Advertising and Word of Mouth on Consumer Decision-Making When Selecting Mobile Phone Service Provider in Kuwait.
“Can you hear me now?”
Verizon’s popular TV advertisement’s tag line, “Can you hear me now?” stresses the value of hearing what someone has to say. What happened to Josh Vondran, however, according to Andy Piper (2008) in the article, “Stolen phone rings up soldier’s bill,” reflects the opposite message that Verizon Wireless or any other mobile phone service provider in Kuwait or any other location would promote in their advertisements.
When consumers select mobile phone service provider in Kuwait or any other location, one of the primary concerns would be that the company makes a point not only to invest effort in advertising their service, but also “listen” to and fill the consumer’s needs. In the case of Condran, however: “Apparently, no one was listening” (Piper, Â¶ 19). Prior to serving in Kuwait, Vondran, an airman with the 101st Airborne Division, based in Fort Campbell Kentucky, mailed his cell phone to his mother, thinking his cell phone service had been terminated. Because no one appeared to listen, from 2003 to 2008, Vondran had to fight a five-year battle Verizon Wireless over a $40,000 cell- phone bill. Verizon ultimately did listen to Vondran’s concerns and credited his account, as well as sent a request to repair his credit.
This literature review chapter examines the information relating to the influence of advertising and word of mouth (WOM) on consumer decision-making when selecting a mobile phone service provider in Kuwait. In regard to the consumer decision-making process, the researcher asserts, mobile phone service provider could benefit not only form considering research relating to advertising, but also heed what Verizon advertised, make a point to “hear” concerns Kuwait consumers, like Vondran, have to contend with.
According to Piper (2008), theft of cell phones constitutes a major concern that consumers in Kuwait, considering cell phone service providers, have to contend with. Piper notes the following anti-theft tips from Wireless Consumers Alliance News, not only aimed toward the cell phone service providers’ market in Iraq, but to help protect the cell phone owner, as well as, his/her credit:
Lock your cell phone with a password.
Keep track of where your cell phone is at all times.
Read your cell phone contract carefully — some contracts provide for specific steps you must take if your cell phone is stolen.
If your phone is stolen, you should notify the police at once so there is a written record of the theft. Notify your cell phone company right away and ask them to turn your phone off.
When you talk to your cell phone company about the theft, make a written note of the time of the call, the person you spoke with and that person’s position. This information will be useful if the cell company later says that the theft was not reported. (Piper 2008 Â¶ 1)
In the article, “Mobile Services Roll out in Iraq; for So Long Denied Access to a Mobile Telephone Network, Iraq Has Three Providers and Much to Discuss,” John William Fenn (2004) notes that mobile telephone service commenced in Iraq in February 2004, with mobile adoption increasing this same year. Since 1759, the Al-Sabah dynasty, a reportedly respected monarchy, ruled Kuwait. Kuwait, an Islamic constitutional monarchy in southwestern Asia, constitutes one of the world’s richest countries per capita (National day ofâ€¦ 2008, Â¶ 2). According to measures the Gross National product (GNP) utilizes:
Petroleum production provides most of Kuwait’s income.
Crude oil production is about 500 million barrels annually, of which about half is exported.
Oil pays for free medical and social security.
Education is also free and compulsory for citizens aged 6 to 14.
There are no taxes in Kuwait, except customs duties (National dayâ€¦ 2008,
1, Consumer Behaviour
Understanding consumer behavior, according to John Mowen and Michael Minor (2003) in “Consumer Behavior: A Framework,” proves vital for a business.” Consumer behavior influences the consumer’s “acquisition, consumption, and use of goods, services, and ideas”(Mowen and Minor, Â¶ 1). When marketers, managers, researchers and public policy makers understand consumers/decision makers, they may make better informed decisions, as well as develop strategies and tactics that maximize consumer welfare and firm profitability.
Jari Salo, Assistant Professor, Department of Marketing, Faculty of Economics and Business Administration, University of OuIu, Finland, and Heikki Karjaluoto (2007), Research Professor, Department of Marketing,â€¦ University of OuIu, Finland, relate a number of considerations of new research relating to consumer behavior, as they explore mobile games as an advertising medium in the article, “Mobile Games as an Advertising Medium: Towards A New Research Agenda.” From their review of mobile games research, Salo and Karjaluoto explain that M-advergame consists of a game application that companies use to advertise their products. Converging underlying mobile gaming technology will contribute to more successful and effective m-advergames, Salo and Karjaluoto predict. Increasing brand awareness and improving customer loyalty influences decision making by, and consequently consumer behavior.
Mowen and Minor (2003) define the terms, “Consumer Behavior” and “Consumer Behaviors”:
Consumer behavior: The study of the decision-making units and the processes involved in acquiring, consuming, and disposing of goods, services, experiences, and ideas.
Consumer behaviors: consist of all the actions taken by consumers related to acquiring, disposing, and using products and services. (Mowen & Minor 2003)
1.2 The Importance of Consumer Behaviour
Andrew Ehrenberg, Research Professor of Marketing, South Bank University, London, England and Neil Barnard (1997), Consultant, market analysis and advertising assert in the article: “Advertising: Strongly Persuasive Or Nudging?” that some individual’s content that advertising increases the advertised brand’s sales when it persuades brand-switchers to stay true to the brand. Others purport that advertising primarily reinforces and sometimes nudges consumers’ existing propensities to buy the advertised product or service. Barnard and Ehrenberg explore the distinction of the two view points.
Barnard and Ehrenberg (1997) relate the following advertising tactics:
Converting Other Brands’ Loyals into Your Loyals: Involves severing a variety of existing ties and establishing a new and different bond with your brand.
Converting Switchers into Your Loyals: A markedly different task is to persuade consumers who had so far never committed themselves to just one brand to do so now.
Converting Switchers to Buy Your Brand More: Yet a different advertising task – not full conversion / commitment but just more attraction to your particular brand (our “nudging”).
Keeping Your Existing Customers: In the face of strongly persuasive=
competitive advertising or other threats (e.g., price, display, sheer availability, or product innovation) your advertising would either have to inoculate your
Loyals well beforehand, or try to defend them just in the nick of time.
Keeping Your New Customers: Any converts must be prevented from slipping back into their old ways, e.g., commitment to their previous brand’s values, or to switching for price.
Reinforcing Your Existing Customers: The task would once more be different in that there might seem to be little need for routine brand maintenance if your existing Loyals are already committed to your brand, and Switchers
apparently buy you for other reasons like variety-seeking (Barnard & Ehrenberg 1997, p. 22).
Targeting a particular consumer group, according to Barnard and Ehrenberg (1997), presupposes the group to be significant, however the advertising also reaches other numerous consumers. Nevertheless, the impact likely depends more on the potential consumers who are actually reached. Barnard and Ehrenberg argued that advertising does not aim to persuade consumers loyal to one certain brand, but that empirical evidence reveals that few customers of a brand remain exclusively loyal to that brand.
1.3 Factors Affecting Consumer Behaviour (Cultural, Social, Personal, Psychological etc…)
In her qualitative report, “Self-monitoring and consumer behavior,” Sue-Ellen Kjeldal (2003), a professional educator, purports that personal and psychological factors affect consumer behavior. Kjeldal reports that the results of her study “demonstrate a relationship between two sub-disciplines of psychology, namely self-monitoring and decision-making. Self-monitoring, consistently appears to influence human behavior in various settings” (Kjeldal, Â¶ 3). Kjeldal utilizes The Word Association Method, an unstructured, qualitative methodology, to examine components relating to self-monitoring and decision-making. These concepts include image and quality/form and function / social identity/value-expressiveness.
Kjeldal (2003) cites Snyder and DeBono to note:
â€¦to the extent that an advertisement allows high self-monitoring individuals to perceive that a given product has the potential to be used to create or enhance an image, they should react favorably to it…. By contrast, low self-monitoring individuals typically do not attempt to mold their behavior to fit situational and interpersonal considerations. Instead, these individuals tend to guide their behavioral choices on the basis of information from relevant inner sources, such as attitudes, feelings and dispositions…. Unlike their high self-monitoring counterparts, low self-monitoring individuals are less concerned with the images they project to others in social situations; instead, they are more concerned that their behavior in social contexts be an accurate reflection of their underlying attitudes, values and dispositions. As such, they may be particularly responsive to advertisements that feature appeals to a product’s quality. (Snyder & DeBono quoted in Kjeldal 2003, Introduction section, Â¶ 6).
The results from the study Kjeldal (2003) conducted with 70 participants in two stages suggest that the word association responses high self-monitors (HSMs) produce reflect selective activation of a personally meaningful, experiential, system. The responses low self-monitors (LSMs) produce, on the other hand, indicate an intellective factual system.
2. Decision Making Process Theories
Dr. Bonnie Halpern-Felsher (2009), an Associate Professor at theUniversity of California, San Francisco, identifies a number decision-making criteria in her report, “Adolescent decision making: an overview.” According to Halpern-Felsher, determinations of definitions for a competent decision, the process of how the decision was made, differ dramatically. The actual behavior or outcome, albeit, does not determine competent decision making, however, during the normative model of decision-making process, one does consider the consequences to not choosing a particular behavior or a specific event.
Normative models of decision making, commonly utilized in theory, empirical investigation, and policy to explain competent decision making, describe the most general steps one may take to make the most rational decision for the individual. Similar to the legal definition, normative models include fundamentals, articulating the components in terms of the following five general processes (Halpern-Felsher 2009):
1. Identifying all possible decision options;
2. identifying the possible consequences of each option, including all possible related risks and benefits;
3. evaluating the desirability of each consequence;
4. assessing the probability or likelihood that each particular consequence will actually occur, should that course of action be adopted; and
5. combining all information using a decision rule, resulting in the identification of the best option or action. (Halpern-Felsher 2009, Models ofâ€¦section, Â¶ 1)
The following list denotes a number of additional decision-making criteria Halpern-Felsher (2009) presents:
the willingness to make a decision;
the capacity to make autonomous decisions;
searching for, recognizing, and incorporating new information relevant to the decision;
the ability to judge the value of advice from other sources;
the willingness to change one’s decisions;
the ability to implement and carry out one’s decisions;
the ability to evaluate and learn from one’s decisions;
the ability to reach decisions one is satisfied with; and the ability to make decisions that are consistent with one’s goals. (Halpern
Felsher 2009, Dual processâ€¦section, Â¶ 1).
In the article, “Persuasion Knowledge: Lay People’s and Researchers’ Beliefs about the Psychology of Advertising,” Marian Friestad and Peter Wright (1995) investigate persuasion, another noted phenomenon related to decision making. Friestad and Wright argue that the individual’s persuasion knowledge serves as a significant determinant of how he/she copes with (and produces) persuasion attempts; stressing that in a complete theory of persuasion, this knowledge must be accounted for. During their study, Friestad and Wright address questions such as: “What do lay people believe about the psychology of advertising and persuasion?” And “How similar are the beliefs of lay people to those of consumer researchers?” (p. 62).
Findings from the exploration by Friestada and Wright (1995) of the content of individuals’ conceptions of ways television advertising impacts its audience indicate that lay people and researchers share numerous general beliefs regarding the psychology of persuasion. They also, however, note a number of dissimilarities between the two groups’ persuasion knowledge. Ultimately, Friestad andWright discuss implications from the findings regarding the existence of cultural folk knowledge, along with the way this knowledge affects persuasion. When a person interprets and responds to ads or sales presentations, as well as when he/she evaluates the persuasion attempts’ effectiveness or appropriateness, he/she draws on his/her persuasion beliefs (Friestad & Wright 1995).
Following two pre-studies, Friestad and Wright (1995) measured seven types of persuasion beliefs, with each belief relating to a role the psychological events played. Friestad and Wright did not proffer any explanation for the study findings, but note that the two analyses of the structure did not indicate that researchers collectively demonstrate more highly integrated persuasion beliefs than lay people demonstrate.
2.1 Definition of Decision Making Process
In “Introduction to Decision Making, Robert Harris (2008 ) relates the following “standard” decision making definitions:
1. Decision making is the study of identifying and choosing alternatives based on the values and preferences of the decision maker. Making a decision implies that there are alternative choices to be considered, and in such a case we want not only to identify as many of these alternatives as possible but to choose the one that (1) has the highest probability of success or effectiveness and (2) best fits with our goals, desires, lifestyle, values, and so on.
2. Decision making is the process of sufficiently reducing uncertainty and doubt about alternatives to allow a reasonable choice to be made from among them. This definition stresses the information-gathering function of decision making. It should be noted here that uncertainty is reduced rather than eliminated. Very few decisions are made with absolute certainty because complete knowledge about all the alternatives is seldom possible. Thus, every decision involves a certain amount of risk.
In “Consumer Behaviour,” Janice Denegri Knott (N.d) explains that a model constitutes a simplified version of reality. She stresses that a model, neverhtelss is not and will never constitute reality. A theory, according to Knott, consists of “an interrelated set of concepts, definitions and positions that presents a systematic view of phenomenon” (p. 8). A Theory has the following four functions, to:
4. Control. (Knott N.d, p. 6).
2.2 Howard-Sheth’s Theory
In the book, Foundations of marketing theory: Toward a general theory of Marketing, Shelby D. Hunt (2002) examines Howard-Sheth’s Theory. Hunt notes that Howard and Sheth “propose the developmental linkage that attitude influences purchase only through intention to purchase” (p. 206). According to Hunt, the question that needs to be asked regarding this theory, as should be asked of any theoretical structure queries: “How well does this theory represent the real world by explaining and predicting real-world phenomena?” (Ibid.). Even though few theories in marketing have reportedly initiated more scholarly interest than the Howard-Sheth (1969) theory of buyer behavior, noted in Figure 1, “the theory & #8230; is not constructed in a form suitable for testing” (Ibid.). As Figure 1 portrays: “The theory consists of a large number of constructs, both exogenous and endogenous to the system. The constructs are interconnected by both direct causal linkages (the solid lines) and by feed-back effects (the dashed lines)” (Ibid.).
Figure 1: Howard-Sheth (1969) Theory of Buyer Behavior (Howard and Shethâ€¦1998).
The following notes components of the inputs and outputs of the Howard-Sheth Theory.
The ‘real’ (physical) aspects of the product or service symbolic
The ideas or images attached by the supplier social
The ideas or images attached to the product by society, such as reference groups.
The consumers actions constructs perceptual
Obtaining and handling information about the product or service.
The process of learning leading to the decision itself (Howard and Shethâ€¦1998)
Hunt (2002) reports that Farley and Ring partially formalized the Howard-Sheth (H-S) theory; requiring the rigorous specification of the exact nature of the linkages among the constructs. According to Hunt, Farley and Ring struggled as:
â€¦in its [the model’s) present form, the functional relationships among the variables are generally unspecified, al-though their directions are known” (Farley and Ring 1970. p. 427). The for-malization of the theory culminated in a series of eleven simultaneous equations, each having the basic form:
Y., = I Sl, Yn +1 Y, X~,, +Y +11: 1.1 I.
Farley and Ring then obtained measuresâ€¦for each construct and conducted a test of the theory using both ordinary least squares and two-stage least squares regressions. Their results can be interpreted as weakly supporting the H-S theory.
Farley and Ring’s efforts also sparked a critical appraisal of the basic structure of the H-S model by Hunt and Pappas (1972). This appraisal found that because the actual variables used in the H-S model had been common knowl-edge in consumer behavior for some time, the major substantive contribution of the H-S theory was the postulation of certain developmental linkages.
Knott (N.d.) argues that the H-S model contains too many variables; that this complex model can be too difficult to read.
2.3 Consumer Black Box Model
In the book, Marketing, Richard Sandhusen (2000), reports that the “black box” model reflects consumer behavior. Sandhusen reports that consumer behavior focuses on “when, why, how, and where people do or do not buy products.” Figure 2 portrays the Black Box Model.
BUYER’S BLACK BOX
Figure 2: Block Box Model (Sandhusen 2000, p. 218).
The Black Box Model, according to Sandhusen (2000) portrays how consumer characteristics, along with stimuli, and decision processes intermingle to elicit consumer responses.
2.4 Five Stages Model (Problem Recognition, Information Search, Alternative Evolution, Purchase Decision, Post-Purchase Behaviour)
Consumer Buying Behaviour
Numerous internal and external factors impact the consumer buying process. These include the following five components which consumers go through.
1. Problem/Need Recognition: The consumer possesses a problem or a new need.
2. Information search: Consumer search through information search to help them make their purchase decision. Information sources may be family, friends, neighbours who have purchased the product or service the consumer is considering.
3. Evaluation of different purchase options: Consumers may prefer a particular brand or company that presents a positive history.
4. Purchase decision: Consumers reach their final purchase decision and transition through the final process of the purchase action.
5. Post Purchase Behaviour: This stage may include doubts about the purchase, a common trait that purchasers of products experience. As manufacturers of products want recent consumers to be satisfied with their purchase, this stage also proves significant (Learn Marketing (N.d).
In the article, “How Advertising Affects Consumers,” William M. Weilbacher (2003) argues that advertisers do not attempt to hear and understand the way consumers process information the advertisers present. Weilbacher clarifies two false assumptions advertisers routinely make.
1. Marketers assume they can control what consumers think about brands through marketing communications, especially advertising.
2. Marketers assume that brand purchases are made as a direct result of a conscious, rational consumer choice process (Weilbacher 2003, p. 214).
As neither of these assumptions are true, marketing communications and other forms of advertising may best be considered devices to increase brand acceptability. Making a brand seem more acceptable will likely move it into the ranks of brands already perceived acceptable or retain its status within that group. Advertising and sponsored marketing communications, Weilbacher (2003) insists, “must be created in the context of whatever consumers now know and think about the brand” (p. 234). As advertising and marketing communications aim to modify the consumer’s existing perception of the brand, they, in turn, make the competing brand more compatible with the consumer’s expectations. Bringing new and unexpected information, however, as well as different images about the brand forces the consumer’s self-conscious processes to rethink what the brand is and why the brand is important to the individual (Weilbacher).
Don E. Schultz (1995), Professor, Media School of Journalism, Northwestern University, notes that a number of individuals in his research did not know the difference between the definition of advertising and direct marketing. In the article, “What Is Direct Marketing?” Schultz stresses that the definition of a field and a discipline is significant and that when one studies a subject, he/she needs to understand the meanings of terms. “To the researcher, definitions are important” (Schultz, p. 9). Their significance will likely increase in the future.
Advertising, according to “Advertising, Public Relations,” constitutes “Any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor” (N.d).
Signage in ancient times offers evidence of early advertising.
Modern ad spending tops $231 billion in U.S. annually, $500 billion worldwide.
Business firms, not-for-profit, social agencies, and professionals all advertise. (Ibid)
Major media types for advertising include:
3.2 How does Advertising Work?
John L. Stanton (2002), Professor of food marketing at St. Joseph’s University in Philadelphia, explores whether advertising actually “causes” sales or constitutes more of an entertainment, rather than selling venue. In the article, “Does advertising really work? Don’t ask the accounting department, Stanton reports that he is frequently asked if advertising really works. Stanton reportedly responds: “At what?” (Â¶ 1). Part of the answer to his question, according to Stanton, according is that advertising provides consumers with information they need and want about the products out there.
Customers desire information not only to help them make decisions, but also to confirm decisions that have previously been made. Consumers need and want advertisements to help them sort through the multitude of new products. Stanton (2002) purports that new sales for products and services evolve from only the followingthree places:
1. You can get people who didn’t use the category to enter the category and brand. For example, if you are selling dog biscuits, you can get people who never used dog snacks to buy them.
2. You can get people who use your brand to use more of it. You can get dog snack users to buy them more often.
3. You can get people to switch from one brand of dog snack to another.
3.3 Factors Affecting Advertising
Bahaudin Mujtaba, Director of Institutional Relations, Planning, and Accreditation for Nova Southeastern University at the H. Wayne Huizenga School of Business and Entrepreneurship in Fort Lauderdale, Florida and Arthur Jue (2005), a native of Silicon Valley, California, relate findings of their a qualitative survey, examining subliminal advertising, in the study, “Deceptive and Subliminal Advertising in Corporate America: Value Adder or Value Destroyer?” During this study, the researchers also relate considerations of deceptive and subliminal advertising that some firms implement to convey messages intended to persuade and influence consumer behavior. Mujtaba and Jue make a number of recommendations to enhance corresponding public awareness by developing robust methods of ethical evaluation.
Please Note: the following pages in red: 16 — 28 have not been rewritten. Pages 1 — 5, and pages 27 — 34, in black letters, however, have been rewritten. As the order was only for 22 pages, 1 — 15 + 8 = 23 pages. Know these pages, plus the additional info in red, will provide you with TEMPLATE to create your final paper.
As explored in this discussion, the practice of deceptive and subliminal advertising continues to occur in the corporate arena, which raises questions as to its utility, efficacy, and value. Does subliminal advertising turn consumers into mass herds of mindless automatons clamoring to purchase trite and folksy kitsch that they had no intention of initially buying? Perhaps not, but increasing research and empirical evidence indicates that such advertising can and does subtly influence consumer attitudes, perceptions, judgments and even behaviors (Mujtaba & Jue 2005, Discussion section, Â¶ 1).
An election goes on every minute of the business day across the counters of hundreds of thousands of stores and shops where the customers state their preferences and determine which manufacturer and which product shall be the leader today and which shall lead tomorrow. (Barton as cited by Mujtaba & Douglass, 2003) When faced with making these moral choices, many alternatives exist that can provide guidance, including company policies, industry standards, governmental law or regulations, and even structured social or religious institutions. A qualitative narrative approach was also used to ascertain consumer perceptions vs. advertising intentions. In addition, a values-based solution coupled with spirit-centeredness attuned to personal conscience and virtue ethics may represent a robust alternative for assessing/addressing subliminal and deceptive advertising content as well as its value or lack thereof (Mujtaba & Jue 2005, Discussion section, Â¶ 2).
Dwane Hal Dean Ph.D. 2004 Louisiana State University, an assistant professor of marketing at East Carolina University in Greenville, NC asserts in the article, “Consumer Reaction to Negative Publicity: Effects of Corporate Reputation, Response, and Responsibility for a Crisis Event,” Corporate crises often result in negative publicity, threatening the image of the company. The present study investigated the effects of company reputation for social responsibility prior to a crisis event, response to a crisis event, and responsibility for the event on overall consumer regard for the firm. The study is, in part, an experimental test of image restoration strategies conceptualized in the literature. Each of the three factors was found to exhibit a significant main effect. For the crisis scenario used in this Study, responsibility explained the largest proportion of variance and response explained the least. An unexpected finding was that an inappropriate response by a “bad” company resulted in an increase in regard toward the firm, whereas the same response by a “good” company resulted in a decrease in regard for the firm (Hall 2004, Â¶ 1).
Negative Publicity, publicity is generally acknowledged to be more credible and more influential than company-controlled communications (Bond & Kirshenbaum, 1998). Negative publicity, in particular, has the potential to damage corporate image. This is due to its high credibility as well as the negativity effect, a tendency for negative information to be weighted more than positive information in the evaluation of people, objects, and ideas (Mizerski, 1982). Because the media has a preference for reporting bad news (Dennis & Merrill, 1996), companies are more likely to receive bad press rather than positive press (Hall 2004, Background section, Â¶ 1).
The current study focuses on three factors that may affect consumer reaction to negative publicity: company response to the event, company reputation for social responsibility prior to the event, and company responsibility for the event. These three factors appear to constitute an intuitively related set, but they have not previously been investigated together. The first two factors have already been identified in the literature as important in a time of crisis; the third factor was selected for its likely effect on corporate image (Hall 2004, The present study section, Â¶ 1).
In the reputation manipulation, the social responsibility behavior of companies was described in such a way as to generate either high or low expectations of future social responsibility behavior. Then, a product harm crisis was announced, and participants were presented with company statements that were fair and compassionate toward those affected or insincere and evasive. Neither announcement resolved the question of blame for the incident, but the inappropriate response exploited this state of ambiguity by pointing a finger at another company. Participants were predicted to interpret company response to the event in such a way as to confirm expectations induced by the reputation manipulation. (Hall 2004, Discussion section, Â¶ 1).
Consumer experience with a product results in familiarity with the brand, a set of brand associations, brand loyalty, and a degree of commitment to the brand. Commitment to the brand has already been shown to moderate the effects of negative publicity (Ahluwalia et al., 2000), but this factor has not been studied in association with the factors of response to the event and responsibility for the event. Future research may wish to investigate the factor of brand commitment in combination with response and responsibility or other factors. (Hall 2004, Future studiesâ€¦ section, Â¶ 1).
Collectively, this work suggests that negative information about a company is processed differently by loyal customers vs. noncustomers. Loyal customers are believed to have a greater motivation to actively evaluate negative information, generating counterarguments to negative publicity, and rejecting information that runs counter to their positive opinion of the company. In contrast, noncustomers may be swayed by emotional cues and are unlikely to elaborate on the negative information. (Hall 2004, Limitations section, Â¶ 1).
3.4 Advertising in the Service Industry
Dwayne D. Gremler, College of Business Administration, Bowling Green State University, Bowling Green, Ohio, USA, Kevin P. Gwinner, College of Business Administration, Kansas State University, Manhattan, Kansas, USA, and Stephen W. Brown 2001 College of Business, Arizona State University, Tempe, Arizona, USA, assert in the article, “Generating positive word-of-mouth communication through customer-employee relationships,” In this study, we hypothesize and empirically test the proposition that interpersonal bonds, or relationships between employees and customers, can significantly influence positive word-of-mouth (WOM) communication. Such influence may be especially true for many services, particularly in situations where a relationship has developed between the customer and individual service providers. In this study we look at four dimensions of interpersonal bonds: trust, care, rapport, and familiarity. We contend that as a customer’s trust increases in a specific employee (or employees), positive WOM communication about the organization is more likely to increase and such trust is a consequence of three other interpersonal relationship dimensions: a personal connection between employees and customers, care displayed by employees, and employee familiarity with customers (Gremler, Gwinner & Brown, 2001, p. 44).
Word-of-mouth (WOM) communication, “informal communications directed at other consumers about the ownership, usage, or characteristics of particular goods and services and/or their sellers” (Westbrook, 1987, p. 261), has recently received renewed attention in the marketing literature (Anderson, 1998; Gilly et al. 1998; Money et al., 1998). Positive WOM communication has been recognized as a particularly valuable vehicle for promoting a firm’s products and services. Indeed, given its non-commercial nature, WOM communication is viewed with less skepticism than firm-initiated promotional efforts (Herr et al., 1991). Although WOM communication can be very influential in any purchase decision, previous research suggests it is particularly important for services (Ettenson and Turner, 1997; Heskett et al., 1997; Murray, 1991) and that a single recommendation Â± the only source of information obtained is often sufficient to convince a person to try a particular service provider (Gremler, 1994; Price and Feick, 1984; Reingen, 1987). (Gremler, Gwinner & Brown, 2001, p. 44).
In this study, we hypothesize and empirically test the proposition that interpersonal relationships between employees and customers can significantly influence positive WOM communication. For many services, an important component of the offering is the interpersonal interaction between employees and customers (Czepiel and Gilmore, 1987; Surprenant and Solomon, 1987) or what Gremler and Brown (1996) refer to as “interpersonal bonds.” Scholars have suggested that customers who are members of a firm’s “social network” (Reingen and Kernan, 1986) or are in situations where “relationship closeness” exists (Colgate and Danaher, 1999) are more likely to engage inWOMbehavior. One key dimension of the employee-customer relationship is interpersonal trust, or “confidence in an employee’s reliability and integrity” (adapted from Morgan and Hunt, 1994). We contend that as a customer’s trust increases in a specific employee (or employees), positive WOM communication about the organization is more likely to increase. A better understanding of the conditions that facilitate positive WOM communication, such as the relationships proposed above, can provide managers with insight as to how to best stimulate such behavior (Gremler, Gwinner & Brown, 2001, p. 45).
To empirically investigate the proposed model, we use a self-report questionnaire format with two sets of respondents, the average age is 48.4. Of these respondents, 42% are men, the average age is 47.6 years. (Gremler, Gwinner & Brown, 2001, p. 51).
A two-step approach was employed to analyze the data. In the first phase, the measurement model was assessed by performing a confirmatory factor analysis using the CALIS procedure in SAS. (Gremler, Gwinner & Brown, 2001, p. 51).
In spite of the importance WOM communication can have in encouraging new customers to try a good or service, businesses have generally struggled in developing strategies to encourage WOM behavior. Many providers have assumed that providing service that satisfies their customers is sufficient for stimulating positive WOM communication. However, researchers have suggested that satisfaction with the core service provided may not necessarily generate positive WOM (Gremler and Brown, 1996; Reynolds and Beatty, 1999). In this paper we have argued, and presented empirical support, that the fostering of interpersonal relationships between employees and customers may help encourage positive customer WOM behavior (Gremler, Gwinner & Brown, 2001, p. 54).
Focusing on service design, one way to facilitate the development of interpersonal bonds is to design the environment where the service takes place (the service scape) in such a way that opportunities for interactions (both formal and informal) between employees and customers are plentiful (Gremler, Gwinner & Brown, 2001, p. 55).
Focusing on support systems, firms might consider adopting (or altering) technology in order to allow more time for employees to interact with customers. Some customer relationship management (CRM) software adds considerable efficiencies to customer service. Firms deploying this software might encourage front-line employees to use this “extra time” for interactions with customers (Gremler, Gwinner & Brown, 2001, p. 55).
Focusing on employees, service businesses might consider empowering employees and giving them the freedom to develop relationships, do what is right, and correct problems. Such efforts can often result in a customer’s trust in an employee developing. The flattening of organizations and the employees’ ready access to data base information is better enabling this empowerment (Gremler, Gwinner & Brown, 2001, p. 55).
Focusing on customers, similarly, if the organization would like to encourage relationships to develop between customers and employees as part of a WOM strategy, then customers also need to be rewarded for developing interpersonal bonds with employees. Firms might even point out to the customer the benefits of knowing a specific person within the organization. Here again, data base capabilities may make these customer rewarding actions possible (Gremler, Gwinner & Brown, 2001, p. 56).
Word-of-mouth (WOM) communication from an existing customer to a potential customer is often the most creditable method of stimulating new business for firms. In services settings, these referrals may be encouraged through cultivation of interpersonal bonds between employees and customers. This study empirically demonstrates that these relationships are indeed significantly correlated with WOM behavior. Management implications for strengthening these bonds are offered in the form of service design and support systems (Gremler, Gwinner & Brown, 2001, p. 56).
Eun-Ju Lee, an assistant professor of Marketing at the California State University, Los Angeles, Jinkook Lee is Associate Professor at the University of Georgia and David w. Schumann 2002 Associate Dean and Professor of Marketing at the University of Tennessee, Knoxville, purport in the article, “The Influence of Communication Source and Mode on Consumer Adoption of Technological Innovations,” Communication is the critical process of diffusion of technological innovations, yet there is little research in the consumer behavior literature investigating how communication affects consumers’ decision to adopt technological innovations. This paper examines the effects of communication source and modality on consumers’ adoption of technological innovations using the 1999 University of Michigan’s Survey of Consumers data (Lee, Lee & Schumann 2002, p. 1).
Technology is “a form of human activity that applies the principles of science and mechanics to the solution of problems,” to the enhancement of performance, and the creation of competitive advantage (Bush 1981, p. 1). In today’s world, technological advancements seem to occur constantly as companies introduce innovative products and services into the marketplace at an ever-increasing speed (Lee, Lee & Schumann 2002, p. 1).
The communication literature has identified the various paths that information travels as it crosses different population segments within a social system. The two-step flow model of communication, for example, posits that information flows from mass media (e.g., radio and print) to opinion leaders (innovators), and that the less active members of the society (imitators) are subsequently influenced by communication with these innovative consumers (Katz and Lazarsfeld 1955; Katz 1957). Opinion leaders have been found to be highly exposed to formal communication media including marketer- and independent third party-provided information. On the other hand, interpersonal communication was found to mediate the flow of information from mass media to the less active segments of the population (imitators). (Lee, Lee & Schumann 2002, p. 2).
Several marketing researchers (Bayus, Carroll, and Rao 1985; Rogers 1995; Westbrook and Fornell 1979) have suggested that potential adopters tend to use information from various sources, such as marketers and independent third parties beyond close interpersonal networks, because they are often highly involved with the product category (Bloch, Sherrell, and Ridgway 1986). Innovators tend to be heavier users of professional communication sources, such as sellers, governments, and other third parties, than imitators and non-adopters (Bayus, Carroll, and Rao 1985; Midgley and Dowling 1993; Price, Feick, and Higie 1987). Innovators are also heavy users of interpersonal communication (Bayus, Carroll, and Rao 1985; Gatignon and Robertson 1985). Imitators tend to rely heavily on interpersonal communication (Gatignon and Robertson 1985). Based upon these inclinations, the following hypotheses are offered:
H1: Receiving information from an industry or corporate source will be positively associated with the probability of being an innovator.
H2: Receiving information from government/consumer agencies will be positively associated with the probability of being an innovator.
H3: Receiving information from family and/or friends will be positively associated with the probability of being an imitator.
(Lee, Lee & Schumann 2002, p. 2).
3.5 Effectiveness of the Mobile service providers advertising
Cate Riegner 2007 asserts in the study, “Word of Mouth on the Web: The Impact of Web 2.0 on Consumer Purchase Decisions,” The internet stands apart from other media in enabling its “users” to interact. From this perspective, the internet will always be, at its core, a tool for interpersonal communication. While consumers find emotional and practical benefits in participating in online discussions, these conversations have profound commercial implications as well. Everyday consumers are wielding greater control over their media habits and their role in the commercial marketplace. Moreover, with the growth of online participation, consumers exert greater influence over the products and brands considered for purchase. Based on a study of over 4,000 broadband users in the United States, this article examines consumer adoption of Web 2.0 and the impact those rants, raves, comments, and reviews are having on purchase decisions today (Riegner 2007, p. 436).
Facilitated by countless blogs, forums, chat rooms, and social networking sites, we now live in a 24-hour roiling, emotive, media world where we can satisfy our indelible need to feel a part of the events that unfold around us (Riegner 2007, p. 437).
First, it is noteworthy that online sources (e.g., websites, search engines, and comparison shopping sites) compare favorably to traditional sources in terms of their influence on recent purchase decisions: fully half (50%) of all recent purchases among Broadbanders were influenced by at least one online source, whereas 61% were influenced by offline sources. Half of the top 10 sources are based online — noteworthy given that only one-third of the purchases were eventually made online (Riegner 2007, p. 442).
With regard to the influence of WOM, nine percent of Broadbanders link at least one user-generated source to a recent purchase decision. (User-generated source is defined as a blog, rating/review site, forum, discussion board, and/or social networking site.) Consumer review and rating sites, blogs, and discussion boards are more likely to be a source of influence than IM or chat rooms. We suspect IM and chat to be less helpful in tactical online shopping sessions (Table 4), while consumer ratings and review sites remain the most efficient way to obtain consumer feedback (Riegner 2007, p. 442).
4. Word of Mouth
Desmond Lam, Dick Mizerski, and Alvin Lee (2005) University of Western Australia, assert in the study, “Cultural Influence on Word-of-Mouth Communication,” discuss the power of word-of-mouth, noting it has been considerably documented since the 1960s. According to Lam, Mizerski and Lee: “Word-of-mouth has been widely reported to be many times more influential than information from prints, radio, and personal selling” (p. 9). Many companies, despite the power WOM possesses, neglect to develop marketing programs that encourage word of mouth communication relating to culture.
In their study, implementing a survey on a convenience sample of 228 total respondents from two universities in Australia, Lam, Mizerski and Lee (2005) examine whether and how culture may influence consumers’ word-of-mouth behavior; distinguishing word-of mouth communication with individuals of strong ties (defined as in-group) from communication with people of weaker ties (defined as out-group). Culture, Lam, Mizerski and Lee note, may strongly influence the consumers’ thoughts and actions. Consequently, culture may significantly influence the consumers’ word-of-mouth behavior, as it influences the individual’s values, as well as group norms.
Findings from the study by Lam, Mizerski and Lee (2005) support the perception that masculinity and power influence distance cultural dimensions on individuals’ word-of-mouth behavior. “Individuals high in masculinity are expected to be more assertive and aggressive in their approach to communication. As such, they are more likely to exchange product information with weaker ties such as out-groups” (Lam, Mizerski & Lee, p. 9). As both word-of-mouth and mass media influence consumer decision making in regard to the adoption of new products, businesses could benefit from utilizing word of- mouth in marketing, particularly in the international context.
Kathleen Erickson 2007 explains in the article, “Extending your marketing reach through peer influence,” that consumers learn about products and services from three sources. These sources include, however, may not be limited to:
1. From experience,
2. from advertising, and
3. from their peers. (Erickson 2007, Â¶ 2).
Research from Purdue University reveals that a marketplace “ripple effect” evolves from effective word of mouth marketing (WOMM) programs. As program participants share what they learn with other peers outside the formal program setting, the effect extends a product message beyond its initial targeted audience.
Jillian C. Sweeney, Geoffrey N. Soutar and Tim Mazzarol (2007), each with the University of Western Australia, investigate Word of Mouth in the study, “Factors influencing word of mouth effectiveness: receiver perspectives.” Sweeney, Soutar and Mazzarolm investigate the factors likely to enhance the chances receivers of positive word of mouth may be influenced. WOM, according to Sweeney, Soutar and Mazzarolm constitutes a significant form of promotion, particularly within professional services environments.
The study Sweeney, Soutar and Mazzarolm (2007) conducted purported three primary objectives:
To identify the variety of receiver outcomes that follow WOM delivery about a service organisation;
to identify the factors that are likely to enhance the chances of a receiver acting on such WOM; and to develop a conceptual model that relates to a consumer’s experiences when receiving such WOM. (Sweeney, Soutar & Mazzarol, 2007, p. 345)
A total of 54 participants, who represented customers and potential customers, attended a series of focus groups, during the study by Sweeney, Soutar and Mazzarol (2007). During six focus group sessions, the researchers recorded participants’ responses and transcribed the “findings” into a word processing package. “Recurring themes that were related to the research were first identified. WOM outcomes were investigated from a receiver’s point-of-view. Overall, positive messages led to a sense of enthusiasm, confidence and optimism in the receiver” (Sweeney, Soutar & Mazzarol, p. 349). Ultimately, Sweeney, Soutar and Mazzarol (2007) found that some evidence indicated that WOM did not always depend on “strong ties” but may also be well received when distant relationships, i.e. “weak ties” present the information. WOM appears to be more effective when a close relationship and a good rapport, based on trust and mutual respect, exist between a sender and a receiver.
4.2 Effectiveness of word of mouth
Suzana Gildin (2008) investigates referrals of friends in the study, “Understanding the Power of Word-of-Mouth.” The process of referrals by a friend constitutes a persuasive and influential process marketers know as word-of-mouth (WOM) communication. Because consumers in today’s busy society are overloaded with vast amounts of information, they do not always have the time to research and investigate all the information available. In turn, many depend more on word-of-mouth connections.
Consumers today, according to advertising experts, are exposed to more than fifteen hundred ads each day, which in turn, numbs their belief system. “Research shows that most customers share a similar sense of skepticism and they attribute this to either misleading or disappointing situations they have experienced” (Gildin N.d., p.95). The consumer’s involvement, as he/she utilizes a product or service, may originate tension. One way to reduce this tension includes talking about pleasurable or not so pleasurable things. In addition to relieving tension, when a consumer engages in word-of-mouth, self-involvement, he/she seeks confirmation of his/her decision, which may gratify particular emotional needs. Another motivation for WOM may be that opinion leaders desire to help the listeners; to give the listener something, or express love, friendship, or care. Another motivation, message involvement from the nature of advertising itself, may also stimulate WOM mouth communication.
4.3 Factors Affecting Word of Mouth
The article, “Ethical Communications: Blaze the green trail,” (2008) asserts that brand communication should target an audience, instead of aiming to influence the influencers. A person is more apt to defer to expert opinion filtered through the media, as this source is considered more of a neutral ally. Where the media challenges brands, however, nurturing positive word of mouth may help brands harness their plan and counter negative media coverage.
4.4 Positive and Negative Word of Mouth
Don Charlett, a BBS (Hons) student, Ron Garland, a Senior Lecturer, and Norman Mart (1995), an Associate Professor, in the Department of Marketing, Massey University, assert in the article, “How Damaging is Negative Word of Mouth?” that consumer dissatisfaction occurs at times. The consumer response to dissatisfaction in regard to a product or service may be reflected in numerous several forms, which include, but may extend beyond the following:
Direct complaints to the seller.
Private responses such as brand switching and negative WOM.
Third party responses such as taking legal action and complaining to consumer “watchdog” groups. (Charlett, Garland & Mart 1995, p. 1)
From their this exploratory study, Charlett, Garland and Mart (1995) report that the results indicate that both positive and negative WOM constitute force that may impact the consumers’ attitudes and predicted purchase behaviours. Due to the lack of significant differences between the experimental groups and the neutral (control) group in the study by Charlett, Garland and Mart, they could not relate reliable estimates of the precise magnitude of this effect. Although several authors argue that negative WOM proves to exert more influence than positive WOM. Charlett, Garland and Mart contend their research does not support this supposition.
4.5 The Internet word of mouth (web 2.0)
Gary Spangler (2006) e-business leader, DuPont Electronic & Communication Technologies explains in the article “Companies are leveraging the trust in WOM marketing and the power of the Internet,” interest in WOM is increasing. In fact, advertising agencies currently promote new WOM practices, leading to the emergence of creative WOM tactics, as well as the development of a trade association, the Word of Mouth Marketing Association (WOMMA).
Word-of-mouth marketing, nevertheless, is not a new advertising strategy, Spangler (2006) stresses; explaining that WOM likely constitutes the oldest channel for communicating what a seller offers to a prospective buyer. The way contemporary marketers now leverage “the trust in WOM and the power of the Internet to promote their products and services. A company creates WOM through superior products, services and customer trust that compel users to share their experiences with others” (Spangler, Â¶ 2). Smart marketing, according to Spangler, leverages these referral sources to a broader community, with the Internet providing an “almost perfect” venue. Not all WOM campaigns, however, may be perceived to be ethical.
5. Comparison Between Advertising and Word of Mouth
Ed Keller, CEO of Keller Fay Group, a market-research and consulting company focused on WOM marketing and Jon Berry (2006), senior VP of Keller Fay Group, assert in the article, “Word-of-mouth: The real action is offline; Research shows 90% of WOM conversations occur face-to-face or by phone vs. only 7% online,” warn that the more control a marketer possesses, the more out of touch he/she may become. Being willing to let go of some control reportedly fosters the ability to be in better touch with consumers. Ongoing research by the firm of Keller and Berry monitored and measured Americans’ WOM conversations “about products, services and brands, regardless of whether they take place face-to-face, by phone or over the internet. The findings have consistently shown that some 90% of these conversations take place offline” (Keller & Berry 2006, Â¶ 2). According to findings from this study, face-to-face interaction constitute the majority of WOM (72%). Phone conversations, at 18%, ranked second place. Email and instant messages, along with and text messages each garnered 3% of total WOM. Chat rooms and blogs accounted only for 1% of WOM, contributing to a total of 7% of WOM occurring through the various online channels.
W. Glynn Mangold and Fred Miller, Professors of Marketing, Murray State University, along with Gary R. Brockway (1999),Chairman and Professor of Marketing, College of Business & Public Administration, assert in the study, “Word-of-mouth communication in the service marketplace,” that WOM constitutes a dominant force in the service marketplace. Results of the content-analytic study Mangold, Miller and Brockway provides insight into WOM’s content and the catalysts which stimulate it. As WOM, according to Mangold, Miller and Brockway, seems particularly vital to the marketing of services, consumers may rely on WOM to reduce the level of perceived risk, as well as the uncertainty frequently associated with service purchase decisions. Basically, this study suggests that a strong need on the part of the receiver, unintentional communication relating to a broader subject, or a high level of contentment or dissatisfaction on the part of the one communicating constitute factors likely to stimulate WOM.
6. Influence of Advertising on Consumer Decision Making Process
Gail Tom, Carolyn Nelson, Tamara Srzentic and Ryan King (2007), of California State University, Sacramento, investigated the interactive nature of non-conscious processes in the study, “Mere exposure and the endowment effect on consumer decision making.” From their investigation of anecdotal and empirical evidence, the researchers find that evidence supports the relationship between object valuation and object preference. Along with the object’s face validity, its frequent occurrence contributes to this occurrence. When consumers prefer a particular brand, Tom, Nelson, Srzentic and King assert, they willingly pay more for the preferred brand, rather than settle for comparable alternatives.
Tom, Nelson, Srzentic and King (2007) assert that the endowment effect on object valuation proves similar to the mere exposure effect on object preference. “The endowment effect refers to the finding that consumers assign more value to objects simply because they own them” (Tom, Nelson, Srzentic & King, Â¶ 4). In this study, after the researchers created three versions of the identical video for the exposure condition, the subliminal condition delivered a nonconscious exposure. After Tom, Nelson, Srzentic and King created a promotional video which featured selected alumnus, the promotional item was shown three times in the subliminal piece. Participants viewed the video and completed the survey, evaluating the format. After participants also received additional selected messages, the results suggested that neither the mere exposure effect nor the endowment effect interact to affect object preference. Influence of Word of Mouth on Consumer Decision Making Process
Reginald M. Peyton, and Sarah T. Pitts, Christian Brothers University, along with Rob H. Kamery (2004), Nova Southeastern University, explore consumer satisfaction/dissatisfaction (CS/D) in their study, “The consumer satisfaction/dissatisfaction process: The context of joint or syncratic decision-making.” “Customer satisfaction with a product often leads to repeat purchase, acceptance of other products of the same product line, and favorable word-of-mouth communications” (Peyton, Brothers, Pitts & Kamery 2004, Â¶ 2). Consumer satisfaction proves to be a significant considerations for marketers as consumer dissatisfaction may contribute to a number of adverse effects.
Peyton, Brothers, Pitts and Kamery (2004) consider the context of joint or syncratic decision-making, with findings suggesting that, despite significant differences in norms, expectations, and performance perceptions, husbands and wives did not reveal any significant difference in disconfirmation and satisfaction. In addition, this study did not reveal any “significant difference between the joint and the individual satisfaction of either husbands or wives. Implications are that individual differences in norms, expectations, and perceptions of product performance could result in similar levels of satisfaction” (Peyton, Brothers, Pitts & Kamery, Â¶ 1). If a business is to be successful, it must subscribe to satisfying the needs of its customers as its foundation stone.
8. Summary of Literature Review Section (Conclusion). In the study, “Cultural Sensitivity to Satisfaction and Service Quality Measures,” Linda C. Ueltschy, Assistant Professor of international business at Bowling Green State University and Robert F. Krampf (2001), Associate Professor of marketing at Kent State University, stress the need for firms to appropriately measure service quality. In concluding this literature review chapter, the researcher recounts that much of the literature concurs that WOM proves significant in advertising. An even more significant consideration for advertisers, the research suggests, could be found in the answer to the question promoted by the Verizon ad: “Can you hear me now?”
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Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.Read more
Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.Read more
By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.Read more