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The effect of word of mouth on consumer purchasing decision

MARKETING RESEARCH PROJECT TOPICS AND MATERIALS

The effect of word of mouth on consumer purchasing decision, a case study of Longrich Company

Introduction 

Consumer behavior is a young discipline; the earlier books were written in 1960’s however, its intellectual forefathers are much older. Understanding of consumers is the consumption process provides a number of benefits. These benefits include assisting the manager in decision making and providing the marketing research with a theoretical base from which to analyses consumers in making better purchase decision. The study of consumer can help to understand more about psychological, sociological and economics factors that influence human behavior. A general knowledge of consumer behaviors also has personal value. It can help people to become better consumers by informing them of the way in which they and others go about their consumption activities. In addition it can assist consumers in the buying process by informing them about some of the strategies used by companies to market their products (Foxall & Goldsmith, 1994).
The field of consumer behavior explores why people make certain purchasing decisions, what products and services they buy, where they buy them, how they use them, the frequency with which they purchase them, and the consumer decision process in action. In this context, consumer behavior has been defined as the activities of people engaged in actual or potential use of market items-whether products, services, retail environment, or ideas (Berkman & Gilson, 1978).
One of the important means of dissemination for information is word of mouth. Word of mouth both negative and positive can have a profound impact on consumer behavior. If utilized correctly, it can go a long way to promote products or service and build a perception created through this method can persist for a long time and adversely effect to the marketing. Therefore the effect of word of mouth can be harsh as well as beneficial (Solomon, 1996). Word-of-Mouth Marketing progress align advertising campaign messaging and product releases with local market influencers, Trendsetters, and Tastemakers to craft mass opinion and purchase behavior.
Effective word of mouth marketing campaign connects with Influencers and Trendsetters who initiate consumer trends (e.g. Fashion trend, automobile purchase trends, consumer product trends, entertainment trends, and beverage consumption trends) that are followed by mainstream consumption trends) that are followed by mainstream consumers. Consumers value word-of-mouth twice as much as they value advertising. In a world in which we all are bombarded with advertising all day (and all night), what is the first thing we usually do to learn more about a business, a restaurant for example? We try to find someone we know who has been there, or someone who knows someone who’s been there. It’s true. Word of mouth does have more credibility than advertisers can even imagine, much less conjure up. And yet word of mouth suffers from the same virtue that makes it so strong. It is personal and therefore, limited in its reach (Pusateri, 1999).
This paper does not include all dimensions and factors of the consumer buying behavior but limited to the following key terms:

  • Consumer Behavior: According to Loudon and Bitta (1994); the decision process and psychosocial activity individuals engage in, when evaluating, acquiring, using or disposing off goods and services. With growing numbers of consumers suffering from ‘confusion by over-choice’ and distrusting product claims, cutting through advertising “clutter” with a credible message has never been more important.
  • Word of Mouth: It is not Street teaming, where people hand out freebies or flyers to you while you’re walking down the street. Word of mouth is not Shill marketing, where companies hire actors to create staged conversation with consumers, without telling consumers they’re staged (also known as “reaching marketing”). Word of mouth is not fake online marketing, where people send e-mails to individuals who don’t want them, or companies post fake opinions online in chat rooms, or review sites like Word of mouth is honest, real and powerful. Its something we all do everyday – it’s the way we communicate. It’s part of our social fabric. Word of mouth is shared opinion about a product or services between two or more people. Share your honest opinion, and you’re creating word of mouth (Balter, 2004).
  • Viral Marketing: It is the most effective when promoting experiential, complex, premium, quirky and cool products. Given that most packaged goods products do not meet these criteria, marketers will benefit from devising campaigns that enhance consumers’ involvement in general product purchases and their emotional attachment to

This study investigates The effect of word of mouth on consumer purchasing decision, a case study of Longrich Company. Further, how positive and negative word of mouth can manipulate the behavior of consumers?

Objectives of the Study

The more specific objectives are:

  1. To study the influence of word of mouth marketing on the buying decision and individuals.
  2. To gather first hand knowledge about the influence of other’s opinions, this at times can be more powerful than one’s ow
  3. To study the relationship between influencer and the
  4. To see weather consumers are likely to pay more attention to negative word of mouth rather than positive
  5. To understand which situations are more likely to be influenced by word of mouth?

Hypothesis

Based on the above objectives, the present study seeks to test the following hypothesis:
H1:       A previous bad experience of a particular product/service leads to negative word-of-mouth.
H2:      International word-of-mouth campaigns started by marketers can be beneficial for them.
H3:       Word-of-mouth regarding a particular product/service provided by a reliable source carries greater credibility.
H4:      People learn from others’ experience and forward that information through word-of- mouth and
H5:      Viral marketing leads to word-of-mouth both online as well as offline.

Organization of the Study

This paper is organized as follows: after introduction in chapter 1, literature review is carried out in chapter two, Research framework and methodology is mentioned in chapter three, Result and discussion is provided in section four. conclusion and recommendation of  the study in chapter five
 

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