Title: Word-of-Mouth Marketing Speaker: Aung Chit Khin MABE, ACIM, Founding Member of (MMktA) Myanmar Marketing Association Monthly Symposium(6/03), 2 August 2009, Sunday (9:30AM - 11:30 AM), Traders Hotel, Yangon Myanmar.

2. www.mmkta.org Word-of-mouth communication Positive Vs. Negative WOM WOM Marketing Customer Advocacy & Evangelism WOMM Framework Marketing Mix, IMC & WOM Buzz Marketing Online Communities overview

3. Word-of-Mouth (WOM)

4. www.mmkta.org Marketing Communications b2c – traditional marketing communication c2c – word-of-mouth c2b - feedback Communication

5. www.mmkta.org Word of Mouth (WOM) The product information individuals transmit to other individuals. (Solomon, 2009) The act of consumers providing information to other consumers. (Word of Mouth Marketing Association WOMMA,2009) Interpersonal communication amongst consumers regarding product and service performances. (Richins, 1983) (Kaplanidou and Vogt, 2003) Personal communication about a product between target buyers and neighbours, friends, family members and associates. (Kotler & Armstrong, 2009) Definitions

6. www.mmkta.org Passing it along to Family, friends, relatives eWOM Communication patterns http://www.pandemiclabs.com/blog/viral-marketing/how-does-viral-marketing-work/

7. www.mmkta.org People talk about exciting products, innovative products, services, experiences, high involvement products and personal activities. People also observe and talk about the products others are using. (Kaplanidou and Vogt, 2003) Important in customers’ formation of attitudes, risk reduction, decision making (Bone, 1995) (Bansal and Voyer, 2000) (Murray, 1991) Critical for services which are intangible and experiential (Berry and Parasuraman, 1991) WOM Facts Wangenheim and Bayón (2004)

9. People like to talk, when something is Talk-Worthy.

10. WOM comes with social pressure to conform.

11. Sometimes, others’ opinions matter more than own perceptions.

12. 2/3 of all consumer-goods sales are influenced by WOM% of buyers relying on WOM for purchases 69% for restaurant 36% for computer hardware and software 22% for travel and vacation WOM Facts Solomon (2009)

13. www.mmkta.org Viral Infection = WOM WOM message = virus Infectious spread from hosts/ vectors Level of contagiousness depends on the potency/DNA of WOM-unit Some can only be transmitted in specific way “High-risk” populations (High Social Networking Potential –SNP) Some make a purchase, some don’t Message mutates just like the virus depending on the host Viral http://www.pandemiclabs.com/blog/viral-marketing/how-does-viral-marketing-work/

14. www.mmkta.org Viral http://www.arisey.com/images/viral_work.jpg

15. http://ericsusch.com/blog/wp-content/uploads/2008/12/050905wom_n.jpg

16. Positive vs. Negative WOM

17. www.mmkta.org Remarkable Positive Experience Big NegativeExperience Loyalty +WOM Switching -WOM Positive or Negative Customer Acquisition & Growth Customer Retention Loss of other customers & potential customers Customer Defection

18. www.mmkta.org Company’s efforts The Marketing Mix Place Process People Competitors’ Efforts Product Price Competitors’ Efforts Promotion WOM person person person person person person person person Competitors’ Brand Community Brand Community Potential Customers/ Non-Users person person person person

19. www.mmkta.org Negativity Bias in WOM “Customers who have had bad experiences tell approximately 11 people about it; those with good experiences tell just 6” Hart et al. (1990, p. 153) A satisfied customer tells 8 other people. A dissatisfied one tells 20. (Fortune, 1995) Positivity Bias in Feedback Bias cited in Söderlund (1998)

20. Word of Mouth Marketing (WOMM) Sernovitz (2006) http://www.wordofmouthbook.com/free/, WOMMA (2009)

21. www.mmkta.org Word of Mouth Marketing giving people a reason to talk about you motivating people to talk about you making it easier for the conversation to take place WOMM Sernovitz (2006) http://www.wordofmouthbook.com/free/, WOMMA (2009)

22. www.mmkta.org Word of Mouth Marketing Start , Support, Simplify Sharing WOMM Sernovitz (2006) http://www.wordofmouthbook.com/free/, WOMMA (2009)

24. Cost effective

25. Relatively Easy

26. Enhance the impact of other communication tools

27. WOM keeps on going and going and going WOMM

29. Fragmentation of markets

30. Growing distrust of advertising

31. Growth of Internet and virtual communities

32. Media fragmentation

33. Some products/ services cannot be advertised WOMM

35. Delight the customers – Offer more

36. Rewards and recognition

37. Target the influencers

38. Staff development

39. Causes – CSR, Sponsorships

40. Reciprocal referral (B2b context)

41. Leverage existing social networks/ micro markets

42. Be truthful WOMM Guidelines Sernovitz (2006) http://www.wordofmouthbook.com/free/

43. Customer Advocacy & Evangelism

44. www.mmkta.org Happy customers advertise for you Free of charge Customer Advocacy & Evangelism cited in Söderlund (1998)

45. www.mmkta.org Customer Advocacy & Evangelism http://localadlink5star.files.wordpress.com/2009/01/word-of-mouth.jpg

46. www.mmkta.org Customer Satisfaction, loyalty and Word-of-mouth Customer Advocacy & Evangelism Cited in Chakrabarty (2009)

47. www.mmkta.org Company Other Key Opinion Leaders Other Key Opinion Leaders Opinion Leaders/ Key Influencers Customer Advocacy & Evangelism Opinion seekers/ followers Opinion seekers/ followers person person person person

48. www.mmkta.org Customer Advocacy & Evangelism WOMMA (2009)

49. www.mmkta.org Diffusion of Innovation cited in Söderlund (1998)

51. Evangelism in Marketing – trying to convert a non-user or a competitors’ customers into customers

52. Customer Evangelists – customers who spread the words about the products they love

53. Apple’s evangelists - Mike Boich, Guy Kawasaki

54. Build community, share knowledge, create a cause, find the right people,Customer Advocacy & Evangelism

55. www.mmkta.org Profit from price premium Profit from references Profit from reduced op. costs Profit from increased usage Base Profit 1 2 3 4 5 6 7 Year Reichheldand Sasser, cited in Chakrabarty (2009)

56. WOMM Framework

57. www.mmkta.org WOMM Planning Frame work www.wordofmouthbook.com

58. www.mmkta.org WOM Episode Framework WOMMA http://womma.org/terminology/terminology.pdf

59. www.mmkta.org Who: Participants — Creator, Sender, Receiver Individuals whose actions make up a WOM Episode. Participants may serve multiple roles. How: Action What participants do to create, pass along, or respond to a WOMUnit. What: WOMUnit A single unit of marketing-relevant information shared by a consumer. Where: Venue The medium or physical location where the communication takes place. Objects http://www.pandemiclabs.com/blog/viral-marketing/how-does-viral-marketing-work/

60. www.mmkta.org Who Propensity: The likeliness of a consumer to take an action. Demographics: Descriptive data such as age, gender, location, etc. Credibility: Ability to impact the behavior or opinions of others. Reach: A Participant's potential audience size. ___________________ How Velocity: The speed at which a WOMUnit moves Distribution Spread: The number of Receivers reached by a Sender. Source Diversity: The number of different Senders that send a WOMUnit to a Receiver. Qualities http://www.pandemiclabs.com/blog/viral-marketing/how-does-viral-marketing-work/

61. www.mmkta.org What Topicality: Degree that the marketing message is contained in the WOMUnit. Timeliness: Whether the WOMUnit arrives in time to be relevant to a campaign. Polarity: Whether the message content is positive or negative. Clarity: Whether the message is understood by the receiver. Depth: The aspects and/or qualities that increase persuasiveness. ___________________ Where Population: Total possible audience for a WOMUnit in a Venue. Audience: Number of Receivers that actually get the WOMUnit. Rules: Whether a WOMUnit complies with policies set by a Venue. Qualities http://www.pandemiclabs.com/blog/viral-marketing/how-does-viral-marketing-work/

62. www.mmkta.org Consumption The Receiver directly consumes the WOMUnit but takes no further action. Inquiries The Receiver seeks more information after consuming the WOMUnit. Conversions The Receiver completes a desired action after consuming the WOMUnit. Relays The Receiver re-distributes the WOMUnit Re-creations The Receiver creates a new WOMUnit after consuming the WOMUnit. Outcomes http://www.pandemiclabs.com/blog/viral-marketing/how-does-viral-marketing-work/

63. www.mmkta.org Conversions (e.g., clickthroughs, trials, purchases) Advocacy Market Share Shifts in awareness, image, brand equities, etc. Cost per conversion Quality of Advocacy Measuring Performance http://www.pandemiclabs.com/blog/viral-marketing/how-does-viral-marketing-work/

64. Marketing Mix, IMC & WOM

65. http://blogue.us/2009/05/13/united-hearts-of-benetton/ The shocker: Benetton

66. http://hollywooddame.com/wp-content/uploads/2009/06/calvin-klein-threesome-billboard-photo.jpg Controversial Ads – Calvin Klein SoHo, Downtown Manhattan, NYC June 15 to 26, 2009

68. Buzz Marketing

70. Blogs, chat rooms, product giveaways

71. Companies also hire “buzz agents” to imitate real-life WOM experience - Create “unique”, “spontaneous”, “personal”, “exclusive” conversations Buzz http://www.pandemiclabs.com/blog/viral-marketing/how-does-viral-marketing-work/

73. BzzAgent

74. Harry Potter Buzz http://www.pandemiclabs.com/blog/viral-marketing/how-does-viral-marketing-work/

76. Needed to generate pre-show awareness + excitement

77. Materials were held up due to long approval process

78. Hired agency DEI Worldwide for an “Influencer Word-of-Mouth Campaign.

79. Marketers engaged in conversations with people in chat-rooms and message boards

80. provided information and collected intelligence

81. 42% indicated intention to buyhttp://www.cirquedusoleil.com/en/shows/love/default.aspx

82. Viral Marketing

84. Marketing technique that seeks to exploit pre-existing social networks to produce exponential increase in brand awareness through viral processes similar to the spread of an epidemic.

85. Could be passive or active

86. For active Viral, create something people want to share

87. Hotmail to append promotional URLs to all the e-mail messages sent by the users. 12 million users signed up for Hotmail accounts in 18 months.

88. Forwarded e-mails, internet referrals, YouTube

89. “word-of-mouse” Viral http://www.pandemiclabs.com/blog/viral-marketing/how-does-viral-marketing-work/

90. www.mmkta.org Viral http://fb4wineries.files.wordpress.com/2009/06/viral_marketing1.jpg

91. www.mmkta.org Viral http://www.emtactics.com/images/viral-marketing.jpg

92. www.mmkta.org Viral http://viraltheshow.com/wp-content/uploads/2008/01/logistic-curve-viral-marketing.GIF

93. www.mmkta.org Viral http://www.pandemiclabs.com/blog/viral-marketing/how-does-viral-marketing-work/

94. www.mmkta.org Burger King’s “Simsponize Me” Viral http://www.bk.com/en/us/campaigns/simpsonize-me.html

95. www.mmkta.org Burger King’s “Simsponize Me” Viral http://www.bk.com/en/us/campaigns/simpsonize-me.html

96. Online Communities

101. www.mmkta.org Word-of-mouth communication Positive Vs. Negative WOM WOM Marketing Customer Advocacy & Evangelism WOMM Framework Marketing Mix, IMC & WOM Buzz Marketing Online Communities overview

102. www.mmkta.org Take-Away List Delight your customers People like to talk about you Give them something worthy and positive to talk about Consider WOM value in everything you do Find the right target Nurture passionate hard-core fans - the evangelists Facilitate – rewards Join in the talk – conversation – buzz marketing Tap into the social media, online communities Measure Take-Away List

103. www.mmkta.org References Kotler, P. and Armstrong, G. 2009, Principles of Marketing, 13th edn, Prentice Hall. WOMMA, 2009, Word-of-Mouth Marketing Association Website, viewed, 1 August 2009, <http://www.womma.org/> www.subservientchicken.com http://www.cirquedusoleil.com/en/shows/love/default.aspx www.wordofmouthbook.com http://www.pandemiclabs.com/blog/viral-marketing/how-does-viral-marketing-work/ Wangenheim, F. and Bayón, T. 2004, ‘The effect of word of mouth on services switching: Measurement and moderating variables’, European Journal of Marketing, vol. 38, no. 9/10, pp: 1173 – 1185 http://www.arisey.com/images/viral_work.jpg http://www.bk.com/en/us/campaigns/simpsonize-me.html Solomon, M. 2009, Consumer Behavior, 8th edn, Prentice Hall Chakrabarty, A. 2009, Services Marketing: Course Notes, Nottingham University Business School

104. proudly sponsored by www.nottingham.edu.my

105. Thank you!