Psychology and Consumer Behaviour - Coursework Example

Psychology and Consumer Behaviour Deferral/Referral work Introduction Over a period of time, human interaction and communications are getting highly influenced by different internet-based and electronic media. The efficient and quick connecting procedure of different internet based media, enable users to easily access and examine a huge amount of contents and details in an organized format while utilizing a very short amount of time frame. This concept has also facilitated the idea of online dating networks which influences users to explore and connect with other users, who displays similar intimate-based goal in terms of using the community. The industry of online dating community is growing rapidly all over the world (Chu and Kim, 2011). In contrast to different social networking sites, the online dating sites are specifically tailored for users who are searching for connections and encounters in terms of romantic partners. Along with the rapid acceptance of internet dating facilities, a number of dating websites are enjoying the benefits of referral marketing and personal reviews in terms of attracting new users. The method of referral marketing assists organisations to promote products and services through referrals, mainly word of mouth procedure (Berger and Iyengar, 2013). The process of word of mouth marketing influences the practices of passing valuable information from person to person through oral and other means of communication. Hence, various online dating sites are focussing on the utilization of personal review, referral and word of mouth marketing practices to increase the reliability as well as popularity of their services (Sweeney, et al., 2014). The further discussion of this study will focus on the impact and credibility of the reference groups and online word of mouth referral marketing process, to influence the behaviour of new consumers in terms of their decision making process to join online dating sites. Online Dating Industry and Usage of Reference Group and Word of mouth Process Online dating processes and websites have gained immense popularity within various developed countries such as the UK and different parts of the US. As per the claims of a number of leading online dating sites within the US, one out of almost every four couples tend to meet through online dating sites. As per instance, approximately 20 million people across the world are currently using eHarmony.com, one of the leading online dating sites. Similarly, over 15 million populations have their profile on Match.com (Hendricks, 2014). Researchers have illustrated that the usage of online dating sites within the US has demonstrated significant increase over a period of time, while only 1% of population prefer to meet partners through other commercial mediums such as printed personal advertisements (Finkel, et al., 2012). Orr, (2004) has mentioned that in the early age, the online dating procedure has experienced a very slow start and expansion due to their early stigma and negative views based on the printed advertisements. The author has also mentioned that for a long time, this industry was unable to gather any benefits from the word of mouth and personal referral procedure. Hence, this situation has caused much longer time for these sites to reach the potential mass. Sautter et al., (2010) in their research have evaluated that the rapid and continuous network diffusion has highly transformed the usage and reputation of the online dating services. A research of approximately 4,002 adults in the US during 2009 has displayed that almost 22% of the respondents have met their partners through internet dating procedure (Finkel, et al., 2012). Trusov, et al., (2009) have mentioned in their research report that the increased use of word of mouth referral and online reviews have highly influenced the utilization of online dating sites within the population from different age groups. As per the Global Trust in Advertising report by Nielsen, almost 92% of the population believes in the recommendation of family, friends and other users of any product or services rather than the advertising procedure of organisations (Nielsen, 2012). Hence, this situation has influenced the online dating sites to emphasize on their promotional and advertising process through the online user reviews and references and word of mouth marketing (King, et al., 2014). As per example, Grindr, one of the major online dating sites for bi-sexual people, has only utilized word of mouth marketing procedure to acquire more than 1 million users within 2 years for their online dating sites across 180 countries (Ruvolo, 2011). This process has assisted the business to efficiently attract new users while incurring minimum cost (You, et al., 2015). Impact and Importance of Reference Group and Word of mouth Marketing Process A number of researchers views and theories have evaluated and established the impact and importance of reference groups and word-of mouth marketing practices on the decision making process of users while selecting any online dating sites and services. Brown, et al, (2007) have mentioned that word of mouth communication is the major part of online communication which influences consumers to share and exchange their opinion, experiences and knowledge regarding different organisational practices, products and services. The researches of Groeger and Buttle, (2014) have evaluated that, word-of mouth referral process highly affects the diffusion, choice and decision making processes of consumers or users regarding different services and products. The authors have mentioned that generally, people prefer to buy or use those products or services which are recommended by their friends, family and other users. They have also elaborated that these tendencies of consumer’s have increased the usage of online reviews and word of mouth process to spread information to boost the interest of consumers as well as new consumer acquisition. The word of mouth marketing theory of Cheung and Thadani, (2012) has evaluated that this kind of communication process tend to be more reliable and efficient marketing tool for the marketers of different social media and online services. According to the theory, word of mouth marketing process allows businesses to generate proper representation for the intangible services in front of potential consumers. This referral marketing process enables businesses to demonstrate authentic user’s experiences to the potential consumers which assists the businesses to efficiently modify their decision making process in terms of using the services. Brown, et al, (2007) have described three key factors that influences the use of word of mouth communication process within the new users of online services, mainly dating sites. The first key influence is described as ‘Tie Strength’ which describes the strength of interpersonal ties which connects different individuals with valuable information (Chu and Kim, 2011). The strong interpersonal ties within the current users or experience holders and new consumers influence the proper delivery of information and details. This process further enables the online dating sites to attract new users towards their services and offerings. Homophily is another key influence that enhances the use of word of mouth process in online dating businesses. It can be described as a tendency of different individuals to bond or associate with the experience, requirement and opinions of similar others (Sweeney, et al., 2014). Hence, this tendency encourages new users to associate with the experiences and opinions of the prior users and other individuals while deciding upon the subscription and utilization of online dating sites. Source credibility also influences the word of mouth communication of consumers while deciding upon the subscription of any online dating or social networking sites. Source credibility emphasizes on the communicators positive attitude and characteristics. Source credibility provides strong impact on the acceptance of messages and decision making process of the new users. Hence, online dating businesses seeks for positive reviews of users which can efficiently mould the decision making process of new consumers in terms of selecting different online dating services (Wu and Wang, 2011). A number of researchers have detailed various importance and advantages of the usage of word of mouth marketing process in terms of attracting new users or consumers and modifying their decision making process. Generating trustworthiness is one of the major advantages of the use of reference group as well as word of mouth marketing process (King, et al., 2014). The new users tend to trust prior user’s views and opinions in terms of their referral, as they assume that the prior user is happy and satisfied with the services of the online networking site. They also tend to trust on the referral messages due to their unbiased nature. Hence, this process assists online dating businesses to break down the trust barriers by utilizing reviews of influential consumers. You, et al., (2015) have detailed that word of mouth marketing practices and online review assists online dating sites to build up a strong brand reputation within the consumers. The strong brand reputation allows organisations to modify the consumer behaviour in terms of their decision making processes. On the other hand, the presence of a large number of competitors hinders the process of establishing a strong brand reputation within potential consumers. In this scenario, word of mouth marketing through different online sources and reviews enables organisations to create a positive feeling about their services and offerings, without incurring huge advertisement and promotional expenses. Hence, this process assists the online dating sites to create a strong impression within the mind of the potential users about their brand and offerings (Berger and Iyengar, 2013). A research report of University of North Carolina’s Centre has illustrated that, referral consumers or users are more likely to purchase any product or services in comparison to others who have found the brand through traditional marketing methods. Therefore, the word of mouth referral process tends to mould more new users towards the services of online dating websites rather than the traditional advertisement process. The sharing of good experiences and lucrative possibilities through online reviewing enable the new users to stick to specific online dating service providers for a longer period of time. It also encourages them to suggest their family members and friends to use these services (You, et al., 2015). Plentyoffish.com is one of the leading online dating sites that have generated advantages from online review and word of mouth promotional procedure through different reference groups. According to the latest ranking of comScore, this dating website has received almost 7,209,000 visits only in the UK during October, 2007 (PR Newswire, 2015). On the other hand, other large players such as Match.com and Meetic have received 2,100,000 and 4,397,000 visits. Both of these online dating sites generally prefer to restrict the personal reviews of clients as they believe in maintaining the privacy of customers (PR Newswire, 2015). The open discussion and scope of detailed user reviews has assisted Plentyoffish.com to establish the business as the largest force in the UK online dating industry. World Metrix data of comScore has detailed that the business receives an average of 114,000 requests of unique visitors every day in comparison to 73,000 of Meetic and 45,000 of Match.com (PR Newswire, 2015). The founder of the business, Markus Frind, has illustrated that the company’s success is almost entirely driven by the word of mouth referral of potential users. In comparison to the marketing techniques of other players in the market, Plentyoffish.com heavily relies on the word of mouth marketing process rather than any other digital or print advertisement practices (PR Newswire, 2015). Negative Impacts of Reference Group and Word of mouth Marketing Process Though the practices of word of mouth marketing and online reviews by reference groups can positively impact the online dating businesses by influencing the new users to join the service, it also demonstrate few drawbacks in terms of attracting potential users. Negative reviews by users are one of the instances that adversely affect the brand reputation as well as hamper the user’s decision making process. The spreading of information regarding the bad experiences of users can highly demotivate new users to select any particular dating sites. The negative opinions and judgements of the current users or prior users tend to reduce the brand reputation of the business. Hence, it can distract potential new users from the company (Pfeffer, et al., 2014). As per instance, the negative reviews about Match.com through different social media have hugely affected the user relationship process of the company. Hence, it has significantly reduced the new user visits and subscription of the company (PR Newswire, 2015). Apart from the negative reviews, improper tracking processes and slow distribution of information and messages also restricts dating businesses to properly use word of mouth promotional process to attract new visitors and modify their decision making process to join the site (Pfeffer, et al., 2014). Conclusion The overall discussion of this study has illustrated the practices and importance of online reviews and word of mouth marketing processes on the online dating businesses. The study has evaluated a number of positive impacts of the word of mouth marketing processes in terms of attracting new users towards the online dating sites and influencing their decision making process to join the same. Generation of trustworthy relationship and strong brand reputation are the major advantages of the online review and word of mouth reference process in terms of attracting new users towards the online dating sites. The study has described that strong interpersonal tie, tendency of homophily and source credibility influences the use of word of mouth information in terms of positive and effective communication with the new visitors and users of dating websites. The proper representation of personal experiences and positive feedbacks of other users highly motivate the new visitors to join particular dating sites. On the other hand, widespread negative reviews can hugely impact the brand reputation of these dating sites which subsequently cause distraction and loss of potential visitors and users of the services. Reference List Berger, J. and Iyengar, R., 2013. Communication channels and word of mouth: How the medium shapes the message. Journal of consumer research, 40(3), pp. 567-579. Brown, J., Broderick, A. J. and Lee, N., 2007. Word of mouth communication within online communities: Conceptualizing the online social network. Journal of interactive marketing, 21(3), pp. 2-20. Cheung, C. M. and Thadani, D. R., 2012. The impact of electronic word of mouth communication: A literature analysis and integrative model. Decision Support Systems, 54(1), pp. 461-470. Chu, S. C. and Kim, Y., 2011. Determinants of consumer engagement in electronic word of mouth (eWOM) in social networking sites. International journal of advertising, 30(1), pp. 47-75. Finkel, E. J., Eastwick, P. W., Karney, B. 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