Viral Marketing of Retail Products:

A Study on the Influence of Attributes

of Web Portals and Incentives Offered
on User Registrations

Shailendra Dasari* and B Anandakrishnan**

Viral marketing, a relatively new concept, is the web-enabled Word-of-Mouth (WOM)

publicity which leverages internet technology to significantly enhance its effectiveness.
There is a good scope for retail chains in India to market their products using viral
marketing techniques, as the number of internet and mobile phone users have been
growing multifold in India. Reaching messages to prospective customers through
‘connectors’ (freelancers who offer their services to portals operated by retail chains)
has been successfully deployed by global companies like P&G, Amazon, Yahoo and
Unilever. This paper, based on a study conducted in Bangalore, highlights the evolution
of viral marketing, its efficacy as a promotional tool and relevance for the Indian retail
sector. Based on two separate surveys conducted, key factors that influence the connectors
to register with a portal and send/receive messages have been identified and results
validated with the help of advanced statistical techniques.

Introduction internet marketing is one of the tools of

Marketing communications is one of the direct marketing and with the explosion of
major activities aimed at communicating the internet, it has become one of the most
the value of products/services to prospective powerful tools for marketers.
customers. Viral marketing is the web-enabled
Direct marketing is one of the major elements Word-of-Mouth (WOM) publicity which
of communications and has gained immense combines the traditional WOM publicity
with the technological advantages offered
popularity and acceptance in recent times
by internet to marketer’s advantage, at the
due to its cost and time efficiency and unique
same time being customer-friendly.
characteristic of accurate measurability of
Return on Investment (ROI) from a The term ‘Viral Marketing’, was coined by
marketer’s perspective. venture capitalist, Steve Jurvetson of
About the Authors
* Faculty Member, IBS, Kanakapura Road, Bengaluru 560062, Karnataka, India.
E-mail: shailendra.dasari@gmail.com
* * Branch Sales Manager (Home Loans), ICICI Bank, Madurai, Tamil Nadu, India.
E-mail: adk_26@yahoo.co.in

Viral
© 2010Marketing
IUP. All of RetailReserved.
Rights Products: A Study on the Influence of Attributes 99
of Web Portals and Incentives Offered on User Registrations
Draper Fisher Jurvetson (DFJ) in their Types of Viral Marketing
Netscape newsletter published in 1997, Campaigns
to describe Hotmail’s practice of There are several types of viral marketing
appending advertisements to outgoing campaigns, some of which are listed below:
e-mails from their users.1 An extension of
the traditional WOM marketing, viral Pass-Along
marketing, gets its name from the word Pass-along is a message which encourages
‘virus’—which denotes ‘infectious spread’. the user to forward it to others. The crudest
It is the act of spreading WOM form of this is chain letters where a message
information about a brand online. It is the at the bottom of the e-mail prompts the
most time and cost-efficient mode of reader to forward it to his contacts by
communication for a marketer. highlighting suitable rewards/punishments
According to Wilson (2005), editor of Web for acting upon/inaction.
Marketing Today, “Viral marketing describes Incentivized Viral
any strategy that encourages individuals
In this a reward is offered for either passing
to pass on a marketing message to others,
a message along or providing someone else's
creating the potential for exponential
address. This can dramatically increase
growth in the message’s exposure and
referrals. However, this can be effective only
influence. Like viruses, such strategies take
when the offer requires another person to
advantage of rapid multiplication to
take action.
explode the message to thousands, to
millions”. 2 Undercover Marketing
Some of the key factors that determine the A viral message is presented as a cool or
success of viral marketing are:3 unusual page, activity, or piece of news,
without obvious incitement to pass along.
• Giving away products or services for free
In this form of viral marketing, it is not
(to generate the initial interest and
immediately apparent that anything is
induce trial).
being marketed.
• Simplified marketing message to enable
easy and quick transferability. Edgy Gossip/Buzz Marketing
This makes use of advertisements or
• Scalability of the viral model from small
messages that create controversy by
to ver y large. This requires proper
challenging the readers’ taste or
design and selection of servers that do
appropriateness of usage. Discussion of the
not crash when the explosion of ‘virus’
resulting controversy can generate
happens.
enormous buzz and consequent WOM
• Leveraging the existing social networking publicity. For instance prior to the release
preferences of prospective customers. of a blockbuster, some Hollywood movie
1
Steve Juvetson (2000), “What is Viral Marketing”, Red Herring, May 1, available at http:// www.dfj.com
2
Ralph F Wilson (2005), “The Six Simple Principles of Viral Marketing”, available at www.wilsonweb.com
3
Swapna Gopalan (2007), “Viral Marketing: An Introduction”, in Swapna Gopalan and Nasreen
Taher (Eds.), Viral Marketing: Concepts and Cases, pp. 3-10, The Icfai University Press, Hyderabad.

100 The IUP Journal of Marketing Management, Vol. IX, Nos. 1 & 2, 2010
stars get married, get divorced, or get
arrested, or become involved in some
controversy that directs conversational
attention towards them and the movie.
User-Managed Database
Here users themselves create and manage
their list of contacts using a database
provided by an online service provider.
By inviting other members to their
community, users create a viral,
self-propagating chain of contacts that
naturally grows and encourages others to
sign up as well.
Viral Marketing in Action
The following case studies illustrate the
successful deployment of viral marketing:
Success Stories4
• The art of viral marketing was pioneered
by Hotmail. In its first 18 months of
operation, Hotmail attracted 12 million
users, making it the fastest growing
subscriber base company in the world.
Hotmail had spent only $500,000 with
astounding results, while non-viral
competitors like Juno Online Services
who had spent $20 mn on mass
advertising during the same period were
far less effective.
book sites on the web. Within a short
span of time, they succeeded in
mustering more than a 100,000
affiliates to promote Amazon.com in
return for a small commission for every
sale attributed to them.
Flip Side of Viral Marketing
There have been few instances of
organizations getting bogged down by legal
and ethical issues while exploiting the
potential of viral marketing as an effective
communication tool, as illustrated below:
• Procter & Gamble (P&G) created a
division called ‘Tremor’ in 2001, to
market their products and concepts to
the teenagers in the US. Tremor used
both online and offline WOM
marketing. By 2002, around 200,000
teens were identified by P&G as
‘connectors’ without disclosing their
affiliation. A typical connector had
150-200 names on his/her instant
messaging list. Tremor teens were neither
told what to say about the products nor
were they paid for their work. They in
return received coupons, discounts, free
download and product samples as
incentives.5

• Hotmail’s formula was soon successfully However Word-of-Mouth Marketing

replicated by Yahoo and other free
e-mail services with amazing outcomes.
• Amazon.com took viral marketing
beyond its simple e-mail link status.
They created affiliates to promote their
Association (WOMMA) 6 made it
mandatory for the connectors to disclose
their affiliation as not disclosing the
affiliation amounted to exploitation of
consumers which was considered unethical.

4
Ibid.
5
Kaikati A and Kaikati J (2004), “Stealth Marketing: How to Reach Consumers Surreptitiously”,
California Management Review, Vol. 46, No. 4, pp. 6-22.
6
WOMMA was founded in 2004 in US by Pete Blackshaw. It is the official trade association for the
Word-of-Mouth (WOM) marketing industry and all its members are bound by the code of conduct laid
down by WOMMA.

Viral Marketing of Retail Products: A Study on the Influence of Attributes 101

of Web Portals and Incentives Offered on User Registrations
Gar y Ruskin, Executive Director,
Consumer Alert, US Federal Trade
Commission,7 remarked:
Without such disclosure the
company witnessed the danger of
basic ‘commercialization of human
relations’, where friends treat one
another as advertising pawns,
undercutting social trust.
• BzzAgent, an independent WOM
agency launched in the US in 2001,
Further opening of multiple accounts
by members with different (fictitious)
profiles, filing false reports, selling their
samples on eBay forced them to take
the drastic step of expelling 10,000
members.9
Relevance of Viral Marketing
for Retail Products in India
There is a good scope for spreading
marketing messages of Indian retail stores

Exhibit 1: Viral Marketing Model of a Retail Chain

Retail store creates a portal.


Users register with the company’s portal by providing required details.


Users receive and send e-mail and text messages of various promotional offers and
new arrivals to as many people as they can through the portal.


Messages sent get recorded in their account and points are credited.


Users are eligible to receive some benefits based on their performance.

wanted its agents not to disclose their Figure 1: Efficacy of Viral Marketing
affiliations. “Conventional wisdom says,
it would work better if you were quiet
about your affiliation”, was the advice
to its agents from Joe Chernov, Director
of Public Relations.8 However by 2005
they were forced to do an about turn
and advised their members to disclose
their identity, in conformity with the
guidelines issued by WOMMA in 2004.
7
An independent agency of the US government, established in 1914 by the Federal Trade Commission
Act. Its principal mission is the promotion of consumer protection and the elimination and prevention
of anticompetitive business practices.
8
BzzAgent is a US-based WOM network founded in 2001. They pair consumers with products and supply
digital tools that make widespread opinion-sharing easy. They currently have more than 500,000 agents.
9
Betsy Spethmann (2007), “Bracing for Backlash”, in Swapna Gopalan and Nasreen Taher (Eds.),
Viral Marketing: Concepts and Cases, pp. 107-116, The Icfai University Press, Hyderabad.

102 The IUP Journal of Marketing Management, Vol. IX, Nos. 1 & 2, 2010
through the internet in the form of e-mails,
flash images and text messages through
mobile phones which could be a novel
marketing strategy to increase sales as users
of internet and mobile phones have been
growing multifold in India and there is a
potential for further increase in the
number of subscribers.
A typical viral marketing model of a retail
chain/store is depicted in Exhibit 1.
A reward is offered for either passing a
message along or providing someone else’s
contact information.
A diagrammatic representation of the effect
of viral marketing through which a
marketing message spreads, is shown in
Figure 1.
Objectives
The objectives of this study are:
• To understand the relevance and spread
of viral marketing for retail products in
India.
• To ascertain the influence of:
– Features and characteristics of the web
portals of retailers; and
– Incentives offered by retailers on the
registrations by user members.
A market research was conducted at
Bangalore among people of the age group
18-25 using two structured questionnaires
to find out characteristics or attributes of
the web portal the users look for and the
incentives they would like to get from viral
marketing firms before registering
themselves. For example, a user might
expect a viral marketing portal to be user
friendly and facilitate faster downloading
of messages and on the benefits side he/she
Viral Marketing of Retail Products: A Study on the Influence of Attributes
of Web Portals and Incentives Offered on User Registrations
may prefer a site which offers good
monetary/promotional incentives for the
users. Currently, Guruji.com, a music site
is using this type of viral marketing to create
brand awareness of its site among musically
inclined net savvy people.
Methodology
Survey methodology was used and two
separate surveys were carried out in the
city of Bangalore. The objective of the first
survey, the sample size of which was 50,
was to ascertain the general awareness
about viral marketing among the potential
users, their behavior patterns and
willingness to using a retail chain’s viral
marketing portal. The second survey was
carried out among 82 respondents to find
out the important attributes that the users
would expect from a retail chain's viral
marketing portal and incentives they look
for before registering themselves. Both the
samples were chosen on a judgmental
basis from students, unemployed and
employed youth in the age group of
18-25 years based at Bangalore. The
information collected from the first group
of respondents was tabulated based on
their awareness, preferences and
willingness to be connectors in the viral
marketing channel and presented as several
easy-to-read pie-charts. The data collected
from the second group of respondents,
which was larger in number, was subjected
to factor analysis to identify the major
factors which have a bearing on their
decision whether to register with the portals
of retail chains or not. Factor analysis was
chosen in preference to other statistical
tools as it was necessary to examine the
whole array of interdependent relationships
among the variables and identify few
underlying factors that have a significant
103
bearing on the preferences and choices of the
respondents. Adequacy of the sample and
appropriateness of data for factor analysis
was validated by subjecting the data to
Kaiser-Meyer-Olkin (KMO) test of sampling
adequacy and Bartlett’s test of sphericity. The
findings of the factor analysis and their
Figure 2: Viral Marketing Awareness
Figure 4: Willingness to Send Viral
Marketing Messages for Free
Incentives
implications for marketers have been
reported in an action-oriented manner, from
the perspective of leading retail chains in
India, who could be major beneficiaries of
this study. Areas for future research also have
been suggested, considering the currency and
relevance of this topic for the Indian retail
sector.
The questionnaires used have been
appended as Annexures 1 and 2.
104 The IUP Journal of Marketing Management, Vol. IX, Nos. 1 & 2, 2010
Analysis and Findings
of the First Survey
Analysis
The analysis from the survey results reveals
that 62% of the respondents knew about
the term ‘Viral Marketing’ (Figure 2).
Figure 3: Willingness to Send Viral
Marketing Messages
Figure 5: Willingness to Send Viral
Marketing Messages After Getting
Employed
About 54% of the respondents were willing
to send viral marketing messages by logging
on to the viral marketing web portals of
retail chains even if no incentives are
offered (Figure 3).
When asked about their willingness to
send viral marketing messages when they
are offered incentives like discount
coupons, free sample, etc., there was a
drastic shift in responses from the previous
question. A whopping 96% were willing to
 Figure 6: Willingness to Receive Viral
Marketing Messages in E-Mail Inbox
Figure 8: Willingness to Receive Viral
Marketing Messages on Both E-Mail
and Mobile
send viral marketing messages if they are
offered some incentives for their service
(Figure 4).
At the same time 62% of the respondents
were not willing to spend time on sending
viral marketing messages once they are
employed on a full-time basis and 38% of
the respondents were willing to continue
it even after getting employed (Figure 5).
About 80% of the respondents preferred to
receive viral marketing messages in their
e-mail inbox while 20% did not prefer it
(Figure 6).
About 68% of the respondents preferred to
receive viral marketing messages in SMS
Viral Marketing of Retail Products: A Study on the Influence of Attributes
of Web Portals and Incentives Offered on User Registrations
Figure 7: Willingness to Receive
Viral Marketing Messages in Mobile
format on their mobile phones and 32%
did not prefer it (Figure 7).
Compilation of response data from the last
two questions shows that 50% of the
respondents were willing to receive viral
marketing messages on both their e-mail
inbox and mobile phones and 50% were
willing to receive the messages either on
their e-mail inbox or mobile phones and
not on both (Figure 8).
Findings
The analysis shows that the retail chains
have to attract youngsters who do not have
full-time employment in the age group of
18-25 to register with their viral marketing
web portals by offering free membership and
also must offer incentives after one sends a
particular number of messages to the target
customers either to their e-mail inbox or
mobile phones. There seems to be great
potential for implementing viral marketing
to send marketing messages of retail chains
to prospective customers as many net savvy
youngsters are willing to send and receive
viral marketing messages of latest offers and
product launches of their favorite retail
chains.
105
Analysis of Second Survey Table 1: Communalities
Factor Analysis Initial Extra
-ction
The important components of the output
and their interpretation are as follows: Download Speed 1.000 0.638

KMO and Bartlett’s Test Navigation 1.000 0.778

Kaiser-Meyer-Olkin Features 1.000 0.587

Measure of Sampling Firm’s Offers 1.000 0.794
Adequacy 0.520 Incentives 1.000 0.899
Bartlett’s Approx. Customer Database 1.000 0.794
Test of Chi-Square 1036.303 Site Appearance 1.000 0.678
Sphericity
News Updates 1.000 0.737
df 190.000
Free Downloads 1.000 0.845
Sig. 0
Score Reader 1.000 0.719
The Kaiser-Meyer-Olkin (KMO) and Security 1.000 0.827
Bartlett’s test measure the adequacy of the Net-to-Mobile
sample. Messaging 1.000 0.828

Bartlett’s Test of Sphericity: Social Networking 1.000 0.800

• Sphericity means all the variables are Integration 1.000 0.770

uncorrelated to each other. Brand Name of Firm 1.000 0.709
H0: All the variables are uncorrelated Firm’s Products 1.000 0.734
(= 1) Frequency of Offers 1.000 0.671
H 1 : All the variables are correlated Updating of Site 1.000 0.633
( 1) Multilingual
Messaging 1.000 0.751
• Significance value < 0.05 Free Membership 1.000 0.597
H0: Is rejected as KMO is greater than 0.5 Note: Extraction Method: Principal Component
and Chi-square value is significantly high Analysis.

at the chosen level of significance. Total Variance Explained

H1: Is accepted which indicates that all
variables are uncorrelated to each other and
data are suitable for factor analysis.
Communalities
Table 1 shows the extent to which the
variance has been accounted for by the
extracted factors. For example 89.9% of
variance in ‘Incentives’ has been taken into
consideration.
• Based on eigenvalues—only principal
components with eigenvalues greater
than 1.0 have been retained (Table 2).
• Only six factors have been retained each
containing a set of variables.
Scree Plot
As evident from the scree plot, the curve
begins to even out after the extraction of
the sixth factor. Therefore, only six factors
have been retained (Figure 9).

106 The IUP Journal of Marketing Management, Vol. IX, Nos. 1 & 2, 2010
 Rotated Component Matrix

Rotation Sums of Squared Loadings

Cumulative
Loadings less than 0.7 are not shown as

19.847
36.429
47.311
56.459
65.336
73.943
%
the values less than 0.7 were suppressed
using the factor analysis options dialog box
in order to minimize the number of
variables that have high loadings on a factor
Variance

19.847
16.582
10.882
% of
(Table 3).

9.148
8.877
8.607
Summary of Factor Analysis
• 20 variables have been reduced to
six uncorrelated factors.
3.969
3.316
2.176
1.830
1.775
1.721
Total

• A common name has been assigned

to the variables under each factor
having absolute value of more than
Extraction Sums of Squared Loadings

0.7 in Table 3.
Cumulative

21.876
39.464
50.169
59.646
67.157
73.943
Table 2: Total Variance Experience

Naming the Factors

• Factor 1—Major technical
attributes of viral marketing portal.
21.876
17.588
10.705

• Factor 2—Incentives, nature of

Variance

9.477
7.511
6.786
% of

offers and social networking.

• Factor 3—Brands and products
of the retail chain.
• Factor 4—Free downloads offered
4.375
3.518
2.141
1.895
1.502
1.357
Total

to user members.
• Fa ctor 5—Net-to-mobile
messaging facility in the viral
21.876
39.464
50.169
59.646
67.157
73.943
ative %
Cumul-

marketing portal.
Initial Eigenvalues

• Factor 6—Security expectations

of the users/connectors.
21.876
17.588
10.705
Variance

9.477
7.511
6.786
% of

Findings and Interpretations

The respondents’ top six attribute
preferences for choosing a viral marketing
Total

4.375
3.518
2.141
1.895
1.502
1.357

portal of a retail chain are zeroed in using

the factor analysis.

It can be concluded that most of the

Component

potential connectors of a viral marketing

portal may choose to log on to a retail
chain's viral marketing portal based on the
1
2
3
4
5
6

extent the above listed factors are addressed

Viral Marketing of Retail Products: A Study on the Influence of Attributes 107
of Web Portals and Incentives Offered on User Registrations
 Figure 9: Cattell’s Screen Plot

4
Eigenvalue

0
1 2 3 4 5 6 7 8 9 10 1112 1314 15 16 17 18 19 20
Component Number

Table 3: Rotated Component Matrix

Component
F1 F2 F3 F4 F5 F6
Download Speed
Navigation 0.712
Features
Firm’s Offers 0.875
Incentives 0.856
Customer Database 0.726
Site Appearance 0.749
News Updates
Free Downloads 0.843
Score Reader
Security 0.864
Net-to-Mobile Messaging 0.869
Social Networking 0.705
Integration
Brand Name of Firm 0.794
Firm’s Products 0.828
Frequency of Offers
Updating of Site 0.716
Multilingual Messaging
Free Membership

108 The IUP Journal of Marketing Management, Vol. IX, Nos. 1 & 2, 2010
by the retail chains while designing their
portal and deciding the benefits to be
offered to the user members/connectors.
The identification of important factors
enables a retail marketing chain to
concentrate more on those factors to
establish initial points of parity for their
viral marketing portal.
Recommendations
• Retail chains must target youngsters
within 18-25 years of age to act as
connectors as there is vast potential
and willingness among them which
is evident from the survey response
and findings.
• Viral marketing can be used by retail
chains in India to communicate their
promotional messages, new product
launches or arrivals and also to create
brand awareness of their private
brands among their customers at a
relatively low cost.
• During this period of global recession
where cost-cutting is the order of the
day, retail chains can consider cutting
cost on advertisements and
promotions by using viral marketing
campaigns as tools, starting in a small
way initially by targeting their loyal
customers.
Limitations
• This study is confined only to
Bangalore metropolis and therefore
cannot be representative of the choices
and preferences of connectors in
smaller cities and semi-urban areas.
• Age group of 18-25 has been chosen
arbitrarily and not based on any
statistical tools.
Viral Marketing of Retail Products: A Study on the Influence of Attributes
of Web Portals and Incentives Offered on User Registrations
• Responses to questionnaires are
subject to individual biases and to
that extent accuracy of some of the
findings could be affected.
• Sample size is not large enough to
completely eliminate the possible
sampling errors.
Areas for Further Research
Viral marketing being a relatively new
concept, there is lot of scope for further
research on this topic. Some of the suggested
areas for research are:
• Whether connectors of viral
marketing channels patronize select
retail chains in groups rather than
as individuals. If so, what could be
the common characteristics of these
groups?
• Influence of social networking
groups on the acceptance or rejection
of a viral marketing channel.
• Cost effectiveness of viral marketing
vis-à-vis other forms of e-marketing
• Suitability of viral marketing as a
tool for cause-related marketing.
Conclusion
There is a good scope for the deployment
of viral marketing as a marketing
communication tool in the Indian market
by the retail chains, which is evident from
the sample survey conducted as a part of
this project and the findings from this
project will be useful for retail chains to
concentrate on the important factors before
designing and commercializing their viral
marketing portal. The success of viral
marketing campaigns depends on how well
they are promoted within the target users,
109
and also the increased usage of internet and chains to promote their business by using
mobile phones by the Indian consumers viral marketing as an effective and cost
provides a very good platform for the retail efficient tool for marketing. J

Annexure 1
Questionnaire on Viral Marketing

Name: Age: Occupation:

1. Are you aware of the term viral marketing?
Yes No
2. Do you prefer to send viral marketing messages of a retail company by logging
on to its portal?
Yes No
3. Do you prefer to do it if you are offered incentives/rewards?
Yes No
4. Will you prefer to do it even if you are employed fulltime?
Yes No
5. Do you like getting messages of attractive offers of your favorite retail company
to your e-mail inbox?
Yes No
6. Do you like getting messages of attractive offers of your favorite retail company
on your mobile?
Yes No

Annexure 2
Questionnaire on Viral Marketing

Name: Age: Occupation:

Please rate the importance of the following attributes on a seven point scale for
registering with a viral marketing portal of a retail firm.

Attributes (1 – Least Important, 7 – Most Important)

1. Download Speed 1 2 3 4 5 6 7
2. Navigation 1 2 3 4 5 6 7
3. Features 1 2 3 4 5 6 7
4. Firm’s Offers 1 2 3 4 5 6 7
5. Rewards/Incentives 1 2 3 4 5 6 7

110 The IUP Journal of Marketing Management, Vol. IX, Nos. 1 & 2, 2010
 Annexture 2 (Cont.)

Attributes (1 – Least Important, 7 – Most Important)

6. Customer Database 1 2 3 4 5 6 7
7. Site Appearance 1 2 3 4 5 6 7
8. News Updates 1 2 3 4 5 6 7
9. Free Downloads 1 2 3 4 5 6 7
10. Score Reader 1 2 3 4 5 6 7
11. Security 1 2 3 4 5 6 7
12. Net-to-Mobile Messaging 1 2 3 4 5 6 7
13. Social Networking 1 2 3 4 5 6 7
14. Integration 1 2 3 4 5 6 7
15. Firm’s Products 1 2 3 4 5 6 7
16. Frequency of Offers 1 2 3 4 5 6 7
17. Updating of Site 1 2 3 4 5 6 7
18. Multilingual Messaging Options 1 2 3 4 5 6 7
19. Free Membership 1 2 3 4 5 6 7

Reference # 03J-2010-02/05-07-01

Viral Marketing of Retail Products: A Study on the Influence of Attributes 111

of Web Portals and Incentives Offered on User Registrations
Copyright of IUP Journal of Marketing Management is the property of IUP Publications and its content may not
be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written
permission. However, users may print, download, or email articles for individual use.