Professional Documents
Culture Documents
Application of Social
Media to Word of Mouth
Marketing and Promotion
of Luxury Brands
by Sandeep Bhanot
Abstract
Social media is the use of web-based and mobile technologies to turn communication into interactive dialogue. Brands
are attempting to utilize social media to reach existing customers, gain new ones and build or maintain credibility and reputation.
More importantly, brands need to measure their visibility in the most popular social media relative to that of their competitors.
“Word-of-mouth” has always been the most effective form of marketing. People have always trusted their friends' opinions,
whether it is for a new deodorant or any other product. Word-of-mouth never stopped being important, but when mass media
became popular last century, brands could rely on advertising to broadcast their message to the world and word-of-mouth didn't
seem as important to some marketers anymore. Many marketers are spending millions of dollars on elaborate advertising
campaigns when often what's really needed to help influence consumers is a “word-of-mouth recommendation from a trusted
source” which “cuts through the noise” of traditional marketing methods. Online communities and social networks amplify word-
of-mouth and that the right message can resonate and expand, affecting brand perceptions and increasing sales. But what is
interesting is the way the article looks at the impact of word-of-mouth marketing – or, what McKinsey terms, “word-of-mouth
equity”.
Word-of-mouth equity is a brand's power to generate messages that influence the consumer's decision to purchase. In
essence, this is the average sales impact of a brand message multiplied by the number of word-of-mouth messages.
The concept of luxury has been present in various forms since the beginning of civilization. Its role was just as important
in ancient western and eastern empires as it is in modern societies. With the clear differences between social classes in earlier
civilizations, the consumption of luxury was limited to the elite classes. It also meant the definition of luxury was fairly clear.
Whatever the poor cannot have and the elite can was identified as luxury. Luxury brands are now using social media to reach out
to their customers which has resulted in greatly enhancing their brand image.
Keywords
Social Media , Word-of-mouth marketing, Word-of-mouth equity, Brand , Luxury brands.
Introduction
Social Media
Social Media are media for social interaction, using highly accessible and scalable communication techniques.
Social media is the use of web-based and mobile technologies to turn communication into interactive dialogue. Andreas
Kaplan and Michael Haenlein (2010) define social media as "a group of Internet-based applications that build on the
ideological and technological foundations of Web 2.0, which allows the creation and exchange of user-generated content”.
Businesses may also refer to social media as consumer-generated media (CGM). A common thread running through all
definitions of social media is a blending of technology and social interaction for co-creation of value. People obtain
information, education, news and other data from electronic media and print media. Social media are distinct from
industrial or traditional media, such as newspapers, television, and film. They are relatively inexpensive and accessible to
enable anyone (even private individuals) to publish or access information, compared to industrial media, which generally