Word-of-mouth Communication

2.3.1 Word of Mouth

Word-of-mouth communication (hereafter WOM) in marketing and consumer behavior has multifaceted influences ondiffusionoftechnologicalinnovation(Czepiel,1974;Engel, Kegerreis,& Blackwell,1969),developmentofnew product(Arndt,1967;Brooks,1957;

Dodson & Muller, 1978), formation of consumer attitudes and behaviors (Brown & Reingen, 1987), and choices and judgments of products (Herr et al., 1991). WOM is broadly recognized as an important source of information on which consumers rely (Gilly et al., 1998), and has more effective in persuading than mass media has (e.g., advertising) (Gelb & Johnson, 1995) because consumers believe WOM will be more trustworthy (Murray, 1991).

Several factors explained how WOM works differently. Brown and Reingen (1987) categorized the source of WOM recommendation based upon tie strength, which is the closeness of the relationship between decision maker and recommendation source. They concluded weak tie functions as bridging two or more strong tie groups, and hence, is more facilitate to the flow of information. Strong tie, however, is important to the flow of information because of source credibility. Furthermore, prior knowledge level, perceived decision task difficulty level, and types of evaluative cues, will influence the choice of recommendation sources, that is, weak tie or strong tie (Duhan, Johnson, Wilcox, & Harrell, 1997). Money, Gilly, and Graham (1998) considered the culture factors in examining how different cultures influence the WOM referral behavior. Harrison-Walker (2001) discovered affective commitment positively related to WOM activity and praise, whereas high sacrifice commitment do not related to WOM communication. In addition, they concluded the impact of service quality on WOM communication depended on industry categories. Different customer groups also had different WOM behavior (Wangenheim & Bayon, 2004a).

To explore the influence of WOM on decision making, several researches employed the conceptofperceivedinfluencefrom areferralondecision(Wangenheim & Bayon,2004a; Bansal&Voyer,2000;Gillyet al., 1998). From the perspective of information search, Gilly et al. (1998) developed a scale to measure perceived influence of sources on information seekers. Bansal and Voyer (2000) examined the relationships among noninterpersonal forces (e.g., receivers expertise, receivers perceived risk, senders expertise), interpersonal forces (e.g., ties strength, how actively WOM is sought), and perceived influence of WOM within a case of service purchase decision. Wangenheim and Bayon (2004b) suggested that perceived influence of WOM is a valid proxy variable of the true effect of a WOM referral.

They concluded perceived similarity and expertise of a communicator had positive effects on perceived influence of WOM on decision of services switching, and the relationships were moderated by types of perceived risk.

In addition to positive WOM, some studies focused on researching negative WOM (Davidow,2003;Halstead,2002;Lau&Ng,2001;Richins,1983;Nyer& Gopinath,2005;

Wangenheim & Bayon, 2004a). Contrasted to positive WOM, negative WOM were recognized having larger impact on making evaluation (Lutz, 1975). Based on noticeable influence of negative WOM, Richins (1983) conducted a pilot study to explore the nature of negative WOM and identified several important variables to differentiate complaining behavior WOM, including the severity of dissatisfaction, the perceptions of blame for dissatisfaction, and the perceptions of retailer responsiveness. His study provided the fundamental framework on researching negative WOM. Halstead (2002) also discussed the role of negative WOM with customer complaints, and concluded negative WOM is a supplementary to complain behavior rather than a substitution of complaining. Lau and Ng (2001) examined the influence of individual factors included personality, attitudinal and involvement, and situational factor on negative WOM behavior.

2.3.2 Electronic Word of Mouth

Explosive development in information technology, the advent of Internet provides the opportunity for consumers to gather unbiased product from opinions of other consumers, and meanwhile, offers their own consumption-related advices by engaging in electronic word-of-mouth (Hennig-Thurau & Walsh, 2003). One of the most important capabilities for Internet opposite to traditional mass communication technologies is its bidirectionality.

Through the characteristic of bidirectionality, online feedback mechanisms (e.g., electronic markets) can build extensive WOM networks (Dellarocas, 2003). This trait creates an abundant potential profit for marketing product in online environment.

Traditionally, WOM were

consumers about the ownership, usage, or characteristics of particular goods and services or ing the definition to online context, eWOM we

customers about a product or company, which is made available to a multitude of people and institutions via the Internet

(Hennig-Dellarocas (2003) identified three differences to distinguish online feedback mechanisms from traditional WOM networks in realistic society. First, Internet brings an unparalleled scale to enlarge the effectiveness of WOM networks on influencing future profit. Second, the introduction of information technology allows website designer precisely measuring and controlling the powerful social force of WOM, but it is difficult to do in traditional WOM.

Third, because of the volatile and anonymous nature of online identities, almost all contextual cues that facilitate to interpret the subjective information of communication are complete absent in online interaction.

Since WOM communication are believed to relate with the success of product, understanding the nature and impacts of electronic word-of-mouth (hereafter eWOM) is critical to marketing research. Godes and Mayzlin (2004) recommended using online conversations to research eWOM communication. However, they identified three significant challenges in measuring eWOM. First, it is difficult to directly observe the information that exchanged in private conversations. Second, because abundant conversations are presented in online environment, what aspect of these conversations should be measured is not clear.

Finally, not only WOM is a driver of affecting future behavior, but also itself is an outcome of past behavior.

Although WOM plays an important role in determining market success and customer behavior, to date, only few researches centered on studying consumers eWOM communication (Hennig-Thurau et al., 2004; Hennig-Thurau, & Walsh, 2003).

Hennig-Thurau and Walsh (2003) focused on consumer opinion platforms and explored the motives why customers want to read online articulations (i.e., evaluations or descriptions about products/services and consumption experiences). In addition, these motives were further empirically verified having noticeable influences on buying and communication behavior. Furthermore, Hennig-Thurau et al. (2004) reviewed the studies about the motives for tradition WOM communication and recognized the motive for consumers posting their own evaluations on the Internet.

Brown et al. (2007) reviewed relevant studies about WOM and argued that existing theory may be unsuitable in explaining online WOM (i.e., eWOM) and its influence on evaluation and purchase. Three significant conceptual variables (tie strength, homophily, and source credibility), which are extensively discussed in offline WOM, are reinterpreted.

For offline WOM, tie strength were defined as the degree of closeness within a social

relationship. In online environment, however, tie strength we

an interactive and personalized relationship between individual and a web site (Brown et al., . Brown et al. (2007) suggested that website functioned as proxies of individuals. People in online communities interacted with the humanized website rather than with individuals, and they considered information source comes from website but not from an individual. Thus, the dimensions about online WOM should be different to those of offline WOM. The mutuality and perceived closeness with online website is more meaningful than with individual. In this study, the concept regarding sense of virtual community was applied to measure the interactive quality between online members and online communities, and to verify the advocacy proposed by Brown et al. (2007).