Word-of-mouth marketing

Author: (Japanese) Nakajima Masayuki, Suzuki Shigeo, Yoshimatsu Toruichi
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Publish Date: 2006-07-01
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2. The Relationship Between One-to-One Marketing and Word-of-Mouth Communication
When using word-of-mouth communication, it is regarded as a "relevant and convenient" information dissemination method for customers. It has always functioned as a fundamental element of mass marketing strategies, the 4Ps (Product, Price, Place, Promotion). In the era of one-to-one marketing, each of these elements has begun to undergo qualitative changes.
First, in terms of the product, due to the development of IT (Information Technology), the large-scale production and sales of standardized products have shifted to personalized production based on each customer. A representative example is Dell's BTO (Build-To-Order) model.
Regarding price, due to the effects of deflation and other factors, intercompany competition has intensified, and product prices have gradually ceased to follow the company's wishes and are instead set according to the level of acceptance by customers. Like the development trend of communication fees, prices that were once indistinguishable among competitors have begun to diversify, with each company implementing differentiated pricing strategies.
In terms of distribution, just as department stores that previously targeted the general public have transformed into specialty stores focused on specific customers, businesses that do not consider one-to-one marketing in their operations will find it difficult to sustain themselves. Additionally, in product promotion, without effectively attracting the strictly defined target audience, the desired results cannot be achieved.
Although consumers subconsciously retain memories of information disseminated by mass media, to elevate such memories to a level of interest, additional personalized information that makes customers feel "relevant to them" or "highly convenient" must be added.
In this way, facing changes in the marketing environment, the channels that can disseminate "relevant to you" and "highly convenient" information are "word-of-mouth communication." It can be said that word-of-mouth communication, as a means of disseminating positive information, is an effective strategy for ensuring that personalized messages are accurately understood and penetrate the target audience. P12