“Unfiltered feedback from customers is a positive even when it’s negative. A bad or so-so online review can actually help you because it gives customers certainty that the opinion is unbiased.” 

– Source: Gail Goodman, Entrepreneur, 2011

Social media delivers an ultimate platform for customers to broadcast their personal opinions regarding purchased products and services and therefore accelerate word-of-mouth (WOM) or consumer reviews to travel fast. Nearly 63% of consumers are more prone to buy products on a website that has online consumer reviews (iPerceptions, 2011). Online consumers reviews are trusted 12 times more, in comparison with descriptions of the product stated by the manufacturers themselves (eMarketer, February 2010). Companies who provide space for reviews on their websites, have an increase in company sales of nearly 18% (Reevoo). This video below defines how customers can assess online consumer reviews and recommendations while researching and shopping online.

Youtube: “Online Reviews and Recommendations”

Chen et. Al (2011) examined the interactions amongst consumer posting behavior and marketing variables such as product price and quality. An important part of the research was about how such interactions progress as the Internet and consumer review websites draw widespread approval where people use it more often. The study’s new automobile models data comprised of two samples that were gathered from 2001 and from 2008. As an automobile involves thorough searching before making a significant financial decision, these years were seen appropriate. Also more consumers made use of the Internet between 2001 and 2008 when considering purchasing an automobile. A total of 54% of new-automobile consumers made use of the Internet in when buying a car in 2001, reported by Morton, Zettelmeyer and Silva-Risso. According to a report by eMarketer, in 2008 this percentage was increased to nearly 80%. This study included prominent automobile review websites that covered the distinctive sections of the market— leading car enthusiasts (experts) as well as amateur consumers.

Motivations for Posting Online Consumer Reviews.

Gaining social approval – self-approval – indicating a level of expertise or social ranking – by demonstrating their superb purchase decisions, are all psychological reasons why consumers post online reviews. It can also be used to state satisfaction or dissatisfaction. Diverse types of customers are driven by distinctive motivations for posting reviews online. The earlier group of Internet users (in the study – year 2001) differs from the second group of Internet users (year 2008) when it comes to the reasoning as to why they post online. The consumers categorized as early group of users (a.k.a. experts – early adaptors of innovation) have high levels of product expertise, making them more likely to be psychologically seeking status and engaging in noticeable consumption. They are seeking to representing know-how and social ranking is particularly significant in the Internet’s early years (2001), as they tend to have high incomes and are more so price insensitive.

Conversely, the Internet has advanced and developed over this period, and it has appealed to a bigger population of types of consumers. Where, in 2001 it used to be a select group of Internet users who would post reviews, the Internet usage and online consumer review sites of today have become more mainstream. The Late adopters (2008) cultivate to be more no-nonsense and price focused compared to early adopters.

Marketing variables – effect on consumer online-posting behavior

Marketing variables indeed have an influence on consumer online-posting behavior. In the early stages of the Internet (2001) the price of products had negative relationship but premium- brand image has a positive relationship with the number of online consumer postings; differently, product quality has a U-shaped relationship with the number of online consumer postings. These different relationships are likely to be driven by early adopters of Internet usage.

The Internet infiltrates to mass consumers online, who are more inclined to be price sensitive as well as value driven.

Though certain marketing variables can lead to a big number of consumers engaging in online posting activities, these consumers do not automatically give higher ratings. The study shows that mass consumers lean towards posting online consumer reviews at higher as well as lower purchase price levels. In contrast to posting online consumer reviews primarily at lower price levels, which happened frequently during the early stages of Internet usage. The Internet has been accepted more by mass consumers online, where they express (dis)liking a product or service. This motivation of sharing reviews has become more important compared to sharing expertise of social status.

In conclusion, this research showed that the connections between marketing variables and consumer online-posting behavior are distinctive at the early phases compared to mature phases when it comes to Internet usage. High prices increase the overall consumer review ratings, which may be good news for a firm’s pricing decision. They found that the search for status is a core driver behind consumer-review behavior, predominantly in the early Internet stage. In market where it is difficult to assess quality, costly to assess quality, and where heterogeneous tastes are important factors when choosing a purchase, customers are occupied in all-encompassing decision-making. These conditions make it more likely for consumers to request external opinions online, before they make a decision on what they will be purchasing.

References:

Chen, Y., Fay, S., & Wang, Q. (2011). The role of marketing in social media: How online consumer reviews evolve. Journal of Interactive Marketing, 25(2), 85-94.

Charlton, G. (2012) “Ecommerce Consumer Reviews: Why You Need Them and How to Use Them.” Econsultancy.com

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