Words themselves are innocuous - it is the

THE IMPACT OF REVIEW CONSENSUS AND ITS

VALANCE ON THE PERCEIVED

USEFULNESS OF ONLINE CONSUMER REVIEWS -

THE IMPORTANCE OF PRODUCT TYPE, PRODUCT

INVOLVEMENT AND GENDER

Master Thesis

Words themselves are innocuous - it is the

consensus that gives them true power.

(Gloria Naylor)

Agenda

 Problem Statement  OCR Usefulness  Antecedents

 Research Questions

 Hypotheses & Conceptual Model  Design & Product Choice

 Sample & Conditions  Plan of Analysis

 Results

 Takeaway points  Implications

Problem Statement

Problem

 great product offer offline & online 

choice overload

 lack of information about the available

alternatives, the product quality or supplier quality risk perceptions

Solution

 OCRs are the second most

trusted source of information

after friends’ recommendations 1

 influence consumer attitudes and

OCR Usefulness

 OCR usefulness has a significant impact on consumers’ probability to

Antecedents

 purchase decision is influenced by a set of OCRs

rather than a single review

 Gender differences  Product involvement:

high vs. low

 the level of agreement or

disagreement among a group of people drives individual’s buying

behavior3

 the level of perceived risk is not equal for all products

and services4_{ product type: search, experience &}

credence Time of quality evaluation

before purchase after purchase

General possibility to assess the product quality

possible search properties experience properties

impossible experience or

Research Questions

How does the

 OCR consensus impact OCRs usefulness perceptions?

 valance of the OCR consensus (positive vs. negative) influence these

perceptions?

 product type influence the evaluation of usefulness of an OCR set?  gender influence the usefulness evaluation of an OCR set?

 the level of involvement moderate the relationship between review

consensus and review usefulness?

 OCR usefulness impact consumer´s purchase intentions?

Overall research question:

How do the OCR consensus and its valence influence the perceived OCR usefulness and behaviour intentions depending on the product

Hypotheses & Conceptual Model (1)

 H1: The higher the perceived OCR usefulness, the higher the purchase intention.

 H2a: The higher the review consensus or unbalance (both positive and negative) among the reviewers within a set of OCRs, the higher the perceived OCR usefulness of the same set.

 H2b: Negative opinion consensus has a stronger positive impact on the perceived OCR usefulness compared to positive opinion consensus.

 H3a: The more difficult it is for the customer to evaluate a certain product or service, the higher the perceived OCR usefulness.

 H3b: The positive impact of OCR consensus on perceived usefulness is more pronounced for products and services which are difficult to evaluate like credence goods compared to products and services that are easier to evaluate like experience and search goods.

OCR Usefulness Purchase

Hypotheses & Conceptual Model (2)

 H4: The positive impact of consensus information within a set of OCRs on perceived OCR usefulness tends to be higher when product involvement is low.

 H5a: A set of OCRs is perceived as more useful by females than by males.

 H5b: The positive impact of consensus information within a set of OCRs on perceived OCR usefulness tends to be higher for females than for males.

Design & Product Choice

OCR Consensus Product type

High positive OCR consensus

Low OCR consensus (both positive and

negative)

High negative OCR consensus Search to experience Condition 1 Condition 2 Condition 3

Experience to

credence Condition 4 Condition 5 Condition 6

Clothing Furni-_ture Houses Vacation Restau-_rants Child _{care services} Repair _services Legal Medi-_cine

Easy to evaluate

Difficult to evaluate High in credence qualities

High in search qualities High in experience qualities

Product/ Service Evaluation Continuum  Product Choice

Sample & Conditions

Sample

 205 respondents (43% males

and 57% females)

 age ranged between 16 and

64 years with an average of 28 years (66.3% between 21 and 27)

 46.3% students and 42.8%

full-time employed

Plan of Analysis

Regression Analysis:

OCR Usefulness/Purchase Intention =

β₀ + β₁ × High Positive Consensus + β₂ × High Negative Consensus + β₃ ×

Product Type +

β₄× (High Positive Consensus × Product Type) + β₅ × (High Negative Consensus × Product Type) +

β₆ × Involvement + β₇× (Involvement × High Positive Consensus) + β₈×

(Involvement × High Negative Consensus) +

β₉ × Gender + β₁₀ × (High Positive Consensus × Gender) + β₁₁× (High Negative Consensus × Gender) + OCR Attitude + OCR Behavior + Age +

Income + ε

Mediation Analysis:

Results Regression Analysis

OCR Usefulness Purchase

Intentions OCR Consensus Valence 0.637** n.s. 0.429*** 0.514* 0.326* n.s. n.s.

 The OCR usefulness significantly positively affects the purchase intention  H1 is supported  High positive OCR consensus positively affects the OCR usefulness, but the high negative

consensus does not  H2a is partly supported

 The OCR usefulness is higher for the laptop repair shop compared to the OCR usefulness for the

vacation  H3a is supported

 The positive impact of positive OCR consensus is higher for more involved customers  H4 - the

a₃ = 0.6375*** c´3 = 0.3035 b = 0.4028*** a₁= 0.5893** a2 = 0.3712* c´2 = -1.6334*** c´1 = 0.4118**

Results Mediation Analysis

Conclusions:  High positive consensus – partial mediation  High negative consensus – partial mediation

 Product type – full

mediation Purchase Intention Product Type Positive Consensus OCR Usefulness Purchase Intention Negative Consensus Product Type Positive Consensus c2 = -1.4839*** c₁ = 0.6492** c₃ = 0.5602** * p < .05, ** p < .01, *** p < .001 Negative Consensus Total effects

Takeaway points

 OCR usefulness is positively affected by the high positive opinion

consensus

 the high negative consensus set has no significant effect on the OCR

usefulness in the regression analysis

 but shows a significant direct and indirect effect through the OCR

usefulness on the purchase intention in the mediation analysis

 the total effect of the negative consensus set on the purchase

intention is way higher than this of the positive consensus

 the perceived OCR usefulness is higher for goods which performance

is difficult to judge before and after purchase and use such as credence goods

Implications

 show the customers a set of OCRs where the majority of the

reviewers share the same positive opinion regarding the product or service

 invite customers to share their product experiences and opinions if

they are positive

 showing a negative review as the first comment is not to recommend  set an initial positive review should as an anchor for subsequent

evaluation

 different treatment of high and low involved customers (click stream

data)

 inviting customers to share their experience is even more important

Limitations & Further Research

 source of the review  source ratings

References

 1 Nielsen, (2013). The reviews are in: Yelp users are four-star consumers,

06.27.2013, available

at:

http://www.nielsen.com/us/en/newswire/2013/the-reviews-are-in--yelp-users-are-four-star-consumers.html

 2 Cheung, Christy M.K., Matthew K.O. Lee, & Neil Rabjohn (2008). The

Impact of Electronic Word-of-Mouth - The Adoption of Online Opinions in Online Customer Communities. Internet Research, 18 (3), 229–47.

 3 Kelley, H. H. (1967). Attribution theory in social psychology. In Nebraska

symposium on motivation, University of Nebraska Press: Lincoln, 192-238.  4 Nelson, P. (1970). Information and consumer behavior. Journal of

political economy, 78(2), 311-329.

Nelson, P. (1974). Advertising as information. Journal of political

economy, 82(4), 729-754.

Darby, M., & Karni, E. (1973). Free Competition and the optimal