Academic journal article Global Journal of Business Research

What Makes Offline Word-of-Mouth More Influential Than Online Word-of-Mouth?

Academic journal article Global Journal of Business Research

What Makes Offline Word-of-Mouth More Influential Than Online Word-of-Mouth?

Article excerpt

ABSTRACT

In this paper, we examine online and offline WOM communication channels in terms of their effectiveness. We explore the factors that make offline WOM more influential than online WOM. Furthermore, we explore how personal characteristics, culture and product categories and features influence consumer preference of one channel to the other. In addition, we examine the channel characteristics that influence consumer preference of one to the other. This study suggests that the strength of ties and the quality of communication are the antecedents to the effectiveness of WOM communication channel. Moreover, it suggests that the value of information mediates the relationship between the strength of ties and the effectiveness of WOM. The study also argues that consumers trust offline WOM more when they seek information about services. On the other hand, they pay more attention to expertise when they seek information about products with high complexity. The study indicates that mindful consumers tend to engage in online WOM more than less mindful or mindless consumers. Besides, consumers in individualist culture use online communication channel more than those in collectivist culture do in order to obtain information about products.

JEL: M31

KEYWORDS: WOM Communication, Online WOM, Offline WOM, Online Reviews

INTRODUCTION

Many studies have shown that word-of-mouth (WOM), one of the most influential channels of communication in the marketplace, has significant effects on consumer behavior (e.g. Allsop, Bassett and Hoskins, 2007; Trusov, Bucklin, and Pauwels, 2009; Godes and Mayzlin, 2004; Smith, Coyle, Lightfoot, and Scott, 2007). This communication channel can be classified into two broad categories: online and offline WOM. Due to the new developments in technology, and the increase in the number and importance of online social networks, the internet has become a popular channel in facilitating and spreading WOM messages. Since it has become an important driver of consumer behavior, marketers are increasingly interested in managing and influencing online WOM (Ashley and Leonard, 2009; Chen and Lurie, 2013), which is a kind of non-commercial channel. As in the case of "stealth marketing," sometimes without revealing the commercial intention behind the tactics, they attempt to create online WOM through a variety of means such as chat rooms, blogs, newsgroups and other online social networks. This attempt is so widespread among marketers that it comprises substantial amount of total promotion efforts of many firms and the companies' marketing budget for this kind of non-traditional marketing tactics is increasing significantly (Sass, 2006).

Although online WOM has become a useful and a popular channel for the dissemination of marketing messages, very little is known about the effectiveness of this channel relative to offline WOM. Many studies (e.g. Kozinets et al., 2010; Prendergast and Ko, 2010; Chen and Kirmani, 2011) have been conducted to test the influence of either online or offline WOM communication channel. However, to the best of our knowledge, no research has compared the effect of online and offline WOM communications on consumer behavior, and explained the factors that influence the process. Intuitively, we can argue that individuals are more influenced by offline communication than online communication. At this point, the following questions arise: what are the factors that make one channel superior to the other? What are the factors that explain the general process? Why do consumers prefer one channel to the other? What are the roles of personal characteristics, and product categories and features in these preferences? Do these preferences vary across different cultures? In this paper, we seek to answer these questions by utilizing exploratory research method. The organization of the rest of the article is as follows: in section two, we provide a brief review of the literature on online and offline WOM communications. …

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