Examining the Awareness and Persuasive Effects of Online WOM

This study addresses a growing trend in how consumers obtain and use information prior to making their online purchasing decisions. Specifically, the authors investigate the relationship between online word-of-mouth WOM, i.e., customer reviews and ratings and sales as measured by Amazon "ranks" for different product categories. Using data collected from Amazon, the authors find that online WOM metrics and social media impact consumer purchase decisions through awareness and persuasion. From a managerial standpoint, these findings suggest that businesses should use ratings, reviews, and social media to build awareness about their products and influence purchase decisions. Future research in online WOM and sales outcomes for product categories should control for advertising and product heterogeneity within categories, as well as incorporate social media metrics, review text, and review length.

[1]  E. Clemons,et al.  When Online Reviews Meet Hyperdifferentiation: A Study of the Craft Beer Industry , 2006 .

[2]  J. Gotlieb,et al.  The Moderating Effects of Message Framing and Source Credibility on the Price-perceived Risk Relationship , 1994 .

[3]  Chrysanthos Dellarocas,et al.  The Digitization of Word-of-Mouth: Promise and Challenges of Online Feedback Mechanisms , 2003, Manag. Sci..

[4]  Florian Zettelmeyer,et al.  Internet Car Retailing , 2000 .

[5]  Evan G. Mense,et al.  Marketing the Green School: Form, Function, and the Future , 2014 .

[6]  P. Nelson.  Information and Consumer Behavior , 1970, Journal of Political Economy.

[7]  Christoph Meinel,et al.  The Automated Generation and Further Application of Tree-Structure Outline for Lecture Videos with Synchronized Slides , 2014, Int. J. Technol. Educ. Mark..

[8]  Juan Manuel Núñez-Pomar,et al.  Brand Perception and Its Relation to Perceived Performance of a Public Sports Service , 2019, Brand Culture and Identity.

[9]  David Godes,et al.  Using Online Conversations to Study Word-of-Mouth Communication , 2004 .

[10]  E. Rogers.  Diffusion of Innovations , 1962 .

[11]  David Godes,et al.  Sequential and Temporal Dynamics of Online Opinion , 2012, Mark. Sci..

[12]  Lisa R. Klein.  Evaluating the Potential of Interactive Media through a New Lens: Search versus Experience Goods , 1998 .

[13]  D. McFadden,et al.  Consumers' Evaluation of New Products: Learning from Self and Others , 1996, Journal of Political Economy.

[14]  Jeffrey M. Wooldridge,et al.  Introductory Econometrics: A Modern Approach , 1999 .

[15]  Jose Marti Parreno,et al.  Engaging Consumers through Branded Entertainment and Convergent Media , 2015 .

[16]  Mark S. Granovetter.  The Strength of Weak Ties , 1973, American Journal of Sociology.

[17]  Wendy W. Moe,et al.  Measuring the Value of Social Dynamics in Online Product Ratings Forums , 2010 .

[18]  John G. Lynch,et al.  Interactive Home Shopping: Consumer, Retailer, and Manufacturer Incentives to Participate in Electronic Marketplaces , 1997 .

[19]  Chrysanthos Dellarocas,et al.  A Statistical Measure of a Population’s Propensity to Engage in Post-Purchase Online Word-of-Mouth , 2006 .

[20]  Peter H. Reingen,et al.  Social Ties and Word-of-Mouth Referral Behavior , 1987 .

[21]  P. Nelson.  Advertising as Information , 1974, Journal of Political Economy.

[22]  X. Zhang,et al.  Impact of Online Consumer Reviews on Sales: The Moderating Role of Product and Consumer Characteristics , 2010 .

[23]  Glenn Ellison,et al.  Rules of Thumb for Social Learning , 1993, Journal of Political Economy.

[24]  Glenn Ellison,et al.  Word-of-Mouth Communication and Social Learning , 1995 .

[25]  Linda L. Price,et al.  Commercial Friendships: Service Provider--Client Relationships in Context , 1999 .

[26]  John G. Lynch,et al.  Wine Online: Search Costs Affect Competition on Price, Quality, and Distribution , 2000 .

[27]  M. Darby,et al.  Free Competition and the Optimal Amount of Fraud , 1973, The Journal of Law and Economics.

[28]  A. Banerjee,et al.  A Simple Model of Herd Behavior , 1992 .

[29]  A. Banerjee,et al.  The Economics of Rumours , 1993 .

[30]  Wei Chen,et al.  The influence of user-generated content on traveler behavior: An empirical investigation on the effects of e-word-of-mouth to hotel online bookings , 2011, Comput. Hum. Behav..

[31]  Nicholas H. Lurie,et al.  Searching for Experience on the Web: An Empirical Examination of Consumer Behavior for Search and Experience Goods , 2009 .

[32]  Bin Gu,et al.  Do online reviews matter? - An empirical investigation of panel data , 2008, Decis. Support Syst..

[33]  Tak Cheung Chan,et al.  PPBES: How One School District Goes Green , 2015 .

[34]  Yong Liu.  Word-of-Mouth for Movies: Its Dynamics and Impact on Box Office Revenue , 2006 .

[35]  Chrysanthos Dellarocas,et al.  Exploring the value of online product reviews in forecasting sales: The case of motion pictures , 2007 .