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The thesis aims to determine how the online reviews influences consumer buying intentions and give suggestions and recommendation for businesses to gain good online reviews from customers to promote products as a new online advertising strategy. a research model was developed based on a combination of information acceptance model (IAM) and rational action theory (TRA). The results of analysis by SPSS tool and SEM linear structure panel with 9 variables showed the impact of online review characteristics, characteristics of online reviewers as well as characteristics of audiences and the reliability of online evaluation, which are the main element of online reviews influencing consumer buying intention in mobile devices.
THE IMPACT OF ELECTRONIC WORD OF MOUTH (ONLINE REVIEWS) ON THE INTENTION TO BUY MOBILE DEVICES Abstract _ Today, online networking (Internet) has become an integral part of many people's lives With a large number of users and high interactivity, the online environment not only connects people to people but also an ideal place for sharing and advertising activities In the past, the advertising method was limited to one way only through the media such as books, newspapers, magazines, radio, television then today thanks to the development of the system with an online connected global network, businesses have many choices of advertising methods for products and services through online tools such as Google, YouTube, Facebook, Twitter, Instagram easily accessible and attract potential customers In addition, Vietnam is rated as one of the countries with the highest number of online users in the world (Top 13 World according to Internetworldstats.com/top20.htm, 2018) and is considered a potential market in the field of online advertising Therefore, the purpose of the study is to determine how the online reviews influences consumer buying intentions and give suggestions and recommendation for businesses to gain good online reviews from customers to promote products as a new online advertising strategy To achieve this result, a research model was developed based on a combination of information acceptance model (IAM) and rational action theory (TRA) The results of analysis by SPSS tool and SEM linear structure panel with 9 variables showed the impact of online review characteristics, characteristics of online reviewers as well as characteristics of audiences and the reliability of online evaluation, which are the main element of online reviews influencing consumer buying intention in mobile devices The research model is proposed with 4 hypotheses Data is collected from a survey with a convenience sampling method and the scale of sampling is 204 participants in Vietnam The research also suggests some practical applications and future research directions Keywords: Online reviews, purchase intentions, mobile devices 1 2 Table of Contents 3 8 ACKNOWLEDGEMENT 8 STATEMENT OF ORIGINALITY AND AUTHENTICITY 9 ABSTRACT 10 CHAPTER 1: INTRODUCTION 10 1.1 RESEARCH BACKGROUND 1.2 RESEARCH QUESTIONS 10 CHAPTER 2: LITERATURE REVIEW 2.1 WORD-OF-MOUTH AND ELECTRONIC WORD-OF-MOUTH 2.1.1 WORD-OF-MOUTH 2.1.2 ELECTRONIC WORD-OF-MOUTH 11 2.1.3 THE DIFFERENCES BETWEEN WOM AND EWOM 13 2.2 ONLINE PRODUCT REVIEWS 14 2.3 HOW ONLINE REVIEWS AFFECT ON PURCHASE DECISION OF MOBILE DEVICES 16 2.4 FACTORS THAT MIGHT AFFECT THE INFLUENCE OF ONLINE REVIEWS ON 20 CONSUMERS PURCHASE DECISIONS FOR MOBILE TECHNOLOGY DEVICES 20 22 2.4.1 CHARACTERISTICS OF REVIEWS 22 2.4.2 CHARACTERISTICS OF REVIEWERS 2.4.3 CHARACTERISTICS OF TARGETED AUDIENCE FOR ONLINE REVIEWS 25 CHAPTER 3: THEORETICAL FRAMEWORK 25 26 3.1 INFORMATION ADOPTION MODEL – IAM 3.2 THEORY OF REASONED ACTION – TRA 27 3.3 HYPOTHESES BASED ON PREVIOUS RESEARCHES ON THE IMPACT OF ONLINE 27 29 REVIEWS ON PURCHASE INTENTION 30 3.3.1 CHARACTERISTICS OF ONLINE REVIEWS 32 3.3.2 CHARACTERISTICS OF REVIEWERS 33 3.3.3 CHARACTERISTICS OF AUDIENCES 3.4 THE RESEARCH MODEL 33 3.5 INDEPENDENT VARIABLES 33 3.5.1 CHARACTERISTICS OF REVIEWS 33 3.5.2 CHARACTERISTICS OF REVIEWERS 34 3.5.3 CHARACTERISTICS OF AUDIENCE 3.6 DEPENDENT VARIABLE 35 CHAPTER 4: RESEARCH METHODOLOGY 35 36 4.1 RESEARCH PHILOSOPHY 37 4.2 RESEARCH DESIGN 38 4.3 SAMPLING METHOD 4.4 IMPLEMENTATION OF SURVEY QUESTIONNAIRE 38 4.4.1 PILOT STUDY 38 4.4.2 PROCEDURES FOR DATA COLLECTION 4.5 DATA ANALYSIS 39 4.5.1 TESTING OF THE RELIABILITY COEFFICIENT CRONBACH ALPHA 39 4.5.2 FACTOR ANALYSIS (EFA) 39 4.6 THE SCALE OF THE RESEARCH 4.7 QUESTIONNAIRE DESIGN 40 40 CHAPTER 5: FINDINGS AND RESULTS 43 5.1 COLLECTION OF DATA 5.2 DESCRIPTION OF SAMPLING 43 5.2.1 GENDER 43 5.2.2 AGE 5.2.3 OCCUPATION 43 5.2.4 INCOME 44 5.3 RESULTS OF TESTING SCALES 45 5.3.1 RESULTS OF TESTING CRONBACH ALPHA RELIABILITY COEFFICIENT 46 5.3.2 EFA DISCOVERY FACTOR ANALYSIS 47 5.3.3 REGRESSION ANALYSIS AND RESULTS 47 48 CHAPTER 6: DISCUSSIONS, RECOMMENDATIONS AND LIMITATIONS 50 6.1 DISCUSSIONS 52 6.2 RECOMMENDATIONS 6.3 LIMITATION OF THE RESEARCH PAPER 52 53 CHAPTER 7: CONCLUSION 55 BIBLIOGRAPHY 56 APPENDICES 57 APPENDIX 1 LEARNING STATEMENT 67 APPENDIX 2 ETHICAL APPROVAL APPENDIX 3 SUPERVISOR MEETING RECORD FORM 67 APPENDIX 4 PARTICIPANT CONSENT FORM 70 71 74 APPENDIX 5 QUESTIONNAIRE 75 APPENDIX 6 DISSERTATION PROPOSAL 82 Lists of figures Figure 1 WOM Communication (Erkan, 2016) 11 Figure 2 Kotler’s 5A model (2016) 16 Figure 3 Customers’ communications 17 Figure 4 Sussman and Siegal’s acceptance model 25 Figure 5 Research model 32 Figure 6 Gender of sampling 43 Figure 7 Age group of sampling 44 Figure 8 Occupation group status of sampling 45 Figure 9 Income group of sampling 46 Figure 1 WOM Communication (Erkan, 2016) 86 Lists of tables Table 1 Observed variables 34 Table 2 Results from Cronbach Alpha test 47 Table 3 Total Variance Explained 48 Table 4 The Rotated Component Matrix 49 Table 5 Regression coefficients 50 Table 6 Hypothesis results 51 Words count: 15,984 Chapter 1: Introduction This first chapter will provide overall information and background for this research paper The current of using online reviews as a marketing approach in advertising in a global context as well as in Vietnam is also highlighted in this part This creates a strong background for the next chapter of this research Furthermore, the research questions will also be determined in this chapter 1.1 Research background With the explosion of information, the advent and development of the Internet have changed the method of seeking information about consumer products With these useful features, today the Internet has become the main source of information for a large number of tourists to use in the decision-making process for choosing products and services, which results in significantly changing in consumer behaviour of customers The Internet allows customers to share their opinions about experiences and experiences of products and services with countless other consumers The Internet is a worldwide computer network that allows communication between millions of users and access to various resources, people can give personal experiences, thoughts, opinions and easily reach out to communities around the globe The Internet has provided a better way for consumers to gather product information and advice regarding consumption from other consumers through online reviews Consumers can submit comments, feedbacks and product reviews on weblogs, discussion forums, rating sites, and social networking sites (e.g Facebook, Twitter, etc.), this has led to the creation of a diverse online review community Online reviews from previous consumers will be used by potential customers as they now begin to be interested in gathering more information from customers who have experience using the product The term "online reviews" is increasingly mentioned and is an important information channel to assist customers in search and decision-making activities, including reviews related to mobile devices A DoubleClick survey in 2016 also found that for many types of products, such as electronics, home and personal products, product review websites influence the purchasing decisions of customers (DoubleClick, 2016) In addition, due to the peculiarities of Internet communication, online reviews deserve the attention of marketing researchers and managers Mobile phone equipment is a really necessary product for people, especially in the era of the information technology boom Currently, there are many types of mobile devices on the market with different brands, domestically produced or imported from abroad According to the latest report of market research firm Kantar Worldpanel Vietnam, the Vietnamese mobile phone market is growing very hot, with an average speed of about 20% per year and an average of 1 to 2 new mobile phones brands entered the market (Kantar, 2017) This shows that the mobile phone market in Vietnam is growing and more diverse Standing in such a market, consumers who want to buy a quality and the appropriate product must carefully research the product information from different sources before making a purchase Consumers often seek information and decide to buy a mobile device based on information from relatives and friends, advice at the point of sale or through forums In which the form of searching for information via the Internet is used by many consumers and is increasingly popular In addition, consumers tend to be more proactive in sharing commercial information and trust in information provided by other consumers rather than information provided by sellers or marketers Therefore, understanding the impact of online reviews on the decision to buy mobile devices can help managers in getting the product to consumers However, with the strong interactive nature and extremely fast spread of information on the Internet, unfavourable online reviews for businesses can be the source of an unintended communication crisis Therefore, business owners and marketers need to understand and manage these communication flows In fact, the study of the role of online reviews or more generally, eWOM (e-Worth Of Mouth) in the process of finding information on online customers has been interested by many researchers However, most studies focus on understanding the impact of information in online reviews on branding and customer engagement in the fields of general merchandise and other services There have not been many studies focusing on the impact of online reviews on the mobile device business market Hence, the research paper will explore the impact of online reviews on the choice of mobile devices 1.2 Research questions As mentioned above, as there is a lack of empirical findings and studies on the effects of online reviews of mobile device purchasing motive, especially in Vietnam, the research paper aims at identifying and determining elements of digital reviews that influence the buying intention by seeking answers for following questions: ● What parts of the digital evaluations affect customers’ purchase decisions? ● What elements of the digital reviewers affect the customers’ purchase decisions? ● What is the effect of consumers’ characteristics on their purchase intention? Chapter 2: Literature Review In this second chapter, the author will discuss the previous researches of Word-of-mouth and Electronic word-of-mouth and demonstrate what are the differences between them Furthermore, a section of discussion about online reviews will be included, following by examining what are the factors that might have influences customers’ final purchase intention of mobile devices, which consists of aspects of the reviews, personalities of the reviewers and of the targeted audience 2.1 Word-of-mouth and Electronic word-of-mouth 2.1.1 Word-of-mouth Word of mouth marketing (WOM) has been studied and mentioned in many marketing materials, scientific research projects from the past over 50 years According to Johan Arndt (1967), one of the world's leading oral communication pioneers, WOM can be interpreted as communication between two individuals “whom the receiver perceives as non-commercial, concerning a brand, product, or a service” (Arndt, 1967) Non-commercial characters are well received by people who speak without commercial intention namely promoting or selling products This implies the typical aspects of word of mouth as person-to-person communication, only applicable for the age before the advent of the Internet Then, Silverman (1997) defined word of mouth as a form of information about products, services or ideas among people who are not related to the company that provides the product or service (Silverman, 1997) According to Patton (2000), the definition of word of mouth is a message about an organization's product or service, which includes the belief and quality of products or services transmitted from one person to another Stokes and Lomax (2002) argued that word of mouth is an effective way of communicating among individuals in relation to certain products and services Along this line, Kirby and Marsden (2006) defined word of mouth as words, communication between people, between recipients and communicators related to a brand, a product, a service or information on the market Most recently, Word of Mouth Marketing Association (WOMMA) defines it as “the act of consumers providing information to other consumers” (WOMMA, 2005) This definition is deemed considerably wide-ranging and applicable to not only conventional methods (offline) and word of mouth on the digital platforms (online) Word of mouth is considered as a form of informal marketing communication as it uses customers as its representatives to convey advertising information as described in the figure below: Figure 1 WOM Communication (Erkan, 2016) WOM can be started directly between consumers (consumer-generated) which has no external effects or started purposely by marketers (marketer-generated) as a marketing activity (Evans and Erkan, 2014) Arndt (1967) discussed that consumers consider consumer- generated WOM as being more trustworthy than marketer-generated WOM (Arndt, 1967) Furthermore, in the literature, WOM can also be categorised as positive WOM and negative WOM The definition of positive WOM is being information related to the product which conveyed by satisfied customers (Holmes and Lett, 1977), while negative WOM has been described as dissatisfying experiences with the products or services being communicated between friends and relatives (Blodgett et al., 1993) Lee and Cranage (2014) believed that negative WOM can produce a seriously potential destructive impact on a company’s image and reputation, which leads to affecting sales and market share The reason for this is discussed as WOM being in an uncontrollable environment and is very difficult to measure (Erkan, 2016) East et al (2008) argued that positive WOM is more influential than negative WOM, while Chevalier and Mayzlin (2006) believed negative WOM has more significant effects on consumers 2.1.2 Electronic word-of-mouth With the advent of the Internet, a revolution in communication took place Consumers begin to shift from face-to-face communication directly to online forms (Pollach, 2006) The Internet is a perfect environment for consumers to express and share their feelings about a product or service with everyone With the Internet, people do not communicate with each other but rather force them to use an assistive device that connects to the internet like a computer or phone to interact by texting, sharing pictures and clips WOM type in the context of the global electronic communication environment is called an electronic word of mouth (electronic word of mouth, eWOM for short) (Chu and Kim, 2011) Hennig-Thurau et al (2004) defined eWOM as any kind of statement, both positive or negative, made by actual, potential or even former customers relating to a product and are available on the Internet for people and establishments to get access (Thorsten Hennig-Thurau, 2004) In other words, eWOM can also be known as WOM on the Internet and online, digital platforms (Goldenberg and Muller, 2001) Like traditional offline WOM, eWOM can either be consumer-generated or marketer- generated Although the information on the Internet is usually created by marketers and distributed through company-owned websites or social media platforms, people can still share their personal opinions to others with media content creations such as texts, pictures or videos (Evans and Erkan, 2014) Cheung & Thadani (2012) listed different types of eWOM platforms including social media networks, shopping websites, review websites, blogs or discussion forums Electronic word of mouth (eWOM) has long been evaluated as an influential marketing tool (Bickart and Schindler, 2001; Kumar and Benbasat, 2006) Some previous studies have shown the impact of eWOM from the above foundation on consumer buying intentions (Bickart and Schindler, 2001; See-To and Ho, 2014) However, the invention of social media platforms such as Facebook, Twitter, Instagram has transformed the communication battle and introducing unconventional facets of eWOM eWOM now is not only the marketing tool for marketers to deliver a message about their products or service but it helps to spread marketing message on large scale by viral campaigns on social networks (Miller and Lammas, 2010) And the viral ability of eWOM on social media is considered to make a great