior of consumers.

References

Rogers, M.(1995). Diffusion of Innovations, 4th edition. New York: Free Press.

Peterson, R. (2005), Some limits on the potency of word-of-mouth Information. Chicago: Sage publishing

Wagner, H. (1994), Relationship marketing business and the communication process. New York: Pocket Books

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