An Exploratory Study on the Factors Affecting Electronic

Word-of-Mouth

Hee-Woong Kim*

Seung-Eui Noh**

Ji-Eun Lee*

Jung-Eun Son*

* Yonsei University, Seoul, Korea

** Accenture, Seoul, Korea

Research Motivation & Objective

(Trend Report, 2011)

Aims to find on factors affecting WOM activities of consumers with limitation to open market environment

Research Methodology

Qualitative Research

Interview + Coding

Quantitative Research

Online Survey

• One-to-One interview • Consumers with eWOM

activities• Open market context• 31 subjects

• Research model • Online survey • 260 subjects

1

2

Qualitative Research – Results

RankIntention of WOM

activitiesExamples Frequency %

1Information sharing

desire

- I want to share information in relation to products or services.

- I want to exchange information with others.

- I want to share information to prevent others from purchasing damages.

71 54%

2Self-presentation

desire

- I want to show off my information power.

- I want to show off the fact of my purchasing good products.

- I want to gain recognition of my values from others.

28 21%

3 Reward

- I want to get points or mileages after purchase.

- I want to ask for economic and psychological reward.

15 11%

4 Customer satisfaction- I want to express my gratitude to

sellers. - I want to express my dissatisfaction.

10 8%

5 Loyalty

- I want to express the loyalty to a specific shopping mall.

- I want to conduct maniac activities or make relations with others.

6 5%

6 Others- Korean people enjoy spreading a

rumor. . 1 1%

Quantitative Research - Constructs

Identified eWOM Activities Determinants

Definition

Information sharing desire

Need/Attitude to share information on products or services with others in open market

Customer satisfactionA measure of how products or services by a seller meet or surpass customer expectation in open market

Self presentation desire

A behavior of expressing experiences in purchasing products or services in open market

RewardEconomic or psychological reward by WOM activities in open market

LoyaltyThe degree to which a consumer consistently purchases the same brand in open market

eWOMMeans of exchanging purchasing experiences with other consumers and reflect them into purchasing decision in open market

Quantitative Research - Model

6

Quantitative Research - Hypothesis

H1Information sharing desire has a positive effect on WOM activities in the open market.

Fishbein and Ajzen (1975)Brown and Duguid (2002)

H2Customer satisfaction in the open market has a positive effect on WOM activities.

Bitner (1990)Bloch et al. (1986)Anderson (1998)

H3Self-presentation desire in the open market has a positive effect on WOM activity.

Donath (1998)Hirschman (1980)Baumeister (1982)

H4Reward in the open market has a positive effect on WOM activity.

E.L. Deci, R.M. Ryan (1987)

H5Loyalty to the open market has a positive effect on WOM activity.

Reichheld, F. F. and Schefter, P. (2000)Asker, D. A. (1991)

H6Customer satisfaction in the open market has a positive effect on loyalty.

Jun-chul Park (2003)

H7Self-presentation in the open market has a positive effect on information sharing desire.

Dutton and Dukerich (1991)

H8Reward in the open market has a positive effect on information sharing desire.

Bock and Kim (2002)

constructs

　 SPD ISD CS RWD WOM LYT

Self presentatio

n desire

SPD1 0.90 0.14 0.18 0.15 0.12 0.12

SPD2 0.93 0.17 0.13 0.12 0.14 0.10

SPD3 0.92 0.18 0.09 0.12 0.14 0.12

Information sharing desire

ISD1 0.18 0.77 0.10 0.11 0.01 0.03

ISD2 0.05 0.83 0.19 0.09 0.13 0.08

ISD3 0.04 0.85 0.15 0.07 0.14 0.15

ISD4 0.21 0.70 -0.02 0.05 0.08 0.10

Customer satisfaction

CS1 0.13 0.12 0.88 0.11 -0.01 0.18

CS2 0.14 0.10 0.91 0.08 0.07 0.14

CS3 0.10 0.17 0.88 0.09 0.12 0.16

Reward

RWD1 0.10 0.13 0.08 0.87 0.18 0.16

RWD2 0.13 0.10 0.15 0.91 0.17 0.07

RWD3 0.14 0.10 0.06 0.91 0.10 0.10

eWOM

WOM1 0.13 0.17 0.12 0.16 0.84 0.22

WOM2 0.14 0.09 0.07 0.11 0.90 0.22

WOM3 0.12 0.10 0.01 0.20 0.89 0.19

Loyalty

LYT1 0.10 0.21 0.18 0.05 0.22 0.79

LYT2 0.15 0.05 0.15 0.23 0.26 0.82

LYT3 0.22 0.14 0.33 0.12 0.26 0.61

Quantitative Research – Factor Analysis

　 Mean StdCronbach’

s AlphaISD CSI SPD RWD LYT WOM

ISD 4.71 1.27 0.84 1 　 　 　 　 　

CSI 4.87 1.09 0.92 0.31** 1 　 　 　 　

SPD 4.17 1.46 0.96 0.34** 0.34** 1 　 　 　

RWD 3.60 1.42 0.94 0.25** 0.27** 0.28** 1 　 　

LYT 4.09 1.32 0.79 0.35** 0.45** 0.41** 0.37** 1 　

WOM 3.84 1.46 0.92 0.32** 0.22** 0.35** 0.37** 0.54** 1

ISD:information sharing desire, CS: customer satisfaction, SPD: self presentation desire, RWD: reward, LYT: loyalty, WOM: word of mouth**Correlation is significant at the 0.01 level (2-tailed).

Quantitative Research – Reliability & Correlation

Quantitative Research - Result

Implications for Research and Practice

Sampling of factors through the interview

• Systematically coding [Grounded Theory, (Strauss and Corbin’s 1998)]

• Selected 5 factors which were obtained from customers who have experienced in WOM activity in the open market

The importance of strategic establishment for utilization of eWOM as a marketing tool for company

Interaction with consumers through proper utilization of consumers’ information sharing desire in the open market

Overcome limitations of the present reward systems of open markets and establish new reward systems (psychological reward, monetary reward)

WOM on eLearning

12

Graduate School of InformationDigital Services Lab.

http://web.yonsei.ac.kr/dslab/

Qualitative Research - Interview

Data Collection

• Exploratory research revolving around consumers who have conducted WOM activities among the open market

• One-on-one interview format (10~20 minutes)

Sex (%)

Male 18 58%

Female 13 42%Age (%)

10~19 2 6%

20~29 19 61%

30~39 7 23%

40~49 3 10%

WOM activity (%)

1~5 times 19 61%

6~10 times 8 26%

Over 10 times 4 13%

Appendix

Grounded Theory (Strauss and Corbin’s 1998)

Level 1: Initial Coding & Open Coding

Large quantities of raw qualitative data are focused and labeled

during Level 1

Level 2: Focused Coding & Category Development

Level 2 coding reexamines Level1 codes and further focuses the

data

Level 3: Axial & Thematic Coding

Previous coding is studied to develop

highly refined themes

If indicated

Level 4 Theories can emerge from

saturated categories & themes

Appendix

Quantitative Research – Data collection

16

Variables Sample size (%)

SexMale 200 76.9

Female 60 23.1

Age(Average: 25yrs)

10s 25 9.6

20s 106 40.8

30s 103 39.6

40s 23 8.8

50s 3 1.2

Job

Middle(High) schoolstudent

25 9.6

(Under)graduatestudent

46 17.7

Worker 189 72.7

Appendix

Discussion of Findings

17

Customer Satisfaction

• Not significant effect in open market on WOM activity

• Having an effect on WOM activity both satisfaction and dissatisfaction with transaction

Loyalty

• Most positive effect on WOM activity

Reward

• Negative effect on knowledge sharing in the firm (in previous research)

• Positive effect on WOM activity in the open market (points, mileage etc.)

Appendix

Limitation and Future Research Direction

Conducted an online survey limited on Korean open market

• Require to investigate the same research on foreign open market

Not consider an aspect of seller in the open market

• Need to study both the buyer and seller on WOM activity

Measure simultaneously the influence of customer satisfaction

• Necessary to understand more accurate factors by separate investigation into the two cases, both satisfaction and dissatisfaction on WOM activity

Appendix