Presenter: Stan ChungInstructor: Dr. Pi-Ying Teresa Hsu

Date: Nov. 3, 2008

Bolen, W. (1994). The role of word-of-mouth “advertising" in retailing. American Business Review, 12, 11-14.

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I. Introduction

II. Methodology

III. Findings

IV. Conclusion

V. My Research

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Definition of “Word-of-Mouth” Oral person-to-person communication between

a receiver and a communicator whom the receiver perceives as non-commercial, concerning a brand, a product, or a service.

(Ardnt, 1967)

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Traditional word of mouth is restricted to the small circle of family and friends; Internet word-of-mouth is a boundless dialogue with a potentially unlimited number of Net users.

(Stauss, 1997)

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Advertising, a controlled (paid) form of no personal presentation and promotion of an idea, good, or service by an identified sponsor.

(Bolen, 1984)

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Based on these 3 points:

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Retailer does not control word-of-mouth.

Retailer does not purchase word-of-mouth communications.

Word-of-mouth is not mass media.

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Monitoring customer praise

Seeking customer complaints

(Swan & Oliver, 1989)

(Wilson, 1991)9

Awful Service Good or Adequate Service

Great Service

Negative Word of Mouth

No Word of Mouth Positive Word of Mouth

Do retailers understand the importance of word-of-mouth advertising to the retail business?

If yes, do they understand how it might be promoted? Funded? Evaluated?

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Method Participants need to react to many statements.

Duration Over 2 year

Participants 57 retail firms

Word-of-Mouth Advertising as defined

Is limited to positive statements 37%

Is limited to positive and neutral statements 28%

Can include negative as positive/ neutral statements 25%

Non response 10%

N= 57

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Word-of-Mouth Advertising is the most effective of all advertising media

Agree with this statement 86%

Disagree with this statement 14%

N=57

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Much creditability in person-to-person contact.

Especially when this contact is found to be personalized.

Word-of-Mouth Advertising is funded and/or controlled

Yes/How -Absorbed in overhead 12% -Donations/ Goodwill-Free product/ Below market price-Incentives for opinion leaders-After-sale customersNo 54%

Non Response 34%

N=57

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Word-of-Mouth Advertising effectiveness is determined

Yes/How -Unsolicited customer feedback 63%-People tell us how they found out about us-Ask customers how they found out about us-Listen to customers and observe what they purchase-Sales for year versus last year-Old customers bring in new customers

No -Its effectiveness can not be determined 16%

Non Response 21%

N=57 16

Word-of-mouth advertising/communication is believed to be very important to the long run success of a business.

Most retailers feel that word-of-mouth advertising cannot be funded or controlled.

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TopicConsumer’s attitudes towards online word-of-mouth and their purchasing intention.

Participants People who have the experience of using online word-of-mouth.

Methodology Questionnaire for 250 participants.

Thanks for listening!

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