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  • Background of the study

Holiday et al, (2008) holds that brand names in the current global economy are considered as one of the fundamental principles of business. Every brand wants to be powerful, should be able to correctly identify themselves during the birth and growth stages and over time, through innovation, Improve it’s image in the mind of consumers. Today, the brand identity as well as capital creates value for the organization and it’s product. A powerful brand has a duty to be faithful to their identity. The study analyzes the impact of brand identity on consumes loyalty and word of mouth advertising and variables of customer satisfaction and brand commitment have been studied as an intermediate variable.

Customers have so much control these days that loyalty marketers need to tailor their efforts with this at the top of their mind. Marketers that monitor social media and user comments might be ahead of the game by leveraging customer feedback and transforming them into brand loyalty. (Rundle-Theile and Benet, 2011).

New research show that the impact of “consumer word of mouth” in six diverse categories – including online and offline consumer conversations and recommendations- account for 13% of consumer sales, on average, which represent $6 Trillion in annual consumer spending. In higher price-point categories, word mouth’s impact is almost 20% of sales. The study, which was organized by the Word of Mouth Marketing Association (WOMMA, 2009), was based on sophisticated econometric modeling of sales and marking data provided by participating brands on a confidential basis. Analysis was conducted by Analytic Partners, an independent analytics consultancy and recognized leader in marketing analytics.

Here are some key takeaways from the study:

  • Offline and online word of mouth are both strong purchase drivers, with offline accounting for two-thirds of sales and online accounting for one-third.
  • Researches found that an offline word-of –mouth impression drives at least five times more sales than a paid advertising impression, and much more (as much as 100 times more) for higher-consideration categories. A similar finding for Online Word of Mouth requires more comprehensive data on impressions and/ or mentions, which are not yet publicly available.
  • Word of Mouth’s impact happens closer to the time purchase

than traditional media-often within two weeks.


“Intuitively, we know that a consumer’s recommendation is going to be a powerful contributor to brand sales, but this is the first time a rigorous study has quantified that impact across a arrange of product and service categories,” according to WOMMA president Suzanna Fanning said in a release “we hope this research will lead marketers to elevate the role of Word of Mouth, both online and offline, in their marketing plan.

George Silverman, a psychologist, pioneered Word-of-Mouth marketing  when he created what he called “Teleconferenced Peer Influence Group” in order to engage Physicians in dialogue about new Pharmaceutical product. Silverman noticed an interesting Phenomenon while conducting  focus groups with Physicians in the early 1090s. One or two Physicians who were having good experiences with a drug would sway an entire group of skeptics. They would even sway a dissatisfied group of ex-prescribers who had negative experiences. With the experience of Wed 2.0, many web start-ups like Facebook, Youtube, MySpace, and Digg have used buzz marketing by merging it with the increasing use of the internet as a research and communication  platform, Word of Mouth has become an even more powerful and useful resources for consumers and marketers.

In October 2005, the Advertising Watchdog group commercial alert petitioned the United States FTC to issue guidelines requiring paid Word-of-Mouth marketers to disclose their relationship and related compensation with the company whose product they are marketing. The United States FTC states that it would investigate situations in which the relationship between the Word-of-Mouth marketers of a product and the seller is not revealed and could influence the endorsement . The FTC stated that it would pursue violators on a case-by-case basis. Consequences for violators may include cease and desist orders, fines or civil penalties.

Research firm PQ media estimated that in 2008, companies spent $1.54 billion on Word-of-Mouth marketing. While spending on traditional marketing channels was showing, spending on Word-of-Mouth marketing grew 14.2% in 2008, 30% of that for food and drinks brand.

Word-of-Mouth marketing is both online and offline through face-to-face interaction. The Ehrenbeig Bass Institute for Marketing Science has shown that to achieve growth, brands must create Word-of-Mouth beyond core fan groups, meaning that marketers should not focus solely on communities such as facebook. According to Deloite further research has shown that most advocacy takes place offline, instead it happens in person. According to the journal of advertising Research, 75% of all consumer conversation about brands happen face to face, 15% happen over the phone and just 10% online. On the other hand, some see social medium interaction as being inextricably tied to word of mouth marketing.



the following are the problems of this study:

firstly, there are no yardsticks to measure or ascertain how word of mouth defines a brand and gives it a unique identity. This problem causes marketers to adopt other conventional means of improving brand loyalty such as advertising.

Secondly, the need to increase market share and probably dominate the market keeps mangers and marketers at a loss as whether to lay more emphasis on attracting more customers at the expense of maintaining the loyalty of existing customers and vise versa.

Also due to the limited nature of available resources, marketers and managers cannot intensively and simultaneously attract new customers and at the same time retain existing ones and so, are at a loss as to determine whether it is more efficient to retain existing customers or attract new ones.

Finally, the growing demands of the market place make it impossible for both managers and markets to decide whether word of mouth is the most viable marketing strategy.

These problems are demanding scholarly attention and the researcher has chosen to carry out a research work to attempt addressing the problems.



The main purpose of this study borders on analyzing word of mouth and customer loyalty. The study will seek to explain how word of mouth is the best tool that guarantees customer loyalty and also reveals the processes of word of mouth marketing strategy.

Specifically, this study will seek to determine:

  1. to ascertain how word of mouth defines a brand and gives it a unique identity.
  2. To determine if marketers should prioritize retention of existing customers’ loyalty over attraction of new customers.
  • To determine if it is cheaper to retain customers and attracting more.
  1. To ascertain if word of mouth is the most viable marketing strategy so far.


  1. how does word of mouth define a brand and give it a unique identity?
  2. Should marketers prioritize retention of existing customers’ loyalty over attraction of new customers?
  3. Is word of mouth truly a cheaper means to retain customers and attracting more?
  4. Is word of mouth the most viable marketing strategy so far?



the importance of this study cannot be downplayed for any reason. These importance are as follows:

  1. to modern day marketers: this study will help them realize the viability of word of mouth marketing is guaranteeing brand loyalty and help them seek means of giving it a place in their marketing strategies.
  2. Consumers: this study will help consumers realize how much control they have in brand promotion in modern day business world and thereby use this control to regulate and maintain brands’ quality for their own good.
  • The researcher and other students: this study will expose them to indebt knowledge of the happenings in the branding and marketing world.
  1. Future researchers: this study will serve them as a valuable reference material when carrying out studies on related topic.



this study will cover some other marketing activities in a comparative manner with word of mouth. It will cover all the impacts of word of month on brand loyalty.

This study could have covered more areas but due to time and financial constraints suffered by the researcher during the study, due to inadequate time to carry out an indebt research because of the limited time for carrying out the research and submitting the findings and lack of finance to visit and consult all areas of relevance.


  • Word of Month: statements or praises from loyalty customers about a particular brand which helps in promoting such brands and attracting potential customers.
  • Impact: the effect something has on another thing. The outcome of a certain action.
  • Brand: a particular type of product made by a company.
  • Loyalty: the quality of been faithful in support of something; in this case, a product/brand.
  • Customer: a person or organization that buys something from a business.
  • Marketing: the activity of presenting, advertising and selling a company’s product in the best possible way.
  • Advert: messages that are aimed at attracting potential customers and retaining the present ones.
  • Patronage: the support people give to a business by buying its goods or services.
  • Satisfaction: the good feeling or utility derived from consuming a particular good or service.
  • Communication: the activity of expressing ideas or giving people information of a given product or service.
  • Awareness: attracting people’s attention to something (a product or service)
  • Revenue: money generated from sales of goods or services.






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