Influence of electronic word of mouth on Consumers Purchase Intention

Influence of Electronic Word of Mouth On Consumer Purchase Intention

Presented By Nasif ChowdhuryID : 1001439325

SupervisorDr. Lawrence Arokiasamy

Master Coursework ProjectCourse Code: GM 520

Content1. Introductin2. Research Problem3. Research Question4. Research Objectives5. Significance of the Research6. Research Hypotheses7. Conceptual framework8. Research Methodology9. Data Collection10. Data Analysis11. Result and Findings12. Conclusion and RecommendationsReferences

Introduction In recent years, the advance and evolution of new media

technologies such as the Internet has increased consumer opportunities to not only interact with members of their pre-existing social network but also make and communicate with new friends online.

Electronic word-of-mouth refers to a particular type of word of mouth which occurs in the online setting and can be observed in many different online channels, such as discussion forums, product reviews, and emails. Several researchers have examined the influence of Internet-based electronic word of mouth on product success (Chevalier and Mayzlin 2006; Hung and Li 2007). And also explored how the electronic word of mouth process influences consumers online behaviors (De Bruyn and Lilien 2008).

Cont. The current research will analyse customers

purchase intention, what do customers spend by influenced electronic word of mouth in social networking sites.

This will help to make imperative business decisions and shape electronic word of mouth marketing strategy. This will also help to investigate research gaps in the electronic word of mouth marketing.

The research of customers purchase intention influenced by electronic word of mouth will be helpful for the future growth of the electronic word of mouth marketing.

Research Problem Consumers purchase intention is an imperative variable to be

examined. We consider all the extraordinary attributes of the internet, for example, the capacity to be accessible to the overall population for inconclusive time.

Some say that word of mouth is significantly more powerful than customary promoting, for example, commercial through daily papers, radio and individual offering, while others express that it is nine times as viable as conventional showcasing.

Buyers are these days depending generally on online data created by different shoppers to settle on choices on future item buys. Person to person communication destinations stages have officially accomplished countless clients (Romero, 2011).

Charlene Li(2013), key examiner at Forrester Research, expressed that "The more you know and comprehend the people who make up the grounds well around your image and your organization, the more you can utilize the new word of mouth for your good fortune".

Research Question What are the factors effect electronic word of

mouth via social networking services on consumers' purchase intention?

Research Objective To determine the factors influence electronic word

of mouth via social networking services on consumers' purchase intention

Significance of the Research

The research of influence of electronic word of mouth on consumers purchase intention will discover the best procedure to satisfy clients purchase goal and conduct. This research will make easy to relate with the consumers and contact them.

The research will discover the client responses, decisions, and inclinations. The research of consumers aim and conduct influenced by electronic word of mouth will useable to discover the different marketing conceivable outcomes and makes it simple to take advantage of them effectively. It will discover whether product or services is compelling for the consumers or not.

A central question to answer is what factors influence electronic word of mouth behavior in social networking sites and what are the underlying processes of electronic word of mouth communications in this new social medium. This study focuses on five social relationship variables: social capital, tie strength, homophile, trust, and interpersonal influence that are all related to electronic word of mouth behavior in social networking sites

Variables of this researchIndependent variable Mediated variable Dependent variable Social capital Tie strength Homophily Trust Interpersonal influence

Electronic word of mouth via social networking sites

Consumers purchase intention

Conceptual Framework

Consumer Purchase Intention

(Su Chuan Chu, Yoojung Kim,2011)

Hypotheses of the ResearchH1: The social capital has positive influence for electronic word of mouth via social networking services on consumers' purchase intentionH2: The stronger the tie strength has positive influence for electronic word of mouth via social networking services on consumers' purchase intentionH3: The more homophilious the contacts has positive influence for electronic word of mouth via social networking services on consumers' purchase intentionH4: The higher level of trust has positive influence for electronic word of mouth via social networking services on consumers' purchase intentionH5: The interpersonal influence has positive influence for electronic word of mouth via social networking services on consumers' purchase intention

Hypotheses SummaryHypothesis Mediating Variables Dependent Variables

Independent Variables

H1 Social Capital


Consumers’purchase intention

H2 Tie Strength



H3 Homophily



H4 Trust


Consumers’ purchase intention

H5 Interpersonal



Influence

Research Methodology Survey AdministrationThe questionnaire survey for this research is designed by using an online survey tool and it will distributed online through various types of technique such as email, social network and Google online survey tool. Respondent will receive an email or notification so respondent will just click on the address that would link to a secure web-site to fill in the questionnaire. Moreover, hard copy of the questionnaire will be distributed in order to reach respondents. Sampling;Sampling is one of the important component in the research design. The five steps in proper sampling design process are (1) defining target population (2) determining the sampling frame (3) selecting a sampling technique (4) determining the sampling size (5) executing the sampling process (Malhotra,2006) Sampling Technique:

In this study, snowball sampling will be applied. This study will conduct in south asia while the target population is customers influenced by electronic word of mouth, due to the inconvenience of respondent’s accessibility. This study will conduct online by applying convenience snowball sampling. Specially, the questionnaire will send out to officials as initial respondents to start with. After that, this questionnaire will continuously send out to the others. This strategy will be able to reach large number of responses within a limited time frame and finance resource.

Cont. Sample Size:

The required sample size depends on factors such as proposed data analysis technique, financial and sampling frame(Malhotra, 2010).Sampling size is defined as the “number of elements to be included in the study. A sample size of 300 persons is recommended to be sufficient for data analysis (Hair,2003). Therefore, the researcher had set 350 consumers influenced by electronic word of mouth via social networking sites.

Questionnaire Design:The questionnaire will divide into two parts which Section A consisted of Demographic factors and Section B is for examination of the customers purchase intention and behavior influenced by electronic word of mouth in Bangladesh. The five-point Likert scale anchored by “strongly disagree” (1) to “strongly agree” (5). The questionnaire design is take up from previous studies (Karpova Elena E., 2010) in which was used for measurement of the independent variable and dependent variable. The origin of the measurement and Cronbach’s Alpha in earlier study will demonstrate as table 1 and thus, take up and modify in this research.

Cont. Pilot Testing:The pilot test is indicated in this research. The total of 20 questionnaires will be distributed online for pilot testing. According to Sekaran & Bougie (2010). It shows how consistent of measuring the concept so it is important for the reliability test. In this reseach, Section B will be tested and more than 0.60 will be accepted based on Sekaran & Bougie (2010) noted.

Data Collection The questionnaire survey in this research has designed for

consumers who are influenced by electronic word of mouth via social networking sites. The questionnaire gave by online platform google form and distributed using social networking sites. Responding to questionnaire would take approximately 10 minutes. During the process of administering the questionnaire survey all information collected would be treated in strict confidentially and stored securely. At no time would any individual be identified in any reports resulting from this research.

A questionnaire was covering informed the potential respondents that (1) they have the right to decide for themselves whether or not not they wanted to be part of research (2) the survey would not invade their privacy (3) they would not feel obligated, pressured to perticiate (4) all information would be strictly confidential. The researcher would provide a summary report of the findings to the interested respondents.

Data Analysis : descriptive analysis

N Mean Standard Deviation

static static staticI. If given a choice between two products, one recommended

on social networking sites from my contacts and the other not, I would always choose to buy the recommended product

II. I understand a product better after receiving relevant information about that product on social networking sites from my contacts

III. I am likely to recommend a product to others, after receiving relevant comments about that product on social networking sites from my contacts

IV. On social networking sites, I tend to pass along my product-related opinions to my contacts

V. If I am purchasing a new product I always purchase the same brand product as my contacts on social networking sites

Valid N (list wise)

350 350 350 350 350 350

4.03

4.27 3.44 3.08 3.13

1.065 1.126 1.054 1.272 1.241

Reliability TestVariables Cronbach’s Alpha N of Items Strength Consumer purchase intention

0.817 7 Very strong

Electronic word of mouth

0.811 7 Very strong

Social capital 0.815 7 Very strong Tie strength 0.823 7 Very strong Homophily 0.816 7 Very strong Trust 0.838 7 Very strong Interpersonal influence 0.812 7 Very strong

Validity Test Factor’s number Factors Name Eigen value Percentage of

variance explained

Cronbach’s reliability coefficient

F1 Consumer purchase intention

3.315 11.358 0.817

F2 Electronic word of mouth

3.124 11.683 0.811

F3 Social capital 1.054 12.345 0.815 F4 Tie Strength 1.303 12.245 0.823 F5 Homophily 1.216 13.564 0.816 F6 Trust 1.136 12.674 0.838 F7 Interpersonal

influence 1.248 13.566 0.812

Kaiser-Meyer-Olkin Measure of sampling adequacy (KMO)

0.932

Bartlett’s Test of Sphericity approximate chi-square df sig

3367.4383500.000

Person Correlation Analysis Consumer

purchase intention


Social capital

Tie strength

Homophily

Trust Interpersonal influence

Consumer purchase intention

Person correlation

1 0.526 0.465 0.599 0.507 0.523 0.512

Sig(2-tailed)

0.000 0.000 0.000 0.000 0.000 0.000

N 350 350 350 350 350 350 350


Person correlation

0.527 1 0.523 0.678 0.536 0.602 0.611

sig 0.000 0.000 0.000 0.000 0.000 0.000

N 350 350 350 350 350 350 350

social Person correlation

0.465 0.678 1 0.391 0.487 0.512 0.523

sig 0.000 0.000 0.000 0.000 0.000 0.000

N 350 350 350 350 350 350 350

Tie Person correlation

0.589 0.536 0.391 1 0.524 0.612 0.564

sig 0.000 0.000 0.000 0.000 0.000 0.000

N 350 350 350 350 350 350 350

Homophily

Person correlation

0.508 0.602 0.632 0.586 1 0.564 0.489

sig 0.000 0.000 0.000 0.000 0.000 0.000

N 350 350 350 350 350 350 350

Trust Person correlation

0.456 0.576 0.674 0.432 0.456 1 0.697

sig 0.000 0.000 0.000 0.000 0.000 0.000

N 350 350 350 350 350 350 350

Interpersonal influence

Person correlation

0.674 0.456 0.674 0.512 0.621 0.675 1

sig 0.000 0.000 0.000 0.000 0.000 0.000

N 350 350 350 350 350 350 350

Multiple Regression Analysisvariables Unstandardized beta

coefficientt-value Significance

(p<0.05)Social capital 0.234 1.0.62 0.001Tie strength 0.188 5.111 0.000Homophily 0.056 3.345 0.289Trust 0.423 7.123 0.000Interpersonal influence 0.168 3.876 0.002Electronic word of mouth

0.216 4.544 0.000

Consumer purchase intention

0.167 2.345 0.000

R= 79.8 percent, R square = 62.40 percent, adjusted R square = 61.40

F= 98.23, p= 0.000 (p<0.05)

Model SummaryModel R R square Adjusted R

squareStd. error of the estimate

1 0.798 0.624 0.614 2.786

Result of Hypotheses TestingHypothesis Average of SPSS test

p-value<0.05(yes/no)

Status(Accept/Reject)

H1: Yes Accept

H2: Yes Accept

H3: No Reject

H4: Yes Accept

H5: Yes Accept

Summary of Regression & Person Correlation Hypothesis Significant Accept/

reject

H1 The social capital has positive influence for electronic word of mouth via social networking services on consumers' purchase intention

0.002 Accept

H2 The stronger the tie strength has positive influence for electronic word of mouth via social networking services on consumers' purchase intention

0.000 Accept

H3 The more homophilious the contacts has positive influence for electronic word of mouth via social networking services on consumers' purchase intention

0.298 Reject

H4 The higher level of trust has positive influence for electronic word of mouth via social networking services on consumers' purchase intention

0.000 Accept

H5 The interpersonal influence has positive influence for electronic word of mouth via social networking services on consumers' purchase intention

0.001 Accept

Recommendations In this study, researcher must consider ethical issues

when implementing research and questionnaire to protect the rights of the respondents. It is worth mentioning that the respondents should be noticed the following items to avoid potential and unnecessary problem. For example, this survey only is applied to academic research, so the researcher absolutely has no purpose of commercial or financial justification. All the participants are based on the voluntary principle, as well as must to answer truly.

Importantly, electronic word of mouth and consumer purchase intention are related, as well as associated with social capital, tie strength, homophily, trust, interpersonal influence…as Sung (2011) stated in their research literature. Clearly, further research is necessary to study, explore, and interpret the character and pattern of association between electronic word of mouth electronic word of mouth and consumers purchase intention.

ConclusionIn this chapter, a summary of data analysis was illustrated in the initial section. Furthermore, discussion of major findings is presented and implications of the study are showed. Finally, recommendation for further research were suggested to recommend the researchers.in chapter 5 the researcher concentrates on the findings of the study and recommendations for further study.

ReferencesCarroll, Amy, Stuart J. Barnes, Eusebio Scornavacca, and Keith Fletcher (2007), “Consumer Perceptions and Attitudes towards SMS Advertising: Recent Evidence from New Zealand,” International Journal of Advertising, 26 (1), 79-98. Chau, Patrick Y. K., Melissa Cole, Anne P. Massey, Mitzi Montoya-Weiss, Robert M. O'Keefe, (2002), “Cultural Differences in the Online Behavior of Consumers,” Communications of the ACM, 45 (10), 138-143. Chevalier, Judith A. and Dina Mayzlin (2006), “The Effect of Word of Mouth on Sales: Online Book Reviews,” Journal of Marketing Research, 43 (3), 345-354.

ReferencesChoi, Sejung Marina, Yoojung Kim, Yongjun Sung, and Dongyoung Sohn (2008), “Motivations and Social Relationships: A Comparative Study of Social Network Sites in the U.S. and Korea,” presented at the 2008 International Communication Association Convention, Montreal, Canada. Chow, Wing S. and Lai Sheung Chan (2008), “Social Network, Social Trust and Shared Goals in Organizational Knowledge Sharing,” Information & Management, 45 (7), 458-465. Coleman, James, Elihu Katz, and Herbert Menzel (1966). Medical Innovation: A Diffusion Study. New York: Bobbs-Merrill.

ReferencesDwyer, Paul (2007), “Measuring the Value of Electronic Word of Mouth and Its Impact in Consumer Communities,” Journal of Interactive Marketing, 21 (2), 63-79. East, Robert, Kathy Hammond, and Wendy Lomax (2008), “Measuring the Impact of Positive and Negative Word of Mouth on Brand Purchase Probability,” International Journal of Research in Marketing, 25 (3), 215-224. Flanagin, Andrew J. and Miriam J. Metzger (2007), “The Role of Site Features, User Attributes, and Information Verification Behaviors on the Perceived Credibility of Web-Based Information,” New Media & Society, 9 (2), 319-342. Flora, Cornelia Butler and Jan L. Flora (2004). Rural Communities: Legacy and Change. Boulder: Westview Press.

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Influence of electronic word of mouth on Consumers Purchase Intention

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