Chapter 3
3.2 Effects of Information Sources on Receiver's Purchase Intentions
Research in marketing literature points out that eWOM plays an important role in decision processes in which the decision maker receives recommendations for the purpose of lowering the uncertainty and sum of information that has to be processed to make a decision (Olshavsky and Granbois, 1979). The consequences of eWOM occur in the behavior of those who receive it. Research on the potential of eWOM indicates that the conclusion people draw are uncertain upon their receptivity to the eWOM (Wilson and Peterson, 1989). A significant literature documents the influence of the receiver’s predisposition towards the eWOM's receiver on receptivity to and explanation of new information. The stronger an individual’s emotions and motivation in choice prior to exposure to eWOM, the more the emotions will be in control of the explanation and use of eWOM. Therefore instructions used by individuals in decision-making play an significant part in determining if and how much of eWOM is received and the influence of the eWOM on product evaluation and purchase decision.
eWOM is found more trustworthy and credible than advertising and other marketer dominated sources (Herr et al., 1991). In the context of online communities members may provide information about a product, a new genre, or a music album that evokes the desire of other consumers to listen to it. Thus, information and communication within online communities can trigger members to engage in consumption activities related to the communi-ty’s topic of interest, e.g., music and artist.
Bickart and Schindler (2001) have investigated the effect of reference group influence on consumer behavior on bulletin boards. They assume that online information written by individuals is more credible and relevant and results in more understanding than marketer-generated information. Consequently, they hypothesize that content, posted on bulletin boards by an individual, results in more interest in and purchase intentions for the product categories that are discussed. They have tested this in an experimental setting with sixty-one undergraduate students that were asked to look at either corporate web pages or online consumer discussions related to specific product categories. Their study supports that the participants, who are exposed to the online discussions, show more interest than the participants who are exposed to the corporate website. By contrast, the amount of cash that the participants expect to spend are inconclusive and so are the behavioral effects on purchase likelihood.
In Chapter 2 I addressed the value of the research of Chevalier and Mayzlin (2003) in which they address the value of eWOM in terms of their economical influence and their revenue prediction potential. Chevalier and Mayzlin show that online reviews about a book is related to book sales. Dellarocas et al. (2004) show that online reviews about movies are representative of the movie-going audience at large, and that the online reviews are better predictors of movie revenues than professional reviews.
The fact that the study of Bickart and Schindler (2001), Chevalier and Mayzlin (2003) and Dellarocas et al. (2004) came to the conclusion that eWOM resulted in a greater purchase intention is important for this research. Based on the above discussion, I hypothesize:
H1: Information Sources positively influence eWOM's influence on the receiver's purchase intention.