The Role of Social Networks in the Viral Marketing of IDM

The Role of Social Networks in the Viral Marketing of IDM

Bhatt Diptee (Nanyang Technological University, Singapore), Chang Tai Hock (Nanyang Technological University, Singapore), Wang Lihui (Nanyang Technological University, Singapore) and Ravi S. Sharma (Nanyang Technological University, Singapore)
DOI: 10.4018/978-1-61350-147-4.ch019

Abstract

Social networks are structures consisting of individuals or organizations that enable powerful means of communicating and information sharing. Social networks make viral marketing and word-of mouth (WOM) marketing more effective than before. WOM particularly has received extensive attention in the literature. In this chapter, we discuss the value of social networks in business, especially focusing on the WOM marketing which relies on social ties and preexisting connections to spread marketing messages through a community. We discuss viral marketing using a WOM unit framework. Five qualities of a WOM unit are explained with examples. We illustrate new products and services like the iPhone and relate them with the WOM unit framework. It is recognized that WOM helps businesses spread their marketing message in a cost effective way. We found that WOM marketing plays a vital role in the IDM marketplace and conclude that businesses should actively promote and manage WOM communications using viral marketing methods to achieve desired behavioral response.
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Background Concepts

Social information-processing theory provides a useful lens to examine the interpersonal influence processes that are the hallmark of viral marketing. It views the social network as an important source of information and cues for behaviour and action for individuals (Wellman et al., 1996). Social network marketing is different from that of traditional marketing. Traditional marketing such as TV and radio force advertisement on the audience and creates interruption in what they are doing. On the other hand, social network marketing is all about marketing with participation. With social networks, businesses can target a large number of audience with low cost per unit.

Word-Of-Mouth (WOM) and viral marketing have received extensive attention in the recent years. For instance, the success of the largest social network Facebook, with 500 million users, has been driven primarily by word of mouth. It has helped Facebook cross a threshold of cultural importance in the sense that what your “friends” think and say influences you more then the opinions and actions of strangers who may be authorities. Most of the literature describes WOM as one of the more powerful tools in the marketplace. This is due to fact that consumers rely more on informal or personal communication sources in making purchasing decisions than commercial sources. In this sense, WOM is highly effective (Bansal & Voyer 2000). Ditcher (1966) suggested the idea of ‘aha’ experiences which occurs through a WOM exchange. This idea may be a little outdated; however, it provides a view on WOM exchange. Brown and Reingen (1987) investigated the social ties and their influence on WOM. They found that weak-ties are more likely to serve as bridges than strong ties through which WOM referrals flow across groups. Some researchers surveyed online and offline WOM for a group of population and suggested high correlation among them. In their research, online WOM was found to be more pervasive (Bruyn & Lilien, 2004).

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