Home   |   Login   |   Register      

 

    

 

Working Paper

What Products Do People Talk About and Why? How Product Characteristics and Promotional Giveaways Shape Word-of-mouth

Jonah Berger and Eric Schwartz, 2010 [10-105]

View/Order Item >>
Comments from members >>

People often share opinions and information and word-of-mouth has an important impact on product success. But why are certain products talked about more than others? While research has focused on understanding the consequences of word-of-mouth, less is known about the behavioral processes that drive aggregate outcomes such as product adoption and sales. Similarly, research has considered how particular people may shape the diffusion process, but less attention has been given to how the products themselves may impact buzz.

Here, Jonah Berger and Eric Schwartz examine the psychological drivers of word-of-mouth, investigating how product characteristics and campaign giveaways determine which products people talk about. First, they analyze a dataset from buzz marketing campaigns to test their behavioral hypotheses. Second, they conduct a large field experiment to uncover the underlying process driving the findings in the first analysis.

Their dataset comprises everyday conversations from 335 buzz marketing campaigns covering a broad range of products (e.g., food, financial services, and movies). Berger and Schwartz use a hierarchical model of word-of-mouth, which simultaneously reflects underlying differences across people and products, so the behavioral hypotheses are tested with a flexible, heterogeneous model. Their findings include the following:

Products that are used more frequently are talked about more frequently (and by more people). For example, an increase in product usage of four additional times per week is associated with a 10% increase in WOM. Similarly, products that are cued more frequently by the surrounding environment are talked about more frequently (and by more people). In addition, cues drive the effect of product usage on WOM: when both cues and product usage are included in the model, cues remain a significant predictor of WOM, while weekly product usage is reduced to insignificance.

The effect of cues strengthens as campaigns progress. Compared to earlier in the campaign (e.g., the first quarter) the frequency with which a product is cued by the surrounding environment is more positively linked to WOM later in campaigns. This suggests that as more time elapses since people first experience or learn about a product, being cued by the surrounding environment becomes increasingly important in driving conversation.

Results provide no evidence that more interesting products are talked about more frequently over the multi-month period of each campaign. Interesting products may be talked about more right after people experience them, even if they do not receive more WOM overall.

Results provide mixed support for the utility of promotional giveaways in boosting WOM. Giving away the product itself is associated with a strong and significant increase in WOM. Sending consumers a full product to try is associated with a 34% increase in WOM. Sending consumers multiple copies of the free product, however, is not associated with any additional WOM. Giving away samples is associated with a marginal increase in WOM and this was driven by the quantity of the giveaway: more samples were associated with more WOM. Non-product extras are associated with only a moderate increase in WOM, and this was driven by the quantity of the giveaway. Giving away coupons and rebates is not linked with more WOM.

In their second study, the authors sought to test whether the relationship between cues and WOM was truly causal. The experiment was run on 1,687 BzzAgents who participated in a campaign for Boston Market. It corroborated the results of the cross-campaign analysis; increasing the cues for a product, in this case linking it to a usage situation that some participants did not already associate it with, increased WOM.

Overall, the studies demonstrate the important role of triggers or stimuli in the environment in shaping word-of-mouth about a product. Products that are cued more frequently—either because they are used more frequently or brought to mind by a related stimulus—receive more WOM.

These results suggest that when designing products or marketing messages, marketers should take into account the structure of the surrounding environment. Marketers often think that only outrageous or surprising products are buzz-worthy, but these findings indicate that even seemingly mundane products can get lots of word-of-mouth if they are cued often.

Results also indicate that while promotional giveaways can be useful in boosting word-of-mouth, certain types of giveaways (i.e., the product itself) are more effective than others. The framework used here offers a first step for managers to run a cost-benefit analysis of promotional giveaways and the value of the resulting WOM.

Jonah Berger is Assistant Professor of Marketing and Eric Schwartz is a doctoral student in marketing at the Wharton School, University of Pennsylvania.

Acknowledgments

The authors thank Dave Balter, Steve McLaughlin, and the rest of the BzzAgent team for providing the data and for numerous conversations that greatly enriched the research. Eric Bradlow, Pete Fader, Dave Godes, Jacob Goldenberg, Barak Libai, Christophe Van den Bulte, Maria Ana Vitorino, and seminar participants at HKUST, Wharton, Singapore Management University, the 2010 Society for Personality and Social Psychology conference and the 2009 Association for Consumer Research Conference provided helpful feedback on earlier versions of the manuscript. The research was partially funded by a grant from the Wharton Interactive Media Initiative.

Included in the following collections:
MSI Reports 2010

---

Comments from members

Please login to view and/or submit comments

---

View/Order Item

Online version
Your Price: $18.00
Hard copy
List Price: not available Your Price: not available