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CHAPTER I : INTRODUCTION
1.1 Research Background
According to a Nielsen global survey (2007) on word of mouth (WOM) of 26,486 internet users in 47 markets, recommendations from consumers remain “the most trusted sources of information when consumers decide which products and services to buy”. Among top ten markets that rely heavily on “recommendation from consumers,” Taiwan was ranked the second (91%) in the world. From the same survey, in the finding of “trusting web-based opinion such as blogs,” Taiwan (76%) also ranked second. The power of WOM has never been underestimated, and with the rapid development of the internet, more online platforms, are easily-accessible for consumers to search as well as share online WOM, also known as eWOM.
The concept of Web2.0 was first coined by Tim O’Reilly in the Web2.0 conference in 2004, with the core idea suggesting web as platform to operate participation through
interactivity. In recent year, blogging has become one of the most popular applications of Web2.0. It is not hard to find that blogs have not only been viewed as personal expressive channels, but also been utilized as effective marketing tool (BusinessNext, 2005).
“Blog” was chosen by Merriam-Webster’s Collegiate Dictionary the word of the year 2004; the year denoted a defining point for blogs to be “one of the most sought-after media formats” (Wibbels, 2006). A 2006 Pew Internet and American Life Project survey discovered the number of blog creators has increased to about 12 million American adults while blog readers have boosted to 57 million. In 2005, if one searched the word “blog” on Google, there would appear more than 130 million results (Shih, 2005). Today, the number has multiplied to more than 2.5 billion. In Taiwan, a survey done by Market Intelligence & Consulting
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Institute (MIC) in 2009 showed 89.6% of the internet users have their own blogs, and female internet users appeared to be more active in browsing popular blogs as well as looking for information from blog (cited from BusinessNext, 2009).
In Taiwan, beauty bloggers are one of the mostly recruited groups to generate word of mouth (WOM) by posting testimonials or sharing experiences after using certain products or services. Many beauty bloggers nowadays write about the samples they receive or subtly introduce product placement in their blogs. When blogging becomes a tool of marketing, the line between posting personal experiences and advertising has become ambiguous, and beauty blogging is no exception. From 2008 up to now, there have been more and more articles discussing about the marketing truth behind a beauty blogger’s recommendation.
Some condemned the credibility and moral issues( Chang, 2008; Chang, 2008), others
(mostly bloggers) brought up defensive counterarguments ( Xi, 2008; Xin, 2008), and still the others provided some neutral insights for consumers’ references( Tino, 2008).
1.2 Research Rationale and Significance of the Study
Many scholars in the communications realm have studied Word of Mouth for decades;
from their studies, it is noticed that WOM has been evolving with time under different communication environment (Word of Mouth Marketing Association, 2004). Buttle (1998) pointed out that scholars’ contemplation of WOM can be traced back to the fourth century B.C., yet it was not until 50s that modern marketing research on the effectiveness of WOM has started (Katz and Lazarsfeld 1955). Arndt (1967) was one of the earliest to learn about WOM and consumer behavior. According to Breazeale’s overview of WOM studies (2009), many researchers have proven that WOM actually worked better in effecting consumer decision-making than traditional marketing (Day, 1971; Sheth, 1971; Murray, 1991; Buttle, 1998); it is further elaborated that consumers are more prone to be influenced by WOM
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because it is credible, reliable and interpersonal (Engel, Blackwell, & Kegerreis, 1969; Day, 1971; Richins, 1983).
Recent research concerning WOM has altered to concentrate more on operating WOM to reach new customers (Kumar & Krishnan 2002; Brown et al. 2005), to maintain existing customers (Maxham & Netemeyer, 2003; Jones & Reynolds 2006; Gremler &
Gwinner 2008), and to elevate the value or reputation of the company (Luo & Homburg 2007;
Villanueva, Yoo, & Hanssens, 2008; Hong & Yang, 2009). Wojnicki and Jia (2007) pointed out the other main stream of WOM study weighs on the motivations and factors linked with behavior, such as expertise (Jacoby and Hoyer 1981), altruism (Price et al. 1995), and self-enhancement (Wojnicki and Godes 2006). Such motivations and behavior may portray opinion leaders (King and Summers, 1976), early adopters (Rogers, 1983), innovative communicators (Baumgarten, 1975), and market mavens (Feick and Price, 1987).
Current studies on buzz marketing in blogs concentrate more on the impact over consumers and their attitudes of subsequent purchasing behavior. Others of which depict the bloggers as opinion leaders or early adopters. Still others observe their specific motivation as well as their behavior in information-seeking and information-sharing. However, there is lacking of study on how blog readers react to different type of blog posts and what their attitudes and tendency towards buzz marketing are.
Most bloggers are recognized as ordinary people blogging for smaller audience (Nardi, Schiano, Gumbrecht, and Swartz, 2004), showing a "long-tail" (Anderson, 2006) pattern in that the majority of blogs attract little attention. As Anderson (2006) stated, blogs as filters could be considered as a powerful long-tail factor that links demand and supply. Being filters, blogs lower the search costs for consumers, and further alter consumers’ demands under the influence of WOM. From the perspective of long tail theory, 20% of eWOM generated by
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blogs can easily turn into 80% of WOM in real life among consumers (Anderson, 2006).
Furthermore, as more and more people become bloggers, understanding the very nature of blogging activities is crucial for marketers to utilize their ever-growing blogosphere.
1.3 Research Purpose
The purpose of this study is mainly to observe blog readers’ responses to different type of blog posts as well as their attitudes and tendency towards buzz marketing. In first stage, qualitative in-depth interviews are conducted to provide with understandings of current phenomenon on beauty blogging and buzz marketing. In the second stage, the use of
quantitative survey is to further examine the attitudes and tendencies of beauty blog readers toward different blog posts and purchasing behavior. The objectives of this study are as follows:
1. Arousing consumers’ interest is always the first step in marketing communications.
The first objective is to discuss the relationships between blog readers, as potential consumers, their satisfaction toward blog content and interest-arousing in products, services or brands.
2. Consumers’ satisfaction or dissatisfaction that are generated from how they expect and perceive the product would influence the subsequent output WOM from the experiencing consumers, or become the input WOM source for other consumers who seek information on helping them make purchasing decision (Buttle, 1998).
The second objective in this study is to understand the relationships between blog readers’ satisfaction toward blog content and their actual purchasing behavior.
3. As mentioned, satisfaction or dissatisfaction would also be an antecedent of the output WOM. WOM referral is viewed very valuable because WOM has been
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considered more credible than traditional media, especially in Taiwan, where consumers rely heavily on peoples’ recommendations.
4. In order to examine whether incentives do affect blog readers’ attitude towards positive or negative eWOM generated from beauty bloggers, the level of credibility of different types of blog posts will be observed and compared.
5. The study will discuss the relationship between blog readers’ attitudes toward buzz marketing embedded in beauty blogs and purchasing behavior.
1.4 Research Questions
- First Stage:
RQ1. What is the current phenomenon of beauty blogging with and without the involvement of buzz marketing?
- Second Stage:
RQ1. Does readers’ level of content satisfaction influence their attention towards products, services, or brands?
RQ2. Does readers’ level of content satisfaction influence their purchasing behavior?
RQ3. Does readers’ level of content satisfaction influence their conduction of WOM referral?
RQ4. Do different types of blog posts have different WOM credibility?
RQ5. Does WOM credibility moderate the relationships between blog readers’ attitudes toward buzz marketing and purchasing behavior?
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CHAPTER II : LITERATURE REVIEW
For decades, researchers have studied how WOM works on consumer behavior, how WOM has been strategically operated in marketing, how WOM has been evolving in the Web2.0 era, as well as how new media tools, such as blogs, being incorporated into buzz marketing. The following sections review the past literature on WOM, buzz marketing, placement of buzz marketing in blogs, and beauty bloggers’ credibility dilemma.
2.1 Word of Mouth (WOM)
More and more companies accentuate on the immense power of word of mouth (WOM). The power of persuasion and influence of WOM has far exceeded its mass media counterparts (Price & Feick, 1984). Levinson (2003) pointed out two facts concerning word of mouth; one is that people would credit WOM referrals rather than acknowledging the impact of marketing. Nevertheless, on the other hand, most people “do check with friends before patronizing a business” (2003, p.50). Dichter (1966) indicated WOM is related to 80%
of the buying behavior. As Hall (2006) cited from Intelliseek and Forrester, “consumers are 50% more likely to heed peer recommendations than they are to follow advertisers’ leads”
(p.72).
The valence of word of mouth may be positive or negative. While positive WOM can significantly enhance the impact on consumer behavior and loyalty (Engel et al., 1969;
Richins, 1983; Herr et al. 1991), the negative WOM disseminated by the dissatisfied
customers may cause serious consequences, such as change in purchasing decision/behavior, loss of consumer loyalty, even harm to the reputation of the company (Tybout et al., 1981;
Richins, 1983; Singh & Pandya, 1991; Soloman, 1999; Zeelenberg & Pieters, 2004).
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Arndt (1967) defined WOM as “oral, person-to-person communication between a receiver and a communicator whom the receiver perceives as non-commercial, regarding a brand, product or service.” In Buttle’s(1998) review of WOM literature, the author found previous study of WOM inadequate due to market change and innovation of technology.
Three reasons suggested by Buttle (1994) are as follows:
1. WOM not only involve a product/brand/service, it can conclude an organization (Buttle, 1994). It is more frequently seen in later studies that the interrelations between WOM and company’s reputation and values have been examined (Luo &
Homburg 2007; Villanueva et al. 2008; Hong & Yang, 2009).
2. WOM can be electronically mediated via cell phone, chatrooms, e-mail, hyperlinks, and etc. In this study, this form of online WOM is re-positioned as eWOM, which will be discussed in the following literature. Moreover, noted in Buttle’s (1994) examples of electronically mediated WOM, blogs and other online social networks, such as discussion forums or microblogs were not documented yet due to the contemporary time frame.
3. In contrast to Bone’s(1992) definition of WOM as “an exchange of comments, thought, and ideas among two or more individuals in which none of the individuals represent a marketing source” (p.579), there has been an increasing inclination of companies offering incentives or rewards for consumers to disseminate positive WOM or make referrals (Buttle, 1994; Trusov, Bucklin, & Pauwels, 2009). This concept of company-created WOM-spreading behavior based on the benefit exchange (e.g. free product, discount, or direct payment) between consumers and companies has challenged its noncommercial nature, which can be found in Harrison-Walker’s definition, that WOM is “informal, person-to-person communication between a perceived noncommercial communicator and a receiver regarding the target object,
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such as brand, product, an organization, or a service” (2001). For the purpose of distinguishing spontaneous WOM and planned WOM, the latter will be redefined as buzz marketing in the following content.
2.1.1 WOM Model
Recognizing word of mouth, as referring to the previous literature, is the
communication between individuals, it is important to look at Schramm’s interpersonal communication model—the two-way circular communication between the sender and
receiver. The process of encoding and decoding took place simultaneously, and the messages were two-way interchangeable (see Figure 2-1). Schramm’s model provides equilibrium between two parties, that both are equal communicator and messages circulate two-way.
Figure 2-1. Schramm’s Interactive Model, 1954
The earliest WOM theory can be traced back to the two-step flow of Communication (Figure 2-2) proposed by Lazarfeld, Berelson, and Gaudet in 1948, and was elaborated by Katz and Lazarfeld in 1955. By indicating messages, instead of being distributed directly by mass media to the audience, were intentionally sent to opinion leaders/early adopters, who then spread out the WOM to influence their peers/receivers/followers.
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Figure 2-2. Two Step Flow of Communication Model, 1955
From the view of consumer behavior and WOM, the elaboration likelihood model (ELM) of persuasion introduced by Petty and Cacioppo (1982) suggest that the route of persuasion depends on the level of the consumers’ motivation as well as their ability to think about the received information (Figure 2-3). They claimed that the consumer’s attitude changes through diligent consideration of information when ELM is high, and called that central route of persuasion. The input WOM (positive and negative) serves as an important source of information here. Peripheral route, on the other hand, is more likely when ELM is low, and the consumer’s attitude changes without engaging extensive issue-relevant thinking, through associating with either positive or negative cues. ELM has been applied to examine the engagement of WOM and its outcome as attitudinal change.
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Figure 2-3. Elaboration Likelihood Model (Petty & Cacioppo 1982)
Later in 1998, Buttle presented the inclusive model of WOM, containing two sets of variables — the intrapersonal variables and the extrapersonal variables (Figure 2-4). Notice both input WOM (pre-purchase information) and output WOM (post-purchase information) are two-way information exchange by both giving and seeking. In the intrapersonal
environment, the interrelationship between expectation and perception would decide
consumers’ satisfaction or dissatisfaction, which would lead to subsequent output WOM from the experiencing consumers, or become the input WOM source for other consumers who seek information. In the extrapersonal environment, “incentives” plays one of the four main
factors that may influence the construct of WOM.
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Figure 2-4. Inclusive WOM Model (Buttle, 1998)
Ever since the Internet prospered and developed from Web1.0 to Web2.0, from one-way information sharing to two-one-way communicating, WOM as well, evolved to its online version—internet users can freely participate and exchange information, opinions, and suggestions. In 2004, Japan Dentsu Group launched the AISAS online consumer behavior model (Attention Interest Search Action Share), which is the modification of the traditional AIDMA theory (Attention Interest Desire Memory Action) proposed by Ronald Hall in 1920s (Wang, 2009). AISAS model (as shown in Figure 2-5) was
developed to “define the new purchasing process that has resulted from the proliferation of internet” (Dentsu, 2006), and has been used to observe the information-searching and information-sharing behavior of online WOM (eWOM) (Hsieh & Hsieh, 2008; Okada &
Yamamoto, 2009; Wang, 2009).
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Figure 2-5. AISAS Consumer Behavior Model (Dentsu Group, 2006)
Nonetheless, the AISAS model did not put emphasis on eWOM under the CGM (Cnsumer-Generated-Media) environment. In combination of the AISAS model and the AIDEES model (Attention Interest Desire Experience Enthusiasm Share) proposed by Tokuriki (cited from Buzz Lab, 2007), Buzz Lab clearly illustrated the complementary relationships between the two models and how the AIDEE model represents the six stages of consumers being influenced by eWOM in the CGM environment, such as blogs (2007).
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Figure 2-6. AIDEES Model (2007)
2.1.2 Electronic Word of Mouth (eWOM)
With the rapid development of the internet, the definition of WOM should be adjusted.
The internet brought forth a “word-of-mouth Revolution” (Dellarocas, 2003) with millions of internet users “engage in a mass-mediated exchange of personal information and opinions every day” (Thorson and Rodgers, 2008). Hung and Li (2007), in their study of eWOM influence on virtual consumer communities, also observed “product knowledge communicated via eWOM opens up a great quantity and diversity of information that commercial messages rarely can provide.”
Electronic word of mouth (eWOM), also known as word of mouse (Gelb and Sundaram, 2002), is the online form of WOM, which emerges as the internet took part in people’s daily
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lives. Hennig-Thuau, Gwinner, Walsh and Gremler (2004) conceptualized eWOM as “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.” The omnipresence of eWOM on the internet has played an irreplaceable role in marketing communication. Nevertheless, it was only until last decade has the research on eWOM and its impact been studied and observed in academic journals (Breazeale, 2009).
Although similar to the traditional oral/face-to-face WOM, eWOM has several distinctive characteristics—
1. eWOM is dependent on written form (Christiansen & Tax, 2000). Whether reviews in online forum, opinions in chatrooms, recommendations on websites, experience-sharing in blogs, or testimonials in social networks, it is the “online” written WOM that generates
“offline” behaviors.
2. Different from traditional WOM’s ephemeral nature, as Stern (1994, p.7) mentioned
“WOM communication vanishes as soon as it is uttered, for it occurs in a spontaneous manner and then disappears” (cited from Buttle, 1998) eWOM effect can be contagious and long-lasting. Trusov, Bucklin, and Pauwels (2009) found out eWOM “induced both a larger short-term response and a substantially longer carryover effect. “
3. Early studies on WOM and social ties showed strong ties were distinguished to trigger more referrals and thus make greater influence than weak ties, which was perceived as bridging the information flow (Brown & Reingen, 1987). Nevertheless, eWOM often takes place between people with weak ties and can be anonymous ( Dellarocas,
2003;Goldsmith & Horowitz, 2006); this makes consumers more comfortable and willing to share their opinions or experiences (Goldsmith & Horowitz, 2006).
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4. In the pre-internet era, WOM is distributed by consumers who were passively exposed under mass media channels, such as TV, radio or newspaper. Today, by buzzing on the new media tools such as blogs or social networks, consumers can be active participants on generating media content and drive eWOM that travels far in the world of Web2.0.
In Taiwan, a survey conducted by InsightXplorer in 2009 discovered that 80 % of the internet users view online word of mouth (eWOM) as very important and very influential.
Besides searching for pre-purchase information, 60% of the internet users would also post their own experience or comments.
2.1.3 Women Consumer vs. WOM
It is recognized that women consumers are very influential (Yaccato & Yaeger, 2003;
Marletta, 2003.) In “The 80% minority: reaching the real world of women consumers”, Yaccato and Yaeger point out that women construct and effect around 80% of the purchasing decision; in North America, women are in responsible of 80% of total expense (2003, p.2 &
p.4). A research conducted in 2005 by Leo Burnett, an ad agency, indicates that as women in Asia become more financially independent, they also become more self-indulgent and are willing to spend more on themselves. Michelle Kristula-Green, the president of the Leo Burnett Asia-Pacific, noted, “as more women come to terms with their sexuality, their desire to improve and enhance their looks is also rising, creating an unprecedented beauty boom with more women across Asia investing in their looks” (White, 2005, p. 8).
According to Yaccato and Yaeger(2003), there are six characteristics of women consumers’ behavior. First, they weighed on human interactions, both online and offline.
Second, they tend to refer or pass along information. Statistically, women build more referrals and greater word of mouth than men. Third, they draw attention to or provide
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testimonials on personal experiences, either positive or negative ones. In the process of
testimonials on personal experiences, either positive or negative ones. In the process of