Advertising and Word of Mouth Impact on Consumer Decision Making

Word of mouth is considered to be one of the most effective and powerful forms of communication in the world of marketing. Word of mouth takes place when one person communicates some information to other through face to face, telephone, e-mail or any other communication medium based on their personal experience of impression of a product. The power of the word of mouth marketing lies in the personal nature of communication which adds credibility to the marketing efforts (Smith & Taylor 2004).

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The receiver of information is directly influenced by this form of promotion as compared to other formal promotion methods. This is because the receiver believes that the other person passing the information is honest and has no hidden incentives behind the persuasion efforts. For example, a user of a product will share his experience of the product with his friend or others, which will have a powerful impact on the latter and influence his decision of purchasing that product.

This shows that word of mouth marketing has a direct influence on the consumer purchasing behavior and decision (Donaton 2003). Satisfied customers are expected to communicate their experience of satisfaction to people around them, while dissatisfied person are more likely to do the same, which means that word of mouth marketing can have both powerful positive and negative impacts on the purchasing behavior of consumers. Word of mouth communication has the potential to build strong customer relationships as well as to destroy the brand’s image in the market. Therefore, companies all over the world make efforts to build positive word of mouth and mitigate the negative one (File & Prince 1992).

Word of mouth communication is also considered powerful and effective because it mostly takes place between friends or family that is the people who are considered trustable. When a friend or family member recommends a product, one is mostly like to go for it. According to Silverman (2001), “word of mouth marketing is thousand times more powerful than conventional marketing.” Consumers take suggestions from the trusted ones who have an experience with the product before making a purchase (Silverman 2001). For that product, therefore, word of mouth becomes a significant and effective way of communication.

Moreover, the consumers do not trust the marketers of the product and their advertisements due to their skeptical nature, but they trust the direct sharing of information between persons who are not the marketing sources (Haywood 1989). Word of mouth marketing has gained so much importance that consumers are taking suggestions from other people on the internet before making a purchasing decision. This is because in such form of communication both the product is involved as well as the consumer himself. The credibility, experience delivery and customer driven nature of word of mouth marketing makes it a powerful form of communication (Gildin 2003).

Factors Affecting Word of Mouth

Through word of mouth has a powerful impact on the consumer decision making but all word of mouth doesn’t has the same level of influence. Following are the factors which affect the degree of influence of word of mouth communication.

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Characteristics of the sender and the receiver and their interpersonal relationship

The perceived interest, expertise and opinion leadership of the giver plays a significant role in affecting the receiver. These are directly linked to the credibility, which is one of the important aspects of word of mouth marketing. The intensity of the relationships and similarity of the characteristics between two individuals also highly influences the word of mouth impact. This means that people who are closer in relationship and similar in background, nature, likes or dislikes tend to have a higher influence from word of mouth marketing (Lam, Mizerski & Lee 2005).

Situational Factors

The context in which word of mouth communication takes place also influences the outcome. Word of mouth is considered valuable in-service contexts while it is not considered effective when complex services are involved carrying higher risks. Moreover, the value of word of mouth increases when the receiver lacks the needed information and seeks the information himself having a vested interest in the information sought (Belch & Belch 2006). The influence of WOM increases when the product is costly and important to the consumer and cannot be assessed prior to purchase (Sweeney, Soutar & Mazzarol 2008).

Message Characteristics

Finally, the way of delivery and nature of message also affects the outcome of WOM. These characteristics include richness and vividness of the message, vividness of the message delivery, use of body language, expressions, intensity, cues etc.

Positive and Negative Word of Mouth

Word of mouth can work in both positive and negative ways. The positive one will boost the sales of the company while the negative one can destroy the brand image of the company. Negative word of mouth is believed to have a stronger effect than the positive word of mouth therefore; companies make maximum efforts to avoid negative word of mouth. Negative word of mouth is considered dangerous because negative experiences spread faster than the positive ones.

It has been researched that when a person is satisfied with a product or a service, he shares it with three people on an average, but when a person is dissatisfied with a product or a service, he shares the negative experience with seven people on an average. The more the emotional involvement people have with a product, the more they will pass information about that to others (Foxall, Goldsmith & Brown 1998).

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This means that when a person has strong feelings about a product or considers the product exciting like cars, he may share it with a greater number of people. On the other hand, if the product is not exciting like grocery, then people may not share the information even if the service is terrible. This leads us to an important point that people tend to remember the unusual and extraordinary and tend to forget the ordinary and usual. This means that negative experiences make people angry and frustrated, registering themselves in the mind of consumers for a longer time thus, leading to negative word of mouth while the satisfactory experiences are soon forgotten. People will talk about experiences which are either poor or unusually good (Bone 1995).

Moreover, if a product exceeds the level of expectation a consumer is, the positive is the WOM but negative WOM occurs when there is a high level of disappointment. Negative WOM is extremely dangerous since it destroys a company’s credibility and brand image and abruptly affects the consumer purchasing behavior (Charlette & Garland 1995).

Word of Mouth and Service Products

Word of Mouth is believed to have a stronger effect on the marketing of services than that of products. The service purchase decisions are often uncertain and risky because services cannot be assessed prior to purchase; therefore, WOM is considered to be an important source of influence for making the purchase decision (Bansal & Voyer 2000). Services cannot be clearly advertised; therefore, people look for personal sources to seek information about services and these sources have a greater influence in service decisions than a product decision.

Generating favorable WOM is necessary for service promotion. Service marketers can generate positive WOM by offering high quality service and providing effective system for solving customer complaints. They should encourage contact between prospective and satisfied customers by introducing a portal for communication. Thus, word of mouth is believed to have a powerful influence in the marketing of service products since WOM is considered the most reliable medium in the service marketing (Mangold, Miller & Brockway 1999).

The Internet Word of Mouth

Internet is considered to be an important tool for interpersonal communication where users can interact through different ways like blogs, forums, chat rooms etc for online discussions. Consumers have adopted Web 2.0 and share comments, reviews and opinions which influence their purchasing decision. The consumers spend their time on communication activities over the internet in their leisure time and discuss topics about which they feel passionate (Steffes & Burgee 2009).

E-mail, instant messaging, and chat rooms are widely used for communication over the internet. Communities are created on Web 2.0 applications like Facebook, My Space, You Tube, Wikipedia etc where people can share their experiences with each other. These applications are free and allow users to create content and forums in which they can consult each other and share their ideas and opinions.

The culture of Web 2.0 has given a new meaning and shape to word of mouth marketing which has now crossed the traditional boundaries and gone over the internet. Web 2.0 involvement is commonly found among the teenagers (13 to 24 years old), and they actively engage in word of mouth over such applications. There was also some tendency found among the older ones who engage in WOM over internet for e-commerce activities. Thus, word of mouth has grown over the internet as well, and this method of marketing is playing a strong role in the daily purchasing decision of consumers (Riegner 2007).

Influence of Word of Mouth on Consumer Decision Making

When a person recommends a product or a service to another person, the latter is likely to purchase the same product, or when a person asks another for his experience with a product but the latter had a negative experience, then the former will never purchase that product. Such is the influence of word of mouth on consumer decision making (Grewal, Cline & Davies 2003). In this age of information, consumers are surrounded by huge quantities of information from which they have to sort out the relevant ones, which is a difficult job.

Instead of performing this difficult task, they simply ask others, particularly the near ones, for their opinion and suggestions regarding a certain product in order to make their purchase decision easily. When an individual has a need, he gathers information about different alternative products so that he can select the one which can best satisfy his need (Peter & Olson 2004). Marketers advertise their products in a positive manner based on which consumers are unable to make a decision.

This leads them to the actual users of the different products, and they seek the advice of those who have a first-hand experience with the product. People also consult the employees of an organization before making a decision and word of mouth from employees also significantly affects the decision making process (Gremler, Gwinner & Brown 2001).

Decision making process is a complex one starting from total unawareness to complete awareness therefore, a little piece of information can have a huge impact. Thus, the individual selects the product about which he has been provided with positive information. Honest word of mouth significantly affects the consumer decision and buying behavior, and companies can make huge profits if they ensure to spread positive word of mouth and retard the negative one (File, Judd & Prince 1992).

Conclusion

Thus, to sum up, the power of word of mouth cannot be denied since it far exceeds the usual advertisements and customer relation tactics. This is because word of mouth information is communicated directly to the recipient, who is the prospective customer and therefore, has a powerful effect. However, the power of word of mouth can work in both positive and negative ways in either registering a brand in the minds of the consumers or destroying its image all together respectively. It is believed that negative word of mouth has a far damaging effect than the positive one therefore; organizations make every effort to promote positive word of mouth and mitigate the negative one.

Word of mouth is considered most influential when the relationship between the giver and the receiver is that of a close nature and when the recipient lacks the needed information and is provided the needed information in a detailed manner. This strategy is more effective in the services context because the customer cannot judge the service prior to the purchase; therefore, consults others for their valued opinion regarding the purchase.

Word of mouth has crossed the traditional boundaries and has spread on the internet through the introduction of Web 2.0 applications which have made it possible for the people all over the world to interact on a single platform and discuss their likes and dislikes. Lastly, word of mouth leaves a profound effect on consumer decision making since the customers believe the word of those who have a first-hand experience with the product or service.

This practice also saves them from the difficult task of gathering information through different sources; instead, they directly consult the ones who have used the product or the service. Word of mouth is an easy way to attract customers and increase sales drastically, but the consequences of negative word of mouth should not be ignored; therefore, producers should never compromise on quality.

Bibliography

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