E-WOM: Do Brand Advocates “Good Mouth” on Facebook?

Presented by

 S.Senthilkumar& 

Dr. T. Ramachandran&

B.Shyamala DeviFaculty of Management

SRM University, India

Introduction

Social networking sites (SNSs) offer a space for

online communities to gather. SNS users interact

with each other through their personal pages by

posting pictures, photos, comments, reviews,

updates and invite others to access the same.

Popular SNSs are Facebook, LinkedIn, Twitter,

MySpace, Google+, YouTube, and so many alike.

Importance of the study

• SNS platforms provide an easy link to their referrals to connect and engage a two-way communication on product related discussions.

• Younger consumers, particularly Millennials prefer to interact with brands and companies on social media rather than through more traditional channels.

• This preference for digital means younger consumers can become powerful advocates on social sites.

• Millennials give that social endorsement and letting friends know is a way that they are able to promote brands further and ensure its success. (emarketer,Inc , 2012)

WOM (Word of Mouth)

According to Arndt (1967) word of mouth is a non commercial, peer-to-peer communication regarding a brand, product or service.

WOM typically occurs between people from existing personal networks.

WOM is a more important input to the decision process when purchasing services, rather than goods (Francis, 1998).

Electronic word-of-Mouth(eWOM)

Statements (positive or negative) made by customers (potential, actual or former) about a company or product, when made available to many people over the internet e-WOM takes place, (Hennig-Thurau., 2003). Consumers who had many contacts in their networks were more likely to be influenced by others and follow their advice about products (Smith, 2007).

Research Model

This research probes if the recommendation seeking behavior leads to spread the product related information (e-WOM) among SNS users.

Once a person buys based on recommendations of FB friends he may try to spread WOM to others in the circle.

Hence this research tries to link recommendation seeking behavior to spreading WOM on purchases on social networking sites.

Proposed Research Model

Seeking Facebook friends’ recommendations for product purchases:

Algamdi (2012) has studied on the role of Facebook as a source of information for consumers seeking product recommendations from Facebook friends and the consequent impact of these recommendations on their purchase decisions. Consumers seek product and company information on social media sites. The interaction among Facebook users are product or service centric. More research results show that consumer’s product choices are influenced by online recommendations.

Purchase DecisionsA consumers' product choice is influenced more effectively by the recommendations of other consumers on the Internet than by the recommendations of an expert (Huang & Chen, 2006).

Other online consumers' product recommendations have an influence on customers' purchasing behaviors (Chevalier and Mayzlin, 2006).

Online recommendations on products have an impact on consumers’ opinions and therefore encourage a purchase thereby increasing a product’s overall sales (Cheung, et al., 2009).

Web communications over social networking sites influence customer brand perceptions and purchase decisions, and so consumers use it as a more trusted source of information, insights and opinions(Bernard et al., 2009).

Consumer generated online opinions on products have a positive effect on those recipient’s product evaluations and future purchases (Hennig-Thurau & Walsh, 2004; Park et al., 2007).

Spreading WOM on SNSIn their study, Abed et al., (2010) infer that social networking websites with a high level of community driven are predicted to be more likely to share and diffuse viral content. Consumers are and will continue to share their opinions on brands and products with or without company interaction. Facebook users are not only willing to click the "Like button" to express agreement and support, but also willing to share positive product information to their friends (Chen et al., 2012). Pei-wen Fu (2011) in his study showed that Facebook users who have high needs of uniqueness like to share WOM to out-group members.

Research Conceptual Framework & Hypotheses Development

The research conceptual framework explains the likely relationship between factors that influence the consumer’s use of Facebook as a source of information to seek product related recommendations from friends in Facebook and the influence these recommendations has on the purchase behavior. This study further probes whether such a behavior leads one to become an active eWOM referral to others in the network.

From the above factors the following suppositions were made to check the relationship existing among them. – H1- Facebook friends’ recommendations regarding products and the

consumer’s purchase decisions are positively associated.– H2- Purchase decisions based on FB friends’ recommendations on

products is positively associated with spreading WOM on SNS.

Research MethodologyData Collection Method Survey research Sample Unit IT and ITES personnel Research InstrumentStructured QuestionnaireSamplingConvenience samplingSample AreaChennaiSample Size 212 IT and ITES Professional

Demographic data

Among the respondents 70 % were men and 30% were women. Around 20 % of them are in the age group of 18-22 and around 64 % of the respondents are in the age group of 23-28.

Measures

The Measurement scale for the research model factors were measured using items in a seven-point Likert Scale, rating from 1 (strongly disagree) to 7 (strongly agree).

Data Analysis

The reliability and normality of the adopted measurement scales were checked using Cronbach’s Alpha reliability score and One sample Kolmogorov-Sminov and Shapiro-Wilk test for normality. In order to test the research hypotheses, parametric analysis methods were used. Pearson correlation was used to examine the relationships between the independent variables and dependent variables.

Measurement Model

The research hypotheses were tested among those who had bought products based on recommendations from Facebook friends which is 94% (n=200). In order to compute the scores of the scaled data simple averaging method was used (Algamdi, 2012).In order to check the reliability of the scaled items of each construct Cronbach’s Alpha was used. The results of the Cronbach’s alpha showed that all the scales were reliable and valid for measuring the constructs.The alpha scores of the individual scales were high (above 0.7) and showed strong internal consistency among the items.

Testing the research hypotheses-1

In order to test the research hypotheses H1 to H2, Pearson Correlations were calculated to determine the relationships between the independent variables and the dependent variables in the research model. A first Pearson correlation was calculated to assess the relationship in the research model (H1). There was a significant relationship between seeking product recommendations from Facebook friends and purchase decisions based on FB friends’ recommendations on Products.

Testing the research hypotheses-2

A second Pearson Correlation was calculated to assess the second relationship in the research model (H2).

There was a moderate relationship between Purchase decisions based on FB friends’ recommendations on Products and spreading WOM on Social networking sites.

Summary of the assessment of the research hypotheses based on the

Pearson Correlation analysis

H1 Facebook friends’ recommendations

regarding products and the consumer’s

purchase decisions are positively associated.

Accepted

H2 Purchase decisions based on FB friends’

recommendations on products is positively

associated with spreading WOM on SNS.

Accepted

Discussion and Conclusion

The results of the present study suggest that product recommendations obtained from Facebook friends did reasonably influence purchase decisions among the respondents. Almost 44%(n=187) among the respondents who have purchased products, have obtained product recommendations from Facebook friends shows a strong dependence on friends’ approval for purchase related behavior.Purchase decisions based on FB friends’ recommendations did not show strong association with spreading positive WOM among FB Friends.

Limitations of the study

The usage of Social Networking sites among the age group of 20 -30 is presumed to be high compared to other age group and so the study population identified was limited to that group. Heavy users of Facebook are assumed to share more product related information. The study limits its scope only to those who use Facebook for product related information sharing and purchases.

Implications for research

Sharing information on brands, products, services, promotional offers and past purchases among friends has become essential because SNS users need instant approval for their selection and reduce their dissonance quickly.

Also they wanted to be updated on the latest trends to avoid being outcast as old-timers.

Though Facebook users rely on friends for product related inputs before they purchase they do not pass on the WOM to others due to reasons not explored in this study.

Also influences from other marketing stimuli are not taken for consideration while exploring the relationship between seeking product recommendations from FB friends and purchase decisions based on FB friends’ recommendations on products.

Any Questions?

Thanks