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An Exploratory Study on the Factors Affecting Electronic Word-of-Mouth Hee-Woong Kim* Seung-Eui Noh** Ji-Eun Lee* Jung-Eun Son* * Yonsei University, Seoul,

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Presentation on theme: "An Exploratory Study on the Factors Affecting Electronic Word-of-Mouth Hee-Woong Kim* Seung-Eui Noh** Ji-Eun Lee* Jung-Eun Son* * Yonsei University, Seoul,"— Presentation transcript:

1 An Exploratory Study on the Factors Affecting Electronic Word-of-Mouth Hee-Woong Kim* Seung-Eui Noh** Ji-Eun Lee* Jung-Eun Son* * Yonsei University, Seoul, Korea ** Accenture, Seoul, Korea

2 Research Motivation & Objective (Trend Report, 2011) Aims to find on factors affecting WOM activities of consumers with limitation to open market environment

3 Research Methodology Qualitative Research Interview + Coding Quantitative Research Online Survey One-to-One interview Consumers with eWOM activities Open market context 31 subjects Research model Online survey 260 subjects 1 2

4 Qualitative Research – Results RankIntention of WOM activitiesExamplesFrequency% 1 Information sharing desire - I want to share information in relation to products or services. - I want to exchange information with others. - I want to share information to prevent others from purchasing damages. 7154% 2 Self-presentation desire - I want to show off my information power. - I want to show off the fact of my purchasing good products. - I want to gain recognition of my values from others. 2821% 3 Reward - I want to get points or mileages after purchase. - I want to ask for economic and psychological reward. 1511% 4 Customer satisfaction - I want to express my gratitude to sellers. - I want to express my dissatisfaction. 108% 5 Loyalty - I want to express the loyalty to a specific shopping mall. - I want to conduct maniac activities or make relations with others. 65% 6 Others - Korean people enjoy spreading a rumor.. 11%

5 Quantitative Research - Constructs Identified eWOM Activities Determinants Definition Information sharing desire Need/Attitude to share information on products or services with others in open market Customer satisfaction A measure of how products or services by a seller meet or surpass customer expectation in open market Self presentation desire A behavior of expressing experiences in purchasing products or services in open market Reward Economic or psychological reward by WOM activities in open market Loyalty The degree to which a consumer consistently purchases the same brand in open market eWOM Means of exchanging purchasing experiences with other consumers and reflect them into purchasing decision in open market

6 Quantitative Research - Model 6

7 Quantitative Research - Hypothesis H1 Information sharing desire has a positive effect on WOM activities in the open market. Fishbein and Ajzen (1975) Brown and Duguid (2002) H2 Customer satisfaction in the open market has a positive effect on WOM activities. Bitner (1990) Bloch et al. (1986) Anderson (1998) H3 Self-presentation desire in the open market has a positive effect on WOM activity. Donath (1998) Hirschman (1980) Baumeister (1982) H4 Reward in the open market has a positive effect on WOM activity. E.L. Deci, R.M. Ryan (1987) H5 Loyalty to the open market has a positive effect on WOM activity. Reichheld, F. F. and Schefter, P. (2000) Asker, D. A. (1991) H6 Customer satisfaction in the open market has a positive effect on loyalty. Jun-chul Park (2003) H7 Self-presentation in the open market has a positive effect on information sharing desire. Dutton and Dukerich (1991) H8 Reward in the open market has a positive effect on information sharing desire. Bock and Kim (2002)

8 constructs SPDISDCSRWDWOMLYT Self presentation desire SPD10.900.140.180.150.12 SPD20.930.170.130.120.140.10 SPD30.920.180.090.120.140.12 Information sharing desire ISD10.180.770.100.110.010.03 ISD20.050.830.190.090.130.08 ISD30.040.850.150.070.140.15 ISD40.210.70-0.020.050.080.10 Customer satisfaction CS10.130.120.880.11-0.010.18 CS20.140.100.910.080.070.14 CS30.100.170.880.090.120.16 Reward RWD10.100.130.080.870.180.16 RWD20.130.100.150.910.170.07 RWD30.140.100.060.910.10 eWOM WOM10.130.170.120.160.840.22 WOM20.140.090.070.110.900.22 WOM30.120.100.010.200.890.19 Loyalty LYT10.100.210.180.050.220.79 LYT20.150.050.150.230.260.82 LYT30.220.140.330.120.260.61 Quantitative Research – Factor Analysis

9 MeanStd Cronbachs Alpha ISDCSISPDRWDLYTWOM ISD4.711.270.841 CSI4.871.090.920.31**1 SPD4.171.460.960.34** 1 RWD3.601.420.940.25**0.27**0.28**1 LYT4.091.320.790.35**0.45**0.41**0.37**1 WOM3.841.460.920.32**0.22**0.35**0.37**0.54**1 ISD:information sharing desire, CS: customer satisfaction, SPD: self presentation desire, RWD: reward, LYT: loyalty, WOM: word of mouth **Correlation is significant at the 0.01 level (2-tailed). Quantitative Research – Reliability & Correlation

10 Quantitative Research - Result

11 Implications for Research and Practice Sampling of factors through the interview Systematically coding [Grounded Theory, (Strauss and Corbins 1998)] Selected 5 factors which were obtained from customers who have experienced in WOM activity in the open market The importance of strategic establishment for utilization of eWOM as a marketing tool for company Interaction with consumers through proper utilization of consumers information sharing desire in the open market Overcome limitations of the present reward systems of open markets and establish new reward systems (psychological reward, monetary reward)

12 WOM on eLearning 12 Quality of Contents Customer Satisfaction Brand Loyalty Positive eWOM

13 Graduate School of Information Digital Services Lab. http://web.yonsei.ac.kr/dslab/

14 Qualitative Research - Interview Data Collection Exploratory research revolving around consumers who have conducted WOM activities among the open market One-on-one interview format (10~20 minutes) Sex(%) Male1858% Female1342% Age(%) 10~1926% 20~291961% 30~39723% 40~49310% WOM activity(%) 1~5 times1961% 6~10 times826% Over 10 times413% Appendix

15 Grounded Theory (Strauss and Corbins 1998) Level 1: Initial Coding & Open Coding Large quantities of raw qualitative data are focused and labeled during Level 1 Level 2: Focused Coding & Category Development Level 2 coding reexamines Level1 codes and further focuses the data Level 3: Axial & Thematic Coding Previous coding is studied to develop highly refined themes If indicated Level 4 Theories can emerge from saturated categories & themes Appendix

16 Quantitative Research – Data collection 16 VariablesSample size(%) Sex Male20076.9 Female6023.1 Age (Average: 25yrs) 10s259.6 20s10640.8 30s10339.6 40s238.8 50s31.2 Job Middle(High) school student 259.6 (Under)graduate student 4617.7 Worker18972.7 Appendix

17 Discussion of Findings 17 Customer Satisfaction Not significant effect in open market on WOM activity Having an effect on WOM activity both satisfaction and dissatisfaction with transaction Loyalty Most positive effect on WOM activity Reward Negative effect on knowledge sharing in the firm (in previous research) Positive effect on WOM activity in the open market (points, mileage etc.) Appendix

18 Limitation and Future Research Direction Conducted an online survey limited on Korean open market Require to investigate the same research on foreign open market Not consider an aspect of seller in the open market Need to study both the buyer and seller on WOM activity Measure simultaneously the influence of customer satisfaction Necessary to understand more accurate factors by separate investigation into the two cases, both satisfaction and dissatisfaction on WOM activity Appendix


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