ProfessorVerb 35 | 829 ✏ ☆☆ Freelance Writer
May 13, 2014 | #1
Beware of this UK client: naweed
What I was provided with:
Research Problem
An investigation into the influence of electronic word-of-mouth on professional product review websites versus user-generated content based product reviews, in the decision to purchase a next generation console.
Literature Review
Introduction
The significance of the following research is critical in understanding relevant key terms and theory from which a suitable research problem shall be defined. Furthermore, it will provide the necessary foundations needed in order to set appropriate research objectives.
Electronic Word of Mouth
Many acknowledgeable researchers within the study of word-of-mouth (WOM) and electronic word-of-mouth (eWOM) marketing have recognised the importance of its contribution within consumer behaviour. Whilst the majority of research in the past has focused on WOM in an offline context, current trends have caused a shift in focus to WOM occurring online. Keller and Berry (2006) noted that 90 per cent of WOM communication takes place offline, however a more recent study written by Prendergast et al., (2010) makes reference to this and states that as consumers are becoming more reliant on the internet, the role of eWOM continues to grow. Furthermore, the rapid evolution of social media has taken eWOM to the next level. As a result virtual communities have advanced to the point where consumers are able to share opinions amongst each other at the click of a button (e.g. YouTube), prompting an increase in brand related discussions. Additional examples of eWOM platforms include product review websites, retailer's websites (e.g. amazon), brand's websites (e.g. community.eu.playstation.com), personal blogs and forums (Bickart & Schindler 2001; Khammash et al., 2006 Lee and Youn, 2009). It is no wonder then that eWOM has become one of the most significant "consumer touch-points" in regards to deciding about products, brands and services (Keller & Libai, 2009). With this being the case, the influence of eWOM on consumer decision making has gathered interest from researchers and organisations that can no longer ignore its significance.
An agreed upon definition of electronic word-of-mouth (eWOM) cited by various authors (Chu and Kim, 2011; Prendergast et al., 2010; Thorson and Rodgers, 2006) originates from the work of Hennig-Thurau et al., (2004) which has been evaluated in order to understand it's suitability within the context of this literature.
"Any positive or negative statement made by potential, actual, or former customers about a product or company which is made available to a multitude of people and institutions via the internet".
Currently, research into the influence of positive and negative word-of-mouth (WOM) on consumer purchase probability, online or offline provides this literature with significant findings. Generally, it has been assumed that positive (or negative) WOM has a positive (or negative) influence on an individual or "receiver" searching for an opinion of a product. However, Fitzsimons and Lehmann (2004) observed the opposite and found that in some cases, people would react against negative comments resulting in further commitment to that brand. This adverse reaction occurred when:
- people are directed to do things they do not wish to do,
- the WOM receiver disagrees with the values of the advisor, or
- when prior commitment of a brand prevents the consumer from fully accepting useful negative information about a brand.
A recent study evaluated the influence of positive and negative WOM on purchase probability. It considered various "interpersonal" and "non-interpersonal" factors and concluded the extent to which each influenced the receiver's purchase probability, as illustrated in figure 1.
Figure 1: Factors associated with impact of positive and negative WOM on shift in receiver's purchase probability.
These interpersonal factors are "tie strength, sender's experience, sender's strength of expression and how actively WOM is sought". Figure 2 breaks down these factors into further descriptors in order to provide a greater understanding of each.
Figure 2: Interpersonal factors measuring the impact on the shift in receiver's purchase probability.
The influence of tie strength, which is essentially the strength of the relationship between the sender and receiver, is of particular interest. In strong tie relationships, the influence of WOM (positive and negative) on purchase probability would increase whereas weak tie strengths caused the opposite to occur. Whilst this may be the case for WOM (positive and negative) in an offline environment, could the same conclusion be made for WOM (positive and negative) in an online environment? Under the assumption that it does, one could argue that (positive and negative) eWOM would have a decreased influence on purchase probability. This assumption would be based on the fact that "tie strength" between senders and receivers in eWOM are usually formed of multiple weak ties. This is because it is possible for anyone on the internet to submit information (positive and negative eWOM) about a product or brand on a variety of online platform's. Consequently, determining the quality and credibility of eWOM has often been difficult for consumers. This is because the person submitting eWOM in the form of a review or opinion does not feel much responsibility for the consequences involved, as it will often be read by complete strangers (Kadi, 1995; Granitz & Ward, 1996 as cited by Lee & Youn, 2009). As a result, there is an increased possibility that inaccurate information is passed on to receivers of that information (Bailey, 2004). However, whilst this may be the case in some situations, it is not necessarily always the case as there are often many genuine and reliable product reviews available online.
Electronic WOM allows users to remain anonymous, thus allowing them to share opinions of a brand more comfortably resulting in an increase of eWOM interactions taking place. In addition, eWOM communicators are not restricted by the receiver's social circle. It is the combination of these factors that result in the increased possibility of finding people with product expertise amongst weak tie communicators, which is advantageous in developing product judgments. However, it is this anonymity that causes credibility to become questionable (Schindler & Bickart 2005; Catterjee 2001; Lee & Youn 2009). According to Chatterjee as cited by Lee & Youn (2009) the ability for marketers to influence eWOM by "compensating consumers to review products" and even "posting their own product reviews" has made it even more difficult to determine the credibility of electronic WOM. It is therefore not uncommon for consumers to search through a variety of online platforms in the pursuit for credible product reviews.
These eWOM platforms are often perceived as either being "marketer-generated" or "non-marketer-generated" websites (Lee & Youn, 2009). This comes into question when evaluating the organisation or person who has control over the information being sought after, because of the ability to adapt this information to better suit their own interests (Lee & Youn, 2009). As a result, this perception on eWOM platforms is important because consumers may be suspicious that "consumer-generated" product reviews on "marketer-generated" have selling intentions.
. Thus, whether a website is marketer-generated or not seems to be important because consumers may suspect that consumer-generated product recommendations on marketer-generated websites have selling intents (Senecal & Nantel 2004; Xue & Phelps 2004; Schindler & Bickart 2005). It is assumed that persuasion of a consumer-generated product review is decreased to the extent that there is high possibility of a marketer's involvement that would influence the reviewer to provide a biased representation of the product's actual performance in the review.
Furthermore, findings concluded that when senders were perceived as knowledgeable, receivers were more motivated in actively seeking information (positive or negative WOM) from them, indicating a positive relation between "sender's experience" and "how actively WOM is sought" (figure 2). Likewise, strong tie strengths motivated receivers to actively seek positive WOM (empirical evidence for negative WOM was not found) information, indicating a positive relation between "tie strength" and "how actively WOM is sought" (figure 2).
The practical implication of these empirical results is that companies should pay particular attention to the consumers who are most motivated to seek advice actively (less experienced consumers who perceive more risk in the purchase) to maximize their exposure to positive communications from senders perceived as knowledgeable and with whom they have strong ties and minimize their exposure to negative communications from senders perceived as experts.
(evidence for negative WOM was not found).
The current findings indicate that, when senders are perceived as knowledgeable, the receivers are motivated to actively seek information (positive or negative WOM) from them. Thus, a significant positive relation exists between the two constructs.
Likewise, when the tie between senders and receivers is strong, the receivers are motivated to actively seek positive WOM information (empirical evidence for negative WOM was not found).
Conversely, the receiver's experience was also found to be a significant indicator of how actively WOM is sought. The more knowledgeable people are or the more experience they possess, the less intense will be the active search for information (positive or negative WOM).
Furthermore, the greater the receiver's experience, the less risk they will perceive in the purchase; and the greater the perceived risk, the more active the search for WOM information (positive or negative WOM).
"sender's strength of expression" followed by "how actively WOM is sought" had the greatest influence of all the interpersonal factors illustrated in figures 1 and 2. When "sender's strength of expression" was seen to be high and WOM (positive and negative) was being sought after, WOM had a significant impact on influencing receiver's purchase probability. Strength of expression is the activity in which the receiver seeks information from senders with product expertise. In other words, if the receiver perceives the sender's "knowledge, competence, education and experience in the product category" is seen as high. Thus, if the receiver perceives the senders know
Dellarocas et al. (2007) note how the practice of reviewing products online has greatly increased potential for empirical understanding of WOM marketing: while articulated reviews vanish shortly after they are spoken, and are therefore tremendously difficult to capture and analyse, online reviews persist long after they are posted. Breazeale (2009) states that 'digital platforms are changing our very understanding and nature of the significance of eWOM', and sums it nicely thus: 'WOM no longer vanishes instantly and it is not necessarily spontaneous. There may also be a reduced perception that the communicator is in fact non-commercial or even an actual consumer at all.' As a result, online reviews leave an easily accessible and long-lasting record of opinions; moreover, anyone is free to tap in to these records, although care should be taken to validate the source of the eWOM. Further, Zhu and Zhang (2010) indicate that online reviews are a strong reflection of overall WOM, and can therefore be used as a proxy for traditional WOM.
As a result, one might consider the role of professional product review websites versus consumer-generated product reviews.
The organisation or person who has control over this information has the ability to change
as an alternative source of credible and reliable information (e.g. cnet). In fact, even these come under question.
Specifically, the receiver will seek information more actively from a sender seen as expert: in other words, someone who has a high level of knowledge, competence, education, and experience in the product category (Netemeyer and Bearden, 1992).
By contrast, if the receiver perceives the sender's knowledge, competence, education, and experience in the product category is low, the receiver is likely to be less predisposed to seek or request information from the sender to form an intention or make a purchase decision.
In terms of "sender's experience" senders which were perceived as knowledgeable would actively increase the receiver's motivation to search positive and negative WOM opinions, whilst "tie strength" that was deemed to be strong had the same effect (positive WOM only). Consequently, these factors led to an increase in terms of "how actively WOM is sought" by the receiver resulting in a shift in their purchase probability.
Non-interpersonal factors are the "receiver's loyalty, perceived risk and experience". In figure's 2 and 3 these factors have been broken down further in order to provide greater understanding of each.
Figure 3: The impact of non-interpersonal factors on the shift in receiver's purchase probability.
In addition, in terms of the brand loyalty, (2013) found that as the receiver's brand loyalty increased the impact of positive and negative WOM would have less impact on the shift in purchase probability. Furthermore, it was found that receiver's with greater confidence in making decisions would perceive less risk in the purchase of a product thus becoming more active in seeking information of positive and negative WOM. To summarise, it is evident that each of these factors influence the shift in receiver's purchase probability, either directly or indirectly, positively and/or negatively, some to a further extent than others. It provides future research with the data and factor's necessary to
it is evident that each of these factors influence
Each of these factors governed the extent study concluded that
It concludes that positive WOM had a positive impact and negative WOM had a negative impact on consumer's brand purchasing probability respectively. These results provide a useful starting point for future research. Whilst this research assesses positive and negative WOM in an offline context man of
Attribution Theory
Whilst the above study was based on WOM in an offline context,
Whilst the above study is an offline context, the same
An illustration and explanation of strong and weak ties can be seen in appendix one.
An example of strong tie strength could be the relationship between family members or a group of friends.
whereas an example of weak tie strength is the relationship between two strangers. Therefore, it is more likely that a recommendation based on a strong tie is more likely to influence purchase decisions because of the credibility the WOM interaction is based on. Research results released by media agency 'Zentith Optimedia' agree with this statement and concluded that "Recommendations from family and friends trump all other consumer touch-points when it comes to influencing purchases" (Advertising Age, 2008).
In order to establish a suitable research problem, a thorough process of evaluating secondary research was undertaken. Consequently, gaps within relevant literature had been identified and recommendations of future research made by previous academics were taken into consideration. Utilisation of concepts and theories within the study of user-generated content and electronic word-of-mouth set the foundation of analysis for suitable research objectives.
that it is any statement
"any positive or negative statement made by potential, actual, or former customers about a product or company, which is made available to a multitude of people and institutions via the internet".
The first part of this definition takes into account positive and negative statements.
Although this definition remains adequate to the above studies, it is important to evaluate its suitability within the context of this project.
- "Any positive or negative statement made by potential, actual or former customers about a product or company".
This part of the definition takes into account positive and negative statements. The importance of this in the context of this study is that it also aims to take into account positive and negative statements in the decision to purchase an XB1 or PS4. It also recognises that not everyone who contributes in eWOM is a current customer of the companies in question. The significance of this is that not all interviewees that choose to take part in this study will actually own an XB1 or PS4.
- "Which is made available to a multitude of people and institutions via the internet".
This part of the definition recognises the online presence of WOM and the availability of it to a multitude of people and institutions. In the context of this study, its focus shall also remain on WOM interactions occurring exclusively on the internet. The definition also recognises the eWOM is not exclusively available to consumers of a brand. It is also available to the brand themselves. What this means is that brands have the ability to influence eWOM in their favour.
This raises important questions which include:
- What significance does eWOM have on organisations such as Microsoft and Sony?
- To what extent are Microsoft and Sony able to influence eWOM in their favour and how?
This shall be taken into account within the research problem in order to understand the importance of eWOM in influencing the decision to purchase either the XB1 or PS4
To what extent does positive and negative eWOM affect consumer perceptions
In particular, the influence of eWOM opinions on consumer decision-making and consumer product judgement
during the "information search" stage of the consumer decision-making process
Impact on Product Judgement
Consumer Decision Making Process
Attribution Theory
Research Problem
An investigation into the persuasiveness of electronic word-of-mouth on professional product review websites versus user-generated content based product reviews in the decision to purchase a next generation console.
Introduction
In order to establish a suitable research problem, a thorough process of evaluating secondary research was undertaken. Consequently, gaps within relevant literature had been identified and recommendations of future research made by previous academics were taken into consideration. Utilisation of concepts and theories within the study of user-generated content and electronic word-of-mouth set the foundation of analysis for suitable research objectives.
Literature Review
Electronic Word of Mouth
Many acknowledgeable researchers within the study of word-of-mouth (WOM) and electronic word-of-mouth (eWOM) marketing have recognised the importance of its contribution within consumer behaviour. An example of this is the
influence WOM and eWOM has on the consumer's decision to purchase during the decision making process (as explained in figure one). It is not uncommon for consumers to search online for information regarding a brand or product during the "information search" stage of the decision-making process,
The significance of relationship strength is evident within the results of a study conducted by Keller and Fay which indicated that 58% associated "high credibility" to WOM interactions, of which 50% were "very likely to purchase" as a result.
This suggests that the ability for WOM to have an influence on purchase probability is somewhat dependent upon the credibility of the WOM conversation taking place. The factors to what makes
Furthermore, if WOM is to be seen as credible by the consumer, one would consider relationship strength to be a factor.
When comparing electronic WOM against its more traditional counterpart, several unique distinctions can be made in order to distinguish the differences between the two. The first distinction that can be made is that users
to interact in eWOM with little to no prior relationships with each other
Dellarocas 2003; Goldsmith & Horowitz 2006; Sen & Lerman 2007; Lee & Youn 2009. In addition, consumers are able to remain anonymous, thus allowing them to share opinions of a brand more comfortably and as a result increases the amount of eWOM taking place (Chatterjee, 2001). Subsequently, consumers are more likely to find other consumers with product expertise within the eWOM platforms previously mentioned.
Although this may be the case, it is this anonymous nature that has made it difficult for consumers to determine the quality and legibility of eWOM. According to Chatterjee (2001) as cited by Lee & Youn (2009) the ability for marketers to influence eWOM by "compensating consumers to review products" and even "posting their own product reviews" has made it even more difficult to determine the quality of online posts. Because of this, it is not uncommon for consumers to look through a variety of eWOM platforms in the search for credible information about a product.
Whilst previous studies have explored specific platform of which eWOM
Figures
Research Problem
An investigation into the persuasiveness of electronic word-of-mouth on professional product review websites versus user-generated content based product reviews in the decision to purchase a next generation console.
Electronic Word-of-Mouth
Today, social media has helped to modernise word-of-mouth communications into something relatively new to marketer's known as electronic word-of-mouth (eWOM).
One of the earliest definitions for word-of-mouth (WOM) is that of Arndt (1967) as cited by Lee and Youn (2009) which defines the term as any form of "interpersonal communication about products and services". This definition has become one of the most accepted amongst writers of word-of-mouth however, although this definition remains true it is extremely basic and does not take into account two things. Firstly it does not take into account negative and positive WOM which shall be discussed later on and the second of which is how WOM has developed ever since.
Many acknowledgeable researchers within the study of word-of-mouth (WOM) and electronic word-of-mouth (eWOM) marketing have recognised the importance of its contribution within consumer behaviour. An example of this is the influence WOM has on the consumer's decision to purchase during the decision making process (fig.1).
The significance of this becomes apparent throughout the following critical analysis of research
"Recommendations from family and friends trump all other consumer touch-points when it comes to influencing purchases" (Advertising Age, 2008)
The definition of "interpersonal" in this context is the relationship between people
In fact, most researchers have been drawn to similar conclusions (add references).
Researchers have almost always been drawn towards similar conclusions that WOM plays a vital role influence the consumer in terms of brand image, brand engagement and purchasing decisions.
Another example of the popularity eWOM is its ability to influence consumer purchasing behaviour) during the decision-making process (fig.1) (Masterson & Pickton, 2010).
Numerous studies have shown WOM to be "The most significant consumer touch-point when deciding about products, brands and services" (Keller & Libai, 2009). This statement is strengthened by. If this remains the case, how persuasive is electronic word-of-mouth in influencing the decision to purchase?
Before being able to understand this and many other thought-provoking questions research within the study shall offer, it is important to be able to distinguish the different characteristics of WOM and eWOM in order to understand the significance of eWOM in the context of this study.
The first difference between the two terms is that eWOM allows consumers to interact with each other online no matter the strength of their relationships between each other, whereas its traditional counterpart takes place offline and is more dependent on people knowing each other prior to the interaction occurring (Lee & Youn, 2009). The significance of relationship strength between consumers, otherwise known as "tie strength" on the credibility of WOM interactions is evident. If tie strength is strong
with the advent of the internet increasing this importance. Examples of WOM taking place online include product review websites (e.g. cnet), retailers' websites (e.g. amazon), brands' websites (e.g. community.eu.playstation), personal blogs, message boards and social networking sites (e.g. YouTube, Twitter).
As a result, these forms of "interpersonal communications" are no longer being overlooked by successful organisations as an effective way of creating customer engagement.
What I provided (after 24 email exchanges):
Research Problem
An investigation into the influence of electronic word-of-mouth on professional product review websites versus user-generated content based product reviews, in the decision to purchase a next-generation game console.
Literature Review
Introduction
The significance of the following research is critical in understanding relevant key terms and theory from which a suitable research problem shall be defined. Furthermore, it will provide the necessary foundations needed in order to set appropriate research objectives.
Traditional and Electronic Word of Mouth
Many knowledgeable researchers within the study of word-of-mouth (WOM) and electronic word-of-mouth (eWOM) marketing have recognised the importance of its contribution within consumer behaviour. Both traditional offline WOM and eWOM also assume various forms. Despite the fact that the same motivations for traditional WOM can be reasonably expected to hold true for eWOM as well, it is important to distinguish the fundamental differences that exist between them (Choi & Scott, 2013). In sum, in contrast to traditional word of mouth, eWOM is comprised of online content concerning a product or service that is posted by an interested and motivated individual (Sharma & Morales-Arroyo, 2011).
Whilst the majority of research in the past has focused on WOM in an offline context, current trends have caused a shift in focus to WOM occurring online. Keller and Berry (2006) noted that 90 per cent of WOM communication takes place offline, however a more recent study written by Prendergast et al., (2010) makes reference to this and states that as consumers are becoming more reliant on the internet, the role of eWOM continues to grow. Likewise, Bae and Byong-Do (2013) emphasise that word-of-mouth advertising has long been recognised as a valuable marketing tool, and the emergence of eWOM represents a game-changing opportunity for marketers seeking superior solutions to conventional mass-media marketing initiatives that have become less effective in recent years.
An agreed upon definition of electronic word-of-mouth (eWOM) cited by various authors (Chu and Kim, 2011; Prendergast et al., 2010; Thorson and Rodgers, 2006) originates from the work of Hennig-Thurau et al., (2004) which has been evaluated in order to understand its suitability within the context of this literature. "Any positive or negative statement made by potential, actual, or former customers about a product or company which is made available to a multitude of people and institutions via the internet".
Although this definition remains adequate to the above studies, it is important to evaluate its suitability within the context of this project: With respect to: "Any positive or negative statement made by potential, actual or former customers about a product or company," this part of the definition takes into account positive and negative statements. The importance of this in the context of this study is that it also aims to take into account positive and negative statements in the decision to purchase an XB1 or PS4. It also recognises that not everyone who contributes in eWOM is a current customer of the companies in question. The significance of this is that not all interviewees that choose to take part in this study will actually own an XB1 or PS4. With respect to: "Which is made available to a multitude of people and institutions via the internet," this part of the definition recognises the online presence of WOM and the availability of it to a multitude of people and institutions. In the context of this study, its focus shall also remain on WOM interactions occurring exclusively on the internet. The definition also recognises the eWOM is not exclusively available to consumers of a brand. It is also available to the brand themselves. What this means is that brands have the ability to influence eWOM in their favour.
This raises important questions which include:
- What significance does eWOM have on organisations such as Microsoft and Sony?
- To what extent are Microsoft and Sony able to influence eWOM in their favour and how?
This shall be taken into account within the research problem in order to understand the importance of eWOM in influencing the decision to purchase either the XB1 or PS4. In sum, to what extent does positive and negative eWOM affect consumer perceptions?
Respective Effects of Positive and Negative Word-of-Mouth
Currently, research into the influence of positive and negative word-of-mouth (WOM) on consumer purchase probability, online or offline provides this literature with significant findings. Generally, it has been assumed that positive (or negative) WOM has a positive (or negative) influence on an individual or "receiver" searching for an opinion of a product (East et al., 2008). However, Fitzsimons and Lehmann (2004) observed the opposite and found that in some cases, people would react against negative comments resulting in further commitment to that brand. This adverse reaction occurred when
- people are directed to do things they do not wish to do,
- the WOM receiver disagrees with the values of the advisor, or
- when prior commitment of a brand prevents the consumer from fully accepting useful negative information about a brand.
A recent study evaluated the influence of positive and negative WOM on purchase probability. It considered various "interpersonal" and "non-interpersonal" factors and concluded the extent to which each influenced the receiver's purchase probability, as illustrated in figure 1.
Figure 1: Factors associated with impact of positive and negative WOM on shift in receiver's purchase probability.
These interpersonal factors are "tie strength, sender's experience, sender's strength of expression and how actively WOM is sought." Figure 2 breaks down these factors into further descriptors in order to provide a greater understanding of each.
Figure 2: Interpersonal factors measuring the impact on the shift in receiver's purchase probability.
The influence of tie strength, which is essentially the strength of the relationship between the sender and receiver, is of particular interest. In strong tie relationships, the influence of WOM (positive and negative) on purchase probability would increase whereas weak tie strengths caused the opposite to occur. Whilst this may be the case for WOM (positive and negative) in an offline environment, could the same conclusion be made for WOM (positive and negative) in an online environment? Under the assumption that it does, one could argue that (positive and negative) eWOM would have a decreased influence on purchase probability. This assumption would be based on the fact that "tie strength" between senders and receivers in eWOM are usually formed of multiple weak ties. This is because it is possible for anyone on the internet to submit information (positive and negative eWOM) about a product or brand on a variety of online platform's.
Consequently, determining the quality and credibility of eWOM has often been difficult for consumers. This is because the person submitting eWOM in the form of a review or opinion does not feel much responsibility for the consequences involved, as it will often be read by complete strangers. As a result, there is an increased possibility that inaccurate information is passed on to receivers of that information (Bailey, 2004). However, whilst this may be the case in some situations, it is not necessarily always the case as there are often many genuine and reliable product reviews available online.
Electronic WOM allows users to remain anonymous, thus allowing them to share opinions of a brand more comfortably resulting in an increase of eWOM interactions taking place (Chatterjee, 2001). In addition, eWOM communicators are not restricted by the receiver's social circle. It is the combination of these factors that result in the increased possibility of finding people with product expertise amongst weak tie communicators, which is advantageous in developing product judgments (Dunhan et al., 1997 as cited by Lee & Youn, 2009). However, it is this anonymity that causes credibility to become questionable. According to Chatterjee (2001) as cited by Lee & Youn (2009) the ability for marketers to influence eWOM by "compensating consumers to review products" and even "posting their own product reviews" has made it even more difficult to determine the credibility of electronic WOM. It is therefore not uncommon for consumers to search through a variety of online platforms in the pursuit for credible product reviews.
These eWOM platforms are often perceived as either being "marketer-generated" or "non-marketer-generated" websites (Lee & Youn, 2009). This comes into question when evaluating the organisation or person who has control over the information being sought after, because of the ability to adapt this information to better suit their own interests (Lee & Youn, 2009). As a result, this perception on eWOM platforms is important because consumers may be suspicious that "consumer-generated" product reviews on "marketer-generated" have selling intentions.
Thus, whether a website is marketer-generated or not seems to be important because consumers may suspect that consumer-generated product recommendations on marketer-generated websites have selling intents (Senecal & Nantel 2004; Xue & Phelps 2004; Schindler & Bickart 2005). It is assumed that persuasion of a consumer-generated product review is decreased to the extent that there is high possibility of a marketer's involvement that would influence the reviewer to provide a biased representation of the product's actual performance in the review.
Furthermore, findings concluded that when senders were perceived as knowledgeable, receivers were more motivated in actively seeking information (positive or negative WOM) from them, indicating a positive relation between "sender's experience" and "how actively WOM is sought." An examination of the respective effects of consumer-generated versus marketer-generated content on the purchase decision is provided in the sections that follow. Likewise, strong tie strengths motivated receivers to actively seek positive WOM (empirical evidence for negative WOM was not found) information, indicating a positive relation between "tie strength" and "how actively WOM is sought."
The practical implication of these empirical results is that companies should pay particular attention to the consumers who are most motivated to seek advice actively (less experienced consumers who perceive more risk in the purchase) to maximize their exposure to positive communications from senders perceived as knowledgeable and with whom they have strong ties and minimize their exposure to negative communications from senders perceived as experts (evidence for negative WOM was not found).
The current findings indicate that, when senders are perceived as knowledgeable, the receivers are motivated to actively seek information (positive or negative WOM) from them. Thus, a significant positive relation exists between the two constructs. Likewise, when the tie between senders and receivers is strong, the receivers are motivated to actively seek positive WOM information (empirical evidence for negative WOM was not found).
Conversely, the receiver's experience was also found to be a significant indicator of how actively WOM is sought. The more knowledgeable people are or the more experience they possess, the less intense will be the active search for information (positive or negative WOM). Furthermore, the greater the receiver's experience, the less risk they will perceive in the purchase; and the greater the perceived risk, the more active the search for WOM information (positive or negative WOM).
In sum, "sender's strength of expression" followed by "how actively WOM is sought" had the greatest influence of all the interpersonal factors related to purchase decisions. When "sender's strength of expression" was seen to be high and WOM (positive and negative) was being sought after, WOM had a significant impact on influencing receiver's purchase probability. Strength of expression is the activity in which the receiver seeks information from senders with product expertise. In other words, if the receiver perceives the sender's "knowledge, competence, education and experience in the product category" is seen as high.
Dellarocas et al. (2007) note how the practice of reviewing products online has greatly increased potential for empirical understanding of WOM marketing: while articulated reviews vanish shortly after they are spoken, and are therefore tremendously difficult to capture and analyse, online reviews persist long after they are posted. Breazeale (2009) states that 'digital platforms are changing our very understanding and nature of the significance of eWOM', and sums it nicely thus: 'WOM no longer vanishes instantly and it is not necessarily spontaneous. There may also be a reduced perception that the communicator is in fact non-commercial or even an actual consumer at all.' As a result, online reviews leave an easily accessible and long-lasting record of opinions; moreover, anyone is free to tap in to these records, although care should be taken to validate the source of the eWOM. Further, Zhu and Zhang (2010) indicate that online reviews are a strong reflection of overall WOM, and can therefore be used as a proxy for traditional WOM.
In terms of "sender's experience" senders which were perceived as knowledgeable would actively increase the receiver's motivation to search positive and negative WOM opinions, whilst "tie strength" that was deemed to be strong had the same effect (positive WOM only). Consequently, these factors led to an increase in terms of "how actively WOM is sought" by the receiver resulting in a shift in their purchase probability. Non-interpersonal factors are the "receiver's loyalty, perceived risk and experience". In figure 3 below, these factors have been broken down further in order to provide greater understanding of each.
In addition, in terms of the brand loyalty, found that as the receiver's brand loyalty increased the impact of positive and negative WOM would have less impact on the shift in purchase probability. Furthermore, it was found that receiver's with greater confidence in making decisions would perceive less risk in the purchase of a product thus becoming more active in seeking information of positive and negative WOM. To summarise, it is evident that each of these factors influence the shift in receiver's purchase probability, either directly or indirectly, positively and/or negatively, some to a further extent than others. It provides future research with the data and factor's necessary.
The study concluded that positive WOM had a positive impact and negative WOM had a negative impact on consumer's brand purchasing probability respectively. These results provide a useful starting point for future research.
Consumer-Generated Content
The findings that emerged from a study of consumer-generated content in eWOM settings by Choi and Scott (2013) indicate that the intensity of use of social media networks is positively linked with greater trust and identification, both of which have a corresponding positive impact on the perception of the quality of eWOM consumer-generated content. Furthermore, Choi and Scott found that the quality of the consumer-generated content had a positive impact on the social media network consumers' knowledge sharing practices and that females felt stronger about the quality of consumer-generated content. In addition, the extent to which female consumers feel they belong to a social network or community of interest has a direct influence on how well they trust consumer-generated eWOM content. Consumer-generated eWOM has also been shown to improve trust levels among e-shoppers by sharing both good and bad reviews and studies have confirmed that online consumer behaviour and purchase decision are more influenced by trust than by product price (Sharma & Morales-Arroyo, 2011).
There are some constraints to marketers' reliance strictly on eWOM content, though, and doing so may negatively affect the consumers' purchase decision. For instance, Sharma and Morales-Arroyo (2011) report that the research to date indicates that in contrast to marketer-generated content, consumer-generated content describes consumer experiences with the product or service without providing any relevant technical information, thereby diminishing its credibility for the purposes of the purchase decision. Therefore, while consumer-generated eWOM content may be viewed as trustworthy and reliable, it may fail to provide e-shoppers with all of the information they need to make an informed purchase decision.
Marketer-Generated Content
Contrasted with traditional sources of consumer information such as commercial advertisements, eWOM is distinguished by two factors that have implications for the manner in which content is generated:
1. eWOM provides more credibility to consumers than other conventional sources of information due to the stronger influence it has on the purchasing decisions because it is perceived as being a legitimate and reliable source of feedback from other consumers that have been confronted with purchase decisions in comparable situations. In fact, eWOM has been determined to be particularly persuasive in situations where consumers have little information concerning newly released products.
2. In contrast to conventional commercial advertisements that are transmitted to customers via mass-media, eWOM information is user-instigated, typically through social media networks that are easily accessible.
These differences mean that consumers must trust the eWOM content and have easy access to it in order for it to have an effect on purchase decision making. Although it is conceivable that some marketers generate their own eWOM content for their Web sites (for instance, a social media network team member Tweeting a glowing review of a product posing as a consumer), the growing trend is to include marketer-generated website content that is augmented with authentic consumer-generated eWOM content in an online forum or related communities of interest that is known to be trustworthy. This combination of marketer-generated content together with consumer-generated eWOM content provides a synergetic positive impact on the purchase decisions of many e-shoppers today (Bae & Byong-Do, 2013). Indeed, the research to date suggests that the marketer- and consumer-generated eWOM content represents the optimal marketing approach because it provides consumers with feedback from like-minded consumers as well as information for the vendor in ways that facilitate the purchase decision-making process. As Sharmand Morales-Arroyo (2011) point out, irrespective of the amount of consumer-generated eWOM content that is included in a website's offerings, purchase decisions are primarily influenced by the totality of marketer-generated content and the relevant product or service information provided by the marketer.
It must be also noted, however, that it is vitally important for e-marketers to ensure their responses to consumer-generated eWOM content are timely, appropriate, cordial and professional, and they must avoid resorting to insults and derogatory comments even in the face of highly negative content at all times (Sharma & Morales-Arroyo, 2011). Responsive feedback by e-marketers to consumers' eWOM reviews, though, can demonstrate good faith and concern for consumers on the part of the e-marketer.
Chapter Summary
In summary, in order to establish a suitable research problem, a thorough process of evaluating secondary research was undertaken. There is a consensus among eWOM researchers that more studies of this type are needed because there has been a paucity of timely and relevant research in this area, especially in view of the rapid proliferation of social media networks and their importance for e-marketers today. Consequently, gaps within relevant literature had been identified and recommendations of future research made by previous academics were taken into consideration. Utilisation of concepts and theories within the study of user-generated content and electronic word-of-mouth set the foundation of analysis for suitable research objectives.
Product Review Websites
What I was provided with:
Research Problem
An investigation into the influence of electronic word-of-mouth on professional product review websites versus user-generated content based product reviews, in the decision to purchase a next generation console.Literature Review
Introduction
The significance of the following research is critical in understanding relevant key terms and theory from which a suitable research problem shall be defined. Furthermore, it will provide the necessary foundations needed in order to set appropriate research objectives.
Electronic Word of Mouth
Many acknowledgeable researchers within the study of word-of-mouth (WOM) and electronic word-of-mouth (eWOM) marketing have recognised the importance of its contribution within consumer behaviour. Whilst the majority of research in the past has focused on WOM in an offline context, current trends have caused a shift in focus to WOM occurring online. Keller and Berry (2006) noted that 90 per cent of WOM communication takes place offline, however a more recent study written by Prendergast et al., (2010) makes reference to this and states that as consumers are becoming more reliant on the internet, the role of eWOM continues to grow. Furthermore, the rapid evolution of social media has taken eWOM to the next level. As a result virtual communities have advanced to the point where consumers are able to share opinions amongst each other at the click of a button (e.g. YouTube), prompting an increase in brand related discussions. Additional examples of eWOM platforms include product review websites, retailer's websites (e.g. amazon), brand's websites (e.g. community.eu.playstation.com), personal blogs and forums (Bickart & Schindler 2001; Khammash et al., 2006 Lee and Youn, 2009). It is no wonder then that eWOM has become one of the most significant "consumer touch-points" in regards to deciding about products, brands and services (Keller & Libai, 2009). With this being the case, the influence of eWOM on consumer decision making has gathered interest from researchers and organisations that can no longer ignore its significance.
An agreed upon definition of electronic word-of-mouth (eWOM) cited by various authors (Chu and Kim, 2011; Prendergast et al., 2010; Thorson and Rodgers, 2006) originates from the work of Hennig-Thurau et al., (2004) which has been evaluated in order to understand it's suitability within the context of this literature.
"Any positive or negative statement made by potential, actual, or former customers about a product or company which is made available to a multitude of people and institutions via the internet".
Currently, research into the influence of positive and negative word-of-mouth (WOM) on consumer purchase probability, online or offline provides this literature with significant findings. Generally, it has been assumed that positive (or negative) WOM has a positive (or negative) influence on an individual or "receiver" searching for an opinion of a product. However, Fitzsimons and Lehmann (2004) observed the opposite and found that in some cases, people would react against negative comments resulting in further commitment to that brand. This adverse reaction occurred when:
- people are directed to do things they do not wish to do,
- the WOM receiver disagrees with the values of the advisor, or
- when prior commitment of a brand prevents the consumer from fully accepting useful negative information about a brand.
A recent study evaluated the influence of positive and negative WOM on purchase probability. It considered various "interpersonal" and "non-interpersonal" factors and concluded the extent to which each influenced the receiver's purchase probability, as illustrated in figure 1.
Figure 1: Factors associated with impact of positive and negative WOM on shift in receiver's purchase probability.
These interpersonal factors are "tie strength, sender's experience, sender's strength of expression and how actively WOM is sought". Figure 2 breaks down these factors into further descriptors in order to provide a greater understanding of each.
Figure 2: Interpersonal factors measuring the impact on the shift in receiver's purchase probability.
The influence of tie strength, which is essentially the strength of the relationship between the sender and receiver, is of particular interest. In strong tie relationships, the influence of WOM (positive and negative) on purchase probability would increase whereas weak tie strengths caused the opposite to occur. Whilst this may be the case for WOM (positive and negative) in an offline environment, could the same conclusion be made for WOM (positive and negative) in an online environment? Under the assumption that it does, one could argue that (positive and negative) eWOM would have a decreased influence on purchase probability. This assumption would be based on the fact that "tie strength" between senders and receivers in eWOM are usually formed of multiple weak ties. This is because it is possible for anyone on the internet to submit information (positive and negative eWOM) about a product or brand on a variety of online platform's. Consequently, determining the quality and credibility of eWOM has often been difficult for consumers. This is because the person submitting eWOM in the form of a review or opinion does not feel much responsibility for the consequences involved, as it will often be read by complete strangers (Kadi, 1995; Granitz & Ward, 1996 as cited by Lee & Youn, 2009). As a result, there is an increased possibility that inaccurate information is passed on to receivers of that information (Bailey, 2004). However, whilst this may be the case in some situations, it is not necessarily always the case as there are often many genuine and reliable product reviews available online.
Electronic WOM allows users to remain anonymous, thus allowing them to share opinions of a brand more comfortably resulting in an increase of eWOM interactions taking place. In addition, eWOM communicators are not restricted by the receiver's social circle. It is the combination of these factors that result in the increased possibility of finding people with product expertise amongst weak tie communicators, which is advantageous in developing product judgments. However, it is this anonymity that causes credibility to become questionable (Schindler & Bickart 2005; Catterjee 2001; Lee & Youn 2009). According to Chatterjee as cited by Lee & Youn (2009) the ability for marketers to influence eWOM by "compensating consumers to review products" and even "posting their own product reviews" has made it even more difficult to determine the credibility of electronic WOM. It is therefore not uncommon for consumers to search through a variety of online platforms in the pursuit for credible product reviews.
These eWOM platforms are often perceived as either being "marketer-generated" or "non-marketer-generated" websites (Lee & Youn, 2009). This comes into question when evaluating the organisation or person who has control over the information being sought after, because of the ability to adapt this information to better suit their own interests (Lee & Youn, 2009). As a result, this perception on eWOM platforms is important because consumers may be suspicious that "consumer-generated" product reviews on "marketer-generated" have selling intentions.
. Thus, whether a website is marketer-generated or not seems to be important because consumers may suspect that consumer-generated product recommendations on marketer-generated websites have selling intents (Senecal & Nantel 2004; Xue & Phelps 2004; Schindler & Bickart 2005). It is assumed that persuasion of a consumer-generated product review is decreased to the extent that there is high possibility of a marketer's involvement that would influence the reviewer to provide a biased representation of the product's actual performance in the review.
Furthermore, findings concluded that when senders were perceived as knowledgeable, receivers were more motivated in actively seeking information (positive or negative WOM) from them, indicating a positive relation between "sender's experience" and "how actively WOM is sought" (figure 2). Likewise, strong tie strengths motivated receivers to actively seek positive WOM (empirical evidence for negative WOM was not found) information, indicating a positive relation between "tie strength" and "how actively WOM is sought" (figure 2).
The practical implication of these empirical results is that companies should pay particular attention to the consumers who are most motivated to seek advice actively (less experienced consumers who perceive more risk in the purchase) to maximize their exposure to positive communications from senders perceived as knowledgeable and with whom they have strong ties and minimize their exposure to negative communications from senders perceived as experts.
(evidence for negative WOM was not found).
The current findings indicate that, when senders are perceived as knowledgeable, the receivers are motivated to actively seek information (positive or negative WOM) from them. Thus, a significant positive relation exists between the two constructs.
Likewise, when the tie between senders and receivers is strong, the receivers are motivated to actively seek positive WOM information (empirical evidence for negative WOM was not found).
Conversely, the receiver's experience was also found to be a significant indicator of how actively WOM is sought. The more knowledgeable people are or the more experience they possess, the less intense will be the active search for information (positive or negative WOM).
Furthermore, the greater the receiver's experience, the less risk they will perceive in the purchase; and the greater the perceived risk, the more active the search for WOM information (positive or negative WOM).
"sender's strength of expression" followed by "how actively WOM is sought" had the greatest influence of all the interpersonal factors illustrated in figures 1 and 2. When "sender's strength of expression" was seen to be high and WOM (positive and negative) was being sought after, WOM had a significant impact on influencing receiver's purchase probability. Strength of expression is the activity in which the receiver seeks information from senders with product expertise. In other words, if the receiver perceives the sender's "knowledge, competence, education and experience in the product category" is seen as high. Thus, if the receiver perceives the senders know
Dellarocas et al. (2007) note how the practice of reviewing products online has greatly increased potential for empirical understanding of WOM marketing: while articulated reviews vanish shortly after they are spoken, and are therefore tremendously difficult to capture and analyse, online reviews persist long after they are posted. Breazeale (2009) states that 'digital platforms are changing our very understanding and nature of the significance of eWOM', and sums it nicely thus: 'WOM no longer vanishes instantly and it is not necessarily spontaneous. There may also be a reduced perception that the communicator is in fact non-commercial or even an actual consumer at all.' As a result, online reviews leave an easily accessible and long-lasting record of opinions; moreover, anyone is free to tap in to these records, although care should be taken to validate the source of the eWOM. Further, Zhu and Zhang (2010) indicate that online reviews are a strong reflection of overall WOM, and can therefore be used as a proxy for traditional WOM.
As a result, one might consider the role of professional product review websites versus consumer-generated product reviews.
The organisation or person who has control over this information has the ability to change
as an alternative source of credible and reliable information (e.g. cnet). In fact, even these come under question.
Specifically, the receiver will seek information more actively from a sender seen as expert: in other words, someone who has a high level of knowledge, competence, education, and experience in the product category (Netemeyer and Bearden, 1992).
By contrast, if the receiver perceives the sender's knowledge, competence, education, and experience in the product category is low, the receiver is likely to be less predisposed to seek or request information from the sender to form an intention or make a purchase decision.
In terms of "sender's experience" senders which were perceived as knowledgeable would actively increase the receiver's motivation to search positive and negative WOM opinions, whilst "tie strength" that was deemed to be strong had the same effect (positive WOM only). Consequently, these factors led to an increase in terms of "how actively WOM is sought" by the receiver resulting in a shift in their purchase probability.
Non-interpersonal factors are the "receiver's loyalty, perceived risk and experience". In figure's 2 and 3 these factors have been broken down further in order to provide greater understanding of each.
Figure 3: The impact of non-interpersonal factors on the shift in receiver's purchase probability.
In addition, in terms of the brand loyalty, (2013) found that as the receiver's brand loyalty increased the impact of positive and negative WOM would have less impact on the shift in purchase probability. Furthermore, it was found that receiver's with greater confidence in making decisions would perceive less risk in the purchase of a product thus becoming more active in seeking information of positive and negative WOM. To summarise, it is evident that each of these factors influence the shift in receiver's purchase probability, either directly or indirectly, positively and/or negatively, some to a further extent than others. It provides future research with the data and factor's necessary to
it is evident that each of these factors influence
Each of these factors governed the extent study concluded that
It concludes that positive WOM had a positive impact and negative WOM had a negative impact on consumer's brand purchasing probability respectively. These results provide a useful starting point for future research. Whilst this research assesses positive and negative WOM in an offline context man of
Attribution Theory
Whilst the above study was based on WOM in an offline context,
Whilst the above study is an offline context, the same
An illustration and explanation of strong and weak ties can be seen in appendix one.
An example of strong tie strength could be the relationship between family members or a group of friends.
whereas an example of weak tie strength is the relationship between two strangers. Therefore, it is more likely that a recommendation based on a strong tie is more likely to influence purchase decisions because of the credibility the WOM interaction is based on. Research results released by media agency 'Zentith Optimedia' agree with this statement and concluded that "Recommendations from family and friends trump all other consumer touch-points when it comes to influencing purchases" (Advertising Age, 2008).
In order to establish a suitable research problem, a thorough process of evaluating secondary research was undertaken. Consequently, gaps within relevant literature had been identified and recommendations of future research made by previous academics were taken into consideration. Utilisation of concepts and theories within the study of user-generated content and electronic word-of-mouth set the foundation of analysis for suitable research objectives.
that it is any statement
"any positive or negative statement made by potential, actual, or former customers about a product or company, which is made available to a multitude of people and institutions via the internet".
The first part of this definition takes into account positive and negative statements.
Although this definition remains adequate to the above studies, it is important to evaluate its suitability within the context of this project.
- "Any positive or negative statement made by potential, actual or former customers about a product or company".
This part of the definition takes into account positive and negative statements. The importance of this in the context of this study is that it also aims to take into account positive and negative statements in the decision to purchase an XB1 or PS4. It also recognises that not everyone who contributes in eWOM is a current customer of the companies in question. The significance of this is that not all interviewees that choose to take part in this study will actually own an XB1 or PS4.
- "Which is made available to a multitude of people and institutions via the internet".
This part of the definition recognises the online presence of WOM and the availability of it to a multitude of people and institutions. In the context of this study, its focus shall also remain on WOM interactions occurring exclusively on the internet. The definition also recognises the eWOM is not exclusively available to consumers of a brand. It is also available to the brand themselves. What this means is that brands have the ability to influence eWOM in their favour.
This raises important questions which include:
- What significance does eWOM have on organisations such as Microsoft and Sony?
- To what extent are Microsoft and Sony able to influence eWOM in their favour and how?
This shall be taken into account within the research problem in order to understand the importance of eWOM in influencing the decision to purchase either the XB1 or PS4
To what extent does positive and negative eWOM affect consumer perceptions
In particular, the influence of eWOM opinions on consumer decision-making and consumer product judgement
during the "information search" stage of the consumer decision-making process
Impact on Product Judgement
Consumer Decision Making Process
Attribution Theory
Research Problem
An investigation into the persuasiveness of electronic word-of-mouth on professional product review websites versus user-generated content based product reviews in the decision to purchase a next generation console.
Introduction
In order to establish a suitable research problem, a thorough process of evaluating secondary research was undertaken. Consequently, gaps within relevant literature had been identified and recommendations of future research made by previous academics were taken into consideration. Utilisation of concepts and theories within the study of user-generated content and electronic word-of-mouth set the foundation of analysis for suitable research objectives.
Literature Review
Electronic Word of Mouth
Many acknowledgeable researchers within the study of word-of-mouth (WOM) and electronic word-of-mouth (eWOM) marketing have recognised the importance of its contribution within consumer behaviour. An example of this is the
influence WOM and eWOM has on the consumer's decision to purchase during the decision making process (as explained in figure one). It is not uncommon for consumers to search online for information regarding a brand or product during the "information search" stage of the decision-making process,
The significance of relationship strength is evident within the results of a study conducted by Keller and Fay which indicated that 58% associated "high credibility" to WOM interactions, of which 50% were "very likely to purchase" as a result.
This suggests that the ability for WOM to have an influence on purchase probability is somewhat dependent upon the credibility of the WOM conversation taking place. The factors to what makes
Furthermore, if WOM is to be seen as credible by the consumer, one would consider relationship strength to be a factor.
When comparing electronic WOM against its more traditional counterpart, several unique distinctions can be made in order to distinguish the differences between the two. The first distinction that can be made is that users
to interact in eWOM with little to no prior relationships with each other
Dellarocas 2003; Goldsmith & Horowitz 2006; Sen & Lerman 2007; Lee & Youn 2009. In addition, consumers are able to remain anonymous, thus allowing them to share opinions of a brand more comfortably and as a result increases the amount of eWOM taking place (Chatterjee, 2001). Subsequently, consumers are more likely to find other consumers with product expertise within the eWOM platforms previously mentioned.
Although this may be the case, it is this anonymous nature that has made it difficult for consumers to determine the quality and legibility of eWOM. According to Chatterjee (2001) as cited by Lee & Youn (2009) the ability for marketers to influence eWOM by "compensating consumers to review products" and even "posting their own product reviews" has made it even more difficult to determine the quality of online posts. Because of this, it is not uncommon for consumers to look through a variety of eWOM platforms in the search for credible information about a product.
Whilst previous studies have explored specific platform of which eWOM
Figures
Research Problem
An investigation into the persuasiveness of electronic word-of-mouth on professional product review websites versus user-generated content based product reviews in the decision to purchase a next generation console.
Electronic Word-of-Mouth
Today, social media has helped to modernise word-of-mouth communications into something relatively new to marketer's known as electronic word-of-mouth (eWOM).
One of the earliest definitions for word-of-mouth (WOM) is that of Arndt (1967) as cited by Lee and Youn (2009) which defines the term as any form of "interpersonal communication about products and services". This definition has become one of the most accepted amongst writers of word-of-mouth however, although this definition remains true it is extremely basic and does not take into account two things. Firstly it does not take into account negative and positive WOM which shall be discussed later on and the second of which is how WOM has developed ever since.
Many acknowledgeable researchers within the study of word-of-mouth (WOM) and electronic word-of-mouth (eWOM) marketing have recognised the importance of its contribution within consumer behaviour. An example of this is the influence WOM has on the consumer's decision to purchase during the decision making process (fig.1).
The significance of this becomes apparent throughout the following critical analysis of research
"Recommendations from family and friends trump all other consumer touch-points when it comes to influencing purchases" (Advertising Age, 2008)
The definition of "interpersonal" in this context is the relationship between people
In fact, most researchers have been drawn to similar conclusions (add references).
Researchers have almost always been drawn towards similar conclusions that WOM plays a vital role influence the consumer in terms of brand image, brand engagement and purchasing decisions.
Another example of the popularity eWOM is its ability to influence consumer purchasing behaviour) during the decision-making process (fig.1) (Masterson & Pickton, 2010).
Numerous studies have shown WOM to be "The most significant consumer touch-point when deciding about products, brands and services" (Keller & Libai, 2009). This statement is strengthened by. If this remains the case, how persuasive is electronic word-of-mouth in influencing the decision to purchase?
Before being able to understand this and many other thought-provoking questions research within the study shall offer, it is important to be able to distinguish the different characteristics of WOM and eWOM in order to understand the significance of eWOM in the context of this study.
The first difference between the two terms is that eWOM allows consumers to interact with each other online no matter the strength of their relationships between each other, whereas its traditional counterpart takes place offline and is more dependent on people knowing each other prior to the interaction occurring (Lee & Youn, 2009). The significance of relationship strength between consumers, otherwise known as "tie strength" on the credibility of WOM interactions is evident. If tie strength is strong
with the advent of the internet increasing this importance. Examples of WOM taking place online include product review websites (e.g. cnet), retailers' websites (e.g. amazon), brands' websites (e.g. community.eu.playstation), personal blogs, message boards and social networking sites (e.g. YouTube, Twitter).
As a result, these forms of "interpersonal communications" are no longer being overlooked by successful organisations as an effective way of creating customer engagement.
What I provided (after 24 email exchanges):
Research Problem
An investigation into the influence of electronic word-of-mouth on professional product review websites versus user-generated content based product reviews, in the decision to purchase a next-generation game console.
Literature Review
Introduction
The significance of the following research is critical in understanding relevant key terms and theory from which a suitable research problem shall be defined. Furthermore, it will provide the necessary foundations needed in order to set appropriate research objectives.
Traditional and Electronic Word of Mouth
Many knowledgeable researchers within the study of word-of-mouth (WOM) and electronic word-of-mouth (eWOM) marketing have recognised the importance of its contribution within consumer behaviour. Both traditional offline WOM and eWOM also assume various forms. Despite the fact that the same motivations for traditional WOM can be reasonably expected to hold true for eWOM as well, it is important to distinguish the fundamental differences that exist between them (Choi & Scott, 2013). In sum, in contrast to traditional word of mouth, eWOM is comprised of online content concerning a product or service that is posted by an interested and motivated individual (Sharma & Morales-Arroyo, 2011).
Whilst the majority of research in the past has focused on WOM in an offline context, current trends have caused a shift in focus to WOM occurring online. Keller and Berry (2006) noted that 90 per cent of WOM communication takes place offline, however a more recent study written by Prendergast et al., (2010) makes reference to this and states that as consumers are becoming more reliant on the internet, the role of eWOM continues to grow. Likewise, Bae and Byong-Do (2013) emphasise that word-of-mouth advertising has long been recognised as a valuable marketing tool, and the emergence of eWOM represents a game-changing opportunity for marketers seeking superior solutions to conventional mass-media marketing initiatives that have become less effective in recent years.
An agreed upon definition of electronic word-of-mouth (eWOM) cited by various authors (Chu and Kim, 2011; Prendergast et al., 2010; Thorson and Rodgers, 2006) originates from the work of Hennig-Thurau et al., (2004) which has been evaluated in order to understand its suitability within the context of this literature. "Any positive or negative statement made by potential, actual, or former customers about a product or company which is made available to a multitude of people and institutions via the internet".
Although this definition remains adequate to the above studies, it is important to evaluate its suitability within the context of this project: With respect to: "Any positive or negative statement made by potential, actual or former customers about a product or company," this part of the definition takes into account positive and negative statements. The importance of this in the context of this study is that it also aims to take into account positive and negative statements in the decision to purchase an XB1 or PS4. It also recognises that not everyone who contributes in eWOM is a current customer of the companies in question. The significance of this is that not all interviewees that choose to take part in this study will actually own an XB1 or PS4. With respect to: "Which is made available to a multitude of people and institutions via the internet," this part of the definition recognises the online presence of WOM and the availability of it to a multitude of people and institutions. In the context of this study, its focus shall also remain on WOM interactions occurring exclusively on the internet. The definition also recognises the eWOM is not exclusively available to consumers of a brand. It is also available to the brand themselves. What this means is that brands have the ability to influence eWOM in their favour.
This raises important questions which include:
- What significance does eWOM have on organisations such as Microsoft and Sony?
- To what extent are Microsoft and Sony able to influence eWOM in their favour and how?
This shall be taken into account within the research problem in order to understand the importance of eWOM in influencing the decision to purchase either the XB1 or PS4. In sum, to what extent does positive and negative eWOM affect consumer perceptions?
Respective Effects of Positive and Negative Word-of-Mouth
Currently, research into the influence of positive and negative word-of-mouth (WOM) on consumer purchase probability, online or offline provides this literature with significant findings. Generally, it has been assumed that positive (or negative) WOM has a positive (or negative) influence on an individual or "receiver" searching for an opinion of a product (East et al., 2008). However, Fitzsimons and Lehmann (2004) observed the opposite and found that in some cases, people would react against negative comments resulting in further commitment to that brand. This adverse reaction occurred when
- people are directed to do things they do not wish to do,
- the WOM receiver disagrees with the values of the advisor, or
- when prior commitment of a brand prevents the consumer from fully accepting useful negative information about a brand.
A recent study evaluated the influence of positive and negative WOM on purchase probability. It considered various "interpersonal" and "non-interpersonal" factors and concluded the extent to which each influenced the receiver's purchase probability, as illustrated in figure 1.
Figure 1: Factors associated with impact of positive and negative WOM on shift in receiver's purchase probability.
These interpersonal factors are "tie strength, sender's experience, sender's strength of expression and how actively WOM is sought." Figure 2 breaks down these factors into further descriptors in order to provide a greater understanding of each.
Figure 2: Interpersonal factors measuring the impact on the shift in receiver's purchase probability.
The influence of tie strength, which is essentially the strength of the relationship between the sender and receiver, is of particular interest. In strong tie relationships, the influence of WOM (positive and negative) on purchase probability would increase whereas weak tie strengths caused the opposite to occur. Whilst this may be the case for WOM (positive and negative) in an offline environment, could the same conclusion be made for WOM (positive and negative) in an online environment? Under the assumption that it does, one could argue that (positive and negative) eWOM would have a decreased influence on purchase probability. This assumption would be based on the fact that "tie strength" between senders and receivers in eWOM are usually formed of multiple weak ties. This is because it is possible for anyone on the internet to submit information (positive and negative eWOM) about a product or brand on a variety of online platform's.
Consequently, determining the quality and credibility of eWOM has often been difficult for consumers. This is because the person submitting eWOM in the form of a review or opinion does not feel much responsibility for the consequences involved, as it will often be read by complete strangers. As a result, there is an increased possibility that inaccurate information is passed on to receivers of that information (Bailey, 2004). However, whilst this may be the case in some situations, it is not necessarily always the case as there are often many genuine and reliable product reviews available online.
Electronic WOM allows users to remain anonymous, thus allowing them to share opinions of a brand more comfortably resulting in an increase of eWOM interactions taking place (Chatterjee, 2001). In addition, eWOM communicators are not restricted by the receiver's social circle. It is the combination of these factors that result in the increased possibility of finding people with product expertise amongst weak tie communicators, which is advantageous in developing product judgments (Dunhan et al., 1997 as cited by Lee & Youn, 2009). However, it is this anonymity that causes credibility to become questionable. According to Chatterjee (2001) as cited by Lee & Youn (2009) the ability for marketers to influence eWOM by "compensating consumers to review products" and even "posting their own product reviews" has made it even more difficult to determine the credibility of electronic WOM. It is therefore not uncommon for consumers to search through a variety of online platforms in the pursuit for credible product reviews.
These eWOM platforms are often perceived as either being "marketer-generated" or "non-marketer-generated" websites (Lee & Youn, 2009). This comes into question when evaluating the organisation or person who has control over the information being sought after, because of the ability to adapt this information to better suit their own interests (Lee & Youn, 2009). As a result, this perception on eWOM platforms is important because consumers may be suspicious that "consumer-generated" product reviews on "marketer-generated" have selling intentions.
Thus, whether a website is marketer-generated or not seems to be important because consumers may suspect that consumer-generated product recommendations on marketer-generated websites have selling intents (Senecal & Nantel 2004; Xue & Phelps 2004; Schindler & Bickart 2005). It is assumed that persuasion of a consumer-generated product review is decreased to the extent that there is high possibility of a marketer's involvement that would influence the reviewer to provide a biased representation of the product's actual performance in the review.
Furthermore, findings concluded that when senders were perceived as knowledgeable, receivers were more motivated in actively seeking information (positive or negative WOM) from them, indicating a positive relation between "sender's experience" and "how actively WOM is sought." An examination of the respective effects of consumer-generated versus marketer-generated content on the purchase decision is provided in the sections that follow. Likewise, strong tie strengths motivated receivers to actively seek positive WOM (empirical evidence for negative WOM was not found) information, indicating a positive relation between "tie strength" and "how actively WOM is sought."
The practical implication of these empirical results is that companies should pay particular attention to the consumers who are most motivated to seek advice actively (less experienced consumers who perceive more risk in the purchase) to maximize their exposure to positive communications from senders perceived as knowledgeable and with whom they have strong ties and minimize their exposure to negative communications from senders perceived as experts (evidence for negative WOM was not found).
The current findings indicate that, when senders are perceived as knowledgeable, the receivers are motivated to actively seek information (positive or negative WOM) from them. Thus, a significant positive relation exists between the two constructs. Likewise, when the tie between senders and receivers is strong, the receivers are motivated to actively seek positive WOM information (empirical evidence for negative WOM was not found).
Conversely, the receiver's experience was also found to be a significant indicator of how actively WOM is sought. The more knowledgeable people are or the more experience they possess, the less intense will be the active search for information (positive or negative WOM). Furthermore, the greater the receiver's experience, the less risk they will perceive in the purchase; and the greater the perceived risk, the more active the search for WOM information (positive or negative WOM).
In sum, "sender's strength of expression" followed by "how actively WOM is sought" had the greatest influence of all the interpersonal factors related to purchase decisions. When "sender's strength of expression" was seen to be high and WOM (positive and negative) was being sought after, WOM had a significant impact on influencing receiver's purchase probability. Strength of expression is the activity in which the receiver seeks information from senders with product expertise. In other words, if the receiver perceives the sender's "knowledge, competence, education and experience in the product category" is seen as high.
Dellarocas et al. (2007) note how the practice of reviewing products online has greatly increased potential for empirical understanding of WOM marketing: while articulated reviews vanish shortly after they are spoken, and are therefore tremendously difficult to capture and analyse, online reviews persist long after they are posted. Breazeale (2009) states that 'digital platforms are changing our very understanding and nature of the significance of eWOM', and sums it nicely thus: 'WOM no longer vanishes instantly and it is not necessarily spontaneous. There may also be a reduced perception that the communicator is in fact non-commercial or even an actual consumer at all.' As a result, online reviews leave an easily accessible and long-lasting record of opinions; moreover, anyone is free to tap in to these records, although care should be taken to validate the source of the eWOM. Further, Zhu and Zhang (2010) indicate that online reviews are a strong reflection of overall WOM, and can therefore be used as a proxy for traditional WOM.
In terms of "sender's experience" senders which were perceived as knowledgeable would actively increase the receiver's motivation to search positive and negative WOM opinions, whilst "tie strength" that was deemed to be strong had the same effect (positive WOM only). Consequently, these factors led to an increase in terms of "how actively WOM is sought" by the receiver resulting in a shift in their purchase probability. Non-interpersonal factors are the "receiver's loyalty, perceived risk and experience". In figure 3 below, these factors have been broken down further in order to provide greater understanding of each.
In addition, in terms of the brand loyalty, found that as the receiver's brand loyalty increased the impact of positive and negative WOM would have less impact on the shift in purchase probability. Furthermore, it was found that receiver's with greater confidence in making decisions would perceive less risk in the purchase of a product thus becoming more active in seeking information of positive and negative WOM. To summarise, it is evident that each of these factors influence the shift in receiver's purchase probability, either directly or indirectly, positively and/or negatively, some to a further extent than others. It provides future research with the data and factor's necessary.
The study concluded that positive WOM had a positive impact and negative WOM had a negative impact on consumer's brand purchasing probability respectively. These results provide a useful starting point for future research.
Consumer-Generated Content
The findings that emerged from a study of consumer-generated content in eWOM settings by Choi and Scott (2013) indicate that the intensity of use of social media networks is positively linked with greater trust and identification, both of which have a corresponding positive impact on the perception of the quality of eWOM consumer-generated content. Furthermore, Choi and Scott found that the quality of the consumer-generated content had a positive impact on the social media network consumers' knowledge sharing practices and that females felt stronger about the quality of consumer-generated content. In addition, the extent to which female consumers feel they belong to a social network or community of interest has a direct influence on how well they trust consumer-generated eWOM content. Consumer-generated eWOM has also been shown to improve trust levels among e-shoppers by sharing both good and bad reviews and studies have confirmed that online consumer behaviour and purchase decision are more influenced by trust than by product price (Sharma & Morales-Arroyo, 2011).
There are some constraints to marketers' reliance strictly on eWOM content, though, and doing so may negatively affect the consumers' purchase decision. For instance, Sharma and Morales-Arroyo (2011) report that the research to date indicates that in contrast to marketer-generated content, consumer-generated content describes consumer experiences with the product or service without providing any relevant technical information, thereby diminishing its credibility for the purposes of the purchase decision. Therefore, while consumer-generated eWOM content may be viewed as trustworthy and reliable, it may fail to provide e-shoppers with all of the information they need to make an informed purchase decision.
Marketer-Generated Content
Contrasted with traditional sources of consumer information such as commercial advertisements, eWOM is distinguished by two factors that have implications for the manner in which content is generated:
1. eWOM provides more credibility to consumers than other conventional sources of information due to the stronger influence it has on the purchasing decisions because it is perceived as being a legitimate and reliable source of feedback from other consumers that have been confronted with purchase decisions in comparable situations. In fact, eWOM has been determined to be particularly persuasive in situations where consumers have little information concerning newly released products.
2. In contrast to conventional commercial advertisements that are transmitted to customers via mass-media, eWOM information is user-instigated, typically through social media networks that are easily accessible.
These differences mean that consumers must trust the eWOM content and have easy access to it in order for it to have an effect on purchase decision making. Although it is conceivable that some marketers generate their own eWOM content for their Web sites (for instance, a social media network team member Tweeting a glowing review of a product posing as a consumer), the growing trend is to include marketer-generated website content that is augmented with authentic consumer-generated eWOM content in an online forum or related communities of interest that is known to be trustworthy. This combination of marketer-generated content together with consumer-generated eWOM content provides a synergetic positive impact on the purchase decisions of many e-shoppers today (Bae & Byong-Do, 2013). Indeed, the research to date suggests that the marketer- and consumer-generated eWOM content represents the optimal marketing approach because it provides consumers with feedback from like-minded consumers as well as information for the vendor in ways that facilitate the purchase decision-making process. As Sharmand Morales-Arroyo (2011) point out, irrespective of the amount of consumer-generated eWOM content that is included in a website's offerings, purchase decisions are primarily influenced by the totality of marketer-generated content and the relevant product or service information provided by the marketer.
It must be also noted, however, that it is vitally important for e-marketers to ensure their responses to consumer-generated eWOM content are timely, appropriate, cordial and professional, and they must avoid resorting to insults and derogatory comments even in the face of highly negative content at all times (Sharma & Morales-Arroyo, 2011). Responsive feedback by e-marketers to consumers' eWOM reviews, though, can demonstrate good faith and concern for consumers on the part of the e-marketer.
Chapter Summary
In summary, in order to establish a suitable research problem, a thorough process of evaluating secondary research was undertaken. There is a consensus among eWOM researchers that more studies of this type are needed because there has been a paucity of timely and relevant research in this area, especially in view of the rapid proliferation of social media networks and their importance for e-marketers today. Consequently, gaps within relevant literature had been identified and recommendations of future research made by previous academics were taken into consideration. Utilisation of concepts and theories within the study of user-generated content and electronic word-of-mouth set the foundation of analysis for suitable research objectives.