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Information direction, website reputation and e-WOM effect: A moderating role of product type

Information direction, website reputation and e-WOM effect: A moderating role of product type

Presenter: Peter Huang

Instructor: Dr. Pi-Ying Teresa Hsu

Date: December 15, 2010

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Park, C., & Lee, T. M.(2009). Information

direction, website reputation and e-WOM

effect: A moderating role of product type.

Journal of Business Research, 62, 61-67.

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Contents

Click to add Title1 IntroductionI

Click to add Title2 Literature ReviewII

Click to add Title1 MethodologyIII

Click to add Title2 ResultsIV

Click to add Title1 ReflectionV

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Introduction

The Internet has extended consumers’ options for gathering information, and has provided consumers offer their own consumption-relation advice by (eWOM).

(Hennig-Thurau et al., 2004)

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Purposes of the Study

To examine the impact of eWOM information direction

To investigate the influence website reputation

To examine the interactions of eWOM information direction and website reputation with product type

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Research Question

Does the impact of the eWOM information

direction and website reputation on the

eWOM effect vary with the product type?

Does the impact of the eWOM information

direction and website reputation on the

eWOM effect vary with the product type?

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Literature Review

eWOM direction

Website reputation

Categorization of goods

Interaction effect

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eWOM direction

The WOM influence appears to be asymmetrical in that a negative WOM has a stronger influence on customers’ brand evaluations.

(Arndt, 1967; Mizerski, 1982; Wright, 1974)

H1: The eWOM effect is greater for negative

eWOM information than for positive eWOM

information.

H1: The eWOM effect is greater for negative

eWOM information than for positive eWOM

information.

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Website reputation

Due to low barriers of entry on the Web, well-established and reputable websites have been more readily accepted by consumers than have unknown sites.

(Shamdasani et al, 2001) H2: The eWOM effect is greater for websites with

established reputations than for those without established

reputations.

H2: The eWOM effect is greater for websites with

established reputations than for those without established

reputations.

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Categorization of goods

Search goods are defined by produce attributes where complete information about the goods can be acquired prior to purchase.

(Nelson,1974)

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Categorization of goods

Experience goods are characterized attributes that cannot be known until the purchase and after use of the product.

(Klein, 1998)H3: The eWOM effect is greater for experience goods

than for search goods.

H3: The eWOM effect is greater for experience goods

than for search goods.

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Interaction effect: eWOM direction and product type

Higher levels of brand familiarity, generated through the direct or indirect brand related experiences, are associated with well developed knowledge structure.

(Alba & Hutchinson,1987)

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Interaction effect: website reputation and product type

The message source is a crucial determinant when consumers evaluate experience attributes for a product.

(Jain & Posavac, 2001)

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Research design

2 X 2X 2 between-subjects factorial design

Website’s

reputation

Established Unestablished

Product

Search Experience

eWOM

Positive Negative

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Development of stimuli

Five-point scale

Search goods = TOEIC books

Experience goods = Language school program

can be evaluated can not be evaluated

1 2 3 4 5

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Development of websites

Established website: Interpark.com

Unestablished website: Zomart.com

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Pretest

20 males and 20 females

The eWOM information stressed on 5-point scale.

The website’s reputation was measured on 5-pointscale.

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5-point ratings

Item1 I will refer to this eWOM information in purchase decision.

Item2 I think this eWOM information is credible.

Item3 This eWOM information will crucially affect my purchase decision.

1 2 3 4 strongly disagree

5 strongly agree

Measures

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Participants

Level Undergraduate students (business classes)

Location Seoul

Number 55

Age19-28

Gender Men : women = 55.5 : 44.5

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Factorial design Using a 2 X 2X 2 analysis of covariance with

eWOM familiarity as covariate.

Website’s

reputation

Established Unestablished

Product

Search Experience

eWOM

Positive Negative

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Results

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Results

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Research hypotheses

H1: The eWOM effect is greater for negative eWOM information than for positive eWOM information.

H2: The eWOM effect is greater for websites with established reputations than for those without established reputations.

H3: The eWOM effect is greater for experience goods than for search goods.

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Results

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Research hypotheses

H4: The impact difference of negative and positive eWOM information on the eWOM effect is greater for experience goods than for search good.

H5: The impact difference of established and unestablished website’s reputation on the eWOM effect is greater for experience goods than for search goods.

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Results

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Conclusion

1.The eWOM effect is greater for negative eWOM

than for positive eWOM.

1.The eWOM effect is greater for negative eWOM

than for positive eWOM.

2.The eWOM effect is greater for websites with established

reputations than for unestablished websites.

2.The eWOM effect is greater for websites with established

reputations than for unestablished websites.

3.The eWOM effect is greater for experience

goods than for search goods.

3.The eWOM effect is greater for experience

goods than for search goods.

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Reflection

1. This study focuses on product attribute-related eWOM information. However, the value of negative information is likely to be higher in the morality versus the ability.

2. This study does not include consumer characteristic.

3. This study could investigate an eWOM effect model on cross-cultural basis.

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Reflection

Well and detailed explanations in research design

Managerial implications for an Internet marketing strategy

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Reflection

The categorization of goods are not suitable.

A total of responses were collected with “only” 55

respondents.

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Thanks for your listening.