The Influence of Electronic Word-Of-Mouth Authenticity on

Customers’ Behavior Junfeng LIAO1,

1 School of Economics and Commerce, South China University of Technology,

Guangzhou, China 1 ljf@scut.edu.cn

Jiaying YANG2

2 School of Economics and Commerce, South China University of Technology,

Guangzhou, China 2yangjiaying0704@foxmail.com

Abstract—The positive feedback of e-WOM is

considered to be the higher the better. This study

tries to discuss how the different positive

feedbacks will affect credibility of e-WOM when

fake information exists. In fact, authenticity has

significant impact on customers’ purchase

decision and the positive feedback is not the

higher the better.

Keywords-Authenticity;Positive Feedback; e-WOM

I. INTRODUCTION

A. Research Background

Netizens have reached 513 million in China in 2012, the Internet penetration rate has reached 38.3% and the growth of e-business applications is 20.8%. Customers focus on price, brand and some other factors when they shop online. At the same time, e-WOM can’t be ignored, too.

Traditional WOM is information exchange about products or service among customers. Compared with traditional WOM, e-WOM spread anonymously, widely and faster[1]. Surveys show that 65.3% of netizens will refer to e-WOM when shopping online. E-WOM has significant impact on purchase decision.

This research is about online reviews, which are attached to merchandise information on the websites. According to pervious researches, many factors of e-WOM can affect purchase decision. However, the past literatures ignored fake information. This research tries to find out the influence of different positive feedbacks of e-WOM on credibility and customers’ purchase decision when fake information exists.

B. Significance of the study

It’s difficult for customers to trust e-WOM because of its anonymity, especially when there is plenty of fake information online. Lots of factors can affect the credibility of e-WOM, including disseminator, receiver and information channel. Besides, online reviews’ own features should also be considered. This research uses experimental method and questionnaires to analyze the change of authenticity and purchase intention under different level of positive feedback. Finally this theme will give suggestions to help merchants improve their marketing effectiveness.

C. Literature Review

Researches on WOM are originated in Arndt[2]. He thought that WOM is an informal kind of communication behavior between information disseminator and receiver. Through information exchange, customers would have more understanding of products or service. There have been lots of researches about the factors affecting the effectiveness of e-WOM, which have been studied in three aspects. First, the authority and some other features of disseminator have influence on the credibility of e-WOM[3]. Second, features of receiver are also important, such as their characters and ages[4]. Last but not least, features of websites are significant. The credibility of e-WOM is higher when the website is more reliable and regular. In addition to all the factors above, the own characters of WOM can’t be ignored. By reviewing the past literatures, quantity, lengths,

2012 Second International Conference on Business Computing and Global Informatization

978-0-7695-4854-8/12 $26.00 © 2012 IEEE

DOI 10.1109/BCGIN.2012.117

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direction of e-WOM all have influence over its credibility[5]. Those factors change customers’ perceived value. Customers will balance perceived value and perceived risk to make the final purchase decision[6]. In a word, different characters of e-WOM have different influences on customers. However, authenticity of e-WOM should have been considered. E-WOM spread anonymously, which means higher possibility of online rumor or fake information. Surveys show only 31% of netizens is satisfied with authenticity of e-WOM, which will obviously reduce the marketing effectiveness. This study tries to find out the influence of different positive feedbacks on authenticity of e-WOM. And then discusses how will the credibility affect customers’ purchase decision through perceived risk, perceived value and some other variables.

II. RESEARCH DESIGN

A. Variables Select

This theme is to set 5 variables as follow: credibility, perceived risk, trust, perceived value and purchase intention.

1) Credibility: Credibility refers to whether customers believe in online information is true and fair.

2) Perceived Risk: Perceived risk talks about some possible risk customers may face when shopping online, such as bad quality or differnces between goods and online information.

3) Trust: In social science, trust is regarded as a kind of dependencies. In consumption environment, customers give enterprises trust, believing enterprises can keep their promises and provide qualified goods.

4) Perceived Value: Perceived value is a whole evaluation about products or service after customers balance their cost and benefit. Perceived value is usually related to customers’ expectation.

5) Purchase Intention: Purchase intention talks about whether customers are willing to purchase the products or share their experiences with others. Purchase intention is the result of the influence of e-WOM.

B. Questionnaire design

The questionnaire set a real scene, let the investigators image they are now shopping online: “You want to buy a kettle online and find out one whose basic information you are satisfied with on a website. You decide to look through the e-WOM before making the final decision.” The questionnaire stresses “a website” and “you are satisfied with its basic information” to remove the influences of other factors. So the investigators’ choices will mainly depend on e-WOM. In the shopping situation, the investigators will read some reviews about the kettle. There are four sets of questionnaires and about 20 comments of the kettle in each questionnaire. All the comments are extracted from the internet and have been corrected after interviews. The positive feedbacks in the questionnaires differ from each other. The positive feedback of the first questionnaire is 100%. In the second questionnaire, each comment points out some defects when the general judgement is positive. So the positive feedback drops to 80%. Comments in the third questionnaire can hardly reach agreement. The positive feedback is 50%. Comments in the last questionnaire are totally negative so that the positive feedback is 0%. Considering there’s almost no difference when the positive feedback drops to a specific level, there’s no positive feedback which is set to be 20%. The questionnaire uses Likert Scales to detect the investigators’ feelings about the five variables. There are four questions for each variable.

C. Hypothesises:

H1: C and PR are negative correlation. H2: C and T are positive correlation. H3: PR and T are negative correlation. H4: PR and PV are negative correlation. H5: T and PV are positive correlation. H6: PV and PI are positive correlation.

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Figure 1 Research Model

III. RESEARCH SIGNIFICANCE AND

RESULTS

A. Investigation Design

1) Tentative Investigation Initial questionnaire has been finished basing on pervious study. The questionnaires were sent to students in SCUT. 174 effective questionnaires were recycled. The credibility and validity of this investigation matched with identification index. Some details have been changed to gain a formal questionnaire.

2) Formal Investigation Formal investigation is sampling survey in Guangzhou, Beijing, Nanjing, Chengdu, Hong Kong and Changsha. 600 questionnaires have been sent 544 of them are effective. The recovery rate reached 90.6%.

B. Research Results

1) 3.2.1 Reliability and Validity Basing on the reliability and validity analysis with SPSS 16.0, the Cronbachps is all over 0.8. The entire Cronbachps is 0.894, so that the questionnaires have a good reliability. According to the validity analysis of the samples with SPSS16.0, KMO are all over 0.7. Bartlett’s statistical value is lower than 0.000.

2) Structural Equation Model Testing This study uses AMOS 17.0 to test the hypothesises and it shows the model has good fitting effect and can do the following analysis.

Table 1 Results of SEM Testing

Model Fit

Standard

Ideal

Result Model

Degree of

compliance

AFI

X2/df <5.00 3.790 YES

RMSEA <0.08 0.072 YES

GFI >0.90 0.902 YES

AGFI >0.80 0.863 YES

IFI

NFI >0.90 0.929 YES

CFI >0.90 0.946 YES

IFI >0.90 0.947 YES

RFI >0.90 0.910 YES

PFI

PNFI >0.50 0.738 YES

PGFI >0.50 0.648 YES

PCFI >0.50 0.752 YES

According to Table 2, only H1 is refused for not being significant.

Table 2 Results of Structural Models

Paths Hypothesis Estimate Results

C->PR H1 0.014 Nonsupportt

C->T H2 0.500*** Support

PR->T H3 0.225*** Support

PR->PV H4 0.145* Support

T->PV H5 0.677*** Support

PV->PI H6 1.079*** Support

Figure 2 Test results of structural models

C=Credibility, PR=Perceived Risk, T=Trust, PV=Perceived Value, PI=Purchase Intention

3) Mean Value Analysis This study uses Excel to analyze the mean

value of credibility and purchase intention.

The credibility is very high when the positive feedback is 80%. The second is 0% and then 50%. However, when the positive feedback is 100%, the credibility is the lowest, which means

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customers don’t believe in perfect e-WOM. Purchase intention becomes higher and higher when positive feedback grows and reaches the maximum when the positive feedback is 80%. Customers are most willing to buy goods whose positive feedback is 80%.

IV. CONCLUSION AND SUGGESTION

A. Conclusions

1) Credibility Have No Significant Influence on Perceived Risk Basing on path analysis, credibility can’t affect perceived risk significantly. Credibility talks about whether customers think e-WOM is true. Perceived risk is concerned with the specific information in WOM. For instance, comments in the fourth questionnaire refer to all kinds of questions the kettle has. The high credibility means customers believe in the information, thinking the kettle has bad quality, so that perceived risk is also very high.

2) Credibility has great influence on purchase intention Basing on the path analysis, credibility and trust have positive correlation. Trust and perceived risk can affect perceived value. Meanwhile, perceived value has significant impact on purchase intention. In a word, credibility can affect purchase intention. 3). Positive feedback isn’t the higher the better Considering mean value analysis to credibility, customers prefer 80% positive feedback to 100%, which means there is fake information when positive feedback is 100%. Customers are willing to choose products or service with both advantages and disadvantages. Therefore, the positive feedback is not the higher the better.

B. Suggestions.

1) More Attention on E-WOM Merchants must pay more attention on e-WOM, especially complaints. Merchants should give apology to those customers who are not satisfied to avoid negative e-WOM.

2) Word-of-Mouths with Defects Accepted

It’s not necessary for merchants to ask for perfect WOM. In fact, WOM with defects are the most credible and should be accepted.

V. LIMITATION AND FUTURE DIRECTIONS

This theme finds out the significant impact that authenticity has on purchase intention. But there are still several disadvantages, for just researching four positive feedbacks. The maximum may not occur when positive feedback is 80% in reality.

Future study will add more positive feedbacks to make more convincing and comprehensive conclusions.

ACKNOWLEDGMENT

This research was supported by Guangzhou Program of Philosophy and Social Science under Grant of 10Y64 and the Fundamental Research Funds for the Central Universities of China under Grant of 2011SM022.

REFERENCES

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and Application Strategy of e-WOM”, New Marketing,

pp.35-41, Dec, 2011.

[2] Arndt, “J.Role of Product-related Conversations in the

Diffusion of a new product”, Journal of Marketing Research,

pp.291-295, April 1967.

[3] Chunhua Sun, Yezheng Liu, “The Effect of e-WOM on

Customers Perception of Information Usefulness”, Journal of

Intelligence, vol 28 No.10, Oct 2009.

[4] Gualin Li, Guang Yang, “Research about Influences of

Electronic Word-Of-Mouth on Students”, Innovation Forum,

pp 6-8, Sep 2011.

[5] Chunhua Sun, Yezheng Liu, “Research about Credibility

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[6]Xueqing Yang, “Research about Influence of Electronic

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