The power of the electronic word of mouth : a study on the service recovery of negative electronic word of mouth

Egyaful, N. D. (2016) The power of the electronic word of mouth : a study on the service recovery of negative electronic word of mouth.

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Abstract:Purpose: Before purchase, more than 70% of consumers search for online reviews of products or services. This study focuses on negative online review service recovery approaches and uses the following independent variables: response (yes and no), financial compensation (yes and no) and congruence between organisation formality and communication formality (congruence and incongruence). This study examines how organisations can respond best to negative online reviews in order to positively influence readers' perception of organisational reputation, trust in the organisation, and purchase intention. Furthermore, this study aims to show organisations the importance of responding to negative electronic word of mouth (eWOM). Method: An online experiment was conducted among 274 respondents and was completed on the respondents’ PC, tablet or smartphone. All respondents were exposed to one condition in which they had to give their opinion regarding organisational reputation, organisational trust, and purchase intention. Results: The findings show that an organisation’s apologetic response to negative online reviews leads to better organisational reputation, more trust in the organisation’s benevolence, and more trust ability in the organisation compared to an organisation that does not respond to negative online reviews. Whether an organisation responds or not has no influence on purchase intention. The same is true for the second variable, financial compensation. Whether an organisation responds with financial compensation or not has no influence on organisational reputation, organisational trust and purchase intention. The last variable involves congruence between organisational formality and its communication formality. No interaction has been found in the congruence of organisation formality and communication formality, when focusing on organisational reputation and organisational trust. However, the results indicate that congruence between formal organisations and formal communication leads to higher purchase intention than incongruence. Conclusion: Organisations should not only be active but also reactive online to measure the opinions of their consumers. As many consumers make use of online review sites to share their experiences, and others use the sites before purchasing a product or service. Negative reviews could have negative influences on the organisation. However, if an organisation simply responds to a negative review, then it has already created a positive effect on the review readers.
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:05 communication studies
Programme:Communication Studies MSc (60713)
Link to this item:http://purl.utwente.nl/essays/71262
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