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Investigating the Attitudinal Impact of
Online Reviews on Consumer Purchase
Decisions: The Case of Electronic
ParaphernaliaPaper Presented at International Conference on Contemporary Management Practices Creative or Dogmatic
Jagan Institute of Management Studies (JIMS) |www.JimsIndia.org
Mr. Shaunak Roy
Post-Graduate Department of Commerce, St. Xavier’s College
(Autonomous), Kolkata
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Jagan Institute of Management Studies (JIMS) www.JimsIndia.org
The phenomenal growth saga of AsusTek Computer Inc.
Riders to Success:
Prefatory Observations
1 Direct Customer Feedback Generation
2 Customer-Connect
3 Embracing Social Media Channels of Communication
4 Enhanced Brand Equity
5 Brisk Product Re-engineering
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Jagan Institute of Management Studies (JIMS) www.JimsIndia.org
5 years ago : Indian customers would archetypally refer to retail advocates on the shop floor,mass media communications and opinion leaders.
Online Review Sites : Empowered customers offer their own consumption-related advice viapeer-to-peer information exchange networks
Introductory Reflection
Electronic Paraphernalia : Complex information products such as: • pen drives • laptops •memory cards • external hard drives • desktops • tablets • mobile phones
Consumer Purchase Decisions: Guided by former preferences, beliefs, attitudes andexperiences, coupled with valued inputs from marketers, various individuals and other ofinformation service agents
The Internet Era : Active consumers seeking information
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Influence Mix: IM = IPCE + IM + IIS
Introductory Reflection
Electronic Manufacturing Organizations: In order to maintain competitive buoyancy, theymust position their products closer to the IIS-dependent end, such that the opinions of otherindividuals guide purchase decisions
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A Conceptual Model of Tapping Credible Volumes of e-WOM to develop Purchase Intentions :
Enterprises in IIS-Dependent Markets : They can diversify more easily than others, becausenovel peer-to-peer information can overcome time-worn impressions about the pros andcons of the said organization
Consumer
Product
Decision Criteria
Retail Brand
Patronage
Perceptual
Influence effects
on products
Accessibility to
Volumes of
WOM
Purchase
Intentions
Introductory Reflection
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Jagan Institute of Management Studies (JIMS) www.JimsIndia.org
Review of Literature
Reference Study
Politz (1958)the buying process itself is a learning experience and can lead
to a change in attitudes
Dellarocas (2003)With the advent of the Internet, users have been particularly productive in providing opinions or online reviews of virtually
every product imaginable
Lee et al. (2008)Online reviews, in contrast to those provided by
merchandisers themselves, convey more consumer-centric product information about purchase and usage experiences
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Review of Literature
Reference Study
Resnick and Zeckhauser (2002)
Consumers’ online reviews have a direct impact on transactions; it is critical to design an effective online review system, where all the activities, ranging from review contributions to review harnessing
occurs
Arndt (1967)WOM communication is verbal, person-to-person communication
between a receiver and a communicator, whom the receiver perceives as non-commercial, with regard to a product, service or a provider
Luca and Zervas(2013)
Need to redirect marketing resources to methodical tracking, coding, and quantifying of information from review sites, user forums, and other social media, rather than merely focussing on measuring the
preferences, satisfaction, and loyalty of individual consumers
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Jagan Institute of Management Studies (JIMS) www.JimsIndia.org
To unfurl the most important factors that shape consumer attitudes by virtue of online reviewsso as to frame their purchase decisions.
Primary Objective of Study
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Hypothesis Formulation
H0A Attitude towards Online Reviews does not depend on gender
H0B
Attitude towards Online Reviews depend on genderH1A
H1B
There is no significant difference between consumers’ level of satisfaction with reference toonline reviews and their income levels
There is a significant difference between consumers’ level of satisfaction with reference toonline reviews and their level of income
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1 Sample Size: 168 respondents (Response Rate: 91.3%)
2Questionnaire: 29 questions of which several questions were adopted from Zou et al. (2011)study while few were self-developed to suit the psychology and preferences of Indian consumers
3 Sampling Method: Stratified Random Sampling Technique
Methodology and Data Collection
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Revelations from StudyDemographic Profiling : Descriptive Statistics
Age Gender Monthly Income
N 168 168 168
Mean 2.48 1.52 2.35
Standard Deviation 0.819 0.501 1.214
Variance 0.670 0.251 1.475
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Jagan Institute of Management Studies (JIMS) www.JimsIndia.org
Revelations from StudyDemographic Profiling : Age Distribution
Below 18
18-2930-44
45-60
Above 60
[ 4.2% ]
[ 57.7% ][ 26.2% ]
[2.4% ]
[ 9.5% ]
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Jagan Institute of Management Studies (JIMS) www.JimsIndia.org
Revelations from StudyDemographic Profiling : Gender Distribution
Male
Female[ 51.8% ]
[ 48.2% ]
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Jagan Institute of Management Studies (JIMS) www.JimsIndia.org
Revelations from StudyDemographic Profiling : Monthly income pattern
Less than INR 10000
INR 10001 - INR 25000
INR 25001 - INR 50000
INR 50000 - INR 75000
Above INR 75000
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Jagan Institute of Management Studies (JIMS) www.JimsIndia.org
Revelations from StudyKMO and Bartlett’s Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy .803
Bartlett’s Test of Sphericity
Approx. Chi-Square 1387.966
df 91
Sig. 0.000
Since p < 0.05 at 5% level, the appropriateness of factor analysis can be ascertained
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Jagan Institute of Management Studies (JIMS) www.JimsIndia.org
Revelations from StudyTotal Variance Explained
Component
Initial Eigen Values Rotation Sums of Squared Loadings
Total % of variance Cumulative % Total % of variance Cumulative %
1 3.385 24.176 24.176 3.310 23.644 23.644
2 1.425 10.177 34.352 1.400 9.999 33.644
3 1.216 8.685 43.037 1.290 9.211 42.855
4 1.102 7.870 50.907 1.120 8.002 50.857
5 1.089 7.776 58.684 1.096 7.827 58.684
Basis: Eigen values > 1 Extraction Method: Principal Component Analysis
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Revelations from StudyRotated Component Matrix : Components based on Factor Loadings
component 1 component 2 component 3 component 4 component 5
ORPD16 [0.816] ORPD13 [0.839] ORPD5 [0.797] ORPD1 [0.632] ORPD7 [0.744]
ORPD9 [0.752] ORPD17 [0.837] ORPD11 [0.699] ORPD18 [0.524] ORPD3 [0.444]
ORPD8 [0.675] ORPD14 [0.832] ORPD4 [0.681] ORPD2 [0.419]
ORPD6 [0.530] ORPD12 [0.822]
ORPD10 [0.236]
ORPD15 [0.114]
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Jagan Institute of Management Studies (JIMS) www.JimsIndia.org
Revelations from StudyH0A: Attitude towards Online Reviews does not depend on genderH1A: Attitude towards Online Reviews depend on gender
Attitude towards Online ReviewsTotal
Favourable Neutral Unfavourable
Gender of RespondentsMale 67 12 2 81
Female 23 49 15 87
Total 90 61 17 168
Pearson Chi-Square (X2) : 135.559 ; p=0.000Conclusion: H0A is rejected and thus we can conclude that attitude towards online reviewsdepends significantly on gender
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Jagan Institute of Management Studies (JIMS) www.JimsIndia.org
Revelations from StudyH0B: There is no significant difference between consumers’ level of satisfaction with reference toonline reviews and their income levels.H1B: There is a significant difference between consumers’ level of satisfaction with reference toonline reviews and their level of income.
The significance value for Levene’s test = 0.158 [F (1, 77) = 0.158]Since it is greater than 0.05 (Levene, 1960), we can conclude that we have not violated theassumption of homogeneity of variance
Levene Statistic df1 df2 Sig.
2.035 1 77 0.158
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Jagan Institute of Management Studies (JIMS) www.JimsIndia.org
Revelations from StudySince the assumption of homogeneity of variance is tenable, we look at the ANOVA table:
p ≤ 0.05Hence, there exists a significant difference between consumers’ level of satisfaction with regard toonline reviews and their monthly income levels
Sum of Squares df Mean Square F Sig.
Between Groups 11.657 1 11.657 41.057 0.000
Within Groups 21.862 77 0.284
Total 33.519 78
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Consumers today are no longer uneasy in referring to the Internet to peruse online reviews
Consumers who use smartphone Android apps such as idealo to compare prices, can minimizethe emphasis of marketers’ inputs on their decisions
Conclusive Deliberation
From this study, we have been able to conclude that consumers essentially rely on the lengthand depth of online reviews, their clarity and assurance while sustaining moderate levels ofknow-how on their part
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Jagan Institute of Management Studies (JIMS) www.JimsIndia.org
Conclusive Deliberation
62.5% of consumers (n=105) resort to online shopping websites such as Flipkart,Amazon or Snapdeal to make informed purchase choices.
61.9% of the respondents (n=104) rely on WOM to make their purchases.
50% of the respondents always prefer to stay online (smartphones).
Other Statistics revealed through the study:
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Conclusive Deliberation
The minute tracking of customer information-referral sources by marketers will leadto success.
As the influence mix evolves further, firms positioning themselves as low-pricedplayers are more susceptible to negative e-WOM activity because consumers findnegative WOM to be more credible and likely to recur in their case.
How can Marketers Benefit?
Essence: Online Reviews (e-WOM) have served as a blessing in disguise as it has offeredcustomers with a feeling of comfort, solace and safety prior to or post-purchase
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About JIMS
JIMS Rohini is one of the leading MBA institutes of Delhi. We impart professional education both at post graduate and undergraduate levels in the fields of management and information technology.
Our PGDM program is approved by the AICTE and is
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Excellence in 2013. We offer excellent academic
structure, industry interaction and job opportunities.
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