Abstract
This study examines the influence of word of mouth (WOM) on eight tourism products by applying economic elasticity theory to understand the relationship between behavioral outcomes and target elements to these behavioral outcomes (customer consumption). The elasticity model of economics was developed to conceptualize WOM elasticity (EWOMx) and measure WOM effects on various products. The results of WOM elasticity values show a significant difference between physical and service product categories. In addition, all effective respondents in this research are highly sensitive to WOM relating to specific products. This shows that WOM is not only a key variable of tourism products but also validates that WOM communications are meaningful for tourism customers. The authors contributes to tourism service and WOM marketing effects compared by validating empirical research in eight different product categories and providing empirical support with prior services marketing literature. Theoretical and practical implications and future research issues are discussed.
Highlights
Word-of-mouth (WOM) is an important issue in marketing
WOM elasticity is a considerable source of influence that leads to different WOM effects
The purpose of this study is to explore the WOM origins so that we can quantify the relation between product sales and WOM, which offers an approach for tourism managers to compare WOM effects with those of other marketing tools
Summary
Word-of-mouth (WOM) is an important issue in marketing. Numerous studies have demonstrated that WOM is an effective marketing tool, for example, Lan et al (2012) shows people like to talk and spread information in their familiar group, whether products are sold at street vendors, night markets, general shops or internet auction sites, most of customers receive in-formation from their very close acquaintances. Villanueva et al (2008) concluded that the lifetime value of customers acquired through WOM is twice as great as that acquired through traditional marketing tools and Trusov et al (2009) pointed out that WOM in website member acquisition is 30 times higher than media appearances. Numerous studies have demonstrated that WOM is an effective marketing tool, for example, Lan et al (2012) shows people like to talk and spread information in their familiar group, whether products are sold at street vendors, night markets, general shops or internet auction sites, most of customers receive in-formation from their very close acquaintances. Villanueva et al (2008) concluded that the lifetime value of customers acquired through WOM is twice as great as that acquired through traditional marketing tools and Trusov et al (2009) pointed out that WOM in website member acquisition is 30 times higher than media appearances. This study will directly combines economic elasticity theory and WOM research to explore a comprehensive principle for quantifying WOM effects and mirroring the primary cause in various WOM phenomena, with a one-size-fits-all standard of WOM quantification in market research can better use this effective marketing tool
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