Retention of latent segments in regression-based marketing models

Product design and marketing mix decisions for segmented markets depend crucially on the correct specification of marketing models used as input to these decisions. With real-world data, the true number of segments in a market is unknown. Current evidence from simulation studies suggests that the accuracy of commonly used criteria for determining the number of segments in a market depends on the usage context, including the type of distribution being used to describe the data, the model specification, and the characteristics of the market. This study investigates via simulation the performance of seven segment retention criteria used with finite mixture regression models for normal data. This is one of the most important analysis contexts in marketing research since regression models are used, for example, in conjoint analysis and market response analysis, yet no previous study in either the marketing or statistics literatures explores the segment retention problem for mixture regression models. The study shows that one criterion, Akaike's Information Criterion (AIC) with a per-parameter penalty factor of 3 (AIC3), is clearly the best criterion to use across a wide variety of model specifications and data configurations, having the highest success rate and producing very low parameter bias. Currently, this criterion is rarely, if ever, used in the marketing literature.     

How Online Product Reviews Affect Retail Sales: A Meta-analysis

A growing body of research has emerged on online product reviews and their ability to elicit performance outcomes desired by retailers; yet, a common understanding of the performance implications of online product reviews has eluded us. Scholars continue to navigate an array of studies assessing different design elements of online product reviews, and various research settings and data sources. We undertake a meta-analysis of 26 empirical studies yielding 443 sales elasticities to examine how these variables relate to retail sales. Building on well-established meta-analytical methods, we address the following questions: How does review valence influence the elasticity of retailer sales? What about review volume? For which product types and usage situations do online product reviews have a greater impact on retailer sales elasticity? Which types of online reviewers and websites exert the greatest influence on retailer sales elasticity? Our study answers these important questions and provides a much needed quantitative synthesis of this burgeoning stream of research.     

Customer segmentation using unobserved heterogeneity in the perceived-value–loyalty–intentions link

Multiple facets of perceived value perceptions drive loyalty intentions. However, this value–loyalty link is not uniform for all customers. In fact, the present study identifies three different segments that are internally consistent and stable across different service industries, using two data sets: the wireless telecommunication industry (sample size 1122) and the financial services industry (sample size 982). Comparing the results of a single-class solution with finite mixture results confirms the existence of unobserved customer segments. The three established segments are “rationalists”, “functionalists” and “value maximizers”. These results point the way for value-based segmentation in loyalty initiatives and reflect the importance of a multidimensional conceptualization of perceived value, comprising cognitive and affective components. The present results substantiate the fact that assuming a homogeneous value–loyalty link provides a misleading view of the market. The paper derives implications for marketing research and practice in terms of segmentation, positioning, loyalty programs and strategic alliances.     

Do consumers still believe what is said in online product reviews? A persuasion knowledge approach

The objective of this paper is to examine the effects of knowledge about manipulated online product reviews on the effectiveness of such reviews in influencing consumers' product evaluations. The results of two empirical studies show that consumers clearly differ with regard to their knowledge that product reviews can be manipulated and that consumers who have such knowledge are less influenced in their product evaluations by reviews, specifically by negative ones. Furthermore, the effects of negative reviews are even weaker when consumers acquire their knowledge through a highly credible source (compared to a less credible source).     

Delight the experts,but never dissatisfy your customers! A multi-category study on the effects of online review source on intention to buy a new product

Online reviews are a pervasive form of electronic word-of-mouth (eWOM) that potentially accelerate—or slow down—the diffusion of recently launched services in the marketplace. While empirical research largely supports the effects of online reviews on attitudinal and behavioral outcomes, less is known about the impact the source of the review—i.e., if it comes from a peer consumer or an expert—has on the recipient. Two experiments that combine reviewer- (expert, consumer), service type- (mobile package, restaurant, car repair), consumer- (level of general innovativeness), and review-related (positive, negative) characteristics reveal a challenging interaction between the review’s source and its valence: while—compared to an established baseline—a positive expert review seems more effective in increasing the recipient's intention to purchase than a review by a peer consumer, a negative consumer review lowers the recipient's intentions to a larger extent than a negative expert review. We further find effects of the consumer's innovativeness and the service category across the experiments. Our research contributes to the topical and increasing body of empirical research on the effects of involved characteristics within online reviews across several product types.     

Does culture affect sentiments expressed in cruise tours’ eWOM?

The study aims to examine the sentiment differences in the content of cruise tour online reviews across North Americans and Europeans, as representing the two largest cruise markets. Dictionary-based sentiment analysis has been carried out on 1127 reviews on guided tours retrieved from TripAdvisor. The results indicate significant differences in the sentiment score of the reviews, with North Americans’ texts being more emotionally charged than the European ones. In addition, North Americans’ reviews conveyed a more positive affect and had a more subjective and intimate tone, while those written by Europeans contained a smaller amount of sentiment-bearing words and their tone was more objective. The study’s contribution lies in (i) providing evidence for the influence of culture on electronic word-of-mouth communication in terms of varying sentiment expression, (ii) demonstrating the effectiveness of sentiment analysis for recognizing cultural differences and (iii) enhancing the current understanding of cruisers’ tour experience.     

Is there any value in the online reviews of remedial satisfied customers? An empirical study in the hospitality industry

Hospitality service providers lack attention to the positive reviews written by remedial satisfied customers, although they have devoted a lot of energy to service recovery. Drawing on the accessibility-diagnosticity framework, this study investigates the relationship between the online review types of remedial satisfied customers and potential customers' booking intentions. The results indicate that outcome satisfactory review not only improves review impression and positively affects customers' booking intentions, but also reduces perceived risk and enhances customers’ booking intentions. The review valence consistency plays a moderating role in the dual-path effect of online review types on booking intentions.     

Why consumers exaggerate in online reviews? Moral disengagement and dark personality traits

Diffusion of digital media has led to extensive reliance on online reviews for purchase decisions. However, consumers may routinely exaggerate about their own consumption experiences. Using moral disengagement theory and the dark personality trait , the present study seeks to enhance the understanding of consumers' intentions to exaggerate about their consumption experience in online reviews. In order to demonstrate convergence of finding and replicability of the proposed relationships, four studies were conducted to examine consumers’ intention to exaggerate about their positive and negative experiences in online reviews for search and experience products respectively. Findings showed significant positive relationships between dark personality traits and intention to exaggerate in online reviews. Furthermore, moral disengagement significantly mediated intention to exaggerate for narcissists and psychopaths. The results reinforce the usefulness of the study for managers as these studies augment the understanding of consumer lying behavior in the context of online reviews and offer insights into mechanisms that might prevent the amplification of such reviews.