Ripple Effect (eBook)

Martin Oetting is Research Director at word-of-mouth marketing platform TRND AG. On Twitter, he is @oetting.

Foreword 6
Acknowledgements 8
Contents 10
List of Figures 15
List of Tables 16
1 Introduction 17
1.1 Consumer Marketing Faces New Challenges 17
1.1.1 Advertising Under Pressure 17
1.1.2 The Decline of Mass Advertising Effectiveness 18
1.1.3 Consumer Empowerment on the World Wide Web 21
1.1.4 The Evolving Field of Consumer Marketing 22
1.1.5 Renewed Interest in Word of Mouth 23
1.1.5.1 The Need for New Approaches 23
1.1.5.2 Online Word of Mouth on the Rise 24
1.1.5.3 Collaborative Marketing 24
1.1.5.4 Word-of-Mouth Marketing as a Response to the Challenges 25
1.2 Word-of-Mouth Marketing Practice 26
1.2.1 Introduction 26
1.2.2 Terminological Diversity 27
1.2.3 “Awareness Word of Mouth” vs. “Evaluation Word of Mouth” 28
1.2.4 The Practice of Stimulating Word of Mouth 30
1.2.4.1 Product-based Word-of-mouth Stimulation 30
1.2.4.2 Advertising-based Word-of-mouth Stimulation 33
1.2.4.3 Relationship-based Word-of-mouth Stimulation 34
1.2.5 Overview: The Awareness Word-of-Mouth Marketing Framework 36
1.3 Word of Mouth as a Field of Academic Study in Marketing 38
1.3.1 Value of Word of Mouth Communication to the Firm 38
1.3.2 Online Word of Mouth 40
1.3.3 Influentials and Their Role in Spreading Messages 41
1.4 Goal of this Research 42
1.4.1 How Can Marketing Stimulate Word of Mouth? 42
1.4.1.1 “Why Do People Listen?” 44
1.4.1.2 “What Effects Does Word of Mouth Create?” 44
1.4.1.3 “What Makes People Talk?” 44
1.4.1.4 “What Happens to the Communicator after the Word of Mouth Event?” 45
1.4.2 The Word-of-Mouth Marketing Model 45
1.4.3 A Neo-Behaviourist Perspective 47
1.4.4 Study Overview 49
2 Word of Mouth Research Traditions 50
2.1 Opinion Leaders and Early Marketing Studies 50
2.1.1 Roots in Opinion Leader Research 50
2.1.2 Early Word-of-Mouth Research in Marketing 50
2.2 Three Strands of Literature 51
2.2.1 Focus on Personal Influence: Opinion Leader Research 51
2.2.2 Focus on Networks: Tie-strength 52
2.2.3 Focus on Personal Experience: Satisfaction and Dissatisfaction 53
2.3 Definition 55
3 Drivers for Word of Mouth 57
3.1 Four groups of Word-of-Mouth Drivers 57
3.1.1 Pre-Purchase Trigger for Word of Mouth 58
3.1.2 Triggers for Word of Mouth During Purchase 58
3.1.2.1 Participation 58
3.1.2.2 Personal Relationships 59
3.1.3 Post-Purchase Triggers for Word of Mouth 59
3.1.3.1 Product Involvement 60
3.1.3.2 Satisfaction/Dissatisfaction 60
3.1.3.3 Emotions 60
3.1.3.4 Network Externalities 61
3.1.4 Undetermined Triggers for Word of Mouth 62
3.1.4.1 Involvement 62
3.1.4.2 Self-involvement 63
3.1.4.3 Other-involvement 63
3.1.4.4 Message Involvement 64
3.1.4.5 Category Involvement 64
3.1.4.6 Purchase Involvement 65
3.1.4.7 Firm-stimulated Word of Mouth 66
3.2 Summary 68
4 Involvement 71
4.1 Introduction 71
4.1.1 Different Levels of Cognitive Processing 71
4.1.2 Definition 72
4.2 Dimensions 73
4.2.1 High vs. Low Involvement 73
4.2.2 Situational vs. Enduring Involvement 73
4.3 Objects of Involvement 74
4.3.1 Product 74
4.3.2 Message 74
4.3.3 Media 75
4.4 Involvement Effects 76
4.4.1 Overview 76
4.4.2 Involvement and Word of Mouth 77
4.4.2.1 Few Explicit Links Between Involvement and Word of Mouth 77
4.4.2.2 Richins & Root-Shaffer (1988)
4.4.2.3 Venkatraman (1990) 78
4.4.2.4 Wangenheim & Bayón (2007)
4.5 Stimulating Involvement 81
4.5.1 Involvement as Internal and Individual-specific 81
4.5.2 Implicit Stimulation of Involvement 82
4.5.2.1 File, Judd & Prince (1992)
4.5.2.2 Mancuso (1969) 83
4.6 Summary: Involvement 84
5 Empowered Involvement 86
5.1 Introduction 86
5.2 Empowerment in Various Fields of Business Research 86
5.2.1 Empowerment in Marketing 86
5.2.2 Empowerment in Healthcare 86
5.2.3 Empowerment in Human Resources Management 87
5.3 Implicit: Involvement 88
5.4 Empowerment as a Motivational Construct 88
5.4.1 Conceptual Considerations, Dimensions of Empowerment 88
5.4.2 Measuring Empowerment 90
5.5 Empowered Involvement as a Word-of-Mouth Marketing Paradigm 91
5.5.1 A Soft Constructionist Paradigm 91
5.5.2 Empowered Involvement Defined 91
5.6 Summary 93
6 Testing Empowered Involvement 95
6.1 Introduction and Overview 95
6.1.1 A Deductive Approach 95
6.1.2 Two Stages of Empirical Analysis 95
6.2 First Preliminary Research 96
6.2.1 Introduction 96
6.2.2 Sample Selection 96
6.2.3 Experimental Treatment and Data Collection 97
6.2.4 Scales/Measurement 99
6.2.5 Hypotheses 99
6.2.6 Results 99
6.2.7 Limitations 101
6.3 Second Research Study 102
6.3.1 Introduction 102
6.3.2 Hypotheses 102
6.3.3 Methodical Considerations, Project Description and Sample Selection 104
6.3.3.1 Collaboration with Word-of-Mouth Marketing Company 104
6.3.3.2 Blog Launch Project Description 105
6.3.3.3 Sample Selection 106
6.3.3.4 Test Group 106
6.3.3.5 Control Group 106
6.3.4 Questionnaire Development 107
6.3.4.1 Measuring Empowered Involvement 107
6.3.4.2 Measuring Word of Mouth 108
6.3.4.3 Questionnaire Introduction and Wording 109
6.3.5 Data Analysis: Structural Path Modelling 111
6.3.5.1 Empowered Involvement as a Formative Construct 111
6.3.5.2 Four Dimensions of EmI Measured Reflectively 113
6.3.5.3 Reflective Measurement of Word-of-Mouth Behaviour 114
6.3.5.4 The Structural Path Model of Empowered Involvement and Word of Mouth (Measurement and Structural Model) 114
6.3.6 Choice of an Algorithm 116
6.3.6.1 Varianceand Covariance-based Algorithms 116
6.3.6.2 Selection Criteria 117
6.3.6.3 Assessing the Reflective Measurement Models 118
6.3.6.4 Assessing the Formative Structural Model 124
6.3.7 Results 124
6.3.7.1 Descriptive Statistics 124
6.3.7.2 PLS Analysis 127
6.4 Discussion of the Results 130
6.4.1 A Word-of-Mouth Marketing Paradigm 130
6.4.2 Insight for Community Marketing 130
6.4.3 Four Drivers of Empowered Involvement 131
6.4.3.1 Meaning 131
6.4.3.2 Impact 131
6.4.3.3 Choice 132
6.4.3.4 Competence 132
6.4.4 Performance Measure 133
7 Outlook 135
7.1 EmI as a Component of a Word-of-Mouth Marketing Strategy 135
7.1.1 Linking Engagement Marketing and Word of Mouth 135
7.1.2 Dialogue and Engagement as a Response to Media Fragmentation 136
7.1.3 Stimulating Empowered Involvement 136
7.1.3.1 Nike Armstrong Bands: Meaning 138
7.1.3.2 Kettle Chips: Impact, Choice and Competence 138
7.1.3.3 Tremor: Impact 138
7.1.3.4 Saftblog: Meaning 139
7.1.3.5 A Basic Empowered Involvement System 139
7.2 Empowered Involvement in the Current Marketing context 141
7.2.1 From Transaction-Orientation to Interaction-Orientation 141
7.2.2 Interaction With a Ripple Effect 142
7.2.3 The Customer As A Co-Worker 143
7.3 Limitations and Further Research 145
7.3.1 Limitations 145
7.3.1.1 Limited Generalisability 145
7.3.1.2 Complete Set of Cognitions, Ways to Stimulate Them 145
7.3.1.3 Complete Analysis of WOM Behaviour 146
7.3.1.4 Difference Awareness-WOM vs. Experience-WOM 146
7.3.1.5 Cross-Cultural Applicability 146
7.3.1.6 Integrating SOR- and Interaction Approaches 147
7.3.2 Further Research: Selection of Participants 147
References 149

6 Testing Empowered Involvement (S. 79-80)

6.1 Introduction and Overview

6.1.1 A Deductive Approach

Our previous considerations have equipped us with a theoretical model that can help explain and predict the behaviour of consumers in an Empowered Involvement setting. First, we analysed the connection between involvement and word of mouth based on existing theoretical and empirical findings. Next, we conceptualised a particular type of involvement which we call Empowered Involvement, and which results from the combination of its four formative dimensions.

We are now in a position that allows us to deduce conclusions concerning the relationship between Empowered Involvement and word of mouth (Chalmers, 2001; Popper, 1966). In doing so, we develop a set of hypotheses, i.e., a number of general statements that describe our assumptions about the relationship between Empowered Involvement, its components, and word of mouth. The deductive approach (Popper, 1966) is based on the assumption that our theoretical considerations can be maintained and considered to be valid if we can observe the theoretically assumed relationships between the different components of our model in an empirical test – albeit, only as long as no new test falsifies the hypotheses, or until a new theory is developed which better explains the phenomena observed (Riesenhuber, 2006, pp. 2–4).

6.1.2 Two Stages of Empirical Analysis

The empirical part of our research consists of two stages. In the first stage, we set out to validate the general direction of our research, and more particularly, of our overall research hypothesis – as mentioned above – that an Empowered Involvement approach is likely to stimulate word-of-mouth communication among consumers. This first stage is more descriptive in nature, and less explanatory. In it, we tested whether a very simple form of Empowered Involvement – voting about ads – already leads to the hypothesised word of mouth effects.

On the following pages, we will describe the experiment design, the sample selection, and the results. Once the appropriateness of our direction was confirmed, we moved on to the second stage, based on a more complex conceptualisation, including a measurement of EmI, its antecedents and consequences. This more elaborate test was organised in co-operation with a German word-of-mouth marketing panel, and conducted within a campaign that introduced a new corporate blog.

The second part of this chapter is dedicated to detailing all aspects of this test. It describes the considerations that led to the experiment design, explains the steps taken for the measurement of the different constructs (with a particular focus on the differentiation between formative and reflective specifications), and, finally, presents and discusses the results obtained. 6.2 First Preliminary Research 6.2.1 Introduction In 2006, we conducted an early quasi-experiment with chewing gum maker Wrigley.

The primary objective was to assess whether or not an approach designed to stimulate the four factors thought to contribute to an experience of empowerment, would indeed stimulate word of mouth activity. Chewing gum was found to be suitable for a number of reasons. We follow Zaichkowsky (1985, p. 346), who, based on a literature review, suggested that low-involvement products are characterised by a lack of information-seeking about brands, little comparison between product attributes, perception of similarity among different brands, and no special preference for a particular brand.

In light of this definition, we consider chewing gum to be a low-involvement product category. (Also, in one of Zaichkowsky’s empirical analyses, instant coffee was shown to be a low-involvement product category, as was yoghurt, in Laurent & Kapferer [1985]. We assume that chewing gum, in terms of the level of involvement that consumers experience with it as a product category, can be considered to be similar to these two product categories.)