Word of mouth as a promotional tool for turbulent markets

Abstract

Word-of-mouth advertising involves activities to encourage consumers to talk about a product or company to friends and neighbours, setting in motion a chain of communication that could spread through a whole market. Each activity, itself small and relatively unimportant, could escalate through word of mouth to create strong, positive brand images and beliefs. A major characteristic of chaos theory, sensitive dependence on initial conditions (the butterfly effect) is at work in word of mouth. This paper reviews word of mouth literature from a chaos/complexity theory perspective. Using a multiple case study approach, the significance of word of mouth in turbulent markets is assessed. It was found that more successful companies tended to use word of mouth proactively, and that it is an effective marketing tool for turbulent environments. Furthermore, chaos theory is shown as a good lens through which to view word of mouth. This paper is important because word of mouth has had little attention from the academic community, with the exception of electronic or Internet based word of mouth. Furthermore, it suggests an academic theory to underpin word of mouth that has not been considered before. In addition, it is important because, in South Africa and possibly in other under-developed and developing countries, word of mouth is critical to marketing to less sophisticated or literate markets.