This essay aims toexamine the influence that electronic work of mouth has on consumer purchaseintentions within the travel and tourism industry. Word of mouth(WOM) is defined as ”communication about product and services between peoplewho are perceived to be independent of the company providing the product orservice, in medium perceived to be independent of the company” (Silverman,2001, p.25). WOM has been seen to play a substantial role when it comes toinfluencing consumer purchase attitudes and behaviors. It is also acknowledgedas a tool that can reduce marketing costs whilst boosting profits (Reichheldand Sasser, 1990). Since the advance of the web, WOM has been widely availablefor marketers to examine in a new form, Electronic Word of Mouth.
Electronic Word ofmouth of eWOM refers to the use of the internet to voice opinions on certainproducts, brands or current topics (Vineyard, 2014). Bansal and Voyer state”eWOM conversations consist of basic information transfer between people whosend and receive information” (2000, p.166). Consumer decision-making process? Peter and Olson(2008) state that purchase intention is defined as the act of making aconscious choice to purchase a specific product. Purchase intention is anelement of the consumer decision making process and is utilized to foreseeconsumer buying behavior prior to the act of purchase (Newberry et al, 2003).Further to this, O’Keeffe (2002) suggests that understand intention is the mostaccurate method of forecasting purchase behavior in a range of contexts such ashigh and low involvement purchases.
Hsu et al (2006) also states the purchaseintention is as significant to research as the actual act of purchase. Schindler andBickart (2005) states that online reviews left on social media, corporatewebsites, third party sites significantly influence a number of steps of theconsumer decision making process, however, we will be examining its effectsspecifically on consumer purchase intention. Due to the advance of technologyand the ease of sharing views online, it is clear to see why there have beennumerous studies conducted into the effect of eWOM on consumer purchaseintention (Xie et al, 2011).
The travel and hospitality industry have seen thehighest impact from user generated comments (eWOM) since the development of web(Serra Cantallops and Salvi, 2014). EWOM comments can be viewed on a range ofsocial media platforms such as Facebook or Twitter but are predominantly seenon third party travel sites such as TripAdvisor and Yelp offer an outlet forconsumers to voice their opinions of their post purchase evaluation, thusinforming the decision making process within a prospective consumer. The focusof this study aims to examine the literature regarding the influence of eWOM onconsumers purchase intentions within the UK hospitality industry, due to thenumber of studies conducted within this area of research.
Mainbody Numerous studieshave recognized the influence that eWOM reviews have on consumer purchaseintentions specifically within the travel industry (Xie et al, 2011; Ladhariand Michaud, 2015). Gretzel (2007) studyanalyzed a sample of TripAdvisor users and identified the importance of user-generatedreviews in information purchase intention and decisions. With 92.3% of participantsusing online forums like TripAdvisor and LonelyPlanet to inform themselves on thedestination. A key into theeffect of eWOM on consumer’s came from Jalilvand and Samiei (2011) whoquantitatively identified eWOM as one of the most effective tools wheninfluencing an individual’s purchase decision.
A later study from Jalilvand andSamiei (2012) supports the earlier findings and identified in an experimentalstudy of 295 tourists in Isfahan, Iran, eWOM was significant when it came toincreasing purchase intention. However, this stud mainly focuses on the automotiveindustry so it is difficult to generalize the findings to the hospitalityindustry. Further to this, Smith and Vogt (1995) discovered from a study withinthe hotel industry that eWOM effects consumers brand preference and purchaseintention as well as the hotels credibility. It has also been discussed how positive eWOM has the ability to reducemarketing costs by acting as a persuasive form of free advertising (Yi Lin& Yuh Lu, 2010). EWOM is separatedinto three categories, Variance, Volume and Valence.
Variance, which examinesthe statistical variance of the comments (Clemons, Gao & Hitt, 2006).Volume discusses the amount of online word of mouth comments that are receivedabout a particular topic or product. It has been identified that a significantvolume of comments casn results in an upsurge in sales (Moe & Trusov,2011). Finally, numerous studies have focused on the valence of the eWOMcomments, which refers to the sentiment rating of said comment (positive ornegative) (Mauri and Minazzi, 2013, p.101). Kim, Park and lee (2013) aimed toidentify the effects of eWOM on consumers purchase behavior through onlinechannels. The study proposed that the directionality of eWOM would have asignificant effect on purchase intention. It was found that negative eWOMcomments, such as complaints or disappointments in experience, had a moresignificant impact upon consumers purchase decisions that positive eWOMcomments.
The directionality of eWOM has received a vast amount of researchinto its effects on consumer purchase intention. A quantitative study byLadhari and Michaud (2015) examined how positive and negative eWOM commentsleft on Facebook influenced an individual’s purchase intention when researchinga hotel. Their findings identified a direct correlation between positive eWOMcomments and a significant increase in purchase intention.
They also recognizedhow positive sentiment also decreased the level of perceived risk and enhancedperceptions of quality and credibility of the hotel. This study also found adirect correlation between exposure to negative comments and a decreasedpurchase intention for hotels and resorts (Ladhari and Michaud, 2015).Thesefindings support a number of similar studies who identified the effects offavorable sentiments on a consumers’ likelihood of booking a hotel stay(Duverfer, 2013; Sparks and Browning, 2011). However, Chatterjoe (2001) statesthat negative valence may only be detrimental to purchase intention if theconsumer has no prior knowledge to the company and its offerings.
A further studyfrom Sen and Lerman (2007) also identified that the directionality of eWOM(positive or negative) has an effect on purchase intention. However, it wasfound that this was dependent on whether the product was hedonic/utilitarian orhigh risk/low risk. Further to this, Berger (2015) discussed how positive eWOMreviews are particularly important for products with a high level of risk, suchas automobiles, or travel choices. Numeroustheoretical models and frameworks have been utilized to examine eWOM and purchaseintention such as the Theory of Reasoned Action model (TRA) (Fishbein andAzjen, 1975) and the Information Adoption Model (IAM) (Sussman and Siegal,2003).
The TRA model (Fishbein and Azjen, 1975) suggests that intentions predictbehavior and are said to be composed of individual attitudes and social norms.Several studies have utilized TRA to explain a relationship between eWOM andpurchase intention (Cheung et al, 2008; Shu & Scott, 2014; Erkan , 2015). Further to this,the IAM model (Sussman and Siegal, 2003) proposes consumers may reactdifferently to the same content than other consumers.
The IAM model addressesthe characteristics of information processing through eWOM and extends the workof the Elaboration Likelihood model’s (ELM) (Petty and Cacioppo, 1986) tworoutes of processing. Erkan and Evans (2015) state that the IAM model has fourmechanisms ”argument credibility (Central route), source credibility(Peripheral route), Information usefulness and Information adoption. Erkan and Evans(2015) employed the IAM to develop the information acceptance model (IACM).Erkan and Evans (2015) adapted the IAM to include elements of the TRA model.
The study aimed to analyze the aspects of social media comments that have aneffect upon purchase intention as tested through the IA model. The findingshighlight that the characteristics of eWOM, such as arguments credibility andinformation usefulness, were seen to have a significant effect on purchaseintention. However, whilstthese models have all been effective in explaining elements of purchasebehavior they do not take into account external influences such as a rise inincome or financial gain (Foxall, 2005). Another facet ofeWOM that has been explored is its effects on image creation in relation topurchase intention. Various empirical studies have identified that eWOM canhave an effect on travel destination image creation within the minds ofconsumers (Echtner and Ritchie, 2003). Morgan, Pritchard and Piggot (2003)state that negative comments are highly detrimental to image creation of atravel destination, due to the disgruntled reviews left by travelers online. Insupport of this, Hanlan and Kelly’s (2005) experimental study found thatdestination image is formed overwhelmingly through eWOM sources. Jailvand et al(2012) quantitative study of the tousim industry in Iran aimed to detect onlineword of mouth’s effects on the destinations image, impact on attitude andimpact on travel intention.
From the study of 264 participants, it was foundthat there is a significant impact from eWOM that effects the destinationsimage, this directly resulting in an impact on purchase intention. Khan et al (2015)aimed to identify key factors in Consumer-to-Consumer eWOM that directly affectpurchase intentions with online shopping in Pakistan. Khan et al (2015)findings show that there are six significant factors within WOM that influenceconsumers’ willingness to purchase ”Trustworthiness, source similarity, sourceattractiveness, social tie strength, source expertise and informationusefulness” (2015, p.481). This study highlights the important factors, whichhelp break down the influence that the reviews of others can have upon thepurchase behaviors of others. These findings support previous research, whichidentified the power of factors such as credibility (Pornpitakpan, 2004) andstrength of social ties (Bond et al, 2013).
Baloglu and McCleary (1999) suggestthat reviews from friends and family or others with a social tie were the keyfactor in holiday destination choice. The strength ofsocial ties can explain why eWOM comments via social media channels areeffective at influencing purchase intention due to the strong ties that arepresent between the consumer and the writer. In support of this, Lamberton& Norton (2011) state that people trust the opinions of others when thereare strong social ties, as they believe their preferences will be similar. The detailed, orbasic, nature of comments is another factor of eWOM that has been shown toinfluence consumer purchase intention. Godes & Mayzlin (2004) identify howin-depth comments have a significant effect on behavior. However, this may notalways be the case as consumers may not take the time to read the full reviewif it doesn’t captivate them.
Finally, a factorthat has undergone substantial research is the susceptibility of the recipientof eWOM. Aral & Walker (2012) suggest that some consumers are more likelyto be persuaded by social influence, meaning that they are more willing topurchase a product after hearing about it. It has been suggested that youngerconsumers are often the most easily influenced by social persuasions(Pasupathi, 1990) in contrast to those who believe themselves to be experts ina field (Iyengar et al, 2011). Conclusion With over 60% oftravelers choosing to inform their decision based electronic word of mouthrecommendations (Light speed Research, 2011) there is a significant need formarketers to have a solid understanding of the effects that EWOM can have onthe consumer decision making process.
As can be seen from previous researchconsumer’s comments have had a significant impact upon the travel industry.Particularly the effects that Valence and Volume (Moe and Trusov, 2011; Mauriand Minazzi, 2013) have on consumers purchase intention. Travel industrymarketers must ensure they monitor online conversations to analyse what isbeing discussed about the brand.
Whilst it can be seen from research that themajority of online word of mouth reviews are left on third party websites suchas TripAdvisor it can be stated that a small amount of research studies havealso identified the effect of social media EWOM on consumer purchase intentionwithin the travel industry. It issuggested that marketers utilising social listening tools to monitor socialmedia channels and analysing share of voice and sentiment of the comments beingmade if they are to understand its effects on purchase intention. By analysingthe share of voice, online marketers will be able to make improvements to theirdestination and negate negative social buzz, which may occur. Previous researchfindings also indicate that the level of credibility of EWOM comments have asignificant effect on consumers’ willingness to purchase (Pornpitakpan, 2004;Khan et al., 2005). Within the travel industry, the rise of positive sponsoredreview posts has been seen to increase rapidly (Sirgy et al., 2008).
Whilstthis offers marketers a means of generating positive valence, which we know toincrease sales profits and reduce marketing costs (Reicheld and Sasser, 1990)it also decreases the credibility of EWOM. Mizerski and Green, (1978) statethat sponsored review posts often decrease the level of credibility andtrustworthiness of information, in turn rendering marketers efforts useless andreduces purchase intention. Marketers must be aware of the ethical implicationsof utilizing sponsored posts to increase positive valence Limitations A key limitationof this study into the effects of EWOM on consumer purchase intention withinthe UK travel industry is the restrictive nature of secondary research. Whilstsecondary research offers a low cost alternative to gaining insight there aremany limitations to utilizing only secondary sources to inform your findings.The first limitation is the age of secondary sources on the topic, whilst oldersources are extremely useful, within the fast paced and ever changing market oftravel and tourism up to date information would give a richer understanding ofEWOM’s effects within the current environment (Wrenn et al.
2006). Furtherprimary research should be conducted alongside secondary research to gain adeeper understanding of the effects that online word of mouth has on consumerspurchase intention within the UK travel industry in order to offer significantfindings. A furtherlimitation is the lack of research into the external influences that may have adetrimental effect onto consumers EWOM experience, and thus on their willingnessto purchase. External influences such as the turbulent nature of the travelbusiness due to the threat of terrorism (Michaels, 2003), economic factors andindividual beliefs about travel may have effect the influence of negative EWOMby enhancing the perceived risk attached to travel.