Academic journal article International Journal of Marketing Studies

The Effects of Controversial Reviews on Product Sales Performance: The Mediating Role of the Volume of Word of Mouth

Academic journal article International Journal of Marketing Studies

The Effects of Controversial Reviews on Product Sales Performance: The Mediating Role of the Volume of Word of Mouth

Article excerpt

Abstract

The influence of word of mouth (WOM) is increasing even with today's advanced Internet environment.Although previous studies indicate no consensus on the impact of the valence of WOM on product sales, manufacturers often make use of a variety of ways to correct the direction of the valence of WOM because they want to have a good reputation on the Internet.The question that arises is whether negative WOM has a completely negative impact on product sales. This study usesthe beta distribution to capture the variety of review structures, especially controversial review structures. By verifying the mediation effect of the volume of WOM, we found that products with controversial reviews could arouse a huge amount of discussion among consumers that eventually translates into product sales. The study therefore suggests that manufacturers need not aim to eliminate the spread of negative WOM but should aim to keep it at a moderate level.

Keywords: online user reviews, word of mouth, review structures, two-way persuasion, mediation analysis

1. Introduction

The influence of word of mouth (WOM) is increasing even with today's advanced Internet environment. According to one survey, more than 60% of consumers in the United States would consult online reviews from other consumerswhen making a purchase decision (Razorfish.com. 2008). It is therefore not surprising that manufacturers have started to focus on online WOM and some of them even want to manipulate it (Dellarocas, 2006; Godes & Mayzlin, 2009).

Most previous studies of online WOM explore the impact of characteristics of online WOM on product sales (Chevalier & Mayzlin, 2006; Chintagunta, Gopinath, &Venkataraman, 2010; Dellarocas, Zhang, & Awad, 2007; Duan, Gu, & Whinston, 2008; Liu, 2006; Moon, Bergey, & Iacobucci, 2009; Zhu & Zhang, 2010), especially for the impact of the valence of WOM and the volume of WOM. Theoretically, both characteristics of online WOM have different effects on product sales (Liu, 2006). The valence of WOM affects consumers' attitudes toward a product, while the volume of WOM affects consumers' awareness of a product, both of which affect consumers' purchasing behavior. The influence of the volume of WOM on product sales is less debatable and produces apositive effect (Anderson & Salisbury, 2003; Duan et al., 2008; Liu, 2006). There is nevertheless a controversy on the impact of the valence of WOM on product sales. Some studies suggest that the valence of WOM does have a positive impact on product sales (Chevalier & Mayzlin, 2006; Dellarocas & Narayan, 2006; Godes & Mayzlin, 2004), but others indicate that the valence of WOM does not affect product sales (Duan et al., 2008; Liu, 2006).

Although there is no consensus on the impact of the valence of WOM on product sales, manufacturers often make use of a variety of ways to correct the direction of the valence of WOM because they want to have a good reputation on the Internet. Nevertheless, the extent to which negative WOM has a completely negative impact on product sales remains unclear. According to the arguments from two-sided persuasion, delivering a partial negative message would have a more persuasive effect than using only positive messages while advertising (Etgar& Goodwin, 1982; Golden & Alpert, 1987; Pechmann, 1992). In other words, when the consumer receives two-sided messages in the evaluation of a particular product, it is likely to enhance the consumer's preference for the product and thus increase his/her purchase intention, but only a few WOM studiesinclude the two-sided WOM intheir models. Jen, Shao, and Tien, (2011), for example, found that the controversial review structure is able to attract more imitators (q, imitator coefficient) to purchase products.

This study seeks to verify three issues. First, does the effect of the valence of WOM on product sales exist or not? Second, do controversial reviews really help product sales? …

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