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On Brands and Word of Mouth

On Brands and Word of Mouth On Brands and Word of Mouth On Brands and Word of Mouth On Brands and Word of Mouth
04/18/14
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by Grace Yeung
Brands and word of mouth are key elements of marketing, yet the connection between them is rarely looked at. In August 2013, Mitchell J. Lovett, Renana Peres, and Ron Shachar published a paper in the Journal of Marketing Research, finally shedding light on this intricate relationship.

One of their main takeaways is that it is important to create "talkable" brands by identifying the characteristics that the brand has to have to spark the spread of word of mouth. There are different motivations for people to talk about a brand, though most of these motivations can be broken into three categories: social, emotional, and functional. Each of these categories has corresponding brand characteristics that Brant Asset Valuator tracks.

Social relates to social signaling, such as expressing uniqueness, self-enhancement, and a desire to socialize. The brand characteristics that are associated with the social motivation are differentiation, premium/value, relevance, and visibility.

Emotional relates to brands that evoke a sentiment or a compulsion to share. The associated brand characteristics are excitement, involvement, and perceived risk (whether talking about a brand would positively or negatively impact one’s image/reputation).

Finally, the functional driver relates to the tendency to provide information. The characteristics include age and complexity of the brand, type of good, knowledge, perceived risk, and involvement.

Here are the top 10 most mentioned brands within both the online and offline channel. Note that this research was originally conducted in 2010, so these brands may not be the same today.

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Only Ford managed to be a brand that was most talked about both online and offline. Ford’s online success could be due in part to its Fiesta campaign in 2010, when the company recruited influential bloggers to test drive its cars. Ford’s offline success could be motivated by the fact that when consumers discuss what cars to purchase, they turn to their network of peers on a one-off basis offline to solicit input.

Below is a distribution of total mentions, positive or negative, online and offline. Some categories have drastically different feedback loops. For instance, media and entertainment is one of the biggest categories online yet it is not talked about as often offline. It is much easier to talk about this category on networks such as Facebook, whereas apparel is better discussed offline because consumers can refer to and interact with the items of clothing that they are wearing.

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Finally, differentiated brands have higher word of mouth. Here are the brands with the highest differentiation within our database, which we believe is the most important pillar within the BAV model and most indicative for changing ones' brand stature.

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In spite of our hyper-digitized existences, most of word of mouth volume is still offline. Therefore, it is crucial to focus on both online and offline channels, even in this social media world. In fact, the aforementioned characteristics that are associated with social, emotional, and functional drivers contribute differently both online and offline. For example, complex brands and/or products are discussed mostly offline because it is much easier to go into detail and have a full fledged conversation about them than online. Alternatively, differentiation, esteem, and visibility are stronger characteristics in the online environment because social media users tend to want to set themselves apart by asserting their opinions and talking about brands and/or products that are unique and held in higher regard.

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The bottom line is brand equity has a direct and strong impact on being able to create word of mouth, which together serve as drivers to a company’s economic value. Managers should focus on the appropriate brand characteristics , which link to fundamental human motivations, proven to drive word of mouth online and offline.

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