Electronic Word-of-Mouth through Social Networking Sites : How does it affect consumers?

Abstract:

Researchers, companies and managers have for a long time accepted word-of-mouth as being a crucial marketing activity, since it is extremely effective in shaping consumers’ attitudes and behaviour. Nowadays, the Internet has become a major part of many peoples’ daily lives, and social networking sites attract millions of individuals from all around the world. Because of this, word-of-mouth has shifted to the digitalized world and a new term has been developed, namely electronic word-of-mouth. Electronic word-of-mouth has been recognized to generate the same benefits to companies as word-of-mouth. Due to the growth of the Internet and social networking sites, electronic word-of-mouth has the power to reach more people and is therefore perceived as more influential. This makes electronic word-of-mouth along with social networking sites, two concepts to acknowledge. Thus, for companies to make the most out of them, they need to gain the necessary knowledge.  The purpose of this research is to analyse how consumers are affected by electronic word-of-mouth through social networking sites.

In the specific area, a research gap was noticed, namely, how electronic word-of-mouth through social networking sites affects consumers’ product perceptions and purchase intentions. Based on this gap, six hypotheses and a research model were conducted. The empirical data was collected via questionnaire, where the majority of the respondents were within the target group, which was students, aged 18-24.

It was revealed through the results, that electronic word-of-mouth through social networking sites has a direct positive effect on both consumers’ product perceptions and purchase intentions. In addition, age and gender were found to have a moderating effect on the relation between electronic word-of-mouth through social networking sites and product perceptions, as well as purchase intentions. Finally, it is argued that managers should take electronic word-of-mouth through social networking sites into consideration, and adopt it in their marketing tactics.