Sunday, January 29, 2006

C2C Communication – Why Consumers get into Word-of-Mouth Marketing?


An insightful research paper by Dr Andrea Wojnicki, Assistant Professor of Marketing at Rotman School of Management, talks about the reasons behind consumer-to-consumer communication, or what is popularly known as “Word of Mouth” Marketing.

What makes Marketers so confident of this mode of advertising that they actually PLAN for such activities? Does the consumer consciously participate in this marketing activity? How can we find out the consumer psyche behind this complete exercise? If there is ambiguity in the behavioral pattern of my consumers, how can I be sure of the effectiveness of WOM? Can I predict if I will fail or succeed in my WOM campaigns?

Dr Andrea attempts to answer most of these apprehensions. The theory she proposes is impression management and it offers insight into why consumers actually engage in WOM. Based in part on motivational theories from social psychology, the theory allows us to predict the relative amount of WOM generated by experts or novices following satisfying or dissatisfying consumption experiences.

In order to generate WOM, certain parameters need to be carefully evaluated. Certain characteristics are essential for measuring the effectiveness of WOM.
Specifically, the self-concept of the consumer and his subjective expertise are the quintessential elements to be considered.

What is Self-concept and what qualifies as subjective Expertise?
Self-concept, per se, appears to be ambiguous. It refers to a multi-dimensional entity that includes various “selves” (e.g. the actual self, the ideal self), roles, or traits, each of which may be more or less salient depending on the situation. However, for the purpose of WOM, the author has broadly associated two main motivational forces with the self-concept - self-verification and self-enhancement.

Self-Enhancement - Consumers could tend to enhance (improve) their self-concept, that is they seek experiences and feedback that improve or bolster their egos. When motivated to self-enhance, people seek to link themselves to positive, and avoid negative, associations leading to brand associations with “ideal” products and brands. In such cases, consumers may engage in WOM as a means to gain attention, social status, superiority, or power.

Self-Verification – Consumers could tend to verify (maintain) their self-concept, that is they seek experiences and feedback that facilitate the maintenance of a consistent self-concept. The underlying objective is to ensure that their behavior is predictable and stable and their image is consistent with what others’ believe and perceive of them.
Purchase behavior in such cases reflects loyalty, higher usage, ownership and established preferences.

Apart from Self-concept, the paper also takes into account two other parameters – Expertise and Satisfaction Levels.
Expertise means the relative competency and knowledge of a person in a particular field or category, based on which a person can be classified as an expert or a novice.
Satisfaction levels correspond to the congruence between what I expected and what I get – if I get what I expected, satisfaction levels are high else they are low.

Following is the construct map taken from her paper
(With due permission from the Author. All Rights are reserved with the Author)

As is evident from the diagram, before the self-concept is applied, one needs to diagnose the impact of two factors –
  • Opportunity to Choose - whether the consumer had choice about which product to consume, and
  • Objectivity of evaluation - whether the salient evaluative dimensions of the consumption experience are objective.

  • The relationships explained above will only hold when both these factors hold true!

    To trigger WOM through self-verification force, not only should the satisfaction levels be high, but also the subjective expertise and competency in that particular category is important.
    According to Dr Andrea, there has to be congruence between subjective expertise and satisfaction levels to activate self-verification. “When they are congruent, self-verification will encourage WOM and when they are incongruent, self-verification will discourage WOM.

    When consumers are satisfied, self-enhancement will encourage consumers to generate WOM and when consumers are dissatisfied, self-enhancement will discourage consumers to generate WOM. In this case, expertise is insignificant, since recognition is the motivational force here.

    Few other determining factors
    (a) High vs Low Involvement - High Involvement entails a high amount of WOM (positive or negative) For instance, in the automobile category, certainly characterized by high involvement, WOM increases with satisfaction.
    (b) High Satisfaction vs Low Satisfaction - Experts would generate more WOM regarding their satisfying experiences and novices would talk more of their dissatisfying experiences.
    (c) Expectations – If there is extreme disparity between what consumers expected and what they got, it results in higher dissatisfaction and hence, higher negative WOM (based on expectations disconfirmation theory)

    Thus, Consumers use WOM as a mechanism for impression management purposes to both enhance and verify their self-concepts as category experts or novices.

    Application in Indian Markets
    Rural consumer relies primarily on word of mouth. Be it HLL’s Shakti or ITC’s e-choupal with their sanchalak, the most effective way to gain inroads into the Rural markets is through Word-of-mouth.
    As is mentioned in the paper, subjective expertise of the Shakti or the Sanchalak is the primary driver for WOM. Once this expert is satisfied, the efficacy of the WOM campaign is much more than would be the case with an external salesperson, whose expertise and credibility is yet to be established.

    More so, Shakti works on the model of self-enhancement, in accordance with the model explained above. The motivator for the Shakti lady is the stature in the society, a desire to enhance one’s self-concept!

    Also, the role of the Influencer is played by the Expert and holds much more credence due to the expertise and his competence. For instance, the Sarpanch (head of the village) is approached more often for any PR campaigns, as he is considered the “Opinion Leader” in the community. Be it painting his house by Asian Paints, talking about Pulse Polio campaigns or authorization for Consumer surveys, all efforts are routed through him. Hence, the critical link!

    As for the predictability of WOM in Urban Markets, expertise, or what we call as “been there, done that” …counts…just have a look at the number of links to Guy Kawasaki’s blog - 1119 sites linking at this point within the last 20 days..!
    Need I say more? ;-)

    [Dr Andrea Wojnicki is an Assistant Professor of Marketing at Rotman School of Management, University of Toronto. The contents of this entry have been taken (with permission) from a paper she had authored while pursuing her doctorate of Business Administration from Harvard Business School. Titled "Word-of-Mouth and the Self-Concept: The Effects of Satisfaction & Subjective Expertise on Inter-Consumer Communication", the complete paper is available at this link and the abstract can be read here]

    2 comments:

    Term Papers said...

    It's always nice when you can not only be informed, but also get knowledge, from these type of blog, nice entry. Thanks

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