The impact of blog on consumer decision making from the perspective of word of mouth

Chapter 1: Introduction

1.1 The Background of Research

Along with the advent of internet, consumers are surrounded by the inflow of information from internet. On the one hand, consumers can facilitate the ability to make a better consumer decision from the information of internet. On the other hand, the considerable information can further make consumers not evaluate the quality of the information. Blog, as the aspect of the implication of internet, becomes the increasingly significant source of word of mouth on online. Referring to the question of why and how word of mouth from blog can influence consumer decision making, from the perspective of literature review, word of mouth from blog can have the positive influence on every stages of consumer decision making including need cognition, information search, alternative evaluation, purchase decision and post purchase behavior. This dissertation will further evaluate this question through the survey in China.

1.2 The Meanings of Research

This dissertation will attach increasing importance to the relationship between word of mouth from blog and consumer decision making. Word of mouth from blog is considered as the most influential interpersonal communication for information sharing and exchange. In terms of previous experienced scholars’ research，such as Bloch et al. (1986), Richins and Root-Shaffer (1988), and Blackwell et al. (2001), word of mouth can be regarded as the increasingly important source for consumers to make a felicitous decision. Furthermore, based on the communication platform of blog, word of mouth exerts considerable influence to make consumers recognize the credible information of word of mouth from blog. However, most papers inclined to make comparison between the platform of blog and others platform of corporate web blog, newspaper, and TV. The Nature of the relationship between word of mouth from blog and consumer decision making is not given within the proper situation.

This dissertation will further focus on the impact of word of mouth from blog on consumer decision making. From the research of this dissertation, word of mouth from blog cannot give the same positive influence on the five stages of consumer decision making. According to the understanding of the relationship, it may make the marketing practitioner and managers pay attention to the application of word of mouth from blog on the stages of consumer decision making. Furthermore, it is important that prosing and solving the problems of the reasons for why word of mouth from blog exerts the negative influence on need cognition and information search in China marketplace.

1.3 The Aim and Objectives of This Dissertation

The main purpose of this dissertation is to explore and evaluate the relationship between word of mouth from blog and consumer decision making through conducting the survey in China marketplace. Furthermore,

Simultaneously, there are some objectives of this dissertation as follows.

1. To interpret the question of how word of mouth from blog influence consumers in China to make a better decision from the perspective of the stages of consumer decision-making process.
2. To evaluate the Chinese consumer attitudes toward the impact of word of mouth from blog on consumer decision making.

1.4 The Structure of This Dissertation

This part will explain the structure of this dissertation with the arrangement of table of contents. Firstly, the part of literature review of this dissertation will give some explanations of the relevant theories or items including word of mouth, the definition and situation of word of mouth, the causes and motives for word of mouth activities, blog, consumer decision making, the process of consumer decision making, reference groups, and word of mouth from blog and consumer decision making. Subsequently, the section of research methodology will contain research question and objectives, the justification of research method, research process, method design including research framework, survey questionnaire and data collection, research environment and sampling design and data analysis and validity and reliability, and limitation. Then, the section of data analysis and discussion will offer some items including the general information of this survey, and descriptive statistic and data analysis. Finally, the conclusion of this dissertation will be given.

Chapter 2: Literature Review

2.1 Introduction

This section will explain and critically evaluate some theories on the relevant topics, such as word-of-mouth, blog, online word of mouth, reference group and consumer decision making. Referring to word of mouth, this part will be relevant to the definition of word of mouth and the causes for word of mouth activities. Subsequently, the relevance of blog and consumer decision making will be covered. Furthermore, connecting these topics in the given circumstance will better interpret the question relating to the impact of blog on brand image and consumers’ decision-making from the perspective of academic environment.

2.2 Word of Mouth

Word of mouth is derived from the interpersonal communication for information exchange. Based on the merits of word of mouth communication (the close relationship between the decision makers and the communicators), word of mouth communication becomes the most influential source for the consumers to make a better purchase decision (Bloch et al. 1986; Feick and Price 1987; Richins and Root-Shaffer 1988). Understanding the meanings and nature of word of mouth is essential for further grasping the influence of blog on consumer purchase decision.

2.2.1 The Definition and Situation of Word of Mouth

Word of mouth (WOM) is primarily considered as an important channel of communication wildly used by people (Alreck and Settle 1995; Blackshaw 2006; Bickart and Schindler 2001). In terms of Blackwell et al. (2001 p.404), word of mouth is defined as the exchange of information, comments, opinions and ideas among people (not including marketers, retailers, manufacturers, advertisers and so on) in private. This definition emphasizes on two focuses. Firstly, during the process of word of mouth communication, the receivers and the transmitters (senders) of information are just composed of consumers yet marketers from the aspect of marketing. Secondly, word of mouth is conducted in private or in informal conversation or transformation. Westbrook (1987, p. 261) argued that the nature of word of mouth communications is an informal communication supplying other decision makers with the information on usage, merits of products and services. Compared with these two definitions, there are two apparent differences between these two definitions. Firstly, the communicators from the aspect of Blackwell’s definition concentrate on the non-commercial communicators, but the definition of Westbrook do not focus on the communicators of recommendation sources. Secondly, Blackwell and his partners considered the communication as the two-ways exchange of information. Westbrook attaches less attention to the two-ways exchange, and inclines to view word of mouth communication as the suppliers of the relevant information. The common focus from these two definitions is that word of mouth communication is considered as the informal communication. From the perspective of this dissertation, word of mouth not only focuses on the sharing and exchange of relevant information, but also pays attention to the two-ways communication yet single way.

During the process of communication, Fill (1999 p.5) argued that both senders and receivers could obtain benefits from word of mouth communication. The content and information involved in the communication process of word of mouth concentrate on some aspects, such as status, performance and experience and so on (Blackwell et al. 2001). From the perspective of empirical research on word of mouth, Katz and Lazarsfeld (1955 p.93) demonstrated that word of mouth became a significant information source of the information for making purchase decision of certain household and food products. During the process of gathering information on household and food products, word of mouth is considered as the most credible source more effective than other sources, such as newspaper, magazines, advertising and marketers’ sources. Moreover, Engel et al. (1969) argued that approximately 60 percent of the respondents considered that word of mouth was the most influential source. Consumers are more likely to appreciate the interpersonal communications to make a better purchase decision, especially in the service circumstance (Murray 1991; Zeithaml et al. 1993).

According to Harris Interactive Survey, interpreting word of mouth practice and usage can further comprehend consumer attitudes toward various word of mouth communications and the differences of different word of mouth communications. As Table 1 mentioned, recommendable information derived from colleagues, peers, family, friends, online newspaper, online magazines, blog, online community, and video website and satellite radio accounts for most part of recommendation sources on word of mouth. According to the fact that whether the recommendation source online, these detailed sources can be classified as two catalogs including recommendation source offline (e.g., friend, peers) and recommendation source online (e.g., newspaper online, magazines online, blog). However, this dimension of recommendation source cannot further indicate the closeness of the relationship between the receivers of sources and the advisers of sources. In terms of the closeness of the relationship between the receivers and the advisers of recommendation sources, these sources are conveniently categorized under two dimensions consisting of the strong-tie sources (e.g., friends, colleagues, family) and the weak-tie sources (e.g., blog, radio, newspaper online) (Duhan et al, 1997). In most situations, the strong-tie sources become the most credible sources for consumers needing information on the lack of knowledge and advice of products and services. Nevertheless, Brown and Reingen (1987) indicated that the weak-tie sources might contain some credible and better information from experts without the limitations of the social circle of the decision makers. Here are to some extent no better recommendation sources (the strong-tie sources and the weak-tie sources) for the decision makers.

Table 2.1: New Media Usage

Source: Harris Interactive Annual RQSM. Base= 6, 205 U.S. adults (18+) familiar with one or more of the 10 “most visible” U.S. companies. p.7.

Furthermore, the survey on credible information source from Table 2.3 shows word of mouth becomes the second most influential source. The first credible source is own personal experience. Another important source is opinions of the company’s employees.

Table 2. 2: Credible Information Source

Source: Harris Interactive Annual RQSM. Online survey conducted September 21-October 23, 2006. Base = 6,205 U.S. adults who rated the top 10 companies. p.4.

However, confronted with the lack of the relevant knowledge on products and services, the consumers readily making purchase decision incline to gather the relevant information from friends, colleagues, and family in terms of Table 1. Newspaper online becomes the second important source for the decision makers needing information. One of the most significant reasons for why newspaper online become the second important recommendation source is because consumers will find information processed by the exporters on newspaper online. According to Keller and Berry (2006), the conducted research argued that most word of mouth conversations were conducted with face to face and phone yet online. Face to face and phone word of mouth conversations account for the majority of word of mouth (90%). Furthermore, less than 10% of word of mouth conversations are conducted with online, blog, chat room, and other online channels. According to the survey of Jupiter Communications (1999), 57% of people visited web sites to view the other people’s recommendations.

Faced these research, however, online channels, such as blog, websites, are the important part of word of mouth. There is no denying the fact that along with the advent of internet and advanced communication technologies, electronic word of mouth makes the credible and valuable information is available for consumers. Understanding the nature of word of mouth thoroughly can further interpret the influence of word of mouth from blog. The following will explain the causes and motives for word of mouth activities.

2.2.2 The Causes and Motives for Word of Mouth Activities

Referring to the cause resulting in word of mouth activities, this can better understand the nature of word of mouth communication and the influence of word of mouth. This section will interpret the causes of word of mouth from the previous research.

When discussing the topic of the motives for word of mouth communication, there are many antecedents and motives to interpret the question for why word of mouth communication can take place. Chatterjee (2001) argued that research offering much evidence and empirical research demonstrated that customers meeting their needs would share their experience with other customers. Simultaneously, dissatisfied consumers may tell others failed experience as much as possible. However, the significant factor for completing the word of mouth communication between consumers is that word of mouth communication to some extent can further reduce the risk of purchasing and finance and others. Word of mouth, as an important recommendation resource, can further reduce the amount of information readily processed by consumers to make a proper decision (Olshavsky and Granbois, 1979).

In terms of Hennig-Thurau et al. (2004), Table 2.2 concluded the important motives for word of mouth communication behavior identified in the literature. Dichter (1966) proposed four dominated motives including product involvement, self-involvement, other involvement and message involvement to motivate consumers to implement the positive word of mouth communication. These four factors emphasize on the positive word of mouth communication and give more detailed information on the development of these factors. Based on the work of Engel, Blackwell and Miniard (1993 p.84), dissonance reduction was added to the four motives of Dichter et al.(1998) further attached importance to altruism, vengeance and advice seeking. Furthermore, altruism may make most consumers be involved in negative word of mouth communication.

Table 2. 3: Motives for Word of Mouth Communication Behavior Identified

Source: Motives for Word of Mouth Communication Behavior Identified in the Literature, from Electronic Word of Mouth via Consumer-Opinion Platforms: What Motivates Consumers to Articulate Themselves on the Internet? Hennig-Thurau et al. (2004). p.41.

In terms of Mittal et al. (1999), Oliver (1980) and Swan and Oliver (1989), word of mouth is merely considered as the behavioral consequences of some aspects including satisfaction, perceived value, and commitment. Mazzarol et al. (2007, p. 1478), however, argued that little research would emphasize on the antecedents of word of mouth fully. Recognizing the antecedents of word of mouth communication is to a great extent essential for better the meaning of the word of mouth communication in the marketing context.

In terms of Matos and Rossi (2008), their work paid attention to the antecedents and moderators of word of mouth activity and developed the conceptual framework of the antecedents and moderators of word of mouth activity. Some antecedents, such as satisfaction, loyalty, quality, commitment, trust and perceived value, can motivate consumers to implement word of mouth. During the process of consumer decision making, consumers exposed to word of mouth on blog will focus on some communicators’ aspects including the previous antecedents. In most situation, consumers not only attach importance to the recommendation information on the products and service, but also obverse the communicators’ attitudes, satisfaction and others.

Along with the widespread implementation of internet and telecommunications technologies and the improvement of business environment, electronic word of mouth has been viewed as one of the most important sources of information referring to the companies and their products and services. Blog, as the application of internet innovation, has exert its significant influence to make most consumers express their feeling, attitudes, features on particular products and services and gather and share information effectively.

2.3 Blog

Blog offers the significant opportunity for most consumers. In terms of Wright (2006), blog is defined as a web page consisting of posted inlays arranged in chronological order. These inlays may refer to information on dairy, felling, and others covering anything people experienced in the everyday life. Text, photographs, video and audio files are the most common elements of blog (Korica et al. 2006). The blog initially launched by personal interesting and preference accounts for most part of the blog on the internet. Moreover, the important cause for the rapid development of blog is based on the need of the interaction between the readers and the writers. Understanding the situation of Blog development can further grasp the consumer attitude toward blog and the meanings of the blogs.

In terms of Technorati (2006), since October 2006, there were 57 million blogs on the internet. Furthermore, after 2005, most internet users emphasize on the blogs available for most users to express and share information, experience and others. As Figure 3.1 mentioned, during the period between March 2005 and March 2007, newly creating weblogs has experienced the most rapidly significant development. In March 2007, the volume of total weblogs increased to above 72,000,000. According to the data of Technorati (2007), the growth of the weblogs kept the increasing of 120k newly creating blogs every day.

Source: The Volume of Weblogs Cumulative: May 2003 – March 2007, from Technorati, The State of the Live Web.

In terms of Figure 3.2 and Figure 3.3, in the top 100 MSM and Blogs, there are only 18 blogs accounting for 18 % of the top 100 most popular sites. MSM (mainstream media) still dominate the formation of mass media on the internet. Nevertheless, according to the analysis of Technorati, during Q3 2006, there were 12 blogs in this top popular sites list.

Source: The Comparison between top 50 MSM and Blogs, from Technorati, The State of the Live Web.

Source: The Comparison between 21-100 MSM and Blogs, from Technorati, The State of the Live Web.

2.4 Consumer Decision Making

In the context of marketing, consumer decision models represent the choice process in the particular form (Dala and Klein, 1988; Papatla and Krishnamurthi, 1992; West et al. 1997). Consumer decision making theory has been developed within the disciplines including psychology, marketing, and consumer and organizational behavior. According to the different purpose and perspectives, there are three main decision making theories consisting of normative consumer decision making theory, behavior consumer decision making theory and naturalistic consumer decision making theory. The simple explanation and introduction of these three consumer decision making theories will be given as follows.

Normative decision making theory is derived from economic discipline (Beach, 1997 p.43). The nature of normative decision theory is to make decision for obtaining maximum utility (Fischoff et al. 1983; Beach and Mitchell 1998, p. 4). The hypothesis of normative decision making theory is based on the rational decision maker. The foundation of behavior decision making theory is to remove the assumptions of normative decision theory. Within the influence of consumer behavior, behavior decision making theory emphasizes on some aspects, such as the adaptation of decision makers (Luce et al. 1999; Payne et al. 1988), the close correlation between consumers’ preference and person (Bettman and Park 1980; Coupey et al. 1998), context (Huber and Klein 1991; Tversky and Simonson 1993)and task-specific factors (Pieters et al. 1997; Svenson et al. 1990; Swait and Adamowicz 2001). Naturalistic decision making theory is involved in organizational behavior. Based on observing consumer decision behavior in natural environment, naturalistic decision making theory needs consumers making decision to considering the changing situation, information and learning and so on (Orasanu and Connolly 1993p. 57).

2.4.1 The Process of Consumer Decision Making

Referring to the process of consumer decision making, many researchers will agree with the five steps of consumer decision making process. These steps abound with need recognition, information search, alternative evaluation, purchase decision and post purchase behavior. Figure 2.4 shows a general description on the process of consumer decision making.

Source: Consumer Decision Making Process, from Laudon and Traver (2007 p.172),

Need Recognition

The first step of consumer decision making is need recognition. The meaning of need recognition is that consumers begin to recognize their actual need beyond the desired need. Recognizing the desired need truly is so important for consumers to take action for the next step. Furthermore, the actual need in this context is defined as the need consumers have abilities to meet. Since Statt (1997 p.13) demonstrated that the gap between the actual need and the desired need may influence the consumer behavior. In other words, to some extent, the higher degree of the gap between the actual need and the desired need can weaken the consumers’ motivation for purchasing and the relevant behavior. Along with the changes of personal lifestyle and the surroundings, these factors will further affect the actual needs (Blackwell et al. 2001 p. 9).

Information Search

After the step of need recognition, information search can supply the relevant information for the others step. Information search is divided into two aspects including internal search (Wells and Prensky 1996 p.62; Statt 1997; Blackwell et al. 2001) and external search (Blackwell et al. 2001).

Internal search is based on consumer own purchase experience, and products and service knowledge from the post experience and learning (Wells and Prensky 1996). Faced with the need of new products and service, most consumers will recognize and understand these new products and service from the aspect of the comparison between the information on new products and service and their own experience and knowledge. When not processing and recognizing these new products and service, external search will be implemented and may play a significant role in the step of information search. According to Blackwell et al. (2001), when consumers do not understand the knowledge and information for making a better decision, external search will be conducted from the wider sphere. The sources of external search contain peers, families and friends, mass media, word of mouth and internet and so on. In this dissertation, it will mainly emphasize on blog considered as the source of external search.

Alternative Evaluation

Based on the understanding of information and knowledge on products and service, then consumers will narrow and evaluate their choices. Alternative evaluation often refers to personal preference and the criteria viewed as the most important elements. From the perspective of the most important criteria evaluating the choices and alternatives, the ultimate choices of various consumers will differentiate from one person to another. For this reason for the differences of the choices between consumers, this step will not be covered in this scope of this dissertation.

Purchase Decision

According to Blackwell et al. (2001), purchase decision not only covers the question whether to purchase or not, but also refers to some aspects consist of when, where, and how to purchase. In this aspects, Statt (1997) argued that the decision of how and where to purchase to a great extent affect the consumer purchase decision. Furthermore, the environment surrounding consumers including other consumers, government, policy and law, mass media and others can influence purchase decision. Environment protecting policy, for example, can make consumers reduce the volume of the purchase of the products and service polluting the environment.

Furthermore, in terms of Kotler et al. (2005), during the process between the purchase intention and the purchase decision, some factors will