1.

0 Executive Summary
With an average of 1.09 billion active users every day, Facebook is the biggest social media platform in
the world now as of March 2016. It is an important channel for marketers to take note of due to its massive
reach and the proliferation of electronic word of mouth.

Word of mouth is seen as the most credible source of information to a consumer due to its unbiased
nature. It is especially more relevant in the context of services because of its intangible attribute.
With proper steps taken and proper monitoring, businesses and brands can take advantage of electronic word
of mouth to reach out to massive audience with little to no cost.

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2.0 Introduction
This report aims to document how Facebook check-in feature holds as one of the most crucial roles
in the success of the business amongst certain service providers and retailers in Singapore. It will be
focusing on identifying popular service providers or retailers in Singapore where consumers check-in on
Facebook, explaining how the words-of-mouth being important to the business. Subsequently, the report will
also be explaining on how service providers manage and influence the positive and negative word-of-mouth
communication that is spread via social networking sites, the factors that consumers take into account when
evaluating firm-generated against peer-generated communications. The report will then describe the pros and
cons for marketers of highly connected, smartphone-equipped consumers, how marketers are paying interest
to the consumer reference groups, providing examples on how an online consumer reference group may
influence the decision-making process of a Facebook user.

3.0 WOM in Service marketing versus Goods marketing

The reason why word of mouth is particularly more relevant to service marketers compared
marketers of goods is because of the intangible nature of services. As such, consumers rely on other cues
such as physical evidence and word of mouth for assessment. These cues are vital to overcome the various
risks associated with purchasing the service such as psychological and outcome risks. A positive word of
mouth from someone of close tie will increase the consumers confidence level in the service and hence
reduces the psychological risk.

On the other hand, unlike services, goods can be seen and touched, consumers can experience the product
for themselves and determine if it satisfies their needs before purchasing. While word of mouth is still
important in goods marketing, it is even more relevant to service marketers.

3.1 Teo Heng KTV at Causeway Point

https://www.facebook.com/pages/Teo-Heng-KTV-at-Causeway-Point/1010707622325601?fref=ts
Popular and affordable local karaoke joint.
Word of mouth through photos uploaded by customers having fun.
Most of the comments for these posts are friends asking why they are not invited.
Friends of customers see that they are having fun and may want to patronize Teo Heng in the future.

3.2 Singapore Sports Hub

https://www.facebook.com/sporesportshub/
Common venue for big scale events such as concerts and sports events.
Visitors check-in when they are there to share the moment.
May attract potential visitors to visit the sports hub.
Allows tourist to find out more about the sports hub from an unbiased source.

3.3 Art Science Museum

https://www.facebook.com/ArtScienceMuseum/
Iconic landmark in Singapore
Museum cater to tourists and locals.
Word of mouth allows potential visitors to find out more about the museum before visiting to avoid
disappointment.
Gives tourist more assurance as they can find out more about the museum from an unbiased source
when planning their trip to Singapore.

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3.4 LaserOPS Indoor Laser Tag
https://www.facebook.com/LaserOPS/?fref=ts
Indoor laser tag game facility
Corporate and group bookings available
Customers check in to share their experience there.
Electronic word of mouth allows customers to find out more about the place before making a group
booking because the risk associated with disappointing a large group is high.

3.5 Lighthouse Studio

https://www.facebook.com/lighthousestudio.sg/?fref=ts
A local video production house that specializes in wedding videography.
Videography package costs around $3,000.
Positive word of mouth on their Facebook page gives greater confidence to their potential customers
to sign up for their services because a wedding is an important occasion so the appointed vendor
needs to be competent in delivering them.

4.0 Word of Mouth (WOM)

Word-of-mouth (WOM) is the most efficient way of receiving feedbacks from the consumers. The
feedbacks are not just exposed to the company but to the public since social networking sites provide a
global communication platform. Thus, the outcome of word-of-mouth has a huge impact on the companys
value, as they will influence buying decision of the consumers. Since WOM is an unbiased opinion from the
personal experiences of consumers, the viewers of the feedback rely on it. Hence it can be concluded that
positive or negative WOM influences the consumer brand perception positively or negatively. Therefore,
WOM gives businesses the opportunity to reach their customers and attract business of prospective
customers. The service providers can manage WOM communication by increasing interaction with their
consumers via social networks.

4.1 Managing WOM Communication

When consumers visit stores, they are encouraged to like the Facebook page of the company. Many of
the business cards from vendors involve a like us on Facebook at on them. The companies then manage
their Facebook pages to be more appealing and engaging towards the audiences. They include posting
products or service updates or other news such as promotions by the company. These efforts would attract
more interaction from the consumer's - likes, comments and check-ins. This provides a chance for the
companies to reflect and follow up on any useful feedbacks to improve their services. These interactions
from consumers would appear on the newsfeed of their friends who will be exposed to the companys
engaging page setup. They will also be compelled to view and like the page hence increasing the fan base.
Eventually, these interactions would turn into a viral marketing and the major advantage would be the cost-
free advertising.

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4.2 Importance of managing WOM communication
The reason why service providers constantly manage the pages is to promote post likes, comments
and check-ins, which are the mechanisms that constantly broaden companys fan-base, since these activities
appear on the newsfeed of consumers friends, there will be repetition. If the page were to be left
unattended, the only way to increase the fan-base would be by promoting the Facebook page to consumers
in the shop. This limits the likes of page to the consumers that has previously interacted directly with the
company or those that stumbled on the page occasionally. Since liking a page could only be done once by
each consumer, it would appear in a small scale compared to liking, commenting on a post or checking-in
as these actions could be done multiple times. This method is known as the repetition, which uses the
peripheral route. It is especially effective for low involved consumers. Eventually, the brand has
unconsciously registered in their mind causing interest due to repetition.

5.0 Firm-generated versus Peer-generated (WOM)

Firm-generated messages are defined as messages communicated from an organization to the
consumers. For example, when Apple launches a new iPhone, they claim that it is the best smartphone
in the market ("Iphone 6S" 2016). Peer-generated messages, also known as WOM are communications
and reviews among consumers and societies. Consumers may spread WOM to their social circle after
evaluating their purchase.

Firm-generated WOM are more likely to be evaluated objectively by consumers. Evaluation will
be based more on facts and track records of the organization. For example, Apple is a successful
organization that consumers are confident of, making them a more trustworthy company compared to
a new one when it comes to WOM.

On the other hand, peer-generated WOM are more relationship oriented. Evaluation of the
WOM is based on the personal trust with the other party. A recommendation or negative feedback
from a close friend is seen as more credible compared to a firm generated one.

6.0 Pros and Cons of highly connected consumers

With the rapid advancements in mobile technology, people now have easy access to the internet on-
the-go now instead of being tethered to a computer a few years ago. While these advancements benefits
consumers generally, it is not without cons for marketers.

6.1 Pros
Marketers have an advantage when targeting highly connected smartphone users. Forums and social
media such as Facebook provide consumers with comprehensive product information, hence increasing
consumer certainty. The check-in feature on Facebook serves as a form of recommendation for other
consumers as well.

Mobile marketing on applications help create buzzes about products and services. This allow
marketers to reach consumers while they are actively shopping, socializing, and making buying decisions.
Furthermore, mobile phones can receive input anyplace-anywhere-anytime, enabling behavioral targeting for
local businesses.

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6.2 Cons
Dissatisfied consumers are now able to spread negative WOM faster and to a wider audience than
before through social media, presenting a bad image to the company. Furthermore, obtaining information is
made easier with search engines where consumers are able to compare products or services with other
brands resulting in an increase in competition. As WOM are perceived to be more credible by consumers,
marketers need manage them appropriately and carefully.

7.0 Reference Groups

A reference group is any person or a group that an individual compares themselves to or associate
with which can influence and form values, attitudes or behaviour (Joseph Sirgy, Rahtz and Portolese Dias
2016). There is no limitations on the group size or membership and they are also not required to identify
with a tangible group. Reference groups are important as they influence how consumer interpret information
and makes purchasing decisions.

These groups can be further divided into two groups; normative and comparative. Normative
reference group influences the general values or behaviour of an individual through direct interaction.
Whereas, comparative reference group is a group of individuals that one compare themselves against and
may strive to be like (O. Bearden and J. Etzel 1982).

7.1 Types of reference group

Reference group consists of both direct and indirect individual and group influences. It can be further
categorized into the 4 different types of reference group; contactual, aspirational, disclaimant and avoidance.

Contactual - It is a group whereby a person holds membership or has regular direct contact and of whose
values, attitudes and standards he or she approves of (David Mudondo 2014). Therefore, a contactual group
exerts a positive influence on an individuals attitudes or behaviour.

Aspirational - The members of the group does not hold membership, whereby the consumer idealize, idolize
or admire a person which they do not have any direct contact with. However, would like to be associated
with. Thus, it serves as a positive influence on the consumers behavior or attitude (Pittard 2013).

Disclaimant - Disclaimant group is a membership group whose ideology an individual rejects. Thus, the
individual tends to adopt attitudes and behaviour that are in opposition of the norm (Mahajan and Mahajan).

Avoidance - Avoidance group is a non-membership group whose values an individual rejects and wishes to
avoid association with (Brown and Turley 1997).

7.2 Consumer reference group

With the advancement of technology, the Internet enables consumers to gather and form virtual
groups or communities centered on particular brands or interests. Facebook, being one of the largest social
media site (Chaffey 2016), many gather online to discuss and share their e-WOM of various experiences.
Therefore, these consumer reference groups serves as an establishment of online brand communities for
consumer-to-consumer interactions. These opinions generate discussion and highlights the wants of the
consumers, also, providing feedback of a certain product or experience. Through these engagements,
marketers are provided with an opportunity to learn of the consumers attitude, needs and desires. Hence,
marketers are better equipped with knowledge to enhance the consumption experience.

8.0 Reference group influential factors

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 The degree of influence of a reference group is subjective in nature; it varies across an individual,
product or specific social factors.

8.1 Information and experience

An individual whom has a direct experience of a product or service, or is able to easily obtain
detailed information of a product will less likely be influenced by the opinions of others. On the contrary, an
individual with little to no experience of a product or whom is unable to have access to the complete
information will easily tend to accept and be influenced by the opinion of others.

8.2 Credibility, attractiveness and power of the reference group

A reference group, which is considered to be credible, would exert a higher influence on the
consumer whom is looking for accurate information of a product performance, quality and service. Whereby
consumers are concerned with their social acceptance and approval, the individual will tend to use the
product, brand or behave the same as the group. However, when a consumer is fearful of the power of a
group, one would adopt the norms to avoid ridicule or punishments. Hence, the probability of being
influenced by such groups is high.

8.3 Conspicuousness of the product

When a product is visible and conspicuous, such that it relates to the self-esteem and social status of
an individual, the consumer tends to be more conscious while purchasing it due to the reaction of others.

8.4 Consumer conformity

When a consumer is socially directed and looks towards a group for approval, the individual will
conform to the advice given by the members of the group, as he/she wants to be identified and associated
with the group. Therefore, he/she would conform to the products or brands suggested by the group.

8.5 Online consumer reference group influence of the decision-making process

In the Facebook context, an online consumer reference group is able to provide information and
experience from the various to a potential consumer. Also, it allows the consumer to compare his/her
thinking with the group, which may however encourage the user to adopt similar beliefs through
connectivity. Hence, influencing the consumer on its decision making process.

9.0 Conclusion
It can be therefore concluded that electronic word-of-mouth communication is a dominant force in
the marketplace for services. It is inexpensive and the most valuable form of marketing in which the
consumers trust the most above all others. It is pivotal for the success of businesses.

10.0 References
Brown, Stephen and Darach Turley. 1997. Consumer Research. London: Routledge.

Chaffey, Dave. 2016. "Global Social Media Statistics Summary 2016". Smart Insights.
http://www.smartinsights.com/social-media-marketing/social-media-strategy/new-global-social-media-
research/.

David Mudondo, Chenjerai. 2014. "The Social Context Of Consumption: Analysing Social Reference Group
Factors That Influence Millennial Mobile Phone Purchasing Behaviour". http://www.rassweb.com/wp-
content/uploads/PDF/IJMS/Vol-3/Issue-3/Paper%203.pdf.
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Joseph Sirgy, M., Don R. Rahtz, and Laura Portolese Dias. 2016. "Consumer Behavior Today 1.0 | Flat
World Education". Flat World Knowledge. http://catalog.flatworldknowledge.com/bookhub/reader/8111?
e=sirgy_1_0-ch11_s01.

Mahajan, J.P. and Anupama Mahajan. Principles Of Marketing (For B.Com, BBA, BBM And BMS). Vikas
Publishing House.

O. Bearden, William and Michael J. Etzel. 1982. "Reference Group Influence On Product And Brand
Purchase Decisions". https://www2.bc.edu/~woodsiar/nov%202%20reference%20grp.pdf.

Pittard, Vickie. 2013. "Using Reference Groups In Marketing". Business 2 Community.

http://www.business2community.com/marketing/using-reference-groups-in-marketing-
0427866#wfYfF1DL0xdMswxp.97.

Whitler, Kimberly. 2016. "Forbes Welcome". Forbes.Com.

http://www.forbes.com/sites/kimberlywhitler/2014/07/17/why-word-of-mouth-marketing-is-the-most-
important-social-media/#780ec6b67a77.

"Facebook Newsroom". 2016. Newsroom.Fb.Com. http://newsroom.fb.com/company-info/.