Introduction internet to voice opinions on products, brands or

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Introduction

This essay aims to examine the influence that electronic work of mouth
has on consumer purchase intentions within the travel and tourism industry.

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Word of mouth (WOM) is defined as a ”communication about products and
services between people who are perceived to be independent of the company
providing the product or service” (Silverman, 2001, p.25). WOM has been seen
to play a substantial role when it comes to influencing consumer purchase
attitudes and behaviors. It is also acknowledged as a tool that can reduce
marketing costs whilst boosting profits due to its influential ability on
purchase intention (Reichheld and Sasser, 1990). Since the advance of the web,
WOM has been widely available for marketers to examine in a new form,
Electronic Word of Mouth.

 

Electronic Word of mouth of eWOM refers to the use of the internet to
voice opinions on products, brands or current topics (Vineyard, 2014). Bansal
and Voyer state ”eWOM
conversations consist of basic information transfer between people who send and
receive information” (2000, p.166).
 Fan and Miao (2012)
state that “Customers read electronic word-of-mouth (eWOM) to make purchasing
decisions” (p.175). In addition, Fan and Miao (2012) identify that WOM comments
“can be found in virtual communities: consumer reviews, blogs, forums, and
social networks” (p.175).

 

The consumer decision making process can be defined as a process of
buying which begins within the mind of the consumers, it involves an evaluation
of products and information search, which ultimately leads to intent to
purchase, purchase and post purchase evaluation (Khan, 2007). Schindler and Bickart (2005) states that online
reviews left on social media, corporate websites, and third party sites
significantly influence a number of steps of the consumer decision-making
process; however, we will be examining its effects specifically on consumer
purchase intention.

 

Peter and Olson (2008) state that purchase intention is defined as the
act of making a conscious choice to purchase a specific product. Purchase
intention is an element of the consumer decision-making process and is used to
foresee consumer-buying behavior prior to the act of purchase (Newberry et al,
2003). Further to this, O’Keeffe (2002) suggests that understanding
intention is the most accurate method of forecasting purchase behavior in a
range of contexts such as high and low involvement purchases. Hsu et al (2006)
also states the purchase intention is as significant to research as the actual
act of purchase due to its ability to predict future behaviors.

 

Due to the advance of technology and the ease of sharing views online,
it is clear to see why there have been a number of studies conducted into the
effect that eWOM has on consumer purchase intention (Xie et al, 2011). The
travel and hospitality industry have seen the highest impact from user
generated comments (eWOM) on the web (Serra Cantallops and Salvi, 2014). EWOM
comments can be viewed on a range of social media platforms such as Facebook or
Twitter but are predominantly seen on third party travel sites such as
TripAdvisor and Yelp, which offer an outlet for consumers to voice their
opinions of their post purchase evaluation, thus informing the decision making
process for the prospective consumer.

 

The focus of this study aims to examine the literature regarding the
influence of eWOM on consumers purchase intentions within the UK hospitality
industry, due to the number of studies conducted within this area of research.

 

Main body

 

Numerous studies have recognized the influence that eWOM reviews has on
consumer purchase intentions, specifically within the travel industry (Xie et
al, 2011; Ladhari and Michaud, 2015). Gretzel and Yoo (2008) study
analyzed a sample of
TripAdvisor users and identified the importance of user-generated reviews in
information purchase intention and decisions. With 77.9% of consumers choosing
to use EWOM reviews as a tool to inform travel decisions and 92.3% of
participants using online forums like TripAdvisor and LonelyPlanet to do
so. 

 

A key stud into the effect of eWOM on consumer’s purchase intention came from Jalilvand and
Samiei (2012) who quantitatively identified eWOM as one of the most effective
tools when influencing an individual’s purchase decision. However, this study mainly focuses on the
automotive industry so it is difficult to generalize the findings to the travel
industry. A later study from Jalilvand and Samiei (2012) supports the earlier
findings and identified in an experimental study of 264 tourists in Isfahan,
Iran, that eWOM was significant when it came to increasing purchase intention.
Further to this, Smith and Vogt (1995) discovered from a study conducted on the
hotel industry that eWOM effects consumers brand preference and purchase
intention as well as having a significant effect on the credibility of the
hotel.  It has also been discussed how
positive eWOM has the ability to reduce marketing costs by acting as a
persuasive form of free advertising (Yi Lin & Yuh Lu, 2010).

 

EWOM is separated into three categories, Variance, Volume and Valence.
Variance, which examines the statistical variance of the comments and the
differing factors between them (Clemons, Gao & Hitt, 2006). Volume
discusses the number of online word of mouth comments that are received about a
particular topic or product. It has been identified that a significant volume
of comments can results in an upsurge in sales (Moe & Trusov, 2011).
Finally, numerous studies have focused on the valence of the eWOM comments,
which refers to the sentiment rating of said comment (positive or negative)
(Mauri and Minazzi, 2013, p.101). Kim, Park and Lee (2013) aimed to identify
the effects of eWOM on consumers purchase behavior through online channels. The
study proposed that the directionality (Valence) of eWOM would have a
significant effect on purchase intention. It was found that negative eWOM
comments, such as complaints or disappointments in experience, had a more
significant impact upon consumers purchase decisions that positive eWOM
comments.

A quantitative study by Ladhari and Michaud (2015) examined how positive
and negative eWOM comments left on Facebook influenced an individual’s purchase intention when
researching a hotel. Their findings identified a direct correlation between
positive eWOM comments and a significant increase in purchase intention. They
also recognized how positive sentiment also decreased the level of perceived
risk and enhanced perceptions of quality and credibility of the hotel. This
study also found a direct correlation between exposure to negative comments and
a decreased purchase intention for hotels and resorts (Ladhari and Michaud,
2015).The findings of this research support a number of similar studies who
identified the effects of favorable sentiments on an increase in consumers’
likelihood of booking a hotel
stay (Duverger, 2013; Sparks and Browning, 2011). However, Chatterjoe (2001)
states that negative valence may only be detrimental to purchase intention if
the consumer has no prior knowledge or exposure to the company and its
offerings. A further study from Sen and Lerman (2007) also identified that the
directionality of eWOM (positive or negative) has an effect on purchase
intention. However, it was found that this was dependent on whether the product
was hedonic/utilitarian or high risk/low risk. Further to this, Berger (2016)
discussed how positive eWOM reviews are particularly important for products
with a high level of risk, such as automobiles, or travel choices, as it
alleviates a level of perceived risk within the consumers mind.

 

Numerous theoretical models and frameworks have been utilized to examine
eWOM and purchase intention such as the Theory of Reasoned Action model (TRA)
(Fishbein and Azjen, 1975) and the Information Adoption Model (IAM) (Sussman
and Siegal, 2003).

The TRA model (Fishbein
and Azjen, 1975) suggests that intentions predict behavior and are said to be
composed of individual attitudes and social norms. Several studies have
utilized TRA to explain a relationship between eWOM and purchase intention
(Cheung et al, 2008; Shu & Scott, 2014; Erkan & Evans, 2015).

 

Another model utilised within studies is
the ELM model. The ELM model is comprised of two processing paths, the central
and peripheral, Fan & Miao (2012) utalised the ELM model in their study of
online reviews within the travel industry and state consumers who are more
willing to process a message or are interested in finding the information, use
the central route of information processing. Meaning that they will contemplate
influential information more deeply such as eWOM comments, however they will
produce their own thoughts on the information they have found. People who are
less interested in the message topic will likely use the peripheral route when
considering EWOM comments

 

Further to this, the IAM model (Sussman and Siegal, 2003) proposes that
consumers reactions may vary based on the individual, even when the content is
the same. The IAM model addresses the characteristics of information processing
within individuals through eWOM and extends the work of the Elaboration
Likelihood model’s
(ELM) (Petty and Cacioppo, 1986) two routes of processing. Erkan and Evans
(2015) state that the IAM model has four mechanisms ”argument credibility (Central route), source
credibility (Peripheral route), Information usefulness and Information
adoption.

 

Erkan and Evans (2015) employed the IAM to develop the information
acceptance model (IACM). Erkan and Evans (2015) adapted the IAM to include
elements of the TRA model to gain a fuller understanding of eWOM’s effects. The
study aimed to analyze the aspects of social media comments that have an effect
upon purchase intention and was tested through the IAC model. The findings
highlight that the characteristics of eWOM, such as arguments credibility and
information usefulness, were seen to have a significant effect on purchase
intention.

 

However, whilst these models have all been effective in explaining
elements of purchase behavior they do not take into account external influences
such as a rise in income, financial gain  or the market environment (Foxall, 2005).

 

Another facet of eWOM that has been explored is its effects on image
creation in relation to purchase intention. Various empirical studies have
identified that eWOM can have an effect on travel destination image creation
within the minds of consumers (Echtner and Ritchie, 2003). Morgan, Pritchard
and Piggot (2003) state that negative comments are highly detrimental to image
creation of a travel destination, due to the disgruntled reviews left by
travelers online forming an image within the minds of prospective consumers. In
support of this, Hanlan and Kelly’s (2005) experimental study found that destination image is formed
overwhelmingly through eWOM sources. Jailvand and Samiei (2012) quantitative
study of the tousim industry in Iran aimed to detect online word of mouth’s effects on the destinations image,
the impact on attitude and the impact on travel intention. From the study of
264 participants, it was found that there is a significant impact from eWOM
that effects the destinations image, thus directly resulting in an impact on
purchase intention.

 

Khan et al (2015) aimed to identify key factors in Consumer-to-Consumer
eWOM that directly affect purchase intentions whilst online shopping in
Pakistan. Khan et al (2015) findings show that there are six significant
factors within WOM that influence consumers’ willingness to purchase ”Trustworthiness,
source similarity, source attractiveness, social tie strength, source expertise
and information usefulness” (2015, p.481). This study highlights the important
factors, which help break down the influence that the reviews of others can have
upon the purchase behaviors. These findings support previous research, which
identified the power of factors such as credibility (Pornpitakpan, 2004) and
strength of social ties (Bond et al, 2013). Baloglu and McCleary (1999) suggest
that reviews from friends and family or others with a  strong social tie were the key factor in
holiday destination choice.

 

The strength of social ties can explain why eWOM comments via social
media channels are effective at influencing purchase intention due to the
strong ties that are present between the consumer and the writer. In support of
this, Lamberton & Norton (2011) state that people trust the opinions of
others when there are strong social ties. i.e. family and friends, as they
believe their preferences will be similar.

 

The detailed, or basic, nature of comments is another factor of eWOM
that has been shown to influence consumer purchase intention. Godes &
Mayzlin (2004) identify how in-depth comments have a significant effect on
behavior. However, this may not always be the case as consumers may not take
the time to read the full review if it does not captivate them.

 

Finally, a factor that has undergone substantial research is the
susceptibility of the recipient of eWOM. Aral & Walker (2012) suggest that
some consumers are more likely to be persuaded by social influence, meaning
that they are more willing to purchase a product after hearing about it. It has
been suggested that younger consumers are often the most easily influenced by
social persuasions (Pasupathi, 1990) in contrast to those who believe
themselves to be experts in a field (Iyengar et al, 2011).

 

Conclusion

 

With over 60% of travelers choosing to inform their decision based
electronic word of mouth recommendations (Light speed Research, 2011) there is
a significant need for marketers to have a solid understanding of the effects
that EWOM can have on the consumer decision making process. As can be seen from
previous research consumer’s comments have had a significant impact upon the travel industry.
Particularly the effects that Valence and Volume (Moe and Trusov, 2011; Mauri
and Minazzi, 2013) have on consumers purchase intention. Travel industry
marketers must ensure they monitor online conversations to analyze what is
being said about the brand. Whilst it can be seen from research that the
majority of online word of mouth reviews are left on third party websites such
as TripAdvisor it can be stated that a small amount of research studies have
also identified the effect of social media EWOM on consumer purchase intention
within the travel industry.  It is suggested
that marketers utilize social listening tools to monitor social media channels
and analyze share of voice and sentiment of the comments being made if they are
to understand its effects on purchase intention. By analyzing the share of
voice, online marketers will be able to make improvements to their destination
and negate negative social buzz, which may occur. Many companies use proactive
methods of replying to negative eWOM comments, this is described as exogenous
WOM (Godes and Mayzlin, 2009). Lee and Song (2010) identified three methods of response that
managers could use to negate negative comments, defensive (negative)
accommodative (aims to amend the issues) and no action. Lee and Song (2010)
found that in some instances, a no action response is often better. However, Chen
and Xie, (2005) suggest that by using a no action response is detrimental to
brand image and it is always better to offer a strategical response to the
comment.

 

Previous research findings also indicate that the level of credibility
of EWOM comments have a significant effect on consumers’ willingness to purchase
(Pornpitakpan, 2004; Khan et al., 2005). Within the travel industry, the rise
of positive sponsored review posts has been seen to increase rapidly (Sirgy et
al., 2008). Whilst this offers marketers a means of generating positive
valence, which we know to increase sales profits and reduce marketing costs
(Reicheld and Sasser, 1990) it decreases the credibility of EWOM. Mizerski and
Green, (1978) state that sponsored review posts often decrease the level of
credibility and trustworthiness of information, in turn rendering marketers
efforts useless and reduces purchase intention. Marketers must be aware of the
ethical implications of utilizing sponsored posts to increase positive valence

 

A key limitation of this study into the effects of EWOM on consumer
purchase intention within the UK travel industry is the restrictive nature of
secondary research. Whilst secondary research offers a low cost alternative to
gaining insight there are many limitations to utilizing only secondary sources
to inform your findings. The first limitation is the age of secondary sources
on the topic, whilst older sources are extremely useful, within the fast paced
and ever changing market of travel and tourism up to date information would
give a richer understanding of EWOM’s effects within the current environment (Wrenn et al. 2006). Further
primary research should be conducted alongside secondary research to gain a
deeper understanding of the effects that online word of mouth has on consumers
purchase intention within the UK travel industry in order to offer significant
findings.

A further limitation is the lack of research into the external
influences that may have a detrimental effect onto consumers EWOM experience,
and thus on their willingness to purchase. External influences such as the
turbulent nature of the travel business due to the threat of terrorism
(Michaels, 2003), economic factors and individual beliefs about travel may have
effect the influence of negative EWOM by enhancing the perceived risk attached
to travel.

 

 

 

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