Academic journal article International Journal of Electronic Commerce Studies

ANALYSIS OF E-WORD-OF-MOUTH INFORMATION FOR COSMETIC PRODUCTS IN JAPAN(a)

Academic journal article International Journal of Electronic Commerce Studies

ANALYSIS OF E-WORD-OF-MOUTH INFORMATION FOR COSMETIC PRODUCTS IN JAPAN(a)

Article excerpt

ABSTRACT

A methodological approach is proposed to understand the potential importance of e-WOM in e-Marketing. Focusing on the cosmetic product market in Japan, a social network named @COSME is chosen for the study. More specifically, actual blogs concerning skin lotions are collected from @COSME in the period between November 1, 2007 and October 31, 2008. By identifying key words which are used by either manufactures for promoting skin lotions on the Internet or consumers in their blogs, it is examined how such key words would overlap each other, thereby providing a basis to establish effective e-marketing strategies in e-WOM communications.

Keywords: Japanese Cosmetics Market, e-WOM (Word of Mouth), Blogs, e-Marketing

1. INTRODUCTION

During the past decade, the Internet has impacted the way marketing is conducted substantially. Before the Internet, the emphasis was on the mass marketing through TV, radio, newspapers, journals and other media directed one way from the media to customers, whereas the one-to-one marketing was laborious, time-consuming and costly, and could be conducted only in a limited way through direct mail, hearings via telephone, interviews at exits of stores and the like. As the use of the Internet has spread rapidly, the importance of e-marketing has become clear, where the mass marketing and the one-to-one marketing can be combined simultaneously with speed and little cost through the Internet.

Along this new trend, CRM (Customer Relationship Management) has become increasingly important, where corporations and customers engage themselves in two way communications and exchange information valuable to each other. In particular, in the midst of new era called WEB2.0, CGM (Consumer Generated Media) has been drawing much attention of practitioners and researchers where information exchanged among consumers through social networks would affect each other significantly and play a vital role in e-marketing. Such exchange of information among indefinite consumers through the Internet is called e-WOM (Word of Mouth), and those consumers who are involved in e-WOM are referred to as bloggers.

The study of WOM outside the Internet can be traced back to the middle of 1990's, represented by a paper by Ellison and Fudenberg1 which proposed a WOM model and analyzed its implications. Bone2 discussed how WOM affected purchasing decisions of consumers, while Goldenberg, Libai and Muller3 found that the effects of WOM would depend on the level of closeness of those involved in WOM. More recently, a new model was proposed in Banerjee and Fudenberg4 for measuring the effects of WOM. Along with this line of research on offline WOM, e-WOM began to attract more attention of researchers. An information filtering algorithm was proposed in Shardanand and Maes5 for identifying preferences of consumers from e-WOM so as to provide personalized recommendations. Stauss6' 7 examined potential threats and opportunities resulting from online articulations by consumers. Balasubramanian and Mahajan8 developed a conceptual framework for describing three types of social interaction utilities within a virtual community. Exploiting this framework' Henning-Thurau' Gwinner' Walsh and Gremler9 studied online samples of some 2000 consumers' identifying key elements for consumers to participate in e-WOM. Dellarocas10 discussed potentials and difficulties of development of online feedback mechanisms for digitization of e-WOM.

While the above papers shed light into the insight of e-WOM from various perspectives, to the best knowledge of the authors, no research exists in the literature focusing on how interactions of consumers through e-WOM could be utilized for enhancing the effects of e-marketing. The purpose of this paper is to fill this gap by analyzing actual blogs concerning skin lotions collected from a social network named @COSME. At the same time, the descriptions of the products under consideration, written by the manufactures, are also collected from the Internet. …

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