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Whether, when, and how does online review matter to buying decisions?
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Whether, when, and how does online review matter to buying decisions?
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Kim
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Rae Yule
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Kim, Rae Yule.
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author
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Yeniyurt
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Sengun (Shen)
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Sengun (Shen) Yeniyurt
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Advisory Committee
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chair
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Mundra
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Kusum Mundra
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internal member
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Richard
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Richard Schaefer
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Advisory Committee
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internal member
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Wang
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Ruxian
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Ruxian Wang
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Advisory Committee
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Rutgers University
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Graduate School - Newark
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theses
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ETD doctoral
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2020
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2020-05
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English
Abstract
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Word of Mouth (WOM) is powerful, and online reviews are the most readily available WOM in electronic commerce. In fact, 82% of American adults see online reviews before making new purchases (Smith and Anderson, 2016). Interestingly, the previous findings of whether or not online review valence influences sales have been inconsistent. In this aspect, the effect of online reviews on sales should be contingent on consumer-level decision making, and thus, the importance of understanding whether and how consumers evaluate online reviews for making purchase decisions cannot be overstated. These three essays investigate how online reviews interact with other promotional signals to predict consumer responses in electronic commerce and add insights into online review literature.
The first study investigates if other product quality signals, such as product attribute cues or brandedness, have substantial influences on whether and how consumers evaluate online review valence for making purchase decisions. Online review valence did not matter to buying decisions when product quality was convincing. The second study extends the finding and investigates whether the effect of online review valence on consumer decisions is influenced by good-enough reference points based on the reference effect theory. The findings suggest the marginal effect of online review valence is negative, and subsequently, the effect of online review valence on sales is not linear and also significantly varies by product quality. The third essay investigates how negative reviews can trigger a backlash effect on sales when price promotions are launched. Negative reviews can have a confirmation effect on consumers’ price-quality beliefs. Although managers might be more tempted to offer price discounts for products with negative reviews to compensate for uncompetitiveness in online review sentiments and increase chances of sales, it can provoke the opposite outcome. Price promotions decreased sales likelihood for products with review ratings below three stars (out of five). Especially, launching price promotions for products with extremely negative reviews, such as one to two (out of five) review ratings tended to decrease the chances of sales by 14 to 31%.
The first study investigates if other product quality signals, such as product attribute cues or brandedness, have substantial influences on whether and how consumers evaluate online review valence for making purchase decisions. Online review valence did not matter to buying decisions when product quality was convincing. The second study extends the finding and investigates whether the effect of online review valence on consumer decisions is influenced by good-enough reference points based on the reference effect theory. The findings suggest the marginal effect of online review valence is negative, and subsequently, the effect of online review valence on sales is not linear and also significantly varies by product quality. The third essay investigates how negative reviews can trigger a backlash effect on sales when price promotions are launched. Negative reviews can have a confirmation effect on consumers’ price-quality beliefs. Although managers might be more tempted to offer price discounts for products with negative reviews to compensate for uncompetitiveness in online review sentiments and increase chances of sales, it can provoke the opposite outcome. Price promotions decreased sales likelihood for products with review ratings below three stars (out of five). Especially, launching price promotions for products with extremely negative reviews, such as one to two (out of five) review ratings tended to decrease the chances of sales by 14 to 31%.
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Management
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Rutgers University Electronic Theses and Dissertations
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Graduate School - Newark Electronic Theses and Dissertations
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rucore10002600001
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ETD_10661
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doi:10.7282/t3-rv0p-bc47
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1 online resource (ix, 128 pages)
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Ph.D.
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Includes bibliographical references
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NjNbRU
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Rights
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The author owns the copyright to this work.
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Kim
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Rae Yule
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Permission or license
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2020-03-29 05:34:38
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Rae Yule Kim
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Rutgers University. Graduate School - Newark
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Author Agreement License
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I hereby grant to the Rutgers University Libraries and to my school the non-exclusive right to archive, reproduce and distribute my thesis or dissertation, in whole or in part, and/or my abstract, in whole or in part, in and from an electronic format, subject to the release date subsequently stipulated in this submittal form and approved by my school. I represent and stipulate that the thesis or dissertation and its abstract are my original work, that they do not infringe or violate any rights of others, and that I make these grants as the sole owner of the rights to my thesis or dissertation and its abstract. I represent that I have obtained written permissions, when necessary, from the owner(s) of each third party copyrighted matter to be included in my thesis or dissertation and will supply copies of such upon request by my school. I acknowledge that RU ETD and my school will not distribute my thesis or dissertation or its abstract if, in their reasonable judgment, they believe all such rights have not been secured. I acknowledge that I retain ownership rights to the copyright of my work. I also retain the right to use all or part of this thesis or dissertation in future works, such as articles or books.
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2020-05-31
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2022-05-31
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Access to this PDF has been restricted at the author's request. It will be publicly available after May 31st, 2022.
Copyright
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Copyright protected
Availability
Status
Open
Reason
Permission or license
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