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1.1       Introduction & Background

Word of mouth is considered to be an effective marketing tool for centuries, but with the development of information technology, social media marketing is emerging as an alternate option too (Sernovitz& Kawasaki2006). Virtual word of mouth through social media is considered as an alternative for the traditional word of mouth because the former has a greater reach than traditional word of mouth (Chevalier &Mayzlin2006). This study is an in-depth comparative analysis of word of mouth and social media marketing through the development of an international perspective.

This research is aimed at exploring which one is a more effective tool of marketing that can be used by marketers and companies; or whether both could be employed together in corporate branding. The ultimate objective of the research is to suggest an effective tool of marketing to contemporary marketers and companies and recommend further topics of research that can be beneficial in the field of corporate branding.

Since there is an ample amount of existing literature on the topic, an in depth analysis of already existing data will be carried out. Secondary data will be collected through case studies, and existing marketing theories will be utilised to analyse the data and get the results.This chapter contains a brief background of the study, along with the statement of the problem and research objectives that will help in achieving the research aim.

Word of mouth marketing has been an effective form of marketing for centuries in consumer industries, especially in the hospitality industry (Litvin, Goldsmith & Pan2008), which has been selected as the case study. The definition of word of mouth as given by Word of Mouth Marketing Association is the transfer of marketing related information created by consumers to other consumers (Liu2006). According to Whitier (2014), amongst all the strategies available, the word of mouth marketing can be identified and acknowledged as the most valuable marketing tool as the majority of consumers trust it more than any other form of marketing and it is also the toolwhich drives the highest number of sales for the user company.

 

However, it can be seen that with the evolution of information technology, marketing processes have also changed greatly. With the development in information technology through internet, a drastic increase in utilisation of social media and its marketing processes can be observed (Trusov, Bucklin &Pauwels2009). Social media is divided into social networking sites, blogs, virtual worlds and content community websites. According to Kaplan &Haenlein (2010), there is no clear definition of social media, but some define it as a group of Internet-based applications that build on the ideological and technological foundations of Web 2.0, and that allow the creation and exchange of the User Generated Content. Moreover, the social media platforms are also considered as platforms for formulating relationships, sharing information, exchanging perspectives, debates and questioning (Brown, Broderick & Lee2007).

As mentioned earlier, technological developments have transformed people’s life styles. With the transformation in life styles there is a transformation in preferences and also in methods of choosing a product (Mangold &Faulds2009). Word of mouth is considered to be an effective method of marketing because it helps in building trust on the product and confirms reliability of a company or product (Hoffman &Fodor2010).

In these terms, marketing can be seenas a process of communication that is comprised of activities that lead to customers buying products (Mangold &Faulds 2009). Social media networks are also utilised for communication thus can be considered as means of spreading word of mouth (Hoffman &Fodor 2010).However, the question that arises here is whether traditional world of mouth or word of mouth transmitted through social media networks, are one and the same or not and if it is as effective as the traditional word of mouth?

Social media is essentially a means of communication, thus a message transferred or marketing through word of mouth using this media or platform can be considered as an electronic word of mouth (eWOM).However, in terms of social media marketing, consumers might still be concerned about the accuracy of the information provided, if it is not provided by friends and family but by viral marketing. Kim (2012) defineseWOM as all kinds of positive and negative expressions that belong to potential, real or former customers in relation to a product or company and that is announced to unlimited individuals and companies through Internet…