This essay aims to
examine the influence that electronic work of mouth has on consumer purchase
intentions within the travel and tourism industry.

 

Word of mouth
(WOM) is defined as ”communication about product and services between people
who are perceived to be independent of the company providing the product or
service, 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 to
influencing consumer purchase attitudes and behaviors. It is also acknowledged
as a tool that can reduce marketing costs whilst boosting profits (Reichheld
and Sasser, 1990). Since the advance of the web, WOM has been widely available
for marketers to examine in a new form, Electronic Word of Mouth.

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Electronic Word of
mouth of eWOM refers to the use of the internet to voice opinions on certain
products, brands or current topics (Vineyard, 2014). Bansal and Voyer state
”eWOM conversations consist of basic information transfer between people who
send 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 a
conscious choice to purchase a specific product. Purchase intention is an
element of the consumer decision making process and is utilized to foresee
consumer buying behavior prior to the act of purchase (Newberry et al, 2003).
Further to this, O’Keeffe (2002) suggests that understand intention is the most
accurate method of forecasting purchase behavior in a range of contexts such as
high and low involvement purchases. Hsu et al (2006) also states the purchase
intention is as significant to research as the actual act of purchase.

 

Schindler and
Bickart (2005) states that online reviews left on social media, corporate
websites, third party sites significantly influence a number of steps of the
consumer decision making process, however, we will be examining its effects
specifically on consumer purchase intention. Due to the advance of technology
and the ease of sharing views online, it is clear to see why there have been
numerous studies conducted into the effect of eWOM on consumer purchase
intention (Xie et al, 2011). The travel and hospitality industry have seen the
highest impact from user generated comments (eWOM) since the development of web
(Serra Cantallops and Salvi, 2014). EWOM comments can be viewed on a range of
social media platforms such as Facebook or Twitter but are predominantly seen
on third party travel sites such as TripAdvisor and Yelp offer an outlet for
consumers to voice their opinions of their post purchase evaluation, thus
informing the decision making process within a prospective consumer. The focus
of this study aims to examine the literature regarding the influence of eWOM on
consumers purchase intentions within the UK hospitality industry, due to the
number of studies conducted within this area of research.

 

Main
body

 

Numerous studies
have recognized the influence that eWOM reviews have on consumer purchase
intentions specifically within the travel industry (Xie et al, 2011; Ladhari
and Michaud, 2015). Gretzel (2007) study
analyzed a sample of TripAdvisor users and identified the importance of user-generated
reviews in information purchase intention and decisions. With 92.3% of participants
using online forums like TripAdvisor and LonelyPlanet to inform themselves on the
destination.

 

A key into the
effect of eWOM on consumer’s came from Jalilvand and Samiei (2011) who
quantitatively identified eWOM as one of the most effective tools when
influencing an individual’s purchase decision. A later study from Jalilvand and
Samiei (2012) supports the earlier findings and identified in an experimental
study of 295 tourists in Isfahan, Iran, eWOM was significant when it came to
increasing purchase intention. However, this stud mainly focuses on the automotive
industry so it is difficult to generalize the findings to the hospitality
industry. Further to this, Smith and Vogt (1995) discovered from a study within
the hotel industry that eWOM effects consumers brand preference and purchase
intention as well as the hotels credibility. 
It has also been discussed how positive eWOM has the ability to reduce
marketing costs by acting as a persuasive form of free advertising (Yi Lin
& Yuh Lu, 2010).

 

EWOM is separated
into three categories, Variance, Volume and Valence. Variance, which examines
the statistical variance of the comments (Clemons, Gao & Hitt, 2006).
Volume discusses the amount of online word of mouth comments that are received
about a particular topic or product. It has been identified that a significant
volume of comments casn results in an upsurge in sales (Moe & Trusov,
2011). Finally, numerous studies have focused on the valence of the eWOM
comments, which refers to the sentiment rating of said comment (positive or
negative) (Mauri and Minazzi, 2013, p.101). Kim, Park and lee (2013) aimed to
identify the effects of eWOM on consumers purchase behavior through online
channels. The study proposed that the directionality of eWOM would have a
significant effect on purchase intention. It was found that negative eWOM
comments, such as complaints or disappointments in experience, had a more
significant impact upon consumers purchase decisions that positive eWOM
comments. The directionality of eWOM has received a vast amount of research
into its effects on consumer purchase intention. A quantitative study by
Ladhari and Michaud (2015) examined how positive and negative eWOM comments
left on Facebook influenced an individual’s purchase intention when researching
a hotel. Their findings identified a direct correlation between positive eWOM
comments and a significant increase in purchase intention. They also recognized
how positive sentiment also decreased the level of perceived risk and enhanced
perceptions of quality and credibility of the hotel. This study also found a
direct correlation between exposure to negative comments and a decreased
purchase intention for hotels and resorts (Ladhari and Michaud, 2015).These
findings support a number of similar studies who identified the effects of
favorable sentiments on a consumers’ likelihood of booking a hotel stay
(Duverfer, 2013; Sparks and Browning, 2011). However, Chatterjoe (2001) states
that negative valence may only be detrimental to purchase intention if the
consumer has no prior knowledge to the company and its offerings. A further study
from Sen and Lerman (2007) also identified that the directionality of eWOM
(positive or negative) has an effect on purchase intention. However, it was
found that this was dependent on whether the product was hedonic/utilitarian or
high risk/low risk. Further to this, Berger (2015) discussed how positive eWOM
reviews are particularly important for products with a high level of risk, such
as automobiles, or travel choices.

 

Numerous
theoretical models and frameworks have been utilized to examine eWOM and purchase
intention such as the Theory of Reasoned Action model (TRA) (Fishbein and
Azjen, 1975) and the Information Adoption Model (IAM) (Sussman and Siegal,
2003).

The TRA model (Fishbein and Azjen, 1975) suggests that intentions predict
behavior and are said to be composed of individual attitudes and social norms.
Several studies have utilized TRA to explain a relationship between eWOM and
purchase intention (Cheung et al, 2008; Shu & Scott, 2014; Erkan &
Evans, 2015).

 

Further to this,
the IAM model (Sussman and Siegal, 2003) proposes consumers may react
differently to the same content than other consumers. The IAM model addresses
the characteristics of information processing through eWOM and extends the work
of the Elaboration Likelihood model’s (ELM) (Petty and Cacioppo, 1986) two
routes of processing. Erkan and Evans (2015) state that the IAM model has four
mechanisms ”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 an
effect upon purchase intention as tested through the IA model. The findings
highlight that the characteristics of eWOM, such as arguments credibility and
information usefulness, were seen to have a significant effect on purchase
intention.

 

However, whilst
these models have all been effective in explaining elements of purchase
behavior they do not take into account external influences such as a rise in
income or financial gain (Foxall, 2005).

 

Another facet of
eWOM that has been explored is its effects on image creation in relation to
purchase intention. Various empirical studies have identified that eWOM can
have an effect on travel destination image creation within the minds of
consumers (Echtner and Ritchie, 2003). Morgan, Pritchard and Piggot (2003)
state that negative comments are highly detrimental to image creation of a
travel destination, due to the disgruntled reviews left by travelers online. In
support of this, Hanlan and Kelly’s (2005) experimental study found that
destination image is formed overwhelmingly through eWOM sources. Jailvand et al
(2012) quantitative study of the tousim industry in Iran aimed to detect online
word of mouth’s effects on the destinations image, impact on attitude and
impact on travel intention. From the study of 264 participants, it was found
that there is a significant impact from eWOM that effects the destinations
image, 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 affect
purchase intentions with online shopping in Pakistan. Khan et al (2015)
findings show that there are six significant factors within WOM that influence
consumers’ willingness to purchase ”Trustworthiness, source similarity, source
attractiveness, social tie strength, source expertise and information
usefulness” (2015, p.481). This study highlights the important factors, which
help break down the influence that the reviews of others can have upon the
purchase behaviors of others. These findings support previous research, which
identified the power of factors such as credibility (Pornpitakpan, 2004) and
strength of social ties (Bond et al, 2013). Baloglu and McCleary (1999) suggest
that reviews from friends and family or others with a social tie were the key
factor in holiday destination choice.

 

The strength of
social ties can explain why eWOM comments via social media channels are
effective at influencing purchase intention due to the strong ties that are
present between the consumer and the writer. In support of this, Lamberton
& Norton (2011) state that people trust the opinions of others when there
are strong social ties, as they believe their preferences will be similar.

 

The detailed, or
basic, nature of comments is another factor of eWOM that has been shown to
influence consumer purchase intention. Godes & Mayzlin (2004) identify how
in-depth comments have a significant effect on behavior. However, this may not
always be the case as consumers may not take the time to read the full review
if it doesn’t captivate them.

 

Finally, a factor
that has undergone substantial research is the susceptibility of the recipient
of eWOM. Aral & Walker (2012) suggest that some consumers are more likely
to be persuaded by social influence, meaning that they are more willing to
purchase a product after hearing about it. It has been suggested that younger
consumers are often the most easily influenced by social persuasions
(Pasupathi, 1990) in contrast to those who believe themselves to be experts in
a field (Iyengar et al, 2011).

 

Conclusion

 

With over 60% of
travelers choosing to inform their decision based electronic word of mouth
recommendations (Light speed Research, 2011) there is a significant need for
marketers to have a solid understanding of the effects that EWOM can have on
the consumer decision making process. As can be seen from previous research
consumer’s comments have had a significant impact upon the travel industry.
Particularly the effects that Valence and Volume (Moe and Trusov, 2011; Mauri
and Minazzi, 2013) have on consumers purchase intention. Travel industry
marketers must ensure they monitor online conversations to analyse what is
being discussed about the brand. Whilst it can be seen from research that the
majority of online word of mouth reviews are left on third party websites such
as TripAdvisor it can be stated that a small amount of research studies have
also identified the effect of social media EWOM on consumer purchase intention
within the travel industry.  It is
suggested that marketers utilising social listening tools to monitor social
media channels and analysing share of voice and sentiment of the comments being
made if they are to understand its effects on purchase intention. By analysing
the share of voice, online marketers will be able to make improvements to their
destination and negate negative social buzz, which may occur.

Previous research
findings also indicate that the level of credibility of EWOM comments have a
significant effect on consumers’ willingness to purchase (Pornpitakpan, 2004;
Khan et al., 2005). Within the travel industry, the rise of positive sponsored
review posts has been seen to increase rapidly (Sirgy et al., 2008). Whilst
this offers marketers a means of generating positive valence, which we know to
increase sales profits and reduce marketing costs (Reicheld and Sasser, 1990)
it also decreases the credibility of EWOM. Mizerski and Green, (1978) state
that sponsored review posts often decrease the level of credibility and
trustworthiness of information, in turn rendering marketers efforts useless and
reduces purchase intention. Marketers must be aware of the ethical implications
of utilizing sponsored posts to increase positive valence

Limitations

A key limitation
of this study into the effects of EWOM on consumer purchase intention within
the UK travel industry is the restrictive nature of secondary research. Whilst
secondary research offers a low cost alternative to gaining insight there are
many limitations to utilizing only secondary sources to inform your findings.
The first limitation is the age of secondary sources on the topic, whilst older
sources are extremely useful, within the fast paced and ever changing market of
travel and tourism up to date information would give a richer understanding of
EWOM’s effects within the current environment (Wrenn et al. 2006). Further
primary research should be conducted alongside secondary research to gain a
deeper understanding of the effects that online word of mouth has on consumers
purchase intention within the UK travel industry in order to offer significant
findings.

A further
limitation is the lack of research into the external influences that may have a
detrimental effect onto consumers EWOM experience, and thus on their willingness
to purchase. External influences such as the turbulent nature of the travel
business due to the threat of terrorism (Michaels, 2003), economic factors and
individual beliefs about travel may have effect the influence of negative EWOM
by enhancing the perceived risk attached to travel.