Academic journal article International Journal of Marketing Studies

Relationship between Word-of-Mouth Network and Behavioral Tendency-Preliminary Research for Local Downtown Activation

Academic journal article International Journal of Marketing Studies

Relationship between Word-of-Mouth Network and Behavioral Tendency-Preliminary Research for Local Downtown Activation

Article excerpt

Abstract

Considering the conversational transmission of a specific topic in human circles as a word-of-mouth (WOM) network, we enumerate two hypotheses. First, the structure of a WOM network is strongly related to the network members' behavioral tendency concerning the topic of WOM communication. Second, if new information is acquired by some network members, it will be spread in the network. In this research, to verify these hypotheses, we conduct questionnaire surveys of two communities of students in a university, and we investigate members' conversational relations on the topic of eating-out destinations. To understand the WOM networks, we propose some indexes-n-density, effective edge rate of word-of-mouth, and others-and the spread rate of new information is evaluated based on the results. The results will be used as preliminary data for activation of downtown Kiryu City, including restaurants.

Keywords: network graph structure, n-density, effective edge rate of word-of-mouth

(ProQuest: ... denotes formulae omitted.)

1. Introduction

These days, the downtowns in most provincial cities in Japan have lost their bustle, and these circumstances have greatly impaired the regional economy. This is true of Kiryu City in Gunma prefecture, whose shopping streets downtown are an emblem of the city. In order to activate the shopping streets, we are trying to find an effective method of disseminating information to citizens to make them recognize the charm of the shopping streets again. According to our investigation of the population composition of Kiryu City, most shop owners and their customers are aging (see note 1). On the other hand, we also found that there are about 7000 high school students and about 3000 university students in Kiryu City. It means that many teenagers who are free in the daytime are in Kiryu City. Therefore, effective information dissemination for both elders and teenagers should be found. Though the internet is popular in the society of today, we believe that face-to-face word of mouth (henceforth WOM), the traditional way of disseminating information, will be more effective in this case, in which elders and teenagers are the key persons in the community. Therefore, in this research, we examine the capability of the WOM network.

The purpose of our research is to evaluate the effect of WOM in relation to the graph structure of a WOM network. First, we evaluate the relationship between the behavioral tendency of the members of the network and the WOM graph structure. Next, we evaluate the spread of new information based on the WOM graph structure. The understanding of WOM in a student community will be used as preliminary data for the activation of the shopping streets of Kiryu City.

1.1 Related Research

Problems concerning interpersonal relationship networks are addressed in many fields-such as informatics, sociology, psychology, business administration, and economics-from different viewpoints. We introduce related studies in the following two areas: interpersonal relationship networks and WOM marketing, which is an effect of those networks.

1.1.1 Interpersonal Relationship Network

Research that analyzes social networks has been conducted for a long time, for example, the famous Small World study by Milgram (1967). Lada et al. (2003) devised techniques and tools to mine internet information in two data sets and extracted social networks and the exogenous factors underlying the networks' structure. This study found that some factors are better indicators of social connections than others and that these indicators vary between user populations.

1.1.2 WOM Marketing

In the field of marketing, WOM is examined chiefly in comparison with the mass media influence on an individual's decision making. Rogers (2003) compares advertisement to WOM, and shows that the former has a great influence on an individual at the information-gathering stage but the latter has a big influence at the decision-making stage. …

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