Word of mouth marketing, current trends and future prospects – Literature review

1. MirazizBazarov 2011
Word of mouth marketing, current trends and future prospects – Literature review
Evidently, there is an increasing competition nowadays for each of the customers, and every
company have to implement the most effective and efficient marketing and advertising mix in
order to maintain and strengthen their positions (Kotler, 2003).
Hixson (2006) also suggest that with the rise of internet, and with the current decline of the
trust in the traditional advertising media channels, the gradual shift in the marketing focus from
traditional media to internet and online networks becomes more and more obvious. However,
Nielsen Company (2009) suggests that traditional types of Medias, such as TV, newspapers or
radio are not declining dramatically; instead, they maintain their positions, while the rise of the
trust in opinions of others during the decision-making process is becoming indisputable, and
this growth is partly explained by the outburst of online consumer-generated media since 2007.
On the contrary to Nielsen Company, traditional mass advertising methods become less
effective according to Thomas (2007), who notes that Americans are exposed to more than
3000 advertising messages per day, thus they become “invulnerable” to them, while Ruskin
(2004) notes that perception of traditional advertising methods is decreasing, and ads are now
mostly ignored even if the particular ad is designed in a way that directly addressed to a person.
So, Nielsen Company supports the perception of the new trend expressed by many marketing
specialists by finding out the global trend of increasing the trust in the recommendations of
friends and partly in the consumer opinions posted online, while also suggesting the large
decline in the trust in online banners ads.

2. MirazizBazarov 2011
Indeed, the most persuasive channel of information is asking information about the products
are friends, acquaintances and experts who express their opinions about the products they
have already used, as Kotler (2003) suggests, calling this phenomenon as word-of-mouth
marketing. It is now proved that “network neighbors”, or in other words, friends and relatives
help service companies to increase the average adoption services by more than 3-5 times than
average comparing with aiming at the groups based on traditional attributes, since word-of-
mouth method not only helpful with promotions of the products to the targeted customers, but
in finding the customers which are interested in particular mix or features of services and were
not targeted initially (Hill, et al., 2006).
Taking into account the nature of word-of-mouth marketing and the fact that many of the
researchers define it differently, it is important to find the most accurate and precise definition
to make a further literature research. Businessdictionary.com (2011) gives probably the most
precise definition of word-of-mouth marketing (WOMM), defining it as the most effective form
of promotional activity which consists in “oral or written recommendation by a satisfied
customer to the prospective customers of a good or service”. It also adds that it should not be
confused with advertising, as many researchers do, since it is not paid and it is a personal type
of marketing communication.

3. MirazizBazarov 2011
Dye (2001) notes that not only outrageous and edgy products can benefit from word-of-mouth
promotion; in fact it was found out that more than two-thirds of the U.S. economy “has been
influenced by buzz” at that moment. The issue of marketing buzz as a part of word-of-mouth
marketing was further investigated by Greg, who (2006) suggested defining the buzz as the set
of methods for the amplification of the initial marketing communications efforts by consumers
of the product, or in other words, encouraging and acceleration word-of-mouth reaction to the
new product after the launch of a campaign for a new product. To be more specific, Dye (2001),
as well as Procter and Richards (2002) suggests the introduction of Harry Potter, Volkswagen
New Beetle and Pokémon as a good example of the products with solid buzz marketing, while
Procter and Richards also notes the importance of implementing buzz and viral marketing and
also using coolhunters, who are responsible for predicting the changes in the society and
culture in general, in order to make an effective marketing propositions with the aimof
maintaining the effectiveness of word-of-mouth marketing efforts. Taking into account the
latest researches, current level of buzz influence in word-of-mouth marketing is suggested to be
even higher while comparing with 2001, in addition to the increase of the influence of word-of-
mouth marketing itself (Taufique and Shahriar, 2011; Nielsen Company, 2009).
Indeed, Trusov et al. (2009), as well as Parise et. al. (2008) suggest that with the rise of Web 2.0
online platforms, such as Facebook, Twitter and the range of blogs, more opportunities for
creating and supporting the marketing buzz have appeared for the both big and especially small
companies. The proper management of buzz marketing and word-of-mouth marketing in
general in the area of online consumer reviewing can be considered as a considerable
contributor to improving the marketing communication mix, as Chen and Xie (2008) note. They
suggest that this can be done by acting in advance - reshaping marketing strategies even before
the expert consumer reviews are published, reshaping the products features and marketing mix
after the first reaction to create an image of “flexible company” in addition to the improvement
of the product itself, and benefiting from customers-created information via implementing the
system of post-purchase products reviews on the company's website. Rise of Web 2.0 also
considered now as the main contributor to the further understanding of “how customers are
actually reacting to the product”, in terms of prices, design and features, so it helps monitor the
after-launch reaction, in addition to the monitor of the launching of new loyalty and retaining
programs, so this method is not limited to the supervision of the reaction to a launch of a new
product, but to every change in the company (Parise et. al, 2008; PNT Marketing Services,
2008).

4. MirazizBazarov 2011
On the other hand, despite of the increasing influence of social media, there is an obvious trend
that more and more customers consider online recommendations as less credible than face-to-
face recommendations nowadays because of increased implementation of these methods in
unscrupulous way by the companies, especially if they were not expressed by the close friends
or very reputable experts, as Sodderland and Langedijk (2011) suggests. On the contrary,
marketing specialists become more and more competent in the area of buzz marketing and
employ brand pushers and promotional messages in blogs and social networks in more
sophisticated and disguised manner, as if it is purely word-of-mouth, in order to create the
atmosphere of social acceptance and support for using particular products, which will further
lead to increased demand, as Magnini (2011) notes. He also suggests that one of the most
popular of the implemented techniques is guising and imitating the sponsored promotion as
pure word-of-mouth by the celebrities who promote the products by ostentatious consumption
of a particular product.
Wilson (2005) notes that with the rise of the Internet, the shift of the attention from referring
these measures as word-of-mouth marketing and managing a buzz to the usage of viral
marketing occurred. Wilson (2005) and Cédric (2005) together define viral marketing as the
number of strategies which are encouraging the possible customers to pass on a persuasive and
interesting marketing message from one to others, usually via the internet and e-mails, thus
increasing the message's exposure and influence, while Freeman and Chapman (2008) also note
that viral marketing can be far more effective in more areas than the traditional approach. So,
word-of-mouth marketing was targeted at the management of informal communication
between individuals about the products and services, both positive and negative, with more
weighted importance of negative communication in determining what should be chosen out of
many, while viral marketing, using the opportunities of the internet, is usually more effective,
faster and with higher possible penetrations (Bayus, 1985; Helm, 2000; Solomon, 2003; Larson,
2009). To add, the reason of the increased attention to viral marketing is that the value
proposition and marketing message to the target audience now become more important for
success than the features of the product, and increasing interest of customers to marketing
messages exposed trough unconventional and catching advertising campaigns, such as YouTube
videos or flash mobs, in addition to the tiredness of conventional methods for delivering the
advertising message create new and far more promising opportunities for the promotion of the
products, especially in the shortage of the recourses targeted to promotional activities and

5. MirazizBazarov 2011
marketing efforts in general. (Phelps et al., 2004; JupiterResearch, 2004; Greenberg, 2007;
Leskovec and Adamic, 2007; Larson, 2009; Gidman, 2009).
To sum up, after the literature review is done, it can be concluded that with the decrease of
trust in traditional marketing and advertising approaches, the importance of word-of-mouth
marketing is becoming obvious for marketing specialists, thus requires more meticulous and
comprehensive research. It was also found out that word-of-mouth not only helps in promoting
the products to targeted customers, but also in finding new audience. Buzz marketing, which is
influencing more than two third of U.S. economy is no less important, with blogs, Facebook,
Twitter are increasing the opportunities for buzz and word-of-mouth promotions and
enhancing the products' marketing mix, in both large and small companies. Also, with the rise
of the internet, viral marketing become a popular tool for creating attention to the company
and products, especially in the atmosphere of toughening competition and decreasing
marketing budgets.
However, it should be noted that word-of-mouth promotion cannot be well managed without
the properly created product of high quality which satisfy the particular needs of targeted
audience. To add, it is important to mention that despite of the difficulties related to the
analysis and determination of the level of contribution of both internet-based and offline word-
of-mouth or viral and buzz marketing efforts to the products sales and thus calculations of
return on quantitative investment, they have an observable and considerable effect on brand
awareness even in the long-turn (Ferguson, 2008).
To conclude, this issue is considered to be very important for current marketing specialists and
this will evidently lead to new academic studies in this area.

6. MirazizBazarov 2011
Bibliography
Bayus B, 1985. Word-of-mouth: the indirect effects of marketing efforts, Journal of Advertising
Research, 25, pp. 31-39.
Businessdictionary.com, 2011. Word of mouth marketing, [online]
<http://www.businessdictionary.com/definition/word-of-mouth-marketing.html> [Accessed on
16 December 2011]
Cédric G., 2005. Connected Marketing, the viral, buzz and Word of mouth revolution. Book
review, [online] <http://www.market-in-mind.com/wp-content/uploads/2008/01/connected-
marketing-the-viral-buzz-and-word.pdf> [Accessed on 16 December 2011]
Chen Y, and Xie X, 2008. Online Consumer Review: Word-of-Mouth as a New Element of
Marketing Communication Mix, Management Science 54(3), pp. 477-491
Dye R, 2001. The Buzz on Buzz, [online] <http://hbswk.hbs.edu/archive/1956.html> [Accessed
on 16 December 2011]
Ferguson R, 2008. Word of mouth and viral marketing: taking the temperature of the hottest
trends in marketing, Journal of Consumer Marketing, 25(3), pp.179 – 182
Freeman B, and Chapman S, 2008. Gone viral? Heard the buzz? A guide for public health
practitioners and researchers on how Web 2.0 can subvert advertising restrictions and spread
health information, J Epidemiology Community Health.
Gidman J., 2009. Guerilla Event Marketing: A Mob in a Flash, [online]
<http://www.brandchannel.com/features_effect.asp?pf_id=493>, [Accessed on 16 December
2011]
Greg T, 2006. Building the buzz in the hive mind. Journal of Consumer Behaviour 4 (1): 64–72
Greenberg A, 2007. The Secret Strategies Behind Many "Viral" Videos, [online]
<http://techcrunch.com/2007/11/22/the-secret-strategies-behind-many-viral-videos/>
[Accessed on 16 December 2011]
Helm S, 2000. Viral Marketing - Establishing Customer Relationships by 'Word-of-mouse'.
Electronic Markets, 10(3), 158-161
Hill S, Provost F, and Volinsky C, 2006. Network-Based Marketing: Identifying Likely Adopters
via Consumer Networks, A Special Issue on Statistical Challenges and Opportunities in
Electronic Commerce Research, Statistical Science, (21) 2.
JupiterResearch, 2004. Viral Maketing, Ten Core Tactics to Improve Marketing Campaign
Effectiveness and Efficiency, [online]
<http://www.rightnow.com/pdf/whitepapers/RN_VitalMarketing.pdf>, [Accessed on 16
December 2011]
Kotler, P, 2003. Marketing Insights from A to Z: 80 Concepts Every Manager Needs to Know

7. MirazizBazarov 2011
Larson R, 2009. The Rise of Viral Marketing through the New Media of Social Media, [online]
<http://digitalcommons.liberty.edu/cgi/viewcontent.cgi?article=1009&context=busi_fac_pubs>
[Accessed on 16 December 2011]
Leskovec J, and Adamic L , 2007. The Dynamics of Viral Marketing, [online] <http://www-
personal.umich.edu/~ladamic/papers/viral/viralTWeb.pdf> [Accessed on 16 December 2011]
Magnini V, 2011. The implications of company-sponsored messages disguised as word-of-
mouth, Journal of Services Marketing, 25(4), pp.243 – 251
Nielsen Company, 2009. The Global Online Media - Nielsen, [online]
<http://blog.nielsen.com/nielsenwire/wp-content/uploads/2009/07/pr_global-
study_07709.pdf> [Accessed on 16 December 2011]
Hixson T K, 2006. Internet Advertising and the Decline in Trust and Use of Traditional
Advertising Media, International Journal of Technology, Knowledge and Society, 7(1), pp.21-32
Parise S, Guinan P, and Weinberg B, 2008. The Secrets of Marketing in a Web 2.0 World,
[online] <http://online.wsj.com/article/SB122884677205091919.html> [Accessed on 16
December 2011]
Phelps J, Lewis R, and Mobilio L, 2004. Viral Marketing or Electronic Word-of-Mouth
Advertising: Examining Consumer Responses and Motivations to Pass Along Email. Journal of
Advertising Research, 44, pp 333-348
PNT Marketing Services, 2008. Banks use Web 2.0 to increase customer retention, [online]
Available at:
<http://www.pntmarketingservices.com/newsfeed/article/Banks_use_Web_2_0_to_increase_c
ustomer_retention-800226524.html> [Accessed on 16 December 2011]
Procter J, and Richards M, 2002. Word-of-mouth marketing : beyond pester power, Young
Consumers: Insight and Ideas for Responsible Marketers, 3(3), 3 – 11
Ruskin G, 2004. A 'Death Spiral of Disrespect'; If the Consumer is Really King, Why Do Marketers
Keep Bombarding Him? [online] <http://www.commercialalert.org/issues/culture/ad-creep/a-
death-spiral-of-disrespectif-the-consumer-is-really-king-why-do-marketers-keep-bombarding-
him > [Accessed on 16 December 2011]
Sodderland W, and Langedijk J, 2011. You Like This?, WOMMA Research Digest, [online]
http://womma.org/researchdigest/?p=220 [Accessed on 16 December 2011]
Solomon M, 2003. Conquering Consumer space; Marketing Strategies for a Branded World,
Amacom, New York.
Taufique K.R. and F.M. Shahriar 2011, Online social media as a driver of buzz marketing: who‟s
riding?, Annual Conference on Innovations in Business & Management, [pdf]
<http://www.cibmp.org/Papers/Paper572.pdf> [Accessed on 16 December 2011]
Thomas A, 2007, The end of mass marketing: or, why all successful marketing is now direct
marketing, Direct Marketing: An International Journal, pp.5-16

8. MirazizBazarov 2011
Trusov M, Bucklin, R, and Pauwels K, 2009. Effects of Word-of-Mouth Versus Traditional
Marketing: Findings from an Internet Social Networking Site. Journal of Marketing: 73(5), pp.
90-102.
Wilson R, 2005. The Six Simple Principles of Viral Marketing, [online]
<http://www.wilsonweb.com/wmt5/viral-principles.htm> [Accessed on 16 December 2011]