Importance of Word of Mouth in Business and its Implications for Management

Running head: MANAGEMENT
Management
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1MANAGEMENT
Table of Contents
Definition of Word of Mouth.....................................................................................................1
Importance of Word of Mouth in Business, Pros and Cons.......................................................1
Examples of Other Companies Affected by the Word of Mouth...............................................2
Implications of the Management or Managers in those Situations............................................3

2MANAGEMENT
Definition of Word of Mouth
The word of mouth commonly known as the viva voce refers to the passing down of
information from one person to another through means of oral communication that might be
as simple as telling story to the others regarding the real event or certain things install made
up (Berger 2014). Story telling is however the most common forms of the word of mouth. In
this case, one of the people tells a story to the others. Oral tradition refers to the cultural
means and tradition transmitted by the word of the mouth through successive generation.
Importance of Word of Mouth in Business, Pros and Cons
The Word of mouth represents a non paid form of promotion or advertising shared by
the satisfied consumers and mentioned by the entrepreneur. It is triggered by the experiences
of the customers (King, Racherla and Bush 2014). In other words, Word of Mouth is
important in business as it can substantially influence the purchase decision of the consumer.
It also has an impact of various other factors of the business which includes switching of
services, perception regarding a product/service along with the facilitation of brand choice for
consumers. It is in fact more effective compared to the traditional tools of marketing like the
personal selling and the various types of the advertisements. Thus in other words, Word of
Mouth is effective since it is considered a credible form of advertising. Besides, it also helps
in building loyalty for a brand and helps in generating a buzz for the business.
Pros
No Cost: Word of Mouth takes place at without incurring any cost to the business
(Hajli et al. 2014). For instance, if a particular customer remains highly satisfied then he
conveys the messages to the family and friends. This leads to additional sales in the long run