Chapter 2: Word-of-Mouth

• 2 Word-of-Mouth
• 2.1 Theoretical Background
• 2.2 Pre-Purchase Information
• 2.3 Communication Channels
• 2.4 eWord-of-Mouth
• 2.5 Motives

2.2 Pre-Purchase Information

Pre-purchase information will be defined in terms of the extent of experience and familiarity that one has with a product (good or service) (e.g., Alba, 1983; Alba and Hutchinson, 1987; Brucks, 1985; Herr, 1989; Murray, 1991). Many of these authors refer to it as:

1. accessible from memory;
2. generally accessed before external search occurs.

The first stage in the consumer buying process is the information search. Consumers collect and evaluate information through consumer reports, magazine advertising, brand name, eWOM, and customized information. Although consumers find much information through papers and magazines, one of the main reason that they use the Internet is to collect optimal information. Information that is available any time and any place. Furthermore, pre-purchase information within consumer consideration sets has an important effect on consumer buying decisions (Hoyer and Brown, 1990; Nedungadi, 1990).

Information search activity is entered into with the intent of lowering the consumer's overall perceived risk level. The important resources that influence consumer perceived risk are the following (Berthon, Hulbert and Pitt, 1999; Foxall, Goldsmith and Stephen, 1998; Harris et al., 1999; Jarvenpaa and Todd, 1997):

Their own experience with a product or brand;

Recommendation from family, friends, colleagues, virtual community (i.e., eWOM);

Previous imprinting as a result of promotion, usually in association with a specific brand or artist.

Hoffman (1998) concludes that consumers have characteristics that recognize optimal information and consumers act depending on their own given situation. Consumers are able to collect product information and compare the products online. Because of the possibility to do this across national and currency boundaries shopping on the Internet has a big advantage.