Gensantos Foundation College, Inc.
Bulaong Extension, General Santos City
"The Impact of Review and Ratings towards Consumers' Decision to
Buy in an Online Shop "
An Undergraduate Thesis
Presented to the Faculty of
Gensantos Foundation College Inc.
In Partial Fulfillment
of the Requirements for the Degree
BACHELOR OF SCIENCE IN BUSINESS ADMINISTRATION
MAJOR IN MARKETING MANAGEMENT
By:
Barcatan, Maxine Louise P.
Basarte, Jasmine O.
Buenaflor, Daisy M.
Dela Cruz, Hannah Leah N.
Elman, Mat Jim B.
Ewican, Karen Joy A.
Obera, Melanie N.
Sarte, Nice Neko O.
Soliminiano, Russel Bell A.
Tero, Christian A.
October 07, 2023
Chapter I
INTRODUCTION
Background of the Study
The reviews and ratings of consumers' decisions are one of the most
significant in the business sector. Online business has become popular, and almost
all businessmen worldwide engage in online activities to easily communicate with
customers. By this means, the retainers of an online business give importance to the
reviews and ratings, whether negative or positive responses of the customer to buy
the product or services. Under the circumstances, the customer's decision provides
awareness to an online business and helps online sellers improve the company for
customer satisfaction.
According to Byrne (2022), there are 30,000+ global shoppers, and the
majority (88%) of shoppers use reviews and ratings to discover and evaluate the
product. In addition, Stefanowics (2023), ratings and reviews are helpful for
businesses, as they help to spread brand awareness and improve the
trustworthiness of the company. Moreover, Sharma & Kidane (2022), explained that
the market comprises many different people and cultures with diverse viewpoints,
e-commerce businesses are being challenged by the reality of the complex behavior
of consumers. Besides, e-commerce is continuously achieving success, and it
becomes more critical for people in business to follow the current trend because as
technology changes, consumer behavior also changes (Krupa, 2023).
The study by Fernandez, Panda, Venkatesh, Swar, and Shi (2022), it fills the
gap of having a standardized scale that online retailers can use as an indicator to
assist consumers in their decision-making. In addition, Zhou (2022), stated that
there are differences in consumers' reception of the type of online reviews, with a
more significant effect on the perceived usefulness of negative reviews; the quality
and validity of reviews positively affect consumers' purchase intention. Also, in the
study conducted by Mahmoud and Mamdouh (2022), a significant relationship
exists between the volume of online reviews and consumer purchasing decisions.
Also, a significant relationship exists between the length of online reviews and
consumer purchasing decisions. How
In the study of Crismundo (2022), it was explained that most Filipino
online shoppers read product reviews first to help them decide on their online
purchases. It added that since Filipinos value online reviews, e-shoppers also share
their reviews of the purchased products with their family and friends or publish their
feedback on e-commerce platforms. In addition to the article Asean Up (2019)
“Insights and Trends of E-Commerce,", the Philippines is a country with a large and
rapidly growing market for e-commerce. With the continuous growth and
development of digital technologies in our country, especially through internet
connectivity and the use of mobile phones, this would be one of the main factors
that will make the Philippines, sooner or later, the major player in e-commerce in
Southeast Asia.
This study helps to understand consumers' desires regarding their buying
decisions. It fills the company's service gap and initiates obsolete and essential
products. The customers' feedback and response to every online business matter the
most because it is the company's opportunity to encourage more customers through
ratings and reviews. Furthermore, positive reviews and ratings in an online store are
very beneficial in gaining customer trust, increasing demand, and making the
product more profitable. Thus, this study will cater to the particular needs of online
business owners and online shoppers in terms of reviews and ratings of their most-
liked online shop in the Philippines.
Theoretical Framework
Positivism was used as the theoretical and conceptual framework for this
quantitative correlation study. It is to examine the relationship between reviews and
ratings towards consumers purchasing decision.
Social Influence
Social influence has been called in other names as social factors, subjective
norms, or social norms. It is defined as the change in behavior that one person
causes in another intentionally or unintentionally. The reason is due to a person’s
perception of the need to behave in a certain way to meet the social pressure, and
people change their ideas and actions to meet the demands of a social group (Mei &
Aun, 2019). In the study of Cialdini (2001), revealed that the influence of reviews and
ratings on consumers' decisions to make purchases in online shops is intricately
linked to various social influence theories. Positive reviews and high ratings act as
social proof, signalling to potential buyers that others have had positive experiences,
thereby influencing their purchasing decisions.
As proposed by Deutsch and Gerard (1995), it suggests that people conform to
the opinions or behaviours of others when they believe others possess accurate
information. In the context of online reviews, consumers may rely on the collective
wisdom of others as reflected in reviews to make informed decisions about a
product or service. In addition to Lombard, Snyder-Duch, and Bracken (2002),
suggests that individuals tend to adopt behaviours or beliefs because they perceive
others doing the same. In the realm of online shopping, the presence of a high
number of positive reviews may trigger the Bandwagon Effect, encouraging potential
buyers to follow the trend. The theory suggests that individuals are less likely to
voice opinions they perceive as in the minority, leading to the amplification of
majority opinions (Noelle-Neumann, 1974).
According to Katz and Shapiro (1985), stated that in online reviews, a growing
number of contributors can enhance the overall value of the review system, making
it a more influential information source for potential buyers. Besides, Katz and
Lazarsfeld (1995), proved that online review context, influencers or opinion leaders
who provide reviews may have a more substantial impact on the purchasing
decisions of their followers. Understanding the social meanings that consumers
ascribe to brands, products, and services. He explain how modern research on
consumer social judgments has built on insight and identified the ways in which
consumers are influenced by their close partners and by larger social groups (Ashc's,
1952).
As Ashc's recognized, social influence arises from consumers' motives to be in
unity with others or to be in conflict with them. Motives refer broadly to either
informational or social-normative goals. The study of Deutsch and Gerard (1955),
revealed that consumers are influenced by the preferences of others to the extent
that these others help them to understand reality, to maintain positive relationships,
and to be themselves. Also, Hsu and Lu (2004), claimed that social Influence by
giving ratings and reviews is causing a highly profitable e-commerce application in
recent years. The market value increasing markedly and number of customers is
rapidly growing. The reasons that people leave ratings and reviews is an important
area of marketing.
In addition to Hajli (2015), found out that engaging people through the content
in the internet influence consumers trust in their decision to intentionally buy online.
Social media becomes the medium of commerce in terms of advertising and reaching
potential customers, and generating content to encourage people to avail the offer.
Individuals simultaneously experience conformity needs (Deutsch & Gerard, 1955;
Sherif, 1936), uniqueness needs (Fromkin,1970), and normative conflict (Packer,
2008) in a social group, with the dominating force contingent on situational
characteristics. In terms of conformity needs, people tend to conform to social
influence from peers with whom they are familiar as well as those they do not know
(Darley & Latane, 1968). By conforming to others, people may make fewer mistakes,
invest less mental effort in tasks, and avoid compromising their reputation (Cialdini,
2009).
Websites prominently display consumers’ product ratings, which influence
consumers’ buying decisions and willingness to pay. Few insights exist regarding
whether a consumer's online product rating is prone to social influence from others’
online ratings (Sridhar and Srinivasan, 2012).
Personal Factor
The uniqueness motivation is activated when people feel as though they are too
similar to other group members and thus take measures to reclaim their uniqueness
and reduce negative affect induced by a lack of differentiation (Snyder & Fromkin,
1980). For instance, people who perceive themselves as too much like other group
members are more to conform less during a judgment task and contribute less to the
task overall (Duval, 1976). Applying this logic, the present author proposes that
when a consumer’s product experience is consistent with the majority of other
consumers’, he/she may sense excessive similarity and become increasingly
motivated to make him- or herself distinct.
Correspondingly, the consumer can attain the objective of remaining unique in
the online review community by contributing less to the review task and choosing
not to submit aproduct rating and review at all. When people are certain in their
judgments but perceive a large discrepancy from the group norm (and believe the
group’s opinion is harmful), they may exhibit strong normative conflict (Ashforth,
Kreiner, & Fugate, 2000; Hornsey, Oppes, & Svensson, 2002). For example, Sridhar
and Srinivasan (2012) reported that an online reviewer will experience normative
conflict when product failure occurs and the personal product experience
simultaneously deviates to an extreme degree from that of most other group
members.
Meanwhile, consumers tend to overlook conformity pressure and instead
behave altruistically even if their actions deviate from the majority (Hornsey et al.,
2002), especially if they believe their actions will benefit the group (Dreu, 2002;
Louis, Taylor, & Neil, 2004). Packer (2008) pointed out that normative conflict
induces greater dissenting behavior when people are given the opportunity to make
their behaviors highly visible and to explain the reason behind their deviation. In the
current study, when a consumer’s product experience largely deviates from the
majority, the consumer is expected to encounter a high degree of normative conflict.
By providing a distinct online rating (compared to the majority) based on his/her
own personal product experience, the consumer reduces normative conflict and has
a motive to correct seemingly inaccurate online ratings provided by other consumers
(Sridhar & Srinivasan, 2012).
Confidence is an important dimension of expectation (Yi & La, 2003), referring
in this case to “a cognitive component that reflects the degree of conviction or
certainty with which a belief or attitude is held” (Krishnan & Smith, 1998).
Consumers can hold the same expectation valence but may exhibit different levels of
expectation confidence. Yi and La (2003) noted that expectation confidence can be
measured by the probability or certainty of outcomes expected from a product
purchase or consumption.
In the online review context, Yin, Mitra, and Zhang (2016) stated that a
consumer’s level of confidence in his/her initial opinion of a product (i.e., product
expectations) can be measured by the dispersion (i.e., standard deviation) of other
consumers’ prior review ratings. Review rating dispersion reflects the consensus
among prior consumers (Yin et al., 2016), with a high degree of dispersion indicating
low agreement among customers (Moe & Trusov, 2011). According to Petrocelli et
al. (2007), lower agreement leads consumers to be less confident in the validity of
average review ratings, which in turn leads to less certainty in their initial product
expectations. In other words, consumers’ disconfirmation tends to be less
pronounced when expectations are uncertain.
In the study of Hart et al. (2009), indicated that as people become less
confident in their expectations or initial beliefs, they tend to experience less
psychological discomfort upon encountering disconfirmation. Several studies have
indicated that confidence can moderate the attitude–behavior relationship (Bennett
& Harrell, 1975; Fazio & Zanna, 1978; Krishnan et al, 1998). In a laboratory
experiment, Spreng et al. (2001) found confidence in expectations to moderate the
influence of disconfirmation on customer satisfaction, with higher confidence
leading to a significant influence of disconfirmation on satisfaction and lower
confidence leading to an insignificant influence.
Moreover, Bronner and de Hoog (2011) reported that the motivations of
vacationers who contribute to online review sites are self-directed motivation, social
benefits, consumer empowerment, and helping the company, the most frequently
mentioned of which was concern for others. In add on, Limbu, Wolf, and Lunsford
(2011) revealed that when it comes to online retailers, some websites provide very
little information about their companies and sellers, due to which consumers feel
insecure to purchase from these sites.
According to other research, consumers are hesitant, due to scams and feel
anxious to share their personal information with online vendors (Miyazaki and
Fernandez, 2001; Limbu et al., 2011). Online buyers expect websites to provide
secure payment and maintain privacy. Consumers avoid online purchases because of
the various risks involved with it and do not find internet shopping secured (Cheung
and Lee, 2003; George, Ogonkuya, Lasisi, and Elumah, 2015; Banerjee, Dutta, and
Dazgupta, 2010).
Consumers perceive the internet as an unsecured channel to share their
personal information like emails, phone and mailing address, debit card or credit
card numbers, etc. because of the possibility of misuse of that information by other
vendors or any other person (Lim and Yazdanifard, 2014; Kumar, 2016; Alam and
Yasin, 2010; Nazir, Tayyab, Sajid, Rushid, and Javid, 2012). Some sites make it vital
and important to share personal details of shoppers before shopping, due to which
people abandon their shopping carts (Yazdanifard and Godwin, 2011). About 75% of
online shoppers leave their shopping carts before they make their final decision to
purchase or sometimes just before making the payments (Cho, Kang, and Cheon,
2006; Gong, Stump, and Maddox, 2013).
According to HennigThurau et al. (2004), concern for other consumers is
strongly associated with altruism, which has been acknowledged as an important
motivation in other studies (Ho & Dempsey, 2010; Sundaram, Mitra, & Webster,
1998). This motivation can apply to positive and negative experiences (Hennig-
Thurau et al., 2004). It has become more popular among customers to buy online, as
it is handier and time-saving (Huseynov and Yildirim, 2016; Mittal, 2013).
Convenience, fun and quickness are the prominent factors that have increased the
consumer’s interest in online shopping (Lennon, 2008).
Later, busy lifestyles and long working hours also make online shopping a
convenient and time-saving solution over traditional shopping. Consumers have the
comfort of shopping from home, reduced traveling time and cost and easy payment
(Akroush and Al-Debei, 2015). Furthermore, price comparisons can be easily done
while shopping through online mode (Aziz and Wahid, 2018; Martin, Mortimer, and
Andrews, 2015). According to another study, the main influencing factors for online
shopping are availability, low prices, promotions, comparisons, customer service,
user friendly, time and variety to choose from (Jadhav and Khanna, 2016). Moreover,
website design and features also encourage shoppers to shop on a particular website
that excite them to make the purchase.
Despite so many advantages, some customers may feel online shopping risky and
not trustworthy. The research proposed that there is a strong relationship between
trust and loyalty, and most often, customers trust brands far more than a retailer
selling that brand (Bilgihan, 2016; Chaturvedi, Gupta, and Sigh Handa, 2016). In the
case of online shopping, there is no face-to-face interaction between seller and
buyer, which makes it non-socialize, and the buyer is sometimes unable to develop
the trust (George et al., 2015). Trust in the e-commerce retailer is crucial to convert
potential customer to actual customer.
However, the internet provides unlimited products and services, but along with
those unlimited services, there is perceived risk in digital shopping such as mobile
application shopping, catalogue or mail order (Tsiakis, 2012; Forsythe, Liu, Shannon,
and Gardner, 2006; Aziz and Wahid, 2018).
Conceptual framework
IV
Reviews DV
The Impact towards Consumers'
and
Decision to Buy
Ratings
Figure 1. Conceptual framework of the study
This study aims to distinguish the impact of reviews and ratings on consumers
decisions to buy from an online shop. It consists of two variables: reviews and ratings
as independent variables and the impact of consumers decisions to buy as
dependent variables. Hence, Sutanto & Aprianingsih (2016) define online customer
reviews as a form of electronic word of mouth (e-WOM), which can be said to be a
new marketing communication and can influence and play a role in the purchasing
decision process. Also, Shah, Aziz, Jaffari, and Waris (2012) point out that purchase
intention is a type of decision-making concerning the reasons why a customer tends
to buy a particular brand.
Related Literatures
This chapter presents the review of related literature and studies gathered by
the researchers that are closely relevant to the study. This review focuses more on
online shopping alone about the comparisons, perceptions, factors and intentions of
a consumer. This chapter also gives reader insights regarding the concepts used in
this study.
Review and Ratings
According to Gutt, Nuemann, and Zimmermann (2019), online reviews of
products and services have become an integral component of product information
on e-commerce platforms and are often used as strategic instrument to gain
competitive advantage. E-commerce has significantly expanded over the past few
years and has taken on greater significance in our daily lives, particularly in light of
COVID-19's recent influence (Hasanat, Hoque, Shikha, Anwar, Abdul, & Huam 2020).
In add on, Klaus and Changchit (2019), stated that the absence of physical
interaction with the product, they aid consumers to take decisions based on
experiences shared by previous users on the e-commerce platform.
Online reviews refer to the comments made by consumers on the platform
about the usage experience, price, quality and other aspects of the purchased goods
after making a purchase on the Internet for reference use by other purchasers.
( Siyuan et al. 2020) argues that online reviews can provide consumers with a more
accurate reference of product parameters and reduce consumption risks, but due to
the unsoundness of the online shopping mechanism, a large amount of false
information exists, which has a very bad impact on other potential consumers.
Therefore, establishing a scientific online information screening mechanism and
improving the quality of online reviews is the primary goal of optimizing the current
online environment.
Furthermore, Guo, Wang, and Wu (2020), showed that pleasant online
customer reviews lead to a higher purchase likelihood compared to unpleasant
ones. They also found that perceived credibility and perceived diagnostically have a
significant influence on purchase decisions, but only in the context of unpleasant
online customer reviews. There are distinguishable different types of online review
platforms. The grouping of these platforms encompasses programs majorly created
for consumer comments, such as the video-sharing platforms, which were originally
meant for other purposes but attracted reviews for some products, and the
independent customer review platforms (Wang, 2020).
Online reviews can be divided into positive and negative reviews, and in
general, negative reviews provide a better basis for consumer shopping and
business improvement than positive reviews. Along with Shanyan, Yue, and Yancai
(2022), found that the higher the number of reviews, the better the product sales,
and that a larger number of negative reviews would discourage consumer behavior.
The co-existence of positive and negative reviews can also lead to information full of
ambivalence. Also, Cox (2020), stated that negative or neutral reviews provide the
company with an opportunity to learn and develop. It can see exactly where the
business is failing to meet customer needs and remove common roadblocks in
the customer journey.
In the study of Zhao, Wang, Min and Chen (2020), it shows that the negative
impact of default positive reviews is a consequence of interfering with consumer
judgment and reducing consumers' perceived product diagnosticity. Yet, Chen and
Ku (2021), found out a positive relationship between diversified online review
websites as accelerators for online impulsive buying. Furthermore, some studies
have reported on other aspects of online product reviews, including the impact of
online reviews on product satisfaction. In the claimed of Changchit and Klaus
(2020), relative effects of review credibility, and review relevance on overall online
product review impact (Mumuni, O'Reilly, Macmillan, Cowley, and Kelley, 2020),
functions of reviewer’s gender, reputation and emotion on the credibility of
negative online product reviews (Craciun and Moore, 2019).
In accord to Cox (2020), the other major reason for obtaining reviews is the
opportunity to share them with potential customers. Positive reviews can be used as
customer testimonials. In fact, 91% of consumers read at least one review before
purchasing a product. The reviews come in the form of stars which rank the level of
satisfaction that consumers have with the products that they bought (Saumya,
Singh, Baabdullah, Rana, and Dwivedi, 2018). In many instances, reviews are out of
five-star ratings where five stars depict high-quality products or services while one
star indicates the contrary which could be a dismal performance of the commodity
or poor customer service that failed to satisfy the customer. So, the consumers will
leave behind their ratings and the sites average all the ratings to come up with a
general rating for the product or service (Saumya et al., 2018).
Other than the electronic commerce platforms, these users can always make
reviews of the products or services on dedicated online review platforms such as
Yelp (Gaillot, 2021), and these platforms are impartial and strive to capture the
accurate opinion of the different users of the products that are reviewed on the
platform for the legitimacy of the practice and to avoid misinformation. On the
other hand, some dedicated online reviewers choose to review different products on
their social media platforms such as YouTube of the purchases that they make
(Gaillot, 2021). In this environment, a hypercognitive generation has grown up
knowing how to gather and cross-reference a wide range of sources of knowledge,
as well as how to integrate virtual as well as offline experiences (Francis and Hoefel,
2018).
Hence, online reviews and influencers affect the different market segments
in different ways, segmentation based on the age of these consumers is important
in describing the different impacts of the marketing approaches within the intended
markets. Young people fulfilled such social roles even before the word "influencer"
was invented, by originating and interpreting trends (Francis & Hoefel, 2018). The
more reviews, the better, and one study found that consumers want to see at least
40 reviews to justify trusting an average star rating. However, a few reviews are still
better than no reviews. A wealth of positive words can have a measurable impact on
the sales, driving purchases and creating a base of consumers who will stand behind
retailer and the product (Regan, 2023).
Additionally, online reviews are a key part of the buying process, especially
toward the bottom of the funnel. Reviews also help confirm the brand’s authority
and expertise. When costumers have successfully helped others overcome problems
and achieve positive outcomes (or simply helped them to fall in love with your
product), it makes them more likely to trust the claims (Licata, 2023). Online
customer reviews are defined as product or service evaluations made by customers
on third-party websites, which directly affect the company's image. Information
received by consumers has become a strategic factor in corporate communications
as it shapes public evaluations of the perceived quality and value of services
(Rodriguez-Diaz and Rodriguez-Voltes, 2018; Zhou, 2018).
Consumer Decision to Buy
Purchase intention is a customer's willingness to buy certain products or
services. Purchase intentions measure the respondent’s attitude towards purchasing
a product or using a service (Abumalloh, 2018). Purchase intention refers to
repurchase intention in the future of customers and the willingness to recommend
their friends use a platform to purchase products in the future (Nuanchaona,
Siripipatthanakul, Norittamont, and Phyayaphrom, 2021). Before purchase
decisions, during purchase decisions, and after customer purchase decisions are all
critical levels of decision linked to the buying power intentions of the individual
behind the individual's attention (Sosanuy, Siripipatthanakul, Norittamont, and
Phyayaphrom, 2021). Suppose a person intends to buy a particular product. In that
case, their purchase intention indicates that they are deciding or a willingness to
choose whether a customer wants to purchase that product (Hing and Vui, 2021).
In the study of Morah (2019), it revealed the online buying and selling have
become more important parts of many people’s lives. Students and parents rely on
the internet to acquire and sell textbooks at affordable prices. Both businesses and
customers have embraced online sales as a cheaper and more convenient way to
shop, but just like anything associated with the internet, there are benefits and
dangers associated with shopping online. The relation of this to the study is the
good and bad effect of online shopping to the customers where they buy products
that is cheaper than the other to save money and that helps the students in their
needs to help them in their expenses.
Further, Saudi Arabia’s future expansion plan targets to increase the
percentage of e-commerce transactions by 2030, up to 70 percent higher than in
previous years (Jan, Manal, Rizwan, Brahimi, 2021). Over the past years, the
economy of Saudi Arabia underwent an exceptional growth supported by the steady
shift from offline shopping to internet shopping. In Saudi Arabia, the young
population increased its broadband and smartphone perceptions, and the
government’s enhanced focus on e-commerce continues to drive the shift towards
online purchasing. Although Saudi Arabian shoppers prefer the traditional shopping
channels, online shopping continues to grow, due to the convenience of in-home
deliveries (Albliwi 2021; Al-mani 2020).
Customer behavior is the study of the psychological, behavioral, and emotional
processes that affect people’s decisions about what they consume, how much they
consume, and how frequently they place orders for products and services
(Mothersbaugh, David, Hawskins, Kleiser, and Watson, 2020). Understanding
customer behaviors before and after purchases, is aided by several disciplines,
including economics and psychology. It also assists businesses in identifying new
potentials (Qazzafi, 2019). Baabdullah and Ansari (2020) mentioned that Saudis’
online spending depends on their confidence in online stores, where consumers
often purchase goods at what they believe is a good price.
Meanwhile, Nachar (2019), found that customers’ intentions to embrace
online shopping is predicted by the e-commerce platform simplicity of use and
effectiveness technology. In add on, Valaskova, Durana, and Adamko (2021),
examined the changes in consumer buying behaviors, as a result of the COVID-19
pandemic. The pandemic affected different aspects of consumer behaviors in
Slovakia. This included spending, investments and financial assets, and social and
financial security. The study found that factors, such as customer income, age, and
area of expertise, have a significant impact on buying behaviors.
Customer wants, desires, and loyalties are changing as a result of the
electronic revolution, which has broken barriers and created an intense demand
among retailers and service suppliers (Al-Ayed, 2022). There are about 34% of Saudi
Arabian consumers prefer to purchase their desired brands in stores with lower
prices. While, 54% of Saudi consumers are trading down to less expensive brands or
luxury labels, resulting in a high satisfaction with merchandise and little desire to
purchase costly items. Consumers in Saudi Arabia are selective in spending their
income, progressively dividing their expenditures, by either moving up or down,
where 11% of Saudi consumers trade up and 16% trade down ( McKinsey, 2018).
The web browsing of the product and price comparisons are the significant
activities engaged by a customer. Once a customer selects the product or service,
user accounts are created by providing personal information. Finally, a customer
completed by delivering the actual purchase preferences, and monetary and private
information (Athapaththu & Kulathunga, 2018). Purchase intention is considered a
dependent variable, and it can be inferred that it is a valuable attribute to examine
and is employed as the outcome variable (Shim, Moon, Song, and Lee, 2021).
Therefore, purchase intention is a willingness to pay or purchase via online shopping
sites and apps during the COVID-19 in this study. Customer experience has become
a central topic in marketing research due to the fact that businesses are increasingly
realizing that their success largely depends on providing positive shopping
experiences to their customers (Becker and Jaakkola, 2020).
Businesses utilize more of their financial resources to create positive and
memorable customer experiences that can motivate customers to spend more
money on products (Bleier, 2019). Positive customer experience plays a critical role
in generating desirable outcomes for businesses, such as strong emotional
attachment with brands, and increased customer satisfaction leading to customer
loyalty (Anshu, 2022). Given the extant literature regarding online impulsive buying
and the OCSE, it is reasonable to assume that both functional and psychological
components of the OCSE may influence online impulsive buying (Pandey and
Chawla, 2018; Kuppelwieser and Klaus, 2020).
Online Shop or Online Business
According to the article of Market Business News, online shopping is the
activity or action of buying products or services over the internet. It means going
online, landing on a seller’s website, selecting something, and arranging for its
delivery. The buyer either pays for the good or service online with a credit or debit
card or upon delivery. In this article, the term ‘online’ means ‘on the internet. The
Search relation of this to the study is the process of online shopping in different
people that gave them advantage paying through credit or debit cards to buy some
products in an online shop with its services.
In the study stated by Vilner (2018), online shopping is no longer just a fad, it’s
a lifestyle. In order to capitalize on this shift in lifestyle, retailers have taken to the e-
commerce world and are setting new norms for online businesses. Websites are
smarter, shipping is quicker, and expectations are higher. In order to keep up with
the market, online stores have started to gravitate towards new trends. In addition
to, Montaldo (2019), revealed that online stores are highly competitive, not only
with other online stores, but also with brick-and-mortar competitors. Price
comparison websites make deal hunting easier and also help guide shoppers to
online stores with the best reputations by posting reviews submitted by other
shoppers. Also, Virtual stores allow people to shop from the comfort of their homes
without the pressure of a sales person, and online marketplaces provide a new and
more convenient venue for the exchange of virtually all types of goods and services
(Morah, 2019).
E-commerce or internet shopping is a form of commerce that enables
consumers to purchase goods or services using a web search engine. Users are able
to purchase online utilizing a variety of devices, such as desktops, tablets, and
mobiles. There were different terms used to reflect this e-commerce, such as e-
shopping, e-web-store, e-shop, e-store, internet shop, web-shop, web-store, online
store, online storefront and virtual store. Online shopping refers to purchasing goods
and services over the internet, also known as e-commerce (Fu, Manogaran, Wu, Cao,
Jiang, ang Yang, 2020).
Objective of the Study
This study aims to identify the impact of reviews and ratings on consumers’
decision to buy in an online shop.
Specifically, the researchers will seek to:
1. Identify the importance of reviews and ratings in an online businesses;
2. Distinguish the effects of reviews and ratings towards consumer decision to buy in
online shop;
3. Determine the influence of reviews and ratings in consumers buying decision; and
4. Relate the effectiveness of reviews and ratings on consumers’ decision.
Significance of the Study
The result of the study will benefit the following:
To the Online Business Shop– It helps to improve their company's social credibility
and provide positive impressions to potential customers. It also allows potential
customers to trust the company's business and feel comfortable making a purchase
that will help the company excel and become profitable.
To the Customer – The result of this study helps them assess the product for their
purchase decision-making since they understand the product's performance, quality,
and service based on the recent buyer’s perspective through ratings and reviews.
This could provide awareness that will make the consumer wiser in terms of their
buying decisions.
To the Social Media User – The outcome of the study will help them gain a better
understanding of how social media affects their day-to-day lives in society. It also
gives insights to people who engage in online business. Hence, both online shoppers
and online businesses connect together and benefit from one another
To the Researcher – It helps to foster critical thinking and analytical skills through
hands-on learning, defining academic, career, and personal interests. Also, it gave
researchers credibility to understand the importance of consumer decisions in the
online world, which broadened their knowledge and understanding.
To the Future Researcher – This could serve as base-line data that will guide future
researchers on related issues. It may also provide further investigation similar to this
study and serve as their foundation as well as extra literature for a meaningful,
relevant, and trustworthy investigation.
Scope and Limitation
This research study is conducted primarily and is only focused on the impact
of reviews and ratings on consumers' decisions to buy in an online shop. The
researchers in this study will randomly select 50 online shoppers which is a special
class marketing management student as their respondents. Also, the researchers will
use quantitative correlation analysis and a survey to gather data. This study will be
conducted at Gensantos Foundation College, Inc., in the years 2023–2024.
In terms of the study's limitations, it will be conducted by special-class
marketing management students; therefore, individuals may refuse to participate in
this study. Furthermore, respondents may not provide reliable information, resulting
in prejudice and a one-sided outcome of the study. However, the conclusion of this
study may or may not affect other loyal online shoppers. Likewise, the respondents'
participation was voluntary, and no compensation was demanded.
Definition of Terms
The following terms in this study are defined conceptually and operationally for
better understanding of the readers.
Buying Decision
Conceptually - A typical decision-making process, when consumers become aware of
products/brands, search for information, compare offers, and perform a cost-benefit
analysis before actually buying the desired product (Epure, 2019).
Operationally - It is the end of the buyer decision process and refers to the decision
to buy goods, services, inventions, companies or other things. The goal of a buying
decision is usually to maximize benefits or sales. To understand how to plan
marketing
and business strategies, it is important to understand the types of buying decisions
and the buyer decision process.
Consumer
Conceptually - consumer is a category that belongs within the food chain of an
ecosystem. It refers predominantly to animals. Consumers are unable to make their
own energy, and instead rely on the consumption and digestion of producers or
other consumers, or both, to survive (Knapp, 2020).
Operationally - the people or organizations that purchase products or services. The
term also refers to hiring goods and services. They are humans or other economic
entities that use a good or service. Furthermore, they do not sell on that item that
they [Link] are the end users in the distribution chain of goods and services. In
fact, sometimes the consumer might not be the buyer.
Rating
Conceptually - a rating is an evaluation of a bond or stock done by a rating agency or
analyst after carefully studying it. ( Vineeth, 2023)
Operationally - it is referring to a set of opinions, expressed and describe the details
of the product design.
Review
Conceptually - a review says more about the service itself, and potential customers
rely on it when deciding whether to book your company or not. It usually includes
specific information about the service quality and other details regarding it. It can
help you improve your methods and make them more efficient. (Stewart, 2022)
Operationally - refers to the feedback or opinion that a customer had the specific
product or items purchased.
Online Business
Conceptually - is a business conducted entirely on the internet. Online business may
encompass selling goods and services, as well as SaaS (software as a service )
solutions (Alex, 2022).
Operationally - It is referring to any form of media and usually used internet
connection to promote and sell the product around the world.
Chapter II
METHOD
This chapter presents the research method. It focuses on the method used in
conducting this study, which covers the research design, the respondents, the locale
of the study, the methods of research, the instruments, the data gathering
procedures, the statistical tools, and the ethical considerations used in the study.
Research Design
This study employs a quantitative correlation, non-experimental design
utilizing the correlation technique. Quantitative research is the process of collecting
and analyzing numerical data. It can be used to find patterns and averages, make
predictions, test causal relationships, and generalize results to wider populations
(Bhandari, 2023). Correlational research design is a type of quantitative method that
examines the relationship between two or more variables from the same group of
subjects. This design will be used since the aim of this study is to determine the
impact of reviews and ratings on consumers' buying decisions in an online shop.
Research Locale
The present study will be conducted at Gensantos Foundation College Inc.
specifically in the Special Class Marketing Management department. Gensantos
Foundation College Inc. was established in 1994 at Bulaong Extension, General
Santos City 9500. At this time, the school is offering non board courses for special
class including: Bachelor of Science in Business Administration Major in Marketing
Management (BSBA-MM), Bachelor of Science in Business Administration Major in
Financial Management (BSBA-FM), Bachelor of Science in Business Administration
Major in Human Resource Development Management (BSBA-HRDM), and Bachelor
of Science in Entrepreneurship.
Figure 2. Map of the Locale of the Study
Population and Sample
The researchers randomly select one hundred forty (140)online shoppers of
special class marketing management students to participate in the study. The
sample of this study was selected through non-probability/non-random sampling
wherein the researchers choose the samples based solely on convenience.
According to Simkus (2023), convenience sampling (also called availability sampling,
accidental sampling, or non-random convenience sampling) is a method of non-
probability sampling where data is collected from an easily accessible and available
group of people. The individuals in the sample are selected not because they are
most representative of the entire population, but because they are most easily
accessible to the researcher. The researchers utilized the convenience sampling
considering that it is the easiest way to gather respondents and conduct a survey.
Research Instrument
This researchers will utilize a modified questionnaire the impact of online
product review on purchasing decision from Holleschovsky and Constantinides
(2015) to conduct the study. The instrument will be consisted of 16 items that will be
use to determine the online shoppers purchasing decision which is the special class
marketing management students. The researcher will deliver the survey
questionnaire, which will be completed by respondents who will be educated about
the research.
The gathered data from the special class marketing management student will
be use by the researcher to generate the different purchasing decision as an online
shoppers. It helps to provide valuable insight and it becomes the first- hand primary
data that is collected, maintained, and analyzed to achieve the main goal of this
study. The modified survey questionnaire used by the researcher will become the
most reliable, accurate, and applicable only to this study. The type of questions
provided by the researcher and the answers of the actual respondents rely entirely
on the goal of the survey is administered, all selected respondents of special class
marketing students would receive the same question.
Data Collection
The researchers will do the following procedure to gather adequate and
sufficient data needed for the completion of the study: First, The researchers will
send a letter to the school president of Gensantos Foundation College Inc., stating
their purpose which is to conduct an educational research study. The affixed
signature is the sign of permission of the educational research to be conducted.
Second, the researchers will ask a consent to one hundred forty (140) online
shoppers of special class marketing management students. The validated survey
questionnaire will be distributed to the selected respondents. Third, properly
completed survey form will be gathered by the researcher. Lastly, the data gathered
from this research instrument were tallied and computed for interpretation
according to the frequency of items checked by the participants.
Statistical Tools
The following statistical treatments will be used to answer the problem of this
study;
A Sloven's formula will be utilized to conclude the impact of reviews and
ratings towards online shoppers purchasing decisions which is the special class
marketing management students. Slovin's formula provides the sample size (n)
using the known population size (N) and the acceptable error value (e). Fill the N and
e values into the formula n = N ÷(1 + Ne2). The resulting value of n equals the sample
size to be used.
To understand the core flow of this study focusing in the social influences
about the impact of reviews and ratings to online customers, the researchers
emphasized the following: Identifying the importance of revies and ratings in a way
that is measures the behaviors of the online customers that will lead to emphasize
how significant the reviews and ratings in online businesses. Through this, the
researchers can accumulate valuable data that will support this aspect strongly.
Moreover, gathering the preliminary identification of its importance, researchers
proceed to distinguish the effects of revies and ratings towards customers decision
making; what are the different sub-factors that shaping the distinction of it in
customers decision in terms of purchasing online. This will systematically create a
relation to the next procedure which is to determine the influence of reviews and
ratings in customers decision making. From the prior procedure it can finally
proceed in relating the effectiveness of customers revies and ratings to online
businesses. Hence, researchers construct relevant datas that could help to create a
relevant conclusions on how online business could improve its potential success.
Ethical Consideration
In conducting the study, the researchers engaged ethical considerations in
order to maintain proper procedures in the entire durations of this study. This study
must done with the approval granted by the research adviser and the School
President of Gensantos Foundation College Inc., to justify the impact of reviews and
ratings towards consumers' decision to buy in an online shop. The selected
respondents on this study participated voluntarily and not obliged to answer the
problem if they thought that it can destroy their dignity. This means, the
respondents' of this research study are well informed about the research and they
have a power of freedom of choice to decide whether to decline or participate. The
researcher will not add or change any data gathered. Intellectual property rights of
the authors whose works are cited on this paper specifically in the review of related
literature and studies are also bi given importance.
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Appendix A
Survey Questionnaire
(Modified from Holleschovsky and Constantinides, 2015)
Name: (Optional)._ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
Direction: Indicate your answer by putting a check mark (✔️) on the corresponding
items.
1. Which online shopping apps do you use? (Multiple answer are possible)
o Amazon (1)
o AliExpress (2)
o eBay (3)
o Wish (4)
o Lazada (5)
o Shopee (6)
o Instacart (7)
o Others:(8) _ _ _ _ _ _ _ _ _
2. How often are you checking online customers reviews before a product purchase?
o Never (1)
o Rarely (2)
o Sometimes (3)
o Quite Often (4)
o Very Often (5)
3. Have you ever checked online customer reviews/ opinions before purchasing a
product?
o Yes (1)
o No (2)
4. When looking for product reviews what platforms do you mostly choose?
(Multiple answer are possible)
o Retailing websites (e.g. Amazon) (1)
o Independent reviewing platforms (e.g. [Link]; [Link]) (2)
o Video platforms (e.g. YouTube) (3)
o Personal (reviewing) blogs (4)
o Others:(5)_ _ _ _ _ _ _ _ _ _
5. What kind of online reviews do you use as a basis for your buying decision?
(Multiple answer are possible)
o Qualitative (written description or video) (1)
o Quantitative (a scale/ star rating from e.g. 1 to 5) (2)
6. Which kind of review do you consider as more credible?
o Qualitative (written description or video) (1)
o Quantitative (a scale/ star rating from e.g. 1 to 5) (2)
7. What kind of review do you consider as more user-friendly?
o Qualitative (written description or video) (1)
o Quantitative (a scale/ star rating from e.g. 1 to 5) (2)
8. Media support (photo/ video/ sound) make a review more.....? (Multiple answer
are possible)
o Credible (1)
o User-friendly (2)
o None of the two above (3)
9. Reviewing platforms mostly offer sorting or filtering options (helpfulness/
relevance, date, rating, view count). Do yo choose to use those options? If yes,
which?
o Yes (1)
o No (2)
10. Does a sorting option for reviews make the review more user-friendly?
o Yes (1)
o No (2)
11. I consider an overview of all reviews in the form of a summary statistic (e.g.
average star rating) as....? (Multiple answer are possible)
o Credible (1)
o User-friendly (2)
o None of the two above (3)
12. I consider statistics about the total number of reviews existing for a product
as....? (Multiple answer are possible)
o Credible (1)
o User-friendly (2)
o None of the two above (3)
13. Does a review appear more credible to you when a detailed profile/ identity of
the user, who has created the review is visible?
o Yes (1)
o No (2)
14. If yes, which profile commcharacteristics of the reviewer are important to you?
(Multiple answer are possible)
o Member activity statistics like the number of reviews the user has created in
total or his/her duration of member ship (1)
o Personal characteristics like the user's interest, education or friendship (2)
[Link] very influential online reviews and ratings in your purchase decisions?
o Very influential
o Somewhat influencial
o Neutral
o Somewhat Not influential
o Not influential at All
16. What factors, other than reviews and ratings, influence your decision to buy a
product online? (Select all that apply)
o Price
o Brand Reputation
o Shipping and Delivery Options
o Product Description
o Personal Recommendations
o Other (please specify)
