Electronic Word of Mouth and Consumer Behaviour

Word of Mouth: The passing of information from person to person by oral communication, which could be as simple as telling someone the time of day.

Electronic Word of Mouth: 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.

What Men of Letters Say

According to Hong-Youl Ha, Muthaly, and Akamavi (2010), the power of personalized information or consumer reviews lies in its capability to influence the level of satisfaction of the consumers and their intentions for further purchases.

Many scholars such as Armstrong and Hagel (1996), who carried out Electronic WOM researches in the last decade of 20th century, did not differentiate Electronic WOM or Traditional WOM in their studies. At the same time they gave recommendation to the organizations to make use of online meeting places for the betterment of their business other than simple online product advertisements or announcements. Lindgreen and Vanhamme (2005), identified their recommendation as the first known action taken to guide and monitor Electronic WOM communications.

Electronic WOM plays a vital role in the decision making of the consumers while performing product purchase. Description of Online interpersonal influence is initially put forward by scholars such as Senecal and Nantel (2001). They viewed Electronic WOM and Traditional WOM which is offline as parallel to each other. A structure for this trend is proposed by them in their research work which includes narration regarding the categories of online interpersonal interactions.

Research conducted by Fitzsimons and Lehmann (2004) revealed that the reaction of the consumers shall behave negative to Electronic WOM if they are not impressed with the recommendation or product advices given to them by another consumer. Park and Lee (2009 state that negative Electronic WOM has greater effect on the consumers than positive Electronic WOM.  It is found that the manipulated opinions and reviews in Electronic WOM and the administrator’s comments have higher influence on the motivation of consumers to purchase (Xiaofen and Yiling, 2009).  

Findings of Goldenberg et al. (2001) state that decision making process of the consumer is highly influenced by the electronic WOM interactions. In addition, Schindler and Bickart (2001) found greater credibility and relevance on online consumer forums than official websites of the products or services.

An examination of Chevler and Mayzlin (2006) on the effects of testimonials and reviews of consumers on the book sales of Amazon.com stated that Electronic WOM could significantly influence the sales of books. Bickart and Schindler's (2001) argue that the process of information gathering on Electronic WOM platforms does not improve the current knowledge regarding the product but it shall enhance the interest to gather more information regarding the product or service.

Lin, Luarn and Huang (2005), conducted a study on the effect of Electronic WOM on the book purchases found that online reviews have a key role on the book purchasing interests of the consumers. While performing book purchases or searching book related information, the consumers consider online reviews as a reliable source of information. Above studies on the online book reviews and its impact on consumers illustrate that the consumers consider the information gathers from other consumers as trustworthy and their purchase decisions are influenced by them (Lin et al., 2005).

What Market Surveys Say

In keeping with reliable Word of Mouth Market survey results, negative product reviews play a vital role in the decision making procedures. e Commerce customers agree that negative product reviews can change their purchasing decisions while positive reviews can encourage or accelerate purchase process. 

Although one single negative view may not stop the consumer from purchasing a particular product but the number of reviews backing that particular review and number of people agreeing with that negative review may discourage the consumer from purchasing a product.

Not only the success of the product is influenced by the Electronic WOM but also it influences the apparent ethics and values of the consumer. According to Gruen’s (2006) study activities associated with Electronic WOM has very important role the general value of the organization. Additionally their findings recommend that Electronic WOM has a straight connection with reliability objectives, over and above an indirect connection which is pointed out through the general value of the contributions of that organization.