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«Chinho Lin, Institute of Information Management, National Cheng Kung University, Taiwan, linn Yi-Shuang Wu, National Cheng Kung ...»

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ELECTRONIC WORD-OF-MOUTH: THE MODERATING ROLES OF

PRODUCT INVOLVEMENT AND BRAND IMAGE

Chinho Lin, Institute of Information Management, National Cheng Kung University,

Taiwan,

linn@mail.ncku.edu.tw

Yi-Shuang Wu, National Cheng Kung University, Taiwan

pair0406@gmail.com

Jeng-Chung Victor Chen, National Cheng Kung University, Taiwan,

victor@mail.ncku.edu.tw

ABSTRACT

Purpose: As an Internet-based version of word of mouth, electronic word-of-mouth (eWOM), the new information presented from the perspective of consumers who have purchased and used the product, have become a major informational source for consumers. The purpose of this paper aims to investigate the influence of eWOM on purchasing intention. Moreover, this study examines the moderating effect of product involvement and brand image in the relationship between the effects of electronic word of mouth and purchase intention.

Design/ methodology/approach: The target samples of this study are people who have ever searched for opinions or reviews through the Internet before buying the product. The survey is consisted of three parts covering the following issues, including eWOM searching experience, measurement items of each variable, as well as demographics and Internet using experience. A structural equation modeling (SEM) is used to assess the relationships of the research model.

Findings: Viewing online reviews or comments is helpful for consumers because it makes consumers feel more confident on purchase decision. The results indicate that eWOM quality, eWOM quantity and sender’s expertise have positive effect on purchase intention. Most importantly, product involvement and brand image have moderating effect in the relationship between eWOM and purchase intention.

Originality/ value: This study provides new insights into the eWOM, which in turn affects customer purchase intention.

S3-29 Keywords: Electronic word-of-mouth (eWOM), Product involvement, Brand image, Purchase intention, Structural equation modeling (SEM) Paper type: Research paper

INTRODUCTION

As a new marketing channel, the World Wide Web differs from traditional retail formats in many ways. Consumers shop online cannot touch or smell the products, as would be possible in traditional retail stores, so their purchase judgments must be based on the product information presented on the website. On-line sellers seek to overcome this limitation by giving consumers the opportunity to share product evaluations on online platform. This consumer-created information is helpful in making purchase decisions because it provides indirect experiences of products.

Word-of-mouth (WOM) is defined as “all informal communications directed at other consumers about the ownership, usage, or characteristics of particular goods and services or their sellers (Westbrook, 1987).” While WOM has been traditionally spread among acquaintances through personal “contagions,” its value has also been recognized and used in practice. Pioneered by the seminal Bass (1969) paper, WOM is widely considered as a major driver of new product diffusion for non-adopters. Additionally, the concept of positive word of mouth has been largely used by marketing professionals as it can serve both the purpose of measuring the effectiveness of the marketing tools like advertising and also at the same time be used as a credible source for gaining information relating to the product (Li and Zhan, 2011).

The rapid development of the Internet with its enhanced communication capabilities has dramatically increased the scale and scope of word-of-mouth communication. As an Internet-based version of word of mouth, online reviews, the new information presented from the perspective of consumers who have purchased and used the product, have become a major informational source for consumers. Online reviews have very important implications for a wide range of management activities, such as brand building, customer acquisition and retention, product development, as well as quality assurance. Companies such as Amazon.com and Circuitcity.com, provide convenient access for the customers to read and write review for the products sold on their websites. Reichheld (2003) claimed that a customer's propensity to recommend a product to others – termed referral value - was the most important success measure in business today. Reichheld argued that referral value has a higher correlation to firm performance than such traditional measures as customer

S3-30satisfaction.

As an Internet-based version of word of mouth, eWOM has become a major informational source for consumers before they buy the products. Whereas many studies have examined the importance and roles of online product reviews on sales (e.g., Chevalier and Mayzlin 2006, Godes and Mayzlin 2004, Dellarocas, Awad and Zhang, 2004, Judith and Dina, 2006), few studies pay attentions on eWOM’s influences on consumer purchase intention, and this reason motivates this study to conduct the research. Therefore, this study aims to investigate the influence of eWOM (including quality and quantity of eWOM as well as sender’s expertise) on purchasing intention. Additionally, this study examines the moderating effect of product involvement and brand image on the relationship between the effects of electronic word of mouth and purchase intention.





THEORETICAL BACKGROUND AND HYPOTHESES DEVELOPMENT

Electronic Word of Mouth (eWOM) Historically, word of mouth is widely considered as a powerful influence in consumer marketplace, especially on consumers’ information search and subsequent decision making (Brown & Reingen, 1987; Money, Gilly, & Graham, 1998; Silverman, 1997). With the rapid growth of the Internet, electronic communication has become a critical phenomenon.

According to Buttle (1998), computer-mediated communication such as blogs, message boards, and emails can also be included in the definition. Following the notion, Hennig-Thurau et al. (2004) described electronic word of mouth as “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 (p. 39)”.

Comparing with WOM, Bickart and Schindler’s (2001) showed that eWOM may have higher credibility, empathy and relevance to customers than marketer-created sources of information on the Web.

In this study, eWOM is viewed from three dimensions, including eWOM quality, eWOM quantity, as well as sender’s expertise. Quality of eWOM refers to the persuasive strength of comments embedded in an informational message (Bhattacherjee, 2006). Consumer buying decision can be based on some criteria or requirement that meet their needs and to determined their willingness to buy it will be based on their perceived of quality of information they received (Cheung 2008). Therefore, it is important to determine consumer’s perception of information quality as element for assessing their potential buying decision. In addition, S3-31 quantity of eWOM refers to total number of posted comments (Cheung and Thadani, 2010).

The popularity of the product is determined by quantity of online comments because considered could represent the market performance of product (Chevalier and Mayzlin, 2003).

Consumer also need reference to strengthened their confidence to reduce the feeling making mistake or risk while shopping, and online comment quantity represent the product popularity and importance. In other words, consumers may perceive that more reviews represent higher product popularity and importance (Lee, 2009). Furthermore, expertise is aptitude, required training and experience and is domain specific. On the other hand, expertise can be viewed as “authoritativeness,” “competence,” and “expertness” (Hung and Cheng 2006). It is considered that the expertise of sender when they made a comment in consumer review will attract user to adopt the information and make decision to purchase.

Purchase Intention

Purchase intention refers to consumer’s intention to purchase a particular product or service.

Purchase intention, was cited by Fishbein and Azjen (1975), as the single most accurate predictor of actual purchase behavior. Several studies have been conducted in this regard, and have found statistically significant relationships between purchase intention and actual purchase behaviors. It has been found that, particularly in the consumer durable goods category, purchase intention is a reliable measure of actual purchase behavior (Kalwani and Silk, 1982). Research conducted by Godes and Mayzlin (2009) tried to focus on the ways a firm should try to use the exogenous word of mouth to foster the sales. The research result showed that exogenous word of mouth accounts for the higher level of sales for the organizations.

Word of mouth could be one of the most believable form (Henricks, 1998) and affect consumer’s choices of products in the WOM spread by other consumers (Brown & Reingen, 1987; Herr, Kardes, & Kim, 1991). Moreover, the Internet allows peoples’ opinions can be more easily and quickly accessible to other consumers. Advices and product using experiences from online users become influential for their behavior (Thompson, 2003) and eWOM is regarded as a critical source for consumers making a buying decision. Some related studies have also indicated that eWOM messages are an important means whereby consumers can obtain information about product or service quality (Chevalier and Mayzlin, 2006).

Moreover, this kind of message can effectively reduce the risk and uncertainty recognized by consumers when purchasing products or services, so that their purchase intention and decision making can be further influenced (Chatterjee, 2001).

eWOM quality is defined as the quality of a review’s contents from the perspective of S3-32 information characteristics (relevance, understandability, sufficiency, and objectivity). Since previous buyers are anonymous on the Internet, people generally will not easily accept or believe a review posted on a Web site if it does not provide enough information (Ratchford, Talukdar, and Lee, 2001). Other things being equal, reviews that are more persuasive have a greater positive effect on consumers’ purchasing intention. Besides, the number of on-line consumer WOM (eWOM quantity) of a product represents the product’s popularity as the on-line word-of-mouth effect because it is related to the sales volume of the product (Chatterjee 2001; Chen and Xie 2004). It is likely to lead consumers to rationalize their purchasing decisions by telling themselves, “Many other people also bought the product.” Additionally, consumers usually have belief in expert due to experts represent the individuals who have more professional knowledge (Alba & Hutchinson, 1987). Therefore, this study proposes that: H1: The quality of electronic word-of-mouth positively affects consumers’ purchasing intention.

H2: The quantity of electronic word-of-mouth positively affects consumers’ purchasing intention.

H3: Sender’s expertise positively affects consumers’ purchasing intention.

Product Involvement

Product involvement, as defined by Zaichkowsky (1986), refers to “a person’s perceived relevance of the object based on inherent needs, values, and interest.” Involvement is associated with the motivation to process information, and prior knowledge (expertise) is associated with the ability to process information (Celsi, and Olson 1988; Petty and Cacioppo 1984). Issue-relevant arguments and product-relevant attributes were more influential under high-involvement conditions; while peripheral cues, such as the characteristics of information sources or number of arguments, were more influential under low-involvement conditions (Chaiken 1980; Petty and Cacioppo 1984; Petty et al. 1983). Therefore, this study proposes that: H4a: Product involvement moderates the relationship between quality of eWOM and purchase intention.

H4b: Product involvement moderates the relationship between quantity of eWOM and purchase intention.

H4c: Product involvement moderates the relationship between sender’s expertise and purchase intention.

S3-33Brand Image

Keller (1998) conceptualized brand image as a perception of consumers when they see a brand and reflected by brand associations in their mind. And these associations of brand image are multidimensional and contain the emotional dimension or the attitudes regarding the brand and the perceived quality dimension. From consumers’ overall picture of their experiences, brand image is important because through this technique, brand image will create the consumer’s cognitive, emotional, and behavioral responses as an outcome (Padgett and Allen, 1997). Moore (1981) argued that image is a mental estimate of a general degree of satisfaction from an organization’s activities and performances. And through image investigation, organizers will know the attitudes from customers tend to their companies, indeed, how well customers understand and what they prefer of companies.

Park, Jaworski, and Maclnnis (1986) advanced that brand image is one strategic technique with the goal of helping the concept of a brand to be completed by means of an exercise in brand management. The objective of companies is to establish favorable and positive connection about the brand which the outcome in a positive image of the brand. The consumer may have more desire with one brand simply because this brand has the different image from other competitor’s brands (Schiffman and Kanuk, 1994). Engel et al. (2001) indicated that consumers will make the decision based on the existing and external information. When there is the conflict between brand image and information content, consumer’s decision will be hard to make. Therefore, this study proposes that: H5a: Brand image moderates the relationship between quality of eWOM and purchase intention.

H5b: Brand image moderates the relationship between quantity of eWOM and purchase intention.

H5c: Brand image moderates the relationship between sender’s expertise and purchase intention.

–  –  –

After reviewing the literature in chapter two and basing on the research objectives and



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