The purpose of this report is to investigate the rapid growth of word of mouth (WoM) and Electronic word of mouth (EWom). The report will focus primarily on the hotel industry and the brand Club Med and how word of mouth and electronic word of mouth has transformed the way customers perceive what they hear from friends and families. The report will conclude by providing a strategic in depth recommendation and ways to tailor the growth of WoM and Ewom into the hotels\' current operation successfully.
The growth of technology has overhauled the tourism and hospitality industry. Over the past 5 years, the hospitality industry has drastically taken a technology-driven transformation (Bickerton 2015). The transformation has seen changes in the way consumers obtain information and mainly how they book for services. As a result, there has been a growth and importance of Word of Mouth and electronic word of mouth. For an industry that relies on image and positive perception, WoM and Ewom are something that must be considered and taken very seriously. Club Med is in the business of selling intangible services to consumers, however, tangible services such as the appearance of their hotel have an impact on whether a customer would choose to book with them or not. These variables are all focus around Word of Mouth and Electronic word of mouth (Racherla 2008).
Word of Mouth (WoM)
In an industry where good image equates to rapid growth, word of mouth is one of the most important aspects of a service business. WoM is a form of advertising done amongst satisfied and unsatisfied consumers (“word-of-mouth-advertising” 2016). Lo (2012) defined WoM as the transfer of information from one person to another through oral communication.
Impact of WoM
The most important aspect of word of mouth in the tourism and hospitality industry is that a word of mouth recommendation has the potential to direct buyers towards and away from specific products, brands, and service (W. Livtin, E. Goldsmith and Pan 2006). For a company like Club Med maintaining an image is vitally important, the company is both in the business to consumers as well as business to business and a range of other alliance. “word of mouth “(2016) stated that a person puts their reputation on the line when they make a recommendation to someone.
Word of mouth helps consumers build trust between themselves and the company that offered them the service. Lo (2012) stated that positive word of mouth influences consumers to get inclined towards a particular service. This is an important aspect for Club Med. The company offers a variety of service across the hotel\'s sector which puts them at risk of getting negative word of mouth through one of their services which will then have an impact on another service they provide. Word of mouth is important because it is information shared among people you are close to and trust like friends and families.
Electronic Word of Mouth (Ewom)
Electronic word of mouth is defined as an ‘informal information directed consumers through internet-based technology related to the usage and characteristic of a particular goods and service and their seller\' (W.Livtin, E.Goldsmith and Pan 2006).
The growth of technology means information is now available to consumers with very little limitation. Electronic word of mouth can have a positive impact on purchase intention. Brand image is key in the world of advanced technology. When factors such as brand image are positive, companies can influence their consumers and play a role in a consumer\'s purchase intentions ( Pourabedin and W.Migin 2015 ).
Figure 1 above illustrates the effect of electronic word of mouth from the point it starts. The tourism and hospitality industry relies heavily on brand image and you can see how brand image is such a big contributor for positive Electronic word of mouth.
Benefits of Ewom to Club Med
In a competitive hotel environment, Electronic word of mouth is vital. The benefit of Ewom depends on consumer previous hotel experience, however, judgment can be made solely on tangible features such as the design of the hotel, decoration and the way they position certain object when a customer first walks into reception or room. The biggest benefit for Club Med is that customers like to share, seek advice online and trust other people (“electronic word of mouth presents a window of opportunity for businesses” 2012). Therefore, if they are able to influence what information is put out they can incorporate Ewom into their services.
Ways to effectively Manage Ewom
When you operate in an environment like Club Med, it is essential to keep track and correctly manage electronic word of mouth. What the company can see about themselves online, potential consumers can also see. It is vital for companies to manage their image online, although you cannot manage every aspect of the world wide web, you should manage and keep up to date with reviews from customers are popular review pages such as google reviews and yelp. Monitor emails and virtual communities such as Facebook and even video sharing service such as YouTube if your company produces video advertisements. The biggest benefit for managing Ewom and what goes out of your company correctly is a growth in revenue, customer numbers and most importantly a growth in a positive electronic word of mouth. In a competitive environment, where a variety of information are available online, customers will do extensive research, therefore it is important to manage what they can see.
Sources of Ewom for Club Med Hotel Group
For a major hotel company like Club Med, the following will be there biggest sources for electronic word of mouth.
o Social Media – Facebook, Twitter& YouTube. These are the main platform for consumer interaction and also a place where the company can directly interact with consumers.
o Personal Blogs- Club Med will find that some of its customers are involved in blog writing and reviews, therefore it will become critical for them to look into it. Negative Ewom on popular blogs can damage a company reputation as Ewom of this kind are usually written in extensive detail (W. Livtin, E. Goldsmith and Pan 2006).
o Search Engine- Web pages such as google reviews and yelp.com are just as a vital source to Ewom as Facebook. Just by typing the words \"Club Med \"into google you can begin or join an Ewom discussion. This source is vital for Club Med because they appear on page 1 on google web searches and the minute you type in the name reviews from customers also appear on the screen which is very convenient for customers when looking to book.
Factors Impacting Ewom
When you're in the business of providing service, you can never be perfect. There are factors which impact what kind of Ewom a customer is likely to share about Club Med.
o Previous experience is a major factor in Ewom. The downside for Club Med is that Customers don't always stay in the same room when they stay at the hotel, therefore their previous service experience may have been bad and this will have a big impact on the electronic word of mouth you are likely to get out of them.
o Customer reviews. Technology has given consumers the ability to obtain information over the internet easily without limitation. This is a big impact for Club Med because not every customer they have are going to be happy with the service so there is a big chance there Ewom will be negative . what another customer says can have a big impact on the decision of a potential customer.
o The final factor for Club Med is the brand image. The entire industry is run on brand image. What ideas do consumers have about your brand ? are you known among consumers to have exceptional service all round or do you struggle in essential areas such as locations and efficiency (Abalaesei and Mahaela Sandu 2016).
Recommendation & Conclusion
For Club Med to monitor, measure and leverage electronic word of mouth, it is recommended firstly that they focus on engaging, equipping and empowering their clients (A.Whitler 2014). Listen to what your clients have to say, monitor your media outlet and respond to reviews. Give your client a reason to talk by providing outstanding service (A.Whitler 2014). Understanding the need of your consumers is key to enhancing your service marketing initiatives.
In order for Club Med to leverage Ewom and assert their dominance, it must focus on non-transactional customer behavior. Customers are no longer satisfied with just purchasing something and getting rewards for future use. Club Med should look into the option of rewarding customers for sharing their experience at the hotel, online and they should have draws that the customer would go into for sharing their input. This will build a relationship between Club Med and the customer ( A.Whitler 2014).
Pourabedin and W.Migin (2006) stated that consumer are generally looking for a unique personalized and valued added experience. Club Med needs to look at how they can assert more value into what they offer. They need to consider how they are currently providing value to their customer experience and how they can improve that. One recommendation is to focus on tangible aspects of their hotels such as designs and the way they have position items. Some things like this create value to customers, but not all of them so the key is to better understand your customers. Your consumers need to feel more connected with your brand.
Overall if Club Med wants to monitor, measure and leverage Ewom to enhance their service marketing initiative they will need to focus more on connecting with customers rather than just collecting customers (A.Whitler 2014 ). A.Whitler (2014) highlighted that ‘having 100 really passionate customers that love the service your offering is more effective than having 10,000 people on like your facebook page ‘. Positive Ewom comes from your customer feeling like value has been added to their experience. The value that has exceeded their expectation.
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