The Role of Word of Mouth in Business - Coursework Example

Topic The Role of Word of Mouth on Businesses Introduction The world of business sustains on the whims and fancies of its and consumers andin order to maintain business, the organizations have to really depend on marketing strategies. The current business world is extremely competitive and to create a niche in the market, business has to depend on various social media techniques. One of the marketing strategies which benefit the business most in becoming prosper is the word of mouth .One may find it strange to understand that word of mouth has prominent place in expanding the face value of a business. But it is a hard fact that the spread of message from person to person is one of the best ways to publicize one’s business. According to (Ritchie)“It’s worth noting that word of mouth dominates all information channels in terms of usefulness, ranking at a level 8 out of 10 — a top way to find information and advice that helps in the decision-making process”. When opinion of a business is passed on between people in social circle, the impact on people is high. The “word of mouth” spread through social media is more effective and wide spreading. This is the reason why, all businesses concentrates on the comments and opinion generated by its consumers to expand their good will. Word of mouth is an extremely important marketing tool for an organization to understand the credibility of the product or services given out by them. What is word of mouth? Word of mouth is a phenomenon, where a person who is a consumer of a business conveys his opinion or comment about the product or service to another person. In this technologically sophisticated business world, the power of word of mouth has considerably increased with the help of social media. Now as people are faster in communication process their opinion and comments about a business moves faster from one person to another. When people decide to buy a product or service from a certain company, they first assess about the company and reach onto people from their social circle to obtain information on a company and its product value. This is because word of mouth is the purest and most trust worthy channel to find more about a product or services. When looking at word of mouth as an advertising and marketing tool, one can understand that it is a phenomenon where information form one person passes on to another person with the aid of social media or face to face encounter. Nowadays, the social media allows the word of mouth process to happen fast as there is web and mobile phones to present quick comments about a particular product or service. The face value of a company can jolt according to the information passed on by one person to another instantaneously with the aid of social networking sites. Word of mouth occurs through oral communication, and is one of the most reliable, quick and less costly marketing channel. As per (Enterpreneur)“Word-of-mouth advertising is important for every business, as each happy customer can steer dozens of new ones your way”. History of word of mouth concept One may wonder who has discovered “word of mouth” as an effective marketing strategy which has enormous effect on the profitability and prosperity of an organization. Frankly speaking, the credit of this can be bestowed to Dicther , who was the prime researcher who investigated about the way in which the word of mouth influenced the reputation of a company. As per (Ritchie) “Dicther (1966) was one of the first researchers who investigated the way word of mouth influenced consumers’ attitudes and perceptions”. He stated that the word of mouth has a three dimensional effect as the information is passed directly from a consumer to a prospective consumer. Looking at word of mouth from an historical perspective, one can assume that, this phenomenon got recognition as it is based on the reciprocal nature of human being. The importance of this concept existed even in pre – historic period where human beings gave tips regarding the places to find food and shelter to their counterparts. Gradually, as people from hunter stage evolved to farmer’s status, the word of mouth played a significant role in spreading the information regarding the best use of land for food benefits. As we entered industrial world, the competition became harsh and people bought a product based on opinions projected by their friends and relatives. The word of mouth and social media Today, the business world is technologically interdependent and all of the communication process occurs with the aid of web and mobile phone. Word of mouth as an efficient marketing tool is inexpensive, as it process through social media channels which are not sponsored by the companies. It processes directly by the utilization of human voice or can be communicated with the assistance of cell phone or internet. If the companies maintain a standard quality for their product or service, then word of mouth is the most cost efficient and profit making marketing tool. In his journal article (Gregurec 227) mentions that “According to Nielsen research, conducted in 2007, 78% of consumers trust online word-of-mouth recommendations from other consumers, while only26% of them trust banner ads” The way in which a consumer is persuaded by a product, sparks their opinion of a product and this get reflected on to their peers, relatives, friends and acquaintance with aid of mobile and web. Today, as the communication process happens through social networking sites and mobile phones, the processing speed of word of mouth is beyond human calculation. If we look at the concept of word of mouth processing, we can understand that when a consumer uses a product or service, he experience the product and forms an opinion about it in their mind. This opinion can be good or bad and invariably gets transferred to the social circle o f the consumer technologically. Since the comment or opinion about a product is originating from people who are reliable, the effect it has on a company is huge. Role of word of mouth through social media in business When it is the question of relation of business with word of mouth and social media one can understand that the main means by which this process occurs is through web and mobile service. Today the world is highly technical and the main communication between people take place through web and cell phones. Let us look briefly, the way in which both of these technological inventions play an important role in conducting business. Mobile phone To the word of mouth concept, mobile phones can be considered as a gift from technology. It can be considered as a fastest and valid social media which has high potential in selling a product. People are interacting with mobile all around the clock and word spread through mobile has all the capacity to motivate a person to buy a product or services. According to (dentsu)“As an excellent channel for consumers to receive, disseminate and even create brand messages, mobile offers even more to marketers than the PC Internet”. The involvement of mobile phone in the marketing strategy of business has made cell phone the fastest growing technological invention in media and communicative industry. The big business corporate relies on word of mouth marketing method done with the help of mobile phones as this is a main marketing strategy to promote their products and services. Mobile is also used to send instant messages and it is renowned way o f passing information among teenagers and adolescents. The rate of speed at which information about a product or services is spread globally with the aid of mobile phone is way beyond mental calculation. Web Service Internet is also an extremely powerful mode of communication and message passed through web has an instantaneous effect on people. When we consider business world, the sale of products and services happens through strong marketing strategy. The main purpose of marketing is to spread the benefits of a product or service in a prospective market segment. The web service is an important marketing platform due to the fact that, internet communication has the potentiality to convey message to millions of people in a short span of time. As per (Riegner 436-47)“The internet stands apart from other media in enabling its "users" to interact. From this perspective, the internet will always be, at its core, a tool for interpersonal communication”. Internet has the ability to convey to a wide range of people and it can cross the barriers of geographical area, culture and society. For example, one person buys a new brand of perfume and he or she likes its fragrance and quality, so he or she may explain their experience to their friends, relatives or colleagues through social networking sites. This motivates the listener or reader and hence persuades them to buy the product as he or she trust their friend’s words. Here social networking sites are providing an international communicative platform to the consumers. Web as a social media has immense capability of influencing the decision making power of consumers. The consumers comments, submit reviews, raves and rants about the benefits of product or services they used in an effort to project satisfaction obtained from it. It is not one, but thousands of people get accessed to this information which instantly makes a positive impact on the image of a product. Ways to make best use of word of mouth through social media a) Attract and retain: Just having a social media to spread word of mouth is not enough to attract business. Business organization needs to promote their current consumers and motivate them to come back to them. This kind of customer satisfaction is necessary to allow customers to spread the benefits of products or service in their social circle. b) Better engagement: Any company willing to progress in this competitive environment should attempt to keep their consumers engaged with them. It is necessary for a company to respond to the queries and comment of their customers in order to make them actively involved with a company. In his article (Schawbel) writes that“ Engaging them on your site makes your customers feel unique—which in turn will make them vocally praise your business to their friends and family”. c) Communication: It is also essential for a company to invite the customers to their retail store in order to give them a chance to look at their new products and services. When the customers understand that the company care for them, then it creates a positive impression in the minds of customers and this feeling results in appreciation about the products and services , which is later passed down to the social circle of the customer. Conclusion Social media is the biggest trend of 21st century as this way of communicating has a stupendous impact on the population all around the world. Social media channels like web and mobile phones have the potentiality to spread information in the blink of an eye. The internet service has social networking sites which are accessed by millions of people, which gives the advantage to the businesses to advertise their products and services through the process of word of mouth. Word of mouth is a very powerful marketing tool and product appreciation passed from friends and families has a great impact on the brand value of a product. Social media is the best platform for exemplifying the benefit o f word of mouth. Businesses are always in a lookout for promoting their products and services to customers in a cost effective manner. Generally speaking, there is no better way of promoting products and services other than the use of word of mouth. So international and local business organizations should try their level best to improve the quality of their products and services with an aim to give maximum satisfaction for customers for the price they have paid. A satisfied customer tends to be loyal customer and word spread by them about the product through social media impacts thousands of people worldwide. Bibliography Gregurec, Iva. "Word-of-Mouth Marketing within Social." University of Zagreb (2011): 227-33. Print Dentsu, . "The insider’s guide to word of mouth marketing ." mobithinking.com. mobithinking.com, 2009. Web. 29 Nov. 2012. . Enterpreur."Word-of-Mouth Advertising." entrepreneur.com. Ed. Enterpreneur. Entrepreneur Media, Inc. , 2012. Web. 29 Nov. 2012. . Ritchie, Anna. "Is Social Media New Word of Mouth." contentmarketinginstitute.com. Content Marketing Institute, 19 Aug. 2012. Web. 29 Nov. 2012. Riegner, Cate. "Word of Mouth on the Web:." Journal of Advertising Research 10.2501 (2007): 436-47. Print Schawbel, Dan. "The ABC’s of Converting Social Media Into Word-of-Mouth Marketing." openforum.com. American Express Company, 6 Apr. 2012. Web. 30 Nov. 2012. . Read More