Word-of-mouth communication is a valuable means of marketing for small, local service providers. Face-to-face transmission is most prevalent, but electronic word-of-mouth is on the rise. Through the results of an agent-based simulation, this article shows that the penetration of word-of-mouth for a small service provider, who is locally restricted due to the inseparability of production and consumption, could benefit less from a growth in word-of-mouth connections than a larger service provider. Only if the added electronic connections are mainly local, small and larger service providers have similar effects on the penetration of word-of-mouth. The article includes a discussion of how small service providers could react to this threat.
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