“Impact of eWOM Communication on the Online

Purchase Intention Amongst Young Adults

in Lipa City: An Analysis”

Presented by:

Dimaculangan, Angel M.

Ebora, Mathew Edward H.

Lacerna, Keith Louisse S.

Latina, Yasmin Anne D.

Patajo, Lawrence E..

Resilience 12 Practical Research 2

Lipa Montessori School of Learning Inc.

Transville Homes, BanayBanay, Lipa City

1. INTRODUCTION

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1.1 Background of the Study

Marketers always attempts to detect the consumers purchasing intention

due to its importance in understanding how consumers think, feel and choose

from different options. There are essential factors that influence consumer's

buying intention such as: cultural, social, personal and psychological factors.

Hence, consumers can be affected by what they hear (WOM) from others in their

surrounding environment (friends, peers, family) etc. The emergence of Web 2.0

and social networking sites raised the influence of groups and individuals, and

led to the advent of eWOM which is expected to affect consumer’s intention in

both marketplace and market space. eWOM (Electronic Word-of-Mouth) via

internet can be referred as online content which is shared by the customers about

the products or services, and that information is used by the other users in

making their purchasing decisions(Hennig-Thurau et al., 2004).

Consumers seek information by reading the reviews and comments of

consumers available on social Networking Sites’, this information help them to

form opinions about companies and brands, that can have a positive or negative

impact on the reputation of the companies (Utz, 2010).Companies and brands

have got new ways to interact and engage with customers through social media

(Godey et al. 2016). Information about products and services that is shared

through eWOM is regarded as cost effective. Thus information can be shared

with many people at a time with minimum cost. eWOM communication

influences not only consumers’ attitudes and their behaviors but also effects

brand image of the customers (Murtiasih et al, 2013).Therefore eWOM

communication should be considered effectively because satisfied consumers

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can spread positive word of mouth but at the same time dissatisfied consumers

can spread negative word of mouth (Mangold, 2010).

Before purchasing any product or service, consumers always search for

important information that is posted by the previous consumers on different

Social Networking Sites(SNS). Consumers seek product information before

making their purchasing decisions. Social media platforms are increasingly used

by consumers to share and use electronic word of mouth information about

products and services (Cheung&Thandani,2012).

The internet growth has brought forth electronic word of mouth that has

more interactive capabilities and enhances consumers’ interaction with each

other in digital world. Due to this advent, conventional marketing tools are not

much effective on the Web as “people are discovering and inventing new ways

to share relevant knowledge with blinding speed” (Srikantaiah et al., 2010). Day

by day, the internet like a black hole absorbs new tools and technologies. Social

networking websites or social media based on the concept of web 2.0 technology

provide an interactive community to the users e.g. Wikipedia, Facebook and

Twitter etc. Social Networking Sites (SNS) have become a part of our daily life

and it has also provided new venues for businesses to inform, understand and

connect with their customers. The collaborative and social nature of SNS enables

brand related consumer-to-consumer conversations (Chu & Kim, 2011).

Nowadays, consumers rely mostly on online information created or shared by

other consumers to make purchased decisions (Hu et al., 2012). Hence, social

media highly influence the brand awareness, opinions and attitudes of consumers

(Mangold & Faulds, 2009). Several pages on social networking websites are

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 created by the companies and groups so that customers can discuss the features

of products. Online pages are operated by companies while groups are usually

operated by the customer. In these pages, customers share their views about

products and services and this is how they contribute in an electronic word of

mouth. In present era, everyone uses internet in their daily life, thus, they

contribute and involve in electronic word of mouth before and after the purchase

of any product (Berger, 2014).

Despite eWOM being a well researched topic, the lack of exploration

within the target state, on which the researchers decided to emphasized there

study from is conspicuous. Moreover, the prevalence of COVID-19 and its

effect on the market has not been profoundly studied yet, hence, the present

study can help in prepending a more reliable, valid and up to date information

regarding the buying process of the consumer with the influence of other buyers

in terms of depending, communicating and sharing thoughts or ideas about the

product using the internet or actual contact as a primary way of influencing other

consumer in purchasing product as restrictions are still implemented.

1.2 Statement of the Research Problem

This topic aims to analyze the impact of electronic word-of-mouth on the

buying decision of young adults in Lipa City, how it can be of a great

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contribution on a business and how it can help owners decide strategies in

having a profitable business. Specifically, it seeks to answer the following

questions:

1. What are the demographic profile of the respondents in terms of:

1.1 Age

1.2 Gender

1.3 Educational Level

1.5 Social Media Usage

2. How does the online consumer’s feedback influence the purchase decision

of possible buyers ?

3. How does information quality encourage online consumers to recommend

products to other buyers?

1.3 Scope and Delimitation

The current study aims to evaluate the impact of eWOM on the buying intention

mainly on the young adults. Where it is limited only on the online exchange of

information solely on both social media platforms and shopping platforms.This

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study focuses on the impact of eWOM (Electronic Word of Mouth ) on the

purchase decision of the ypung adults buyer of Lipa City, Batangas. The

selection of respondents in the said survey is limited considering the MGCQ

currently being implemented in Lipa due to the pandemic. This research is

designed to have a better understanding and knowledge on the problems the

consumer have been encountering concerning their purchase decision process,

aimed also to offer possible recommendations to the apprehended problem of the

study. Included also the demographic profile of the respondents, such as age,

gender, status, income, and occupation.

The respondents of the study from whom the researchers obtained the data were

the young adults of Lipa City with a total of 80 participants. The researchers

utilized quantitative methods to collect the data. Using convenience sampling,

they distribute online surveys to the 80 young adults in the age range of 18-27

years old. After gathering all the needed information, the researchers tallied,

analyze and interpret their responses.

1.4 Theoretical Framework

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 Figure 3.1: Information Acceptance Model (Erkan&Evans,2016)

This study was supported by the information acceptance model (IACM) of

Erkan, Ismail and Evans Chris (2016) wherein, they show how the influence of

eWOM on social media not only depends on the characteristics of eWOM

information such as the quality and credibility of information , but it also

depends on the consumers behavior towards eWOM information. Wherein, it

Proposed Intervention
Program:
was further proved that IACM is significant in providing a greater understanding

of eWOM within social media “A Guide for a Betterthe determinants of eWOM

by highlighting
Marketing Strategy”
information influencing consumers' purchase intentions. It also incorporates the
Webinar about what to
know about
theory of reasoned action (TRA), eWom
Fishbein and (1975). Consequently, it
& Ajzen,
its purpose in terms of
focuses on the behavioral aspectpurchasing
on consumers towards eWOM information. The
products
online.
reasoned actions which incorporate one more element to the procedure of

persuasion and behavioral intention. Reasoned actions are concerned with

attitudes and behavior. This theory also identified that there are other reasons

which affect and limit the attitude on behavior.

1.5 Conceptual Framework

INPUT PROCESS OUTPUT

 The researchers
conduct online self-
structured
questionnaire to
identify the impact
of eWOM
communication on
the online purchase
Intention amongst
Young Adults 7

 Gathering the data

1.6 Significance of the Study

This study will help the academic and commercial researchers to conduct

their research on the effects of Electronic word of mouth (eWOM) and its new

dimensions. The focus of the empirical study is to provide insights into

consumers perspective in referring products that may serve as index for

advertisers as well as basis for further studies in the research field. Through this

study, us researchers aims to find out the impact of electronic word of mouth on

the buying behaviour of young adults in Lipa City, Batangas. The result of this

study will be useful for the following groups:

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Young Adults. This study bring awareness to young adults consumers regarding

the factors and possible outcomes of the influence of other people or family in

their buying behaviour. With this study they will be informed of the things that

may cause them to have bias when it comes in choosing products, Thus

enlightening the consumers about their buying decisions.

Enterprises. This study will help business owners to know how can they

improve their products through the insights of consumers. It will also help them

understand more about the behaviour of young adults when they are being

persuaded by their relatives, friends or other people that may help them in

improving their advertisements or product. Furthermore, it also aims to help

them understand more about their consumers and their perspective when it

comes to their company.

Online consumers. This study will be useful for online consumers to avoid

impulsive buying, Which helps them in being aware of the insights of other

people on companies and being aware of the “pros” and “cons” of a product.

Marketers. This study may help marketers in formulating an effective

marketing strategy with the utilization of eWOM in their digital marketing

activities

App Developers. The study will help app developers to be informed of the

insights of other people on different brands and companies to somehow adjust

their services by their expectation and likeness. This study will help app

developers on finding ways to engage and listen to their consumers

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1.7 Definition of Terms

 Brand - consists of a name, term, sign, or symbol, or any combination of

them, that attempts to represent the unique benefits a company can provide to

consumers through a particular product or service, in terms of attributes, value,

and culture.

 eWOM quality - defined as the convincing power of reviews/comments

embedded in an informational message.

 eWOM - electronic word-of-mouth is a statement made by potential, actual,

or former customers about a product or company, which is made available to a

multitude of people and institutions via the Internet.

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 eWOM via internet - can be referred as online content which is shared by the

customers about the products or services, and that information is used by the

other users in making their purchasing decisions(Hennig-Thurau et

al.,2004).Consumers seek information by reading the reviews and comments of

consumers available on social Networking Sites’, this information help them to

form opinions about companies and brands, that can have a positive or negative

impact on the reputation of the companies (Utz,2010).

 Expertness - “the degree to which a person perceived to possess knowledge,

skills or experience and thereby is considered to provide accurate information”

 Information Adopt Model (IAM) - The IAM explains how individuals are

affected by the information and thus change their behaviors on computer-

mediated communication platforms.

 Informational influence - is the conformity which occurs when one person

needs the information from the other person to make the purchase decision.

Informational influence occurs when individuals need information for making an

effective purchase decision (Teng et al., 2014).

 Purchasing Intention - the earliest definition of purchasing intention is the

subjective probability that users perform certain behavior. If the users are

concerned to get a specific product or service, that means, there is a purchase

intention in their mind; they wish to purchase that product or service, either in

long term or short term.

 Social Networking Sites (SNS) - Social networking sites are described as

web-based services which aim to provide internet users an opportunity to create

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their profiles and personal networks via friend lists while allow them to reach

(REF).

 Theory of Reasoned Action (TRA) - according to this theory, an individual’s

behavior is determined by its behavioral intention to perform it. This intention is

determined by the individual’s attitudes and subjective norms towards the

behavior. Therefore this model is used to identify individuals’ behavior based on

their attitude towards performing their behavior, subjective norm and intentions.

 Traditional WOM - defined as “oral, person to person communication

between a receiver and a communicator whom the receiver perceives as non-

commer-cial, concerning a brand, a product or a service.” (Arndt, 1967).

Harrison and Walker (2001) defined it as an “informal person-to-person

communication between a perceived non-commercial communicator and a

receiver regarding a brand, a product, an organization, or a service.”

 Trustworthiness - the credibility of the source of information (East et al.,

2008). The concept of trustworthiness is directly related to the trust and

objectivity of the sender of information (Dimitrakos, 2012).

 WOM - Word of mouth can be defined as communication among people

where the person receives some noncommercial messages regarding to brands,

products or services .In other words, sharing and exchanging information about

consumption experience.

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2. LITERATURE REVIEW

This chapter contains the related literature administered by the proponents

with regards to its relevant concepts towards the present study, impact of eWOM

on the online purchase intention preferably amongst young adults.

2.1 Conceptual Literature

Electronic Word of Mouth

Electronic word of mouth (eWOM) provides companies with an advantage

over traditional WOM insofar as it allows them both to try to apprehend what

factors motivate consumers to post their opinions online and to gauge the impact

of those comments on other people (Cantallops and Salvi, 2014). However,

consumers’ use of technology to share opinions about products or services

(eWOM) can be a liability for companies, as it can become a factor they do not

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control (Yang, 2017). To counteract this, businesses are seeking to gain greater

control of customers’ online reviews by creating virtual spaces on their own

websites, where consumers can leave comments and share their opinions about

the business’s products and services (Vallejo et al., 2015). By way of example,

in the field of tourism, companies are starting to understand that ICT-enabled

media inflfluence tourists’ purchasing behavior (Sotiriadis and Van Zyl, 2013).

Information Usefulness

Information usefulness infer how consumer’s information usage is deemed

to be necessary in enhancing their performance as a buyer (Bailey and Pearson,

1983; Cheung et al., 2008). On the study of Chiang and Jang (2007) relationship

between information usefulness and purchase intention were highlighted ans was

found to be worthy to study. Subsequently, information usefulness was found

positively related to purchase intention by other researchers (Lee and Koo, 2015;

Liu and Zhang, 2010; Xia and Bechwati, 2008).More specifically, Lee and Koo

(2015) have examined the message usefulness of online reviews; and found it to

be positively associated with purchase intention. Furthermore, on the first phase

of this research notion within social media context was profusely studies; and it

was found to be one of the determinants of eWOM information on social media

which influences consumers’ purchase intentions. Consumers who consider the

information to be useful have more confidence using it for purchasing decisions

(Nabi and Hendriks, 2003).

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 Information Adoption

Consumers who engage and adapt eWOM information are more likely to

have higher purchase intentions (Cheung and Thadani, 2012; Cheung et al.,

2009). In which eWOM communications differs in valence ( positive vs negative

information ). Positive evaluations are made up of pleasant, vivid and

romanticised descriptions of products or services that a company offers.

Negative eWOM communications are usually complains and awful descriptions.

Content analysis was also used to analyze the importance of various factors in

key constructs (themes) affecting online behavior. The finding from the content

analysis confirmed that both mixed neutral eWOM and rich eWOM content

positively affects online purchase intention. (Sparks and Browning 2011).

Previous studies investigated the link between valence of eWOM and purchase

intention (Bigne et al. 2016; Hamby et al. 2015; Hu et al. 2012; Jones et al.

2009; Ladhari and Michaud 2015; Lee and Youn 2009; Mauri and Minazzi

2013). For example, Mauri and Minazzi (2013) conducted experi- ments with

570 students from Italy and found that pos- itive online reviews about hotels

increase intention to book. Thus, it is hypothesised:

Information Credibility

Credibility of information determines how much the receiver of this

information learns from and adopts the received information: if the received

information is perceived as credible, the receiver will have more confidence to

use it for the purchase decision (Sussman and Siegal 2003). Taking into

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 consideration that online information exchanges occur between people who may

have no prior relationship, it is essential to consider how perceived credibility of

information influences consumer behavior. Some studies have examined the

relationship between eWOM credibility and purchase intention (Koo 2016; Teng

et al. 2017; Wang et al. 2015b; Xie et al. 2011). For example, Koo (2016)

surveyed 302 students from South Korea and found eWOM credibility to have a

significant positive effect on purchase intention of airline tickets, meal at a

family restaurant and a skin care service.

2.2 Related Studies

Wang, Cunningham and Eastin (2015) specified on their study that

message valence of online consumers reviews has a a great persuasive effect

on consumers' attitudes toward the review and product, perceived source

credibility, and purchase intention. In which, it was highlighted, how the positive

review has the greatest impact on consumers’ attitudes toward the review,

followed by the neutral (negative/positive) review and negative-only.In addition,

participants perceive higher reviewer credibility when they read the neutral and

positive-only reviews compared to the negative-only review. Moreover, the

study also identified an interaction between review valence and review type for

message persuasion. Thus it was prevalent in the study that consumers prefer

reviews that emphasize the benefit of the product/ goods being sold and when it

focuses on reviewers’ personal feelings and perceptions toward the product

rather than objective reviews that focus on the technical aspects of the product.

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  Nieto J.,Maestro R. M., and Muñoz-Gallego P. A., (2014) on their study

Marketing decisions, customer reviews, and business performance:the use of the

Top rural website by Spanish rural lodging establishments, found how eWOM

offers businesses a way to identify customers’ needs and perceptions and even a

cost-effective way to communicate with them. Furthermore, it was revealed in

their study how responding to negative reviews improves lodging

establishments’ average ratings, meanwhile responding to positive reviews has

no significant direct effect. Expressing gratitude in responses positively

moderates the effects of review responses; this moderating effect is more

significant for responses to negative than to positive reviews. Hence, the

management of the response has a direct effect on the quantity of the ratings.

In the study of Eisingerich et al. (2015) the differences that exist between

traditional word-of-mouth and social media word-of-mouth were emphasized.

Consumers are less willing comment about products because of the perceived

social risk of WOM in social media settings. This situation is visible even for

their favorite brands. This risk is explained by the fact that the reviews are open

to a broader audience. Furthermore, these comments are read by people who are

unknown to the writer which causes more stress. On the other side, consumers

are more willing to provide feedback using traditional word-of-mouth. The

analyses of Hu (2015) pointed out that on Twitter, when it comes to choosing

which products to buy individuals by far rely on the comments and reviews

which family and friends give them. The research showed that news associations

and brands are the second and third dependable sources; while government

officials on Twitter are considered the least trustworthy. The amount of trust an

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individual has on someone's opinion changes from product to product. For

instance, when individuals were not sure on which product to buy, the apparent

validity of entertainment stars was higher when they expected to purchase an

economical product than a costly one. Nevertheless, paying little mind to the

item category, family and friends were the most dependable ones and legislators

were the minimum credible sources on Twitter. Likewise, the strength of

relationship between the sender and the receiver sets the level of trust the reader

has (Koo, 2016). Supporting the statement of Hu (2015), Coulter & Roggeveen

(2012) have also pointed out that source credibility is a critical factor while

deciding on the viability of a persuasive communication. Likewise, as with

different types of eWOM, their research showed that item page content seemed,

by all accounts, to be the essential driver as far as moving purchasers along the

chain of being aware of the product to liking it. The undeniable ramifications for

advertisers are to keep up a "solid" network page by posting essential and

applicable item information. Additionally, as with different types of e-WOM, the

receivers of the message will probably navigate to the proposed item page if the

message piqued their interest. Even though source expertise is a crucial factor in

the decision making, the trustworthiness of the writer is the variable which

allows the reader to continue with the purchase (O’Reilly, MacMillan, Mumuni

& Lancendorfer, 2016). The reader does not care about the level of knowledge

the commenter has if she or he sees him as an unreliable person. Consumers or

the readers of the comment come to a conclusion based on the approach of the

writer. Certain phrases which give the impression of marketing techniques are

immediately ignored and never taken as a genuine comment with the intentions

to help the reader.

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 Researches demonstrated WOM communications to have greater impact

compared to other mediums of com-munication such as ads, that was justified to

the reason that trustable information are obtained through WOM

communications (Mauri and Minazzi, 2013; Browning and Sparks, 2011). Apart

from that, research also shows that only 14% of consumers believe on what ads

advertise. What’s astonishing is that from every 9 of every 10 consumers believe

in their relatives, friends as well as their work mates since they won’t get any

advantage for favoring a product or service (Nakhaee & Kheiri, 2012). Besides

that, with the growing internet use as a tool to communicate and advertise,

WOM ads enormously developed (Jalilvand & Samiei, 2012). As

communication of WOM initially meant a conversation between individual-to-

individual nevertheless with the global internet outburst, communications of

WOM eventually expanded to what is currently recognized eWOM (Serra

Cantallops & Salvi, 2014). eWOM inculcates various media channels as well as

online portal whereby utmost accessibility to reviews among consumers is

existing (Nakhaee & Kheiri, 2012). Generally, eWOM communications enables

an indi-vidual to have an impact on the purchasing intention of consumers based

on the information illustrated (East, et al., 2007). Henceforth, communication

through WOM immensely impacts the attitude of a consumer while making a

decision as well as minimizes risks pertaining to the acquisition (Liu and Park,

2015; Bronner and de Hoog, 2011; Zhang et al., 2010).

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