How differences in eWOM platforms impact consumers’ perceptions and decision-making

ABSTRACT

This article aims to examine the effects of different features of various eWOM (electronic word-of-mouth) platforms on consumers’ perceived credibility of eWOM regarding the product-related risks. Based on the stimuli–organism–response (S–O–R) theory, this study establishes a model to explore the relationships among eWOM platforms, tie strength, social cues, and perceived eWOM credibility. A mixed design of 2 (eWOM platforms) × 2 (product-related risks) conditions experiment and a survey method is applied to verify the model. The results show that tie strength between eWOM publishers and recipients positively influences the perceived eWOM credibility. The volume of social cues in eWOM platforms positively influences the perceived credibility of a female, while the opposite is true for a male. Both tie strength and volume of social cues in social media are greater than those in e-commerce websites. For products with low risks, eWOM in e-commerce websites is perceived to be more credible. Findings implicate that interactive functions should be added to the product comment area to enhance communications between the reviewers and potential consumers. Findings also encourage the cooperation between e-commerce websites and social media and suggest that managers should develop proper strategies in different situations.     

How Dispersive Opinions Affect Consumer Decisions: Endowment Effect Guides Attributional Inferences

Electronic word-of-mouth (eWOM) dispersion, reflecting the extent of reviewers’ opinion divergence regarding a product, determines consumer decisions. Drawing upon the endowment effect and attribution literature, this research proposes that the endowment effect mediates the influence of eWOM dispersion on attributional inferences, and the display formats of eWOM dispersion (“horizontal bar chart” vs. “eWOM content”) moderate the mediating influence of endowment effect on attributional inferences of eWOM dispersion. Three complementary studies reveal three key insights in this setting. First, when consumers already having an emotional attachment to a product and subsequently encountering dispersive eWOM, the higher the level of eWOM dispersion, the stronger the endowment effect. Secondly, In such circumstance, the stronger endowment effect promotes more reviewer-related attribution inference of high-dispersion eWOM, and the weaker endowment effect promotes more product-related attribution inference of low-dispersion eWOM. Third, the positive influence of eWOM dispersion on endowment effect is stronger for eWOM dispersion in the complexity or disfluency display format (i.e. “reviewers’ impression of product”) than for eWOM dispersion in the simply of fluency display format (i.e. “horizontal bar chart”), more importantly, the mediating influence of endowment effect on attributional inferences is moderated by the display formats of eWOM dispersion, and this findings persists even when product category (hedonic vs. utilitarian) is taken into consideration. The theoretical implications for the eWOM dispersion and attribution literature and practical implications for online retailers are discussed.     

Making new products go viral and succeed

Why are some new product introductions more viral and successful than others? This research integrates theories of interpersonal communication and consumer learning to explore this question. Analyzing a unique data set of millions of consumer word-of-mouth transmissions (eWOM) on social media regarding 345 new automobile products introduced during 2008–2015, we find that more innovative products generate more eWOM volume but surprisingly less positive sentiment. These effects vary in magnitude across eWOM channels. However, the use of rich-content communication, pre-announcement, and cobranding strengthens (weakens) the positive (negative) effect of product innovativeness on eWOM volume (sentiment). The results further indicate that eWOM sentiment is a stronger predictor of new product success than eWOM volume. Experimental results reveal more insights into how product innovativeness influences eWOM metrics in several product categories and shed light on the role of excitement and perceived risk as mechanisms underlying these effects. The research offers useful implications for firms to design effective viral marketing campaigns to enhance new product success.     

Understanding Money-Back Guarantees: Cognitive, Affective, and Behavioral Outcomes

Although money-back guarantees (MBGs) have a long tradition in marketing and retailing practice, a deeper understanding of how consumers value this instrument is still lacking. The results of two experimental studies show that in addition to cognitive effects, MBGs evoke a positive emotional response, thereby increasing consumers’ purchase intentions and willingness to pay a price premium. Moreover, MBGs positively affect consumers’ responses for search and experience goods, although for experience goods, MBGs should be designed with stricter return conditions as compared to MBGs for search goods. The results should help retail managers understand the consumer impact of MBGs, as well as assist them in pricing guaranteed items and designing effective MBGs according to the type of product.     

Electronic word-of-mouth (eWOM) generation in new media platforms: The role of regulatory focus and collective dissonance

In this research, we examine the role of two motivational forces associated with creation of electronic word-of-mouth (eWOM): regulatory focus and collective dissonance. Our studies show that generation of eWOM is enhanced by regulatory fit, while traditional WOM is dominated by the negativity effect. In study 1A, we show that prevention-focused consumers produce stronger intentions to post eWOM when they undergo a negative compared to a positive service experience. In study 1B, we find that promotion-focused consumers are more likely to post eWOM in reaction to a positive service experience when one's self-construal is independent. The final study shows that due to collective dissonance, consumers have greater intentions to create eWOM when their experiences are inconsistent with others' postings. We discuss the implications of these results for the development and management of eWOM communication in virtual communities.     

A Multilevel investigation into the effect of cultural distance on bilateral trade: The roles of product type and uncertainty avoidance

Previous research shows mixed findings about how cultural distance may affect bilateral trade. To reconcile the mixed findings, we examine how key moderators at both the country-pair level (product type) and the country level (uncertainty avoidance) affect the magnitude of the effect of cultural distance on bilateral trade. Using trade data on electronic products from 90 nations during 2008–2 014, we show that cultural distance in general has a negative impact on bilateral trade. However, the effect is more pronounced when the trade is on experience (versus search) products, or if the importing country is low (versus high) in uncertainty avoidance. Apart from its moderating effect, experience (versus search) product also has a negative main effect on bilateral trade, but its impact is stronger for countries low (versus high) in uncertainty avoidance.     

Signaling virtue: Does firm corporate social performance trajectory moderate the social performance–financial performance relationship?

Over the past 40 years, scholars have demonstrated the effects of corporate social performance (CSP) on corporate financial performance (CFP), finding mixed results on the main effect of CSP on CFP. This study moves beyond the search for a universal main effect of CSP on CFP to examine factors that drive some firms to experience greater returns from their CSP efforts. Building from the signaling and stakeholder theory definitions of reputation and the trajectory literature in psychology, this study examines the following question: what is the impact of a firm's CSP reputation on the relationship between CSP actions and CFP in the current period? Findings based on a sample of 351 US firms demonstrate that firms with either a history of growth in negative CSP, a propensity toward increasing negative CSP, or a more inconsistent history of positive or negative CSP, experience decreased returns from current period investments in CSP.     

产品伤害危机属性对横向溢出效应的影响研究——产品相似性和企业声誉的调节作用

产品伤害危机不仅会降低危机产品的销售,还可能负面影响非危机产品,形成横向溢出效应。文章归纳提出产品伤害危机危害性、责任性、无德性、违约性和频发性等五个主要属性,探索这五个属性对产品伤害危机横向溢出的影响,并识别出企业声誉和产品相似性两个重要的调节变量。研究发现,危害性、无德性和责任性较高的产品伤害危机更容易产生横向溢出,企业声誉和产品相似性仅能调节部分产品伤害危机属性对横向溢出的影响,并且它们具有双重调节作用。     

When does electronic word-of-mouth matter? A study of consumer product reviews

Online consumer product reviews, a form of electronic word-of-mouth (eWOM), have attracted increased attention from researchers. This paper examines the persuasiveness of eWOM. Drawing on regulatory focus theory, the authors propose that the consumption goals that consumers associate with the reviewed product moderate the effect of review valence on persuasiveness. Data from lab experiments and actual online retailers suggest that consumers who evaluate products associated with promotion consumption goals perceive positive reviews to be more persuasive than negative ones (i.e., a positivity bias). Conversely, consumers who evaluate products associated with prevention consumption goals perceive negative reviews to be more persuasive than positive ones (i.e., a negativity bias).     

Trust in online recommendations: an evolutionary psychology perspective

Electronic word-of-mouth (eWOM) is playing an increasingly important role in influencing consumer behavior, and it represents another opportunity for marketers to build support for their brands. This study explores how the gender of the reader influences how eWOM is perceived. An experiment grounded in evolutionary psychology examines how males and females differ in their perceived trust of eWOM of positive, negative, or mixed valence. The results indicate that females place greater trust than males in eWOM messages. But both genders find eWOM of mixed valence more trustworthy than entirely positive or negative eWOM. A follow-up phenomenological study of male and female consumers who had experienced eWOM shed more light on the experimental findings and offers additional support for their evolutionary basis. Theoretical and practical implications are discussed as well as recommendations for further research.     

Exploring the influence of online reviews and motivating factors on sales: A meta-analytic study and the moderating role of product category

Online reviews, which significantly influence product sales, have been a central research topic in the field of marketing. Meanwhile, some motivating factors related to online retailers have been linked to product sales. While several articles have examined the impact between online reviews and motivating factors on product sales, many of the conclusions drawn are contradictory. From 28 studies focusing on online reviews and sales, this study performs a meta-analysis to analyze the true impacts of six review-related factors (i.e., the number of reviews, star ratings, standard deviation of ratings, helpfulness, review length and sentiment), and two motivating factors (i.e., price discounts and special shipping) on product sales. Meanwhile, this paper also studies how one product-related factor (i.e., product age) and one reviewer-related factor (i.e., reviewer's reputation) influence the relationship between online reviews and product sales. In addition, to study the moderating effect of product category, we divide the selected literature into two subgroups which are search and experience products. The results indicate that only review length and special shipping have no significant impact on product sales, while product category has a valid and specific moderating effect on the relationship between these determinants and sales. The presented conclusions will have important implications for academic research and for future industry practice.     

The effect of negative online customer reviews on brand equity and purchase intention of consumer electronics in South Africa

This study investigated the effect that negative online customer reviews have on brand equity and purchase intention. This research examined the influence of negative electronic word of mouth (eWOM) on brand equity, as influenced by customer review quality, product involvement and source credibility. A 3 (high quality review versus low quality review versus no review) × 2 (high product involvement versus low product involvement) factorial experiment with 236 respondents was conducted. The results revealed that the presence of negative eWOM has a significant detrimental effect on brand equity and purchase intention. Furthermore, the effect of negative online customer reviews is more detrimental to the brand equity of a high involvement product than a low involvement product. The results also revealed that high quality reviews are more influential than low quality reviews with respect to brand equity, and the difference between the levels of eWOM source credibility has no significant effect on brand equity.     

Offline and Online Search in Used Durables Markets

This study examines how different information sources are used by consumers prior to their purchase of used durable goods, specifically used cars. We examine how online and offline search are related. Categories of online sources are dealer websites and resale websites, and of offline sources are print media and dealer visits. Prior research on new car purchases finds that online sources substitute for traditional, offline sources such as dealer visits. We examine whether this theory extends to used-car purchases and distinguish between dealer websites and resale websites (a distinction relevant to used-goods markets) by collecting data from a sample of used-car buyers. Because search in different sources can be interrelated, and due to data censoring, we build and estimate a simultaneous equations Tobit model. In contrast to existing research, we find that online search on dealer websites is complementary to and not a substitute for dealer visits. This complementary effect highlights the importance of dealers’ web presence in used markets.     

Shopping online for goods vs. services: where do experiential features help more?

This study investigates how the type of offer sold online (goods vs. services) moderates the relationships between perceived experiential values and customers' attitudes towards the website. A sample of 107 e‐shoppers of services and 110 e‐shoppers of physical goods responded to a survey on their most recent e‐shopping experiences. Results support the majority of hypotheses. It was found that although offering experiential values on the site improves customers' attitudes for both physical goods and services websites, the impact is much stronger in the case of services. Theoretical and managerial contributions are discussed.     

Cutting Through the Online Review Jungle — Investigating Selective eWOM Processing

Consumers frequently rely on online reviews, a prominent form of electronic word-of-mouth (eWOM), before making a purchase decision. However, consumers are usually confronted with hundreds of reviews for a single product or service, as well as rich information cues on online review websites (review texts, helpfulness ratings, author information, etc.). In turn, consumers face more information cues on online review websites than they can or want to process, and are likely to proceed selectively. This paper investigates selective processing of such eWOM information cues. Results of Study 1, an exploratory study using verbal protocols, confirm that consumers display selective eWOM processing patterns and are able to articulate them. Study 2 develops and applies a measurement instrument to capture these patterns. A subsequent cluster analysis on members of a large-scale online panel (N = 2,295) indicates five prominent eWOM processing types, termed “The Efficients”, “The Meticulous”, “The Quality-Evaluators”, “The Cautious Critics”, and “The Swift Pessimists”. Insights of this research can help firms to better understand consumers' eWOM processing and improve the user-friendliness of online review websites.     

Investigating the effect of customer-generated content on performance in online platform-based experience goods market

As COVID-19 persists, a new normal has emerged in our lives and consumption patterns. The rapid rise in demand for online consumption without physical contact is a prime example of this shift. Online platform-based markets have evolved into retail channels, allowing consumers to purchase both search goods and experience goods without contact. The platform provides an environment where customers can encounter a diverse range of customer-generated content (CGC) and gain insights into the purchasing experiences of others. However, despite the growing trading volume and diversification of products traded, relatively few studies exist on purchasing tangible experience goods in the online platform-based market. Therefore, this study investigates the impact of CGC (i.e., content and valence) on the market performance of experience goods, such as sales and sales rank in the platform-based market. We first examine the customer experience-related content in CGC in this market and then investigate the effect of CGC on market performance, such as sales and search ranks. We use crawled data from a platform that sells and rents artwork for empirical analysis. LDA topic modeling findings reveal that CGC has three primary topics (i.e., basic, artist, and style). The regression analysis results show that only style-related content improves performance, whereas basic-related content negatively affects search ranks. The valence of CGC does not significantly impact either performance measure. Additionally, we consider the role of rental services in this market and find that rental volume and search rank have an inverted U-shaped relationship. This study has important implications because it proposes a research framework and empirical model for examining the impact of CGC on performance in the online platform-based market for experience goods. It also has important managerial implications for platforms and sellers looking to enhance their market performance by monitoring CGC.     

平台经济视域下的商家投机行为治理——基于平台主动治理视角

平台型网络市场的虚拟性与隐蔽性导致商家隐瞒、欺骗消费者的行为愈演愈烈，衍生了新的治理难题。基于交易成本理论和社会交换理论，立足平台主动治理视角，文章探索平台主动治理中的事前商家规范机制、事中交易保障机制和事后争议处理机制对商家强、弱投机行为的影响，以及平台声誉对其影响的调节作用。基于消费者视角开展问卷调查，对数据进行结构方程模型分析和分层回归分析，结果表明：弱投机行为对强投机行为具有显著正向影响；商家规范机制和争议处理机制对强、弱投机行为均具有抑制作用；而交易保障机制对弱投机行为具有促进作用；平台声誉对交易保障机制、争议处理机制和弱投机行为之间的关系具有负向调节作用。     

Effects of sales promotion type and promotion depth on consumer perceptions: the moderating role of retailer reputation

This study uses a between-subjects experimental design to test the effect of two sales promotion formats (coupon versus markdown) with either high and low face values on consumer attitudes toward the deal, perceived product quality, and purchase intentions. The reputation of the retailer offering the deal is predicted to moderate the relationship between the promotional offer and consumer responses. Consumers perceive product quality to be higher when offered a high value coupon vs. markdown but there is no significant difference in perceived quality across promotion types when the promotion face value is low. When a deep price discount is offered by a retailer with a negative reputation, however, consumers have more favorable attitudes toward the deal and higher purchase intentions when provided with a markdown vs. coupon. Conversely, a high value coupon elicits more favorable evaluations than a markdown when the retailer has a positive reputation. When the value of the promotion is low and the retailer has a positive reputation, consumers have more positive deal attitudes and purchase intentions when offered a markdown vs. coupon. There is no significant difference in the effects of promotion type when the retailer has a negative reputation. The findings therefore establish retailer reputation as an important moderator of sales promotions effectiveness. This research is limited by the use of a single product category and a student sample. Process measures are also needed to validate the proposed theoretical conceptualization. The results provide managers insight into the type and value of the sales promotion to offer based on consumer perceptions of the retailer's reputation in the market.     

Examining Biased Assimilation of Brand-related Online Reviews

This paper examines the impact of pre-existing brand attitudes on consumer processing of electronic word-of-mouth (eWOM). This topic is particularly important for brands that simultaneously possess strongly pronounced proponents as well as opponents. Two experimental studies using univalent (study 1, N = 538) and mixed (study 2, N = 262) sets of online reviews find indications for biased assimilation effects of eWOM processing. Consumers perceive positive (negative) arguments in online reviews as more (less) persuasive when having a positive (negative) attitude towards the brand. Perceived persuasiveness in turn influences behavioral intentions and acts as a mediator on the relationship between attitude and behavioral intentions. We examine two moderators of this effect. When priming individuals to focus on other consumers (vs. a self-focus prime), the biased assimilation effect is weaker (study 3a, N = 131). In contrast, we show that biased assimilation becomes stronger under conditions of high (vs. low) cognitive impairment (study 3b, N = 124). Our findings contribute to the literature on the relationship between eWOM and brands and advance our understanding of potential outcomes of brand polarization.     

Consumer ethnocentrism when foreign products are better

In recent years, there has been a great deal of research exploring the concept of consumer ethnocentrism, although little has been done in Eastern Bloc countries. In these countries, foreign brands are often clearly superior to domestic alternatives. This study applied the CETSCALE in a survey of 218 Polish consumers with respect to attitudes and beliefs for one domestic and two foreign gas station brands. The findings suggest that, in a situation where foreign brands are superior to domestic ones, consumer ethnocentrism is displayed in more positive perceptions of the domestic brand, with little or no effect on perceptions of foreign brands. Moreover, the effect of consumer ethnocentrism on evaluations of different types of product qualities (search vs. experience) is explored. The results support the prediction that consumer ethnocentrism has greater impact on evaluations of experience qualities than on search qualities. Managerial implications and future research directions are suggested. © 2001 John Wiley & Sons, Inc.