『KUCHIKOMI』 Marketing SEMINAR
EU-JAPAN CENTRE FOR INDUDTRIAL COOPRATION
The Strategic Use of ' Word of Mouth'
Feb/2007
KUMA
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Kuchikomi Marketing Association of Japan
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Masayuki Nakajima
Rainer Jeske
Changing Paradigm in Marketing
These days a lot of marketers and agencies are struggling, mainly because there are failing to embrace the emerging marketing paradigm “People are The New Media”.
People are The New Mediaä
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Commercial email is expected to grow from $164 million in 2004 to $7.3 billion by 2005. We are receiving up to 1000 advertising messages and encroachments on our thinking. That is why marketers no longer reach, even less are capable of influencing people. Even worse, some people have become overtly hostile to marketing to the degree that they aggressively boycott products and services that they feel infringes on their privacy. They fight back using e-mail spam filters, Internet pop-up blockers, phone call blockers and so forth.
“You cannot sell a man who isn’t listening; word-of-mouth is the best medium of all…”
Bill Bernbach, Co-Founder DDB Advertising, 1980ies
Traditional media like television, newspapers or radio are widely spread. Their main impact is to create awareness by distributing information about brands. 99.8% rate of non-acceptance for all marketing messages makes traditional media prohibitively costly.
Companies make a multiple times a return on low-budget word of mouth campaigns and run a high risk of making substantial loss with traditional media. Word of mouth is neutral and enjoys high credibility. It primarily increases the closing rate for buying brands. Whereas word of mouth is unlimited and exponential in growth, traditional media have declining returns on investments.
Strategic Use of Word of Mouth
People, information, capital and products are corporate assets. Management needs people to create value with these assets. Both employees and customers are management resources used in the value creation process.
Due to information glut and advertising “noise”, it is more and more difficult to reach
your customers with your marketing message. As a result, customers have a hard time remembering products and services.
The new challenge is to create an excellent relationship with your customers. Customers should know your product and be a fan of it so that they talk to other people about it. In this case, the customer is becoming a corporate resource. This is the fundamental idea of the strategic use of “word of mouth”.
Mantra of Word of Mouth Marketing
Word of Mouth Marketing is complementary to traditional marketing. These days, companies need to approach and touch consumers with different media four to six times before he or she buys something. This is why companies must integrate word of mouth communication into all other media and including their employees and core processes.
Companies should conceive as word of mouth as a new media that creates maximum market impact in combination with all other traditional media. Especially with the goal of moving brands beyond the tipping point, marketers need to exploit the synergies of different media involved.
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Comparison
Word of Mouth versus Traditional Marketing
Aspect / Word of Mouth /Traditional
Approach / People are The New Media-Customer Royalty- / Media drive the market
Impact / Buying Decision / Awareness
Rate of Acceptance / 30% / 0-3%
Trust / High / Low
Performance / Exponential growth / Incremental growth
Return On Investment / Multiple returns / Loss: No longer reach target audience
History / Thousand of years / Hundred of years
Familiarity / Largely ignored / Familiar
Greatest Challenge / Limited metrics / Immunity to marketing:
Cost / Low / (Prohibitively) high
Sustainability / Self-sustaining, indefinitively / One-off fertilizer effect
Declining returns of investment
Mejament / Infiltration and spread level of customer Royalty / Reach and Awareness
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What Buzz Affects*
Slightly more than two-thirds of the U.S. economy has been influenced by buzz.
13% Is Largely Driven by Buzz
Toys, sporting goods, motion pictures, broadcasting, amusement and recreation services, fashion
54% Is Partialy Driven by Buzz
Finance (investment products), hotels and lodging, electronics, printing and publishing, tobacco, automotive, pharmaceuticals and health care, transportation, agriculture, food and drink
33% Is Largely Immune to Buzz
Oil, gas, chemicals, railroads, insurance, utilities
*McKinsey & Company estimate for 1994 U.S. economy (total equals $6 trillion)
KUCHIKOMI MARKETING SEMINAR
TITLE
The Strategic Use of 'The Word of Mouth‘
First Seminar
I Word of Mouth Theory
1. What is 'Word of mouth marketing '?
Word of mouth is called KUCHIKOMI in Japan.
2. The concept of 'Word of Mouth Marketing' (KUCHIKOMI Marketing)
3. Three types of the KUCHIKOMI Marketing.
4. Explaining KUCHIKOMI Marketing by using TSUMUMI MODEL
5. First type of Kuchikomi: 'KUCHIKOMI Ambassador Type
6.Second type of Kuchikomi ‘Community Effector Type
7. Third type of Kuchikomi‘Authority’ Type
8. Question & Answer Session
Second Seminar
II CASE STUDY
Skype and one other case
1. Shogakukan‘s Magazine, 'WARAKU'.case study
{KUCHIKOMI Ambassador case}
2. Sappro Beer ,Namashibori ,case study. {monitor &CP Tie-up}
3. Cosmetic brand of SHISEIDO ,‘D Program’
4. Japanese Sake BRAND,senior person CaseSTUDY""
5. KANSAI ELECTRIC POWER.,INC
{KUCHIKOMI Ambassador case2}
6. Question & Answer Session
Third Seminar
III Results of Word of Mouth Research 2003-2005
in JAPAN
1. Word of Mouth and Purchasing Patterns
2. Word of Mouth and Media Analysis
3. Word of Mouth and Transmission Patterns
4. Question and Answer Session
KUCHIKOMI Marketing Book in Japan
KUCHIKOMI Marketing Book in South Korea
(translation version)
http://www.haneon.com/books/index_02.asp?code=8955961413&idx=1
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