Viral Marketing Communication: The Internet Word-of-Mouth

Viral Marketing Communication – A study on consumer perception and response MBA Thesis ’2009
CHAPTER THREE: LITERATURE REVIEW
3.1 Word-of-mouth Marketing
3.1.1 How does WoM work
WoM is impishly nicknamed “free advertising” (Buttle, 1998). Defining WoM can be a
tricky task as past researchers have bestowed various different definitions on it. As one of the
pioneer researchers regarding the impact of WoM on consumer behavior, Arndt (1967)
characterized WoM as oral, person-to-person communication regarding a brand, product or
service between a receiver and a communicator who is perceived as being independent of any
commercial influences. It is a group phenomenon, an exchange of thoughts or ideas among
two or more individuals (Bone, 1992).
As consumers generally cannot process all of the information available to them for purchase
decisions, they often engage in simple guides for making their information-seeking and
decision-making processes easier. WoM communication helps to reduce the amount of
information that must be processed in order to make a decision (Duhan et al, 1997).
WoM has been shown to influence an array of conditions: awareness, expectations,
perceptions, attitudes, behavioral intentions and behavior (Buttle, 1998). It is assumed that
WoM functions to draw customers up onto the loyalty ladder (See Figure 3.1), in the process
converting a prospect into a customer (Christopher et al, 1991). Beyond that, he or she can
also progress to become a long term client, supporter, advocate or even partner. On the other
hand, although it is likely that some WoM functions to move a customer up a company‟s
loyalty ladder, in other cases WoM may equally likely fend people off the loyalty ladder
(Buttle 1998).
Partner
Advocate
Supporter
Client
Customer
Prospect
Figure 3.1: The loyalty ladder in WoM
Low Jiun Wee Xavier and Goh Yun Shuang Summer Page 18 of 93