The Effect of Electronic Word of Mouth On Brand Image and Purchase Intention
The Effect of Electronic Word of Mouth On Brand Image and Purchase Intention
The effect of electronic word of mouth on brand image and purchase intention: An
empirical study in the automobile industry in Iran
Mohammad Reza Jalilvand, Neda Samiei,
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Mohammad Reza Jalilvand, Neda Samiei, (2012) "The effect of electronic word of mouth on brand image
and purchase intention: An empirical study in the automobile industry in Iran", Marketing Intelligence &
Planning, Vol. 30 Issue: 4, pp.460-476, https://doi.org/10.1108/02634501211231946
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MIP
30,4 The effect of electronic word of
mouth on brand image and
purchase intention
460
An empirical study in the automobile
Received 25 April 2011 industry in Iran
Revised 4 July 2011
1 October 2011 Mohammad Reza Jalilvand
30 November 2011
Accepted 18 January 2012
Department of New Sciences and Technologies, University of Tehran,
Tehran, Iran, and
Neda Samiei
Department of Economics, Faculty of Administrative Sciences and Economics,
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Abstract
Purpose – Word-of-mouth (WOM) has been recognized as one of the most influential resources of
information transmission. Advances in information technology and the emergence of online social
network sites have changed the way information is transmitted. This phenomenon impacts consumers
as this easily accessible information could greatly affect the consumption decision. The purpose of this
paper is to examine the extent to which e-WOM among consumers can influence brand image and
purchase intention in the automobile industry.
Design/methodology/approach – Measurement items are adapted from existing scales found in
the marketing literature. Academic colleagues reviewed the items for face validity and readability. The
scales are evaluated for reliability, convergent validity, and discriminant validity using data collected
in a survey of Iran Khodro’s prospective customers in Iran. A structural equation modeling procedure
is applied to the examination of the influences of e-WOM on brand image and purchase intention. The
research model was tested empirically using a sample of 341 respondents who had experience within
online communities of customers and referred to Iran Khodro’s agencies during the period of research.
Findings – The paper found that e-WOM is one of the most effective factors influencing brand image
and purchase intention of brands in consumer markets.
Research limitations/implications – The paper outlines ways to promote a brand effectively
through online customer communities, as well as general tips for website and forum moderators for
facilitating such presentation in a manner useful to the members of their online communities. While
there is a substantial research stream that examines the branding of consumers goods and an increasing
literature on product brands, little is known about brand image in the context of online communications.
This paper extends existing measurement of brand image to a new setting, namely e-WOM.
Originality/value – This paper provides valuable insight into the measurement of e-WOM, brand
image, and purchase intention in the automobile industry and offers a foundation for future product
branding research.
Keywords Internet, Consumer behaviour, Word of mouth, Brand image, Social networks, Iran
Paper type Research paper
Marketing Intelligence & Planning
Vol. 30 No. 4, 2012
pp. 460-476 The authors would like to thank the Editor and the two anonymous reviewers for their
q Emerald Group Publishing Limited
0263-4503
constructive suggestions and insightful guidance; their input has resulted in the development of
DOI 10.1108/02634501211231946 a much stronger paper.
1. Introduction Electronic word
Word-of-mouth (WOM) communication is generally acknowledged to play a of mouth
considerable role in influencing and forming consumer attitudes and behavioral
intentions (e.g. Chatterjee, 2001; Chevalier and Mayzlin, 2006; Herr et al., 1991; Kiecker
and Cowles, 2001; Sen and Lerman, 2007; Smith and Vogt, 1995; Weinberger and
Dillon, 1980; Xia and Bechwati, 2008). Research has shown that WOM communication
is more influential than communication through other sources such as editorial 461
recommendations or advertisements (e.g. Bickart and Schindler, 2001; Smith et al.,
2005; Trusov et al., 2009) because it is perceived to provide comparatively reliable
information (Gruen et al., 2006). Consequently, this type of communication is
considered as having a great persuasiveness through higher perceived credibility and
trustworthiness (e.g. Chatterjee, 2001; Godes and Mayzlin, 2004; Mayzlin, 2006).
Whereas WOM communication initially referred to the idea of person-to-person
conversation between consumers about a product (Chatterjee, 2001; Sen and Lerman,
2007), the worldwide spread of the internet brought up a less personal but more
ubiquitous form of WOM communication, so-called online WOM communication
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(e.g. Brown et al., 2007; Chatterjee, 2001; Davis and Khazanchi, 2008; Godes and
Mayzlin, 2004; Kiecker and Cowles, 2001; Xia and Bechwati, 2008). This new type of
WOM communication has become an important venue for consumer opinions (Bickart
and Schindler, 2001; Godes and Mayzlin, 2004; Hennig-Thurau et al., 2004; Mayzlin,
2006) and it is assumed to be even more effective than WOM communication in the
offline world due to its greater accessibility and high reach (Chatterjee, 2001). Product
reviews that consumers post on the internet constitute one of the most important forms
of online WOM communication (Schindler and Bickart, 2005; Sen and Lerman, 2007),
and for consumers it is increasingly common to look for online product reviews when
gathering pre-purchase product information (Adjei et al., 2009; Zhu and Zhang, 2010)
and forming purchase intentions (Zhang and Tran, 2009). Furthermore, the issue of
branding has been deemed as primary capital for many industries. Strong brands can
increase customers’ trust in the product or service purchased and enabling them to
better visualize and understand intangible factors. According to Yoo and Donthu
(2001), brand image can influence a company’s future profits and long-term cash flow,
a consumer’s willingness to pay premium prices, merger and acquisition decision
making, stock prices, sustainable competitive advantage, and marketing success.
Based on the argument that especially vividly presented WOM communication has a
strong impact on product judgments (Herr et al., 1991), we argue that online WOM
communications that are posted in such a vivid and interactive medium as the internet
might have strong effects on brand image and as a result, purchase intention. Brand
image is the perceptions about a brand as reflected by the brand associations held in
consumer memory (Keller, 1993). Brand image stems from all of a consumer’s
consumption experiences, and perceived service quality is a function of these
consumption experiences. Thus, customer perception about service quality directly
affects brand image (Aydin and Ozer, 2005). Intangibles such as after sale services
cannot be evaluated before the consumption experience; therefore, purchasing
intangible products and services brings a higher risk, so customers are more dependent
on the interpersonal influence of e-WOM (Lewis and Chambers, 2000; Litvin et al.,
2008). Despite the significant impact of e-WOM in the manufacturing segment, little
research has been done to investigate e-WOM in this field. Based on these findings in
MIP the literature, we understand that e-WOM messages can affect the brand image and
30,4 purchase intention. Since no relevant explanation has been proposed to explain these
effects, this study applied experimental design methodology to explore:
.
the impact of e-WOM communications on image brand;
.
the impact of e-WOM communications on purchase intention; and
462 .
the impact of brand image on purchase intention.
The rest of this paper is organized as below. First, we provide a review on the literature
related to e-WOM and brand image. Second, we introduce hypotheses and the research
model. Next, we describe the research methodology and discuss the statistical results.
Finally, we summarize the findings and discuss the implications for both research and
practice.
2. Empirical background
As no studies exist on the link between online WOM communications, brand image,
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and purchase intention, we will provide separate literature reviews of the research
streams on the effects of e-WOM and brand image.
Over the last decade, firms have markedly increased their investments in the creation
and development of brands. The creation of a brand implies communicating a certain
brand image in such a way that all the firm’s target groups link such a brand (and thus
the services sold using its name) with a set of associations. Aaker (1991, p. 15)
conceptualizes brand equity as “a set of brand assets and liabilities linked to a brand,
its name and symbol that add to or subtract from the value provided by a product or
service to a firm and/or to that firm’s customers”. Building on Aaker’s work, Keller
(1993) develops the behavioral concept of customer based brand equity (CBBE), which
consists of the two dimensions of brand awareness and brand image and is defined as
the differential effect of brand knowledge on customer response to the marketing of the
brand. Brand image comprises the attributes and benefits associated with a brand that
make the brand distinctive, thereby distinguishing the firm’s offer from competition
(Webster and Keller, 2004). Attributes are those descriptive features that characterize a
brand, such as what a consumer thinks the brand is or has and what is involved with
its purchase or consumption. Benefits are the personal value consumers attach to the
brand attributes, that is, what consumers think the brand can do for them (Keller, 1993,
1998). In firm-customer relationships, every interaction between a firm and its
customers becomes an input to brand image. Because a service brand communicates a
commitment to provide a certain kind of experience, it is critical that service firms
assure that everyone in the organization understands the importance of delivering
consistent, predictable, high quality performance to the customer (Webster and Keller,
2004). In B2C exchanges, customers face serious disruptions if product/service
providers fail to meet expectations. Consequently, customers typically rely on a small
number of trusted product/service providers that consistently deliver high quality
precuts or services (Cousins and Menguc, 2006). At the same time, product/service
providers depend on a handful of key customers for a significant portion of their
revenues. The underlying goal is for the brand is to evoke feelings of trust, confidence,
security, strength, durability, speed, status, and exclusivity (Aaker, 1996; Keller, 1993).
Ultimately, a strong product/service brand conveys the core value proposition of both
the organization and its product/service in a way that resonates with customers.
Although empirical evidences indicated that brand equity can affect purchase
MIP intention in the various contexts (Ashill and Sinha, 2004; Chang and Liu, 2009), the
30,4 number of studies which measure the effect of brand image on purchase intention is
limited. Wang and Yang (2010) investigated the impact of brand credibility on
consumers’ brand purchase intention focusing on China’s automobile industry. They
proposed that brand awareness and brand image play a moderating role in this
relationship. However, Bian and Moutinho (2011) examined the impact of perceived
464 brand image, direct and indirect effects (mediator and moderator effects) of product
involvement and product knowledge on consumer purchase intention of counterfeits in
the context of non-deceptive counterfeiting. Their results indicated that brand image is
not a mediator of the effects of involvement/knowledge on purchase intention. Wu et al.
(2011) also investigated the direct effects of store image and service quality on brand
image and purchase intention for a private label brand. Their study revealed that store
image has a direct and positive effect on brand image and purchase intention.
Additionally, they showed that service quality has a direct and positive effect on brand
image. Shukla (2010) indicated that interpersonal influences and branding cues shape
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consumer luxury purchase intentions. The results of his study showed that while
normative interpersonal influences were found to be significant across nations, the role
of informational interpersonal influences was significant among consumers. Moreover,
brand image was a significant moderator between normative interpersonal influences
and luxury purchase intentions. Davis et al. (2009) also suggested that brand
awareness, brand image, and brand equity scales are valid and reliable in the context
of logistics services. The arguments presented above lead to our research hypotheses:
H1. Electronic word of mouth has a significant impact on brand image.
H2. Electronic word of mouth has a significant impact on purchase intention.
H3. Brand image has a significant impact on purchase intention.
Figure 1.
Research model
3. Methodology Electronic word
3.1 Measurement of mouth
To achieve the study objectives, a self-administered survey questionnaire was
developed based on the findings of the literature review. The questionnaire was
pre-tested and revised. The survey consisted of four parts covering the following
issues:
(1) e-WOM; 465
(2) brand image;
(3) purchase intention; and
(4) demographics.
In the e-WOM section, with six items, respondents were asked about using online
WOM communications (Bambauer-Sachse and Mangold, 2011). In the brand image
section, with three items, respondents were asked to rate their level of agreement on the
importance of brand image regarding automobile X (Davis et al., 2009). In the purchase
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intention section, with three items, respondents were asked about their intention to
purchase this automobile (Shukla, 2010). Measurement of “Electronic word of mouth”,
“Brand image” and “Purchase intention” were carried out using a seven-point Likert
scale, ranging from strongly agree (1) to strongly disagree (7). The advantage of using
an interval scale is that it permits the researchers to use a variety of statistical
techniques that can be applied to nominal and ordinal scale data in addition to the
arithmetic mean, standard deviation, product-moment correlations, and other statistics
commonly used in marketing research (Malhotra, 1999). The measures are presented in
Table I. The last section of the questionnaire gathered demographic information
regarding the respondents, such as age, gender, education, and monthly income.
The path diagram of the structural model specified (Figure 1) is proposed based on the
past literature discussed in section 2.
Education
Below high school graduate 5 1.5 1.5
High school 25 7.3 8.8 Table II.
Two-year college or associate’s degree 181 53.1 61.9 Demographic
Bachelor’s degree 91 26.7 88.6 characteristics of
Postgraduate 39 11.4 100 respondents
based on the maximum likelihood (ML) method. The basic conditions assumed for the
use of ML estimation (Byrne, 2001) are met or closely approximated in the study.
Further, the sample is sufficiently large (n ¼ 341 cases), over the recommended size of
200 cases (Medsker et al., 1994), the scale of observed variables is continuous, and no
violations of multivariate normality are found in the survey responses. As presented in
Table III, the reliability of the measurement items was verified using Cronbach’s a to
assess the internal consistency of the constructs in the applied model. The level of
internal consistency for each construct was acceptable, with the value of a ranging
from 0.727 to 0.788, which exceeded the minimum hurdle of 0.60 (Hair et al., 1998). All
measurement items had standardized loading estimates of 0.5 or higher (ranging from
0.518 to 0.702) at the a level of 0.05, indicating the convergent validity of the
measurement model. Construct reliability was verified to estimate convergent validity;
each construct had acceptable construct reliability, with the estimates ranging from
0.801 to 0.836 (Hair et al., 1998).
In addition, because the average variance extracted (AVE) from all three constructs
exceeded the minimum criterion of 0.5 (ranging from 0.593 to 0.670), convergent
validity was assured (Hair et al., 1998). To test the discriminant validity among the
constructs, we estimated correlations among the constructs to determine whether they
were significantly different from 1; the confidence intervals of the correlations,
calculated as correlations ^ 1:96 £ standard error of estimate, did not contain 1, so
these results indicated the discriminant validity of the measurement model. The
correlations for the constructs are shown in Table IV. Overall, these measurement
results are satisfactory and suggest that it is appropriate to proceed with the
evaluation of the structural model.
MIP
Standardized t- Cronbach’s
30,4 Construct Item loading statistic Mean SD a
EWOM1 EWOM2 EWOM3 EWOM4 EWOM5 EWOM6 BI1 BI2 BI3 PI1 PI2 PI3
EWOM1 1.00
EWOM2 0.356 1.00
EWOM3 0.408 0.371 1.00
EWOM4 0.396 0.395 0.381 1.00
EWOM5 0.424 0.321 0.415 0.398 1.00
EWOM6 0.387 0.352 0.347 0.408 0.402 1.00
BI1 0.470 0.403 0.299 0.420 0.277 0.266 1.00
BI2 0.316 0.342 0.306 0.275 0.269 0.244 0.335 1.00
BI3 0.421 0.393 0.288 0.264 0.273 0.243 0.411 0.361 1.00
PI1 0.478 0.269 0.255 0.323 0.332 0.342 0.329 0.299 0.327 1.00
PI2 0.369 0.297 0.292 0.347 0.373 0.310 0.332 0.368 0.307 0.201 1.00
PI3 0.321 0.317 0.289 0.270 0.255 0.176 0.280 0.280 0.274 0.173 0.199 1.00
Note: All of the correlations are significant at the 0.01 level. EWOM, electronic word of mouth; BI, brand image; PI, purchase intention
Correlation matrix
of mouth
Electronic word
469
Table IV.
MIP
30,4
470
Figure 2.
Standardized regression
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coefficients proposed
model
x2 83.2
df 51
p-value , 0.05
Normed x 2 1.631 1.0-3.0
GFI 0.961 .0.90
NFI 0.925 .0.90
CFI 0.969 .0.90
TLI 0.960 .0.90
RMR 0.48 ,0.50
RMSEA 0.043 ,0.08a
Table VI.
Model fit statistics Note: aIndicates good fit
plays a major role as an important antecedent of customer’s behavioral intentions. Electronic word
Finally, brand image influenced purchase intention, with b ¼ 0:690, t ¼ 2:518, and of mouth
p ¼ 0:012, indicating that brand image was an antecedent of purchase intention. The
statistical results, summarized in Table IV, generated three major findings:
(1) e-WOM communication has a positive impact on brand image;
(2) e-WOM communication has a strong positive impact on purchase intention; and
471
(3) brand image influences purchase intention.
In addition, 45 percent of respondents said they used e-mail for their e-WOM, 40 percent
relied on company websites, and 30 percent used other media (e.g. Facebook.com) for
e-WOM communication.
To examine the interplay between the two variables that affect intention to
purchase, an analysis of the standardized direct, indirect and total effects was
conducted (see Table VII). Of particular interest is the direct effect of e-WOM on
intention to purchase (0.574). The analysis also indicates that e-WOM has an indirect
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Independent variable Dependent variable Total effect Direct effect Indirect effect
Table VII.
Electronic word of mouth Brand image 0.866 0.866 0.000 Decomposition of total
Electronic word of mouth Purchase intention 1.172 0.574 0.597 effects for research model
Brand image Purchase intention 0.690 0.690 0.000 (n ¼ 341)
MIP popular, customers can read online recommendations for the product they are
30,4 interested in directly at the point of purchase, which might have strong effects on their
purchase decisions. Therefore, managers could initiate point-of-sale activities in the
form of product trials with the objective of motivating online WOM communication by
enabling consumers to form their own impressions. Many studies have investigated
customers’ perceptions of service quality as a predictor of customers’ behavior
472 intentions, such as WOM communication. Boulding et al. (1993) indicated that service
quality positively affects behavioral outcomes such as loyalty and positive WOM.
Zeithaml et al. (1996) proposed a model of the behavioral consequences of service
quality and suggested that perceived service quality was related to positive behavioral
intentions including WOM, purchase intentions, complaining behavior, and price
sensitivity. Based on Zeithaml et al.’s study, Alexandris et al. (2002) indicated that
service quality explained 93 percent of the variance in WOM. In addition, managers
can improve the brand image by increasing product variety, enhancing product
quality, offering the products in the price worthy of value, and pleasantly providing
after sale services. These improvements directly increase the purchase intention of the
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products. However, companies with high equity brands should not rely on the benefits
of high brand image such as customer loyalty that can be found in the literature
(Aaker, 1991; Agarwal and Rao, 1996; Keller and Lehmann, 2006). Instead, such
companies should be aware of the risks of negative online WOM communication,
because even high brand equity can be significantly diluted by negative online WOM
and because such detrimental effects will become even more important with increasing
improvements in, and spread of, network technology. In addition, the accessibility,
reach, and transparency of the internet allow marketers and organizations to monitor
the online WOM communication about their brands continuously (Kozinets et al., 2010).
Marketers could develop appropriate communication tools to make consumers more
knowledgeable about specific brand or bank characteristics and try to change some of
the negative associations that consumers have about the brand or the product through
online WOM. It is important to say that positive WOM and e-WOM play an important
role in increasing customers’ purchase intentions, creating a favorable image of the
company and its brand, and reducing promotional expenditures. Furthermore, it would
be interesting to analyze the effects of online WOM communication on brand image for
more brands and in other product categories such as financial services because WOM
communication may have a particularly important influence on consumers’
perceptions of products/services that have high credence qualities (Sweeney et al.,
2008). Finally, it would be useful to test an expanded model that more fully examines
brand image by including functional, experiential, and attitudinal dimensions of brand
image (Keller, 1993). In addition to testing this construct within internet networks,
exploring the antecedents to brand image would provide guidance for managers who
want to strengthen their products’ brands.
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Corresponding author
Mohammad Reza Jalilvand can be contacted at: [email protected]
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