Schepers BA IBA
Schepers BA IBA
Schepers BA IBA
ABSTRACT
Since the fast and still increasingly adoption of buying products or services online, online consumer reviews have
become increasingly more important. The online consumer review involves positive or negative statements made
by consumers and experts about a product or service. This consumer-created information is helpful for decision-
making on purchases because it provides consumers with indirect experiences. This paper is concerned with
identifying five relevant factors of online reviews that have an impact on the consumer buying decision. A pilot
questionnaire has been conducted and it’s practical applicability has been tested among 244 Dutch respondents. It
proves that in fact the five factors of online reviews have an impact on the consumer buying decision. Finally some
practical valuable feedback for future research and practical contribution has been made.
Keywords
Online consumer reviews, eWOM, OCR, consumer buying decision,
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5th IBA Bachelor Thesis Conference, July 2nd, 2015, Enschede, The Netherlands.
Copyright 2015, University of Twente, The Faculty of Behavioural, Management and Social sciences.
1. INTRODUCTION relevant factors of online consumer reviews that might have an
The rise of new media channels and consumer communication impact on this buying decision, (2) developing a pilot
platforms during the last years has offered new possibilities for questionnaire which investigates the influence and the
electronic word-of-mouth (eWOM) communication. The magnitude of these different factors, and finally to (3) test the
number of consumers, who use Web 2.0 tools (such as social pilot questionnaire practicability and provide some valuable
media and online review platforms) to exchange product feedback for future research and practical contribution.
information and communicate their opinion about products and This paper consists of three parts. The first part of this paper
services, is growing tremendously fast. This new form of word- will give an overview of the existing literature that will give an
of-mouth (WOM) communication contributes to the rising understanding of the factors of online consumer reviews and the
development of a new era of consumer empowerment. It consumer buying decision. Furthermore we introduce our
enables consumers to easily share and exchange knowledge, conceptual research model based on the “integrative framework
information and experiences with like-minded individuals of the impact of eWOM communication” by Cheung and
worldwide (Olsen, Trimi, & Lee, 2012). Thadani (2012). In the second part, we introduce our pilot
The electronic word-of-mouth has recently attracted the questionnaire and the empirical research is done based on 244
attention among marketing professionals. Traditionally, respondents. Finally this paper ends with a conclusion and
consumers’ expectations about products or services were discussion where we provide some valuable contribution for
formed in two ways: by either traditional marketing efforts or practical use and future research.
word- of-mouth communication. It has been demonstrated by
several studies that WOM communication is more credible and
2. THEORETICAL BACKGROUND
trustworthy than traditional marketing efforts (Christodoulides, The literature review is focuses on providing an overview of the
Michaelidou & Argyriou, 2012; de Matos & Rossi, 2008). This current literature about the relevant factors of online consumer
reviews. To understand these relevant factors first the basic
also counts for eWOM, which is perceived as more credible,
relevant, and having a higher degree of empathy knowledge about WOM, eWOM, OCR and the consumer
(Christodoulides, Michaelidou & Argyriou, 2012; Bickart & buying decision are explained. The author did the research
Schindler, 2001). based on keywords including “WOM”, “word-of-mouth”,
“electronic word-of-mouth”, “eWOM”, “online consumer
Recent social consumer research reports have shown that when review”, “OCR”, “online reviews”, “factors online reviews”
making buying decisions, Internet users trust online reviews and “consumer buying decision” on different scientific search
posted by unknown consumers more than they trust traditional engines such as Google Scholar, Library & archive University
media (DiMauro, Bulmer, 2014). In addition, user-generated Twente, Web of Science, ScienceResearch and Scopus. Also
content (UGC) in the form of online consumer reviews was the snowball method was been applied to retrieve new relevant
found to significantly influence consumer purchasing decisions articles from the founded relevant literature.
(Chang, Cheung, Lai, 2005). 91% of respondents mentioned
that they consult online reviews, blogs, and other user- 2.1 Word-of-mouth
generated content before purchasing a new product or service, Word-of-mouth communications have received a lot of
46% of which are then influenced in the way they to purchase. attention from both practitioners and academics for years. Since
his phenomenon of “online orientation” will bring new the early 1960’s, it has been demonstrated by researchers that
challenges for businesses. The reputation of a product, service personal conversations and information exchange of
or company is no longer defined by what they report or how information among acquaintances not only influence
they say they stand for. Instead, they are increasingly defined consumers’ choices and buying decisions (Arndt, 1967) but also
by the shared opinions and experiences of social connected shape consumers expectations (Zeithaml & Bitner, 1996), pre-
consumers. use attitudes and post-usage perceptions of a product or service
(Burzynski & Bayer, 1977). According to Godes and Mayzlin
A lot of research has been done to eWOM in a business
(2004), Maxham and Netemeyer (2002) the word-of-mouth
perspective; the influence of social media to corporate
communication is one of the most influential resources of the
reputation (Kietzmann, Hermkens, McCarthy, Silvestre, 2011),
transmission of information. According to Arndt (1976), word-
how to deal with reputation threats in social media and the
of-mouth communication can be defined as “Oral, person to
influence of social media in marketing (Kim, Ko, 2012). Also
person communication between a receiver and a communicator
there is a lot of research done in the field of online reviews: Do
whom the receiver perceives as non-commercial, regarding a
consumers use them? (Chatterjee, 2001) What is the impact of
brand, a product or a service”.
reviews on (forecasting) sales (Hu, Liu, Jie, Zhang, 2008) and
what is the impact on product attitude? (Park, Lee, & Han, 2.2 Electronic word-of-mouth
2007). The Internet has enabled new forms of communication
However, in current research on online reviews, many are platforms that further empower both providers and consumers,
concerned about the impact of online reviews on product sales allowing a basis for the sharing of information and opinions
as well as the effectiveness of online reviews. Studies of the both from Business to Consumer, and from Consumer to
impact on consumer buying decisions are rare. Some of them, Consumer. Electronic word-of-mouth (eWOM) communication
regarded online reviews as a single element to discuss their refers to “any positive or negative statement made by potential,
impact on the purchase decision instead of all relevant factors actual, or former customers about a product or service, which is
of online reviews on the consumer’s buying decision. This made available to a multitude of people and institutions via the
missing element in the existing literature is leading us to the Internet” (Hennig-Thurau et al., 2004). eWOM communication
following research question: can take place in different settings. Consumers can post their
information and opinions on weblogs (e.g. iphoneclub.nl),
“What are the relevant factors in online reviews that have an
social network sites (e.g. Facebook.com, Twitter.com), review
impact on the consumer buying decision?”
websites (e.g. kieskeurig.nl, trustpilot.com, besteproduct.nl) and
The objective of this paper is therefore to (1) get a general sometimes directly on the seller or manufacture his website.
insight into the consumer buying decision and to identify the
While the eWOM has most of it’s characteristics in common after you have decided to buy a new phone, you may search for
with traditional WOM communication, in several dimensions it information about different features, technical options and
differs from the traditional WOM communication. First of all, usability in daily use. They’re two main aspects in the search of
compared the eWOM with the traditional WOM, the eWOM information. First of all, consumers search for information that
has the features of spreading information, fast and large volume might solve the problem in their own memories. If there is not
of information, instantly ready to receive, anonymous and enough information to make the decision, they will look for
transcend space and time (Hennig-Thurau et al., 2004). additional information in an external search. This external
eWOM communications involve the exchanges of information search may involve comparing available brands and prices,
in asynchronous mode to multiple receivers. (Hung, Li, 2004). looking for offers, communicating with colleagues and friends
It is not needed that information needs to be exchange at the offline or on social media and for this study the most important
same time when all communicators are physically present aspect: reading reviews online. Individual personal contacts are
(Karakaya, Barnes, 2010). For example; online users can write mostly viewed as the most credible sources of information
comments that others can read later. In traditional WOM, because the consumer trusts them. And as mentioned before,
information is mostly exchanged in dialogs and private one on recent studies have shown that internet users trust online
one sessions. According to Blodgett, Granbois, & Walters reviews posted by unknown consumers more than they trust
(1993), traditional WOM about a negative experience reaches traditional printed media. Also with the possibilities of the
an average of nine people, while the eWOM can reaches Internet, consumers are having increasingly access to relevant
thousands of people (Senecal & Nantel, 2004). Second, eWOM product information due the greater quantities of information.
communication is more accessible and permanent. Much of the However, studies have shown that if consumers are overloaded
textual information presented on the Internet is archived, and is with too much information, they make poorer choices. So
therefore available for an indefinite period of time (Lee et al. , improving the quality of information may help consumers in the
2008). Through the possibility’s of the search machines, people decision process to make better purchase decisions. How
also can easily find the particular information that there are consumers use and process the information obtained in online
looking for. Third, eWOM communication is far more reviews depends on the features of the information itself. In this
measurable then traditional WOM (Lee et al. , 2008). The study we look at different relevant factors of online reviews.
quantity, persistence and the presentation format have made The third stage, evaluation of alternatives, occurs when the
them more observable. According to Chatterjee (2001), eWOM buyer is evaluating the products. He establishes criteria for
communcation is far more voluminous in quantity compared to comparing the possible alternatives products. These criteria are
WOM communication in the offline world. Analyzing the the features or characteristics that the buyer wants (or does not
characteristics, for a large number of eWOM messages, such as want). The buyer also assigns a certain level of importance to
the style of the message, number of (sentimental) words used, each criterion that results in that fact that some features are
the position of the messages and the like, is far more easily. A more important than others. Both, the criteria and the level of
final key difference is that the ability to judge the sender and his importance are used to make a ranking of the possible products.
message on factors such as credibility is being recurred by the By framing the alternatives, marketers can influence the
electronic nature of eWOM in most of it’s settings. consumers’ evaluation. Framing can make certain aspects of the
product more important and can facilitate its recall from
2.3 Consumer buying decision memory. For example, by emphasizing no-sugar in soft drinks,
The consumer buying decision represents a process of five marketers can encourage the consumer to consider this
stages (problem identification, information search, evaluation of particular aspect to be important. Framing affects the consumer
alternatives, purchase, post-purchase evaluation) that the buying decision of inexperienced buyers more then those of
purchaser will go trough before he makes the purchase decision experienced buyers. When the evaluation of alternatives
(Dibb, S., Simkin, L., Pride, W.P. and Ferrell). Although a contains one or more products, the consumer is ready to move
detailed understanding of these stages is needed, a number of to the purchase stage. This fourth stage, where the consumer
general observations are also relevant. First, the actual act of chooses which product to buy, is mainly the outcome of the
purchasing is only one stage in this process, the process begins evaluation of alternatives. Although some other factors such as
several stages before the purchase itself. Second, not all the product availability and the closeness of alternative store
decision processes lead to a purchase, at different stages in the have an impact too. During this stage the buying also picks a
process the consumer can drop out. Finally, consumer decisions seller from where the product will be purchased. Finally the
do not always include all the fives stages of the decision purchase (decision) is made. The final fifth stage is the post-
process. purchase evaluation. After the purchase has taken place, the
buyer starts evaluating the product to check whether its actual
The first stage, problem recognition, occurs when a buyer performance meets his expectations. Most of the criteria used in
becomes aware that there is a difference between a actual the evaluating of alternatives stage are revisited during this
condition and a desired state. For example, a student who needs stage. The outcome will determine whether the consumer is
to keep a record of colleges and appointments. At the end of the satisfied or dissatisfied and this will influence future behavior.
year, when the old diary is finished, he recognizes that a The level of satisfaction a consumer experiences will determine
difference exist between the actual condition (an out of date whether they make a complaint, communicate with other
diary) and the desired state (a current diary). Therefore he possible buyers or purchase the product again.
makes the decision to buy a new one. Sometimes a person has a
problem or need but is unaware of it. For example: some 2.4 Online consumer review
consumers are concerned about their weight but may not aware The online consumer review (OCR), one type of eWOM,
that there is a low-calorie or low-sugar option of their product involves positive or negative statements made by consumers
available. Marketers use advertising, packaging and promotions and experts about a product or service. This consumer-created
help trigger such need recognition. After recognizing the information is helpful for decision- making on purchases
problem or need, the consumer searches for information about because it provides consumers with indirect experiences (Park,
the product that will solve his problem or satisfaction. This Lee, Han, 2007). An online consumer review as a route for
second stage is called the “Information search”. For example, social influence plays two roles (informant and recommender)
(Park, Lee, Han, 2007). As an informant role, the online of the product. The more reviews there are, the more important
consumer review delivers additional user-oriented information. and popular a product is. It is likely to lead consumers to
As a recommender role, it provides a negative or positive signal rationalize their buying decision by “Many other people also
of the product its popularity (Park, Lee, Han, 2007). bought the product” (Park, Lee, Han, 2007). Also a high
Due to it’s information asymmetry setting, the online consumer volume of reviews leads to more (useful) information used for
review is enormous important in the e-commerce context. This making the judgement whether to buy because there is a greater
due the fact that the online retailer has a lot more information likelihood that consumers will find the type of information they
about the product than the consumer has (Chukova, Christozov, are seeking for. Accordingly, we hypothesise as follow:
Mateev, 1999). Compared to traditional shopping, online H2: The quantity of online consumer reviews has a significant
consumers can’t use all of their senses (e.g. touching, feeling, effect on the consumer buying decision.
trying, smelling) to evaluate the product when they are buying
online (Park, Lee, & Han, 2007). This forces the consumer to
make a buying decision based on the information the retailer 2.5.3 Valence
provides on his website or elsewhere. Online consumer reviews Valence refers to the way an online review is framed (e.g.
provide these information-seeking consumers with indirect negatively framed or positively framed). A positively framed
product experiences. Since the fast and still increasingly online review will highlights the strengths of a product or
adoption of buying products or services online, online consumer service and encourage other consumers to buy a product or
reviews have become increasingly more important. service whether negative online reviews reveals the weaknesses
and negative features of a product or service and thus
2.5 Online consumer reviews factors. discourages people to adopt hem (Lee, Youn, 2009).
With respect to the online consumer review, the “integrative Accordingly this leads to the hypothesis:
framework of the impact of eWOM communication” by
Cheung and Thadani (2012) seems to be relevant and the most H3: The valence of online consumer reviews has a significant
helpful to explain the different factors of online consumer effect on the consumer buying decision.
reviews that have an impact on the buying decision. The
underlying assumption of this theoretical framework is that
social communication is “the process by which an individual
2.5.4 Timeliness
The timeliness concerns whether the messages are current, up-
(the communicator) transmits stimuli (usually verbal symbols)
to-date and timely. Products appearance change according to
to modify the behaviour of other individuals (communicates)”
feedback of consumers, due technical progress and new
(Hovland, 1948). The integrative framework provides a
techniques. According to Madu and Madu (2002) a website
systematic overview of elements influencing eWOM and its
cannot deliver expected information to the users if the website
outcome. It is composed of four major elements: receiver,
is not up to date and updated consistently. Also when online
stimuli, communicator, and the response.
reviews are not recent, consumer may think that the information
The receiver is the individual who responds to the message. The
is out-of-date and therefore unreliable for making buying
actual impact of the message may vary from person to person
since none of each receiver is the same. The stimulus refers to decisions (McKinney, Yoon, Zahedi, 2002). Hence the
the transmitted message by the communicator and has an following hypothesis is formulated:
impact on the response. The framework identifies argument H4: The timeliness of online consumer reviews has a
quality, volume, valence and timeliness as important stimuli significant effect on the consumer buying decision.
(factors) that are associated with the response. The
communicator refers to the person who transmits the message
and the source credibility of the communicator seems to be the 2.5.5 Source credibility
most important factor. Source credibility refers to “a message receiver's perception of
the credibility of a message source, reflecting nothing about the
message itself” (Chaicken, 1980). Unknown individuals usually
2.5.1 Argument quality share their experiences and opinions outside their personal
Argument quality refers to “the strength or plausibility of social network with a large en geographically dispersed group
persuasive argumentation” (Eagly, Chaicken, 1993). The of strangers. Therefore Park, Lee & Han (2007) argued that it
quality of each online consumer review is different because may have less credibility than traditional messages and also that
each review is based on the consumers’ subjective feeling. receivers may have difficulties in determining the source
According to Park, Lee & Han (2007) the quality of online credibility of the messages. This is leading to our last
consumer reviews is an important element that affects the hypothesis:
consumer cognitive information processing. High quality H5: The source credibility of online consumer reviews has a
reviews are more logical and persuasive. According to the significant effect on the consumer buying decision.
perceived quality theory, the more an online review appears to
be detailed and complete, accurate, based on facts, and relevant
to consumer needs, the more consumers will find such
information to be helpful in deciding whether to buy the item.
This leads to our following hypothesis:
H1: The quality of online consumer reviews has a significant
effect on the consumer buying decision.
2.5.2 Volume
The volume of online consumer reviews of a product represents
the product’s popularity because it is related to the sales volume
2.6 Research model time spending online, amount of yearly purchases online, type
Based on the factors derived from the “integrative framework of of products buying online) and rating scale questions (impact of
the impact of eWOM communication” a conceptual research the relevant review factors on the buying decision).
model was built. The model represents the starting point for our 3.2 Measurements and Methods
questionnaire. It assumed that all factors have an impact on the To operationalize all suggested relevant factors in online
consumers buying decision. reviews a Likert response scale with a 5-point format has been
applied ranging from “not influenced” to “strongly influenced”.
Quality
Indicators, adapted from existing scales derived from previous
studies, have measured each factor. To minimize the impact of
order bias, the sequence of the items per factor were
Volume
randomized.
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7. APPENDIX
7.1 Questionnaire
Table 3: Gender
Table 4: Age
< 10 min 1 ,5 ,5 ,5
1 - 2 purchases
13 6,4 6,4 6,4
Kaiser-Meyer-Olkin Measure of
,799
Sampling Adequacy.
Sig. ,000
Factors
1 2 3 4 5
Objectivity of
,696 ,372 ,013 ,098 -,104
reviews
Understandability
,759 ,046 ,128 ,182 ,091
of reviews
Credibility of
,807 ,247 -,027 ,097 -,012
reviews
Clearness of
,772 ,225 ,178 ,127 ,017
reviews
Sufficient reasons
supporting the ,790 ,060 -,004 ,050 ,060
opinion
Quantity of
information in -,087 ,005 -,071 ,059 ,813
reviews
Positive online
,120 ,107 ,087 ,879 ,029
review
Negative online
,245 ,043 ,108 ,831 ,043
review
Reviewers’
,250 ,852 ,087 ,081 ,076
credibility
Reviewers’
,224 ,818 ,134 ,071 ,118
reliability
Reviewers’
,156 ,861 ,091 ,034 -,021
expertise
Latest degree of
,127 ,070 ,803 ,124 ,061
information
Degree of
,067 ,072 ,891 ,038 -,001
timeliness
Table 11
21 -
86 3,9047 ,67752 ,07306 3,7594 4,0499 1,40
30
31 -
15 3,9333 ,43205 ,11155 3,6941 4,1726 3,20
40
41 -
21 3,9905 ,76020 ,16589 3,6444 4,3365 2,80
50
21 -
86 3,3023 ,69570 ,07502 3,1532 3,4515 1,00
30
31 -
15 3,3667 ,76687 ,19801 2,9420 3,7913 2,00
40
41 -
21 3,1667 1,02875 ,22449 2,6984 3,6349 1,00
50
31 -
15 3,3778 1,02250 ,26401 2,8115 3,9440 1,00
40
41 -
21 3,6667 ,86281 ,18828 3,2739 4,0594 1,67
50
21 -
86 3,6124 ,68191 ,07353 3,4662 3,7586 1,67
30
31 -
15 3,6444 ,68390 ,17658 3,2657 4,0232 2,67
40
41 -
21 3,7302 ,93464 ,20395 3,3047 4,1556 1,00
50
21 -
86 4,0291 ,59088 ,06372 3,9024 4,1558 2,00
30
31 -
15 4,3333 ,52327 ,13511 4,0436 4,6231 3,50
40
41 -
21 4,2381 ,68226 ,14888 3,9275 4,5487 3,00
50
10 - 30
12 3,6333 ,45793 ,13219 3,3424 3,9243
min
30 - 60
35 3,8286 ,82767 ,13990 3,5443 4,1129
min
10 - 30
12 3,5417 ,65569 ,18928 3,1251 3,9583
min
30 - 60
35 3,2143 ,84266 ,14244 2,9248 3,5038
min
30 - 60
35 3,6095 ,85362 ,14429 3,3163 3,9028
min
10 - 30
12 3,6111 ,80193 ,23150 3,1016 4,1206
min
30 - 60
35 3,7905 ,64719 ,10940 3,5682 4,0128
min
10 - 30
12 3,7083 ,58225 ,16808 3,3384 4,0783
min
30 - 60
35 4,2286 ,62241 ,10521 4,0148 4,4424
min
5 - 10
62 3,8581 ,69034 ,08767 3,6828 4,0334
purchases
5 - 10
62 3,1935 ,73749 ,09366 3,0063 3,3808
purchases
5 - 10
62 3,6559 ,80970 ,10283 3,4503 3,8615
purchases
5 - 10
62 3,7151 ,77963 ,09901 3,5171 3,9130
purchases
5 - 10
62 3,9677 ,71787 ,09117 3,7854 4,1500
purchases