A Study by Ting Tong Marketing of The Effects of E-WOM On Consumer Purchase Decisions of Consumers in Mumbai - Adnan Morbiwala

A study of the effects of E-WOM on
Consumer Purchase decisions of

consumers in Mumbai.
 By Adnan Morbiwala, Founder – Ting Tong Marketing Services
Irfan Morbiwala | Tingtong.marketing 1

Acknowledgements:
I would sincerely like to thank all the individuals who have taken out their precious time to
help me complete this project and those who have helped me through the course.
I hereby express my gratitude to the invaluable learnings that I have received through
guided inputs from the said individuals and ones which have helped me arrive at a
worthwhile conclusion for the hypothesis drawn.
I also acknowledge all individuals who took their time to respond to the survey
questionnaire circulated. Their inputs helped understand the thought process that drives
purchase behaviour and the impact that E-WOM has on that purchase behaviour.
I also thank the different brands and founders who helped understand the impact that
negative reviews have on brand image and what measures they take to counteract that.

Table of Contents
Sr No. Particulars Page No.

1 Objectives of the study 4
2 Scope of the study 5
3 Limitations of the study 7
4 Executive Summary 8
5 Research Methodology 12
6 Literature Review and Hypothesis 20
7 Data Collection and Analysis 25
8 Findings 39
9 Bibliography 41
10 Annexure 43

Objectives
Consumers are increasingly conducting their purchases online. E-Commerce has created an
environment that allows consumers to save time, effort and money all the while purchasing
products through a few clicks from the comfort of their homes.
EWOM has emerged as a scale through which consumers measure the quality of the
product and the experience which they can expect.
With increasing dependency on such reviews, any product that is sold online is subject to
EWOM. Brands have begun to take active measures to engage with early adopters and
innovators to help them communicate more effectively through this channel.
It is interesting then to understand what motivates people to post reviews, how is the trust
factor established and whether reviews posted about a product indeed influence consumer
purchase decision and if so, to what extent.
With the advent and constant evolution of free use technologies and social media, the
concept of word of mouth and peer to peer recommendations have moved digital and
Electronic word of mouth has opened up new possibilities for customers to discover brands
that may not have the resources to advertise as extensively as the larger brands do.
Primary Objective: To study the impact of E-WOM on consumer purchase decisions of

consumers in Mumbai.
Secondary Objective: To study whether negative E-WOM has a higher impact on consumer
purchase decisions that positive E-WOM.

Scope of the study:
The scope of study has been defined keeping in mind the research objectives decided. The
study has been conducted in order to gauge the impact that EWOM has on consumer
purchase decisions of consumers in Mumbai and if Negative eWOM has a higher impact on
brand image than positive eWOM.
The data gathered will help us understand the behaviour of users and frequency of
purchases made online. The factors considered by users when they purchase online and
how much of a bearing product reviews have on their purchase decision.
It will also help us gauge how it subsequently has an impact on brand image and how these
two concepts interact.
Primary data gathered is specific to Mumbai. Secondary data referred to gives us a general
understanding the concept of EWOM and studies conducted globally.
Why Mumbai?
Mumbai is the financial capital of India and sees a high migrant population. People from Tier
2 and Tier 3 cities in India come to Mumbai for employment and higher education.
Being the financial capital, Mumbai is also the birthplace of innovations in technology and a
testing ground for new products.
Established companies and new brands alike look at Mumbai as being one of the main
markets to launch their products in, purely due to the potential that Mumbai’s population
offers, and as such, Mumbai offers a marketplace that is diverse and has opportunity for a
variety of brands and products representing different categories and industries.
It also offers enough opportunity for bespoke and unique products that appeal to niche

lifestyles.
Mumbai also has one of the highest densities of the internet using population in India and
the number of people who use the internet to purchase online is increasing on a day to day
basis.
The ever increasing working class population in Mumbai not only has access to internet, but
they make active use of the latest platforms available to them to make online purchases.
Increased purchasing power helps them explore not just the big brands, but even smaller
brands who are just about beginning but offer premium and home grown products.
The population to be sampled is the Literate Working Class population of Mumbai between
the ages of 25-45 years. The urban working class population of Mumbai is considered as
being the largest contributors to online purchases and digital payments and is considered
second only to Delhi.
Why 25-45 years?
This age group has been chosen specifically as Individuals who are within the age group of
25-35 years can be said as being within the established stages of life. Being in the
established stage of life the individuals within this study have usually established themselves
within their chosen fields, they do not take unnecessary risks, are planned individuals who
have possibly just been married and have begun a nuclear family with their spouse.
The age group of 35-45 years can be considered as being within the mid-career stages of
their life where they are set in their ways and have established a way of living. They usually
cater to dependents as well and are more averse to risks and prefer convenience and
comfort over price.
The targeting of the sample population is based on the following parameters:
 Access to smartphone and internet

 Brand literacy
 Working professionals who do not necessarily find the time to go shopping and shop
online to save time and money
 Individuals, who have a limited source of income and need to be certain of their
purchases, hence are diligent when purchasing online.
The sample survey was distributed through Google Forms / WhatsApp to 100 working class
professionals in Mumbai and Delhi out of which responses were received from 52
respondents. 8 were considered invalid as respondents were not from the specified age
group and did not meet the parameters set above.
44 were considered valid responses and conclusions on primary data were drawn from

those responses.
The scope of the Primary Data gathering is designed to find out
 They depend on reviews when making their purchases online

 How their purchases decisions get altered if the brand has received negative reviews
 Behaviour exhibited when making an online purchase
 The impact EWOM has on Brand Image
The scope for studying the secondary data is designed to find out.
 Gathering relevant info that helps explain EWOM better

 Helps gather information about the impact created by EWOM on customer purchase
decisions.
 Whether the impact of EWOM differs according to the segment which the product
represents.
 To further help understand if the hypothesis in question is correct.
Limitations of the study:
 Sample population is size is small in comparison to the overall number of users.

 Secondary data specific to Mumbai is very limited, hence secondary data can be used
only to draw conclusions basis the overall concept of how this concept appeals to
audiences also within other metros in India.
 While there is a clear distinction between hedonic and utilitarian goods, this study
does not segregate the impact created in between utilitarian goods from different
categories. For example, Reviews about packaged foods might be less impactful than
reviews about skin care and beauty products.
 This study assumes that both big and small brands in equal measure face the same
impact of user reviews. Hence, the concept of digital ad spends and content creation
is assumed as being at the same level, while the actual impact created by activities
conducted by brands might have a bearing on consumer purchase decisions as well.
 While also trying to narrow down the research to actual consumer reviews, there is
no real way of verifying whether a user can distinguish between which review is
genuine and which isn’t, hence it is assumed that the user treats every review as
being genuine.

Executive Summary:
This research has been conducted to study the increasing impact of the concept of
electronic word of mouth on consumer purchase decisions and its subsequent impact on
brand image and perception.
If we trace marketing back to its roots, the concept of marketing came about from the
thought that when a person would experience a product from a shop, they were likely to
speak about it to people known to them, and consequently, the people known to them
would feel more confident to purchase that product themselves.
That led to a marketing focus being word of mouth, with shop keepers asking people to
refer others to the store etc.
That was before advertising and print media came along.
The advent of the internet helped expand geographies and led to the creation of a new form
of advertising where businesses began harnessing the power of the internet to display their
products and drive sales.
Alternately, the internet also gave buyers the power to speak about what they are
purchasing online and reach a far wider audience to share their opinions with.
This phenomenon is known as Electronic Word of Mouth (E-WOM); Electronic word of

mouth (eWOM) is person-to-person communication online or through social media (Yang,
2017) and using E-WOM as a source of reference has become increasingly widespread by
consumers when conducting online purchases in India.
With adoption of E-WOM referencing, several studies have been conducted as to whether
E-WOM actually creates a tangible impact on brand image and whether or not it has a direct
bearing on whether consumers will actually purchase from the brand.
A study at the Chung Ang university found that 95.6% participants who were a part of the
study held E-WOM with high credibility (Doh, Sun Jae et al,2009).
Electronic word of mouth is the process through which consumers exchange information
about products and services that they might have interacted with. From a consumers
perspective E-WOM is an effective medium through which they can gather information
about different products and services and make informed purchase decisions.
In an Indian context, the access to internet is ever increasing and more and more people
now consume information and news than ever before.
As per Statista, the number of internet users in India will increase to 974.6 million users by

2025. Individual cost conscious buyers have shown their willingness to share their
experiences, hence, EWOM has become and continues to become more and more
important and as a result, companies need to include the effects of EWOM within their
social media marketing strategies. (Kaplan and Haenlein, 2010).
Indian consumers have become more value conscious than ever. Teamed up with the
increase in purchasing power, they have started more and more to seek out information to
make informed purchase decisions.
The Indian consumer is cost conscious as well, as most of the Urban Middle Class have a
ceiling on the amount of Income they earn, they conduct stringent due diligence before
purchasing anything online. This makes a study of this nature justifiable as the size of the
market for consumer utilitarian goods is ever increasing.
In addition, users of the internet, social media applications and smartphones are also
increasing in the Indian subcontinent. With more than 462 million users, India has been
ranked as the second-largest country after China.
Total number of Facebook, Twitter and LinkedIn users in India are 270, 27 and 47 million
respectively as of July 2018 (http://www.statista.com). As per the Newzoo’s Global Mobile
Market Report (2018), with 386.9 million smartphones user and 28.5% smartphone
penetration, India is the world’s second largest smartphone market as of May 2018.
The ambitious Digital India project of the Government of India will also act as a catalyst for
the growth of electronic communication in India.
From a brands perspective, this process has opened a world of opportunities to position
their products and services to consumers through actual reviews because consumer to
consumer communication, as we will find out, tends to have a tangible effect on brand
image.
Brand image is a crucial competitive advantage that helps in creating and sustaining value
through differentiating the brand, forming purchasing justifications, developing a sense and
believes, and a significant value for organisations (Aaker, 1996; Keller, 2009).
Brand image can influence an organisation’s future income and cash-flow, consumers’
readiness to pay higher prices, stock prices, competitive advantage, and marketing practices
(Brakus et al., 2009; Chen, 2010). Contrary to price-only models, Wang et al. (2016)
advocated that effective branding strategies make the brand distinctive, change customers’
preference for brands, encourage them to pay premium prices and successfully discourage
the new entrant’s entry and pricing decisions. Keller (2003) advocated that a positive brand
image can be developed by connecting the distinctive and strong brand associations with
consumers’ memories of the brand and supported by effective marketing campaigns.
Bambauer-Sachse and Mangold (2011) recommended that online WOM communication is a

crucial element of online marketing strategy and adds to brand image and the purchase
behaviour of shoppers.
E-Commerce and M-Commerce as mediums have exploded the market for brands and other
concepts such as Drop Shipping and Print on Demand has given rise to competition in
almost every product segment.
With access to more and more information, Indian consumers are becoming more and more
lifestyle conscious and adapting to concepts of health consciousness and sustainability.
Barriers to entry are getting reduced further by the influx of logistics and delivery companies
and drop shipping and print on demand services.
These evolutions have given a further rise to entrepreneurship in India.
Entrepreneurs now place a heavy emphasis on the product and build companies that are
centred on the brand in order to leverage the power of the ecommerce industry in India.
Hence competition for share of voice is on the rise and Consumer to Consumer
communication becomes an even more important aspect in brands getting that share of
voice.
With so many options to choose from, consumers are spoilt for choice and brand image and
the information they get from other consumers is becoming an increasingly important factor
in purchase decision making.
Electronic word of mouth has also contributed to the rise of the Influencer. The influencer is
a term commonly associated to anyone who can influence another’s thought process
through the trust that the person places in them. Influencers on the internet can help
brands influence consumer purchase decisions and prove advantageous for brands to
increase product adoption and purchases.
Being an influencer is slowly becoming an industry in itself where individuals offer opinions
about products and services which are offered to them in exchange for a fee, and
subsequently use the internet to tell their followers about the same.
All of these factors combined make EWOM a powerful tool to influence consumer buying
behaviour.
While examining the effect of eWOM on brand image and purchase intention, Jalilvand and
Samiei (2012) found the strong influence of eWOM on brand image and purchase intention.
They advocated that favourable eWOM communications enhance customers’ willingness to

purchase, build a positive reputation of the organisation and its products, and minimise
marketing expenses in Iranian automobile industry. Torlak et al. (2014) concluded that

eWOM strongly affects the relationship between brand image and intention to purchase the
mobile phone. An experimental study of Sandes and Urdan (2013) in the context of Brazil
revealed that online reviews (either favourable or unfavourable) influence brand image.
Just as positive EWOM influences the customer's willingness to purchase, negative EWOM
influences the customer’s willingness as well, although it makes customers reconsider and in
many cases pick products made by competitors.
Management of negative reviews decreases the effect on the brand image but did not
influence the purchase intention. Krishnamurthy and Kumar (2018) found that customers
evaluate eWOM information more rigorously and devote additional time with eWOM to
build up a brand expectation/image.
With the sheer size of the market, on the brands side as well as the buyers side, this kind of
study becomes plausible to determine, the impact that EWOM has on consumer purchase
decisions and how it can potentially be an even more powerful medium than other
conventional D2C and B2C digital marketing mediums.
Therefore the study of this subject would be beneficial for brand marketers to determine to
what extent EWOM is gaining ground with consumers, the opportunity it presents to build
brand image further and how much of an impact negative reviews have on a consumers
purchase decision.

Research Methodology.
In order to conduct effective research for the study, it was important to reach out to
relevant stake holders and gather primary data that helps us get a peek into the mind-set of
the consumer and accordingly draw conclusions. As the sample population size is small, this
study also takes information from secondary data and conclusions from similar studies
which have been conducted in the past.
By using both these sources, the study aims to arrive at a plausible conclusion that can
prove useful to Brands and can help them further use the opportunity to drive engaging
conversations with their consumers.
For the ease of understanding, this section of the study has structured the secondary data
available first and has compared the primary data gathered with secondary sources to check
concurrence and whether the hypothesis is correct.
With the increase in purchasing power and increasing access to the internet for the urban
population in Mumbai, online buying has slowly become the norm, especially for utilitarian
goods.
The rise in entrepreneurship has new brands being introduced every day. Fuelled by the
enormous rise of social media and E-commerce aggregators, brands now have the
opportunity to scale quickly.
With the size of the user base in Mumbai and the aforesaid factors, the e-commerce
industry in Mumbai is exploding and is on the rise every day.
For us to understand the impact that EWOM has on customer purchase decisions, it is
imperative we understand the market forces at play. These market forces can be
categorized as follows:
 The current state of the ecommerce industry in Mumbai

 The number of options available to the consumer to purchase from
 The amount of diverse information being thrown at consumers during the day by
brands and the amount spent by brands in online advertising
 The level of trust that consumers have towards the purchases they make online.
 The extent of value consciousness that exists in the mind of the consumer when
making a purchase online

If we were to consumer the current size of the ecommerce industry in Mumbai, as per a
Statista report released in 2017, 65% of Mumbai’s population purchased even the essential
daily items online, second only to Bangalore with 69% people.
The population of Mumbai IN 2021, according to World Population Review is 20.7 million
people. If we consider a growth of even 10% in terms of access to the internet for Mumbai’s
population in purchasing online, the size of the consumer base in Mumbai who purchase
utilitarian goods online is a staggering 15.5 million people.
With ease of shipping goods all over India becoming the norm with logistics companies who
work on a per order basis, it has become easier for brands based anywhere in India to easily
satisfy the needs of these people.
If we were to consider data from Instagram, the biggest social media network currently for
brand engagement, there are 25 million business accounts from India that are vying to get
users attention.
All these facts indicate the following:
The size of the ecommerce market in Mumbai is the second biggest in India and is
exponentially growing along with its population YOY.
The number of businesses and brands are also increasing and the competition to get the
consumers attention is ever increasing.
With 25 Million brands active on Instagram, the number of options available to the
consumer to purchase are multiple in every industry. With the rise of social media and the
lack of barriers to entry within the ecommerce segment, the number of brands and
businesses in India are constantly growing and will continue to grow considerably for the
coming years.
According to IAMAI online retailing reached 12.6 billion dollars in the country last year with
an annual growth increase of 32.63%. As policy and FDI issues are addressed and delivery
logistics further improve, even more growth is expected.
With that many brands active, the amount spent by brands to create content and run online
marketing campaigns is also ever increasing. Hence, the consumer tends to get inundated
with messages where the brand is trying to communicate directly with the consumer and
because of the number of options available, it comes down to the consumer to discern what
product and brand would work best to fulfil their needs.
As Mumbai is a working city, and a maximum number of the internet and online purchasing
audience have a ceiling on the income earned, the population is extremely value conscious.
According to a survey conducted by Boston Consulting Group, utilitarian goods such as

household items and fashion and accessories are the types of goods that Indian Consumers
purchase most. Hedonic goods such as Luxury items and electronics are also purchased.
As per the same report, Consumers in India exhibit a smart shopping orientation and 85% of
Indian Consumers touch up on at least 2 data points about the brand / product/ service
before making the purchase and exhibit information centred shopping behaviour (BCG,
Trends that are altering online shopping in India.)
The above trend indicates that the average online shopper proactively researches
information about the product and touch upon at least 2 or more sources to gather that
information, thus exhibiting strong value consciousness for the money that they spend
online.
In order to help us further research this subject, the data for this research was collected
from multiple sources and is qualitative and quantitative in nature. The data was procured
through the following channels:
1) Primary Research: A survey questionnaire was distributed to 100 participants from

diverse backgrounds in Mumbai and we received 52 responses out of which 7 were
considered invalid. While the general parameters mentioned are the same for all
participants, the diversity in the age group and purchasing power of the participants
provides a general insight into behaviour with respect to EWOM.
2) Secondary Research:
Past Academic Research: There have been many studies on E-WOM conducted
globally and published through research papers. These have been used in order to
collect quantitative and qualitative data both.
Journals and Whitepapers: Market research companies in India have conducted
studies about the impact that EWOM has on online purchases.
General Statistics: The general statistics used have provided us with the size of the
market and certain scales used to measure the impact of EWOM on sales and brand
image.
Case Studies: We have used research from notable case studies about how EWOM
has played a big role in helping brands scale and in some cases where the sales have
dropped.
Articles: Articles published by legitimate sources and newspapers have been used to
create this thesis.
The data gathered has been analysed using qualitative methods
The qualitative approach mainly answers questions such as ‘why,’ ‘what’ or ‘how.’ This is

mainly done to conduct contextual analysis of the different trends which have been part of
research in the past and has been built around that.
As we are studying how messages are interpreted by consumers it is difficult to conduct a

quantitative analysis with certainty, however, we have included certain experiments
conducted in the past to shed light on the phenomenon.
We have tried to link the different data gathered in order to answer some questions that
help us gauge the impact of EWOM on consumer purchase decisions.
This method has been considered the most apt as the subject is more to deal with the
perceptions that consumers have about brands and is more to understand the behavioural
patterns exhibited by consumers while making purchases online.
It is very difficult to quantify what a consumer thinks and the emotions that a consumer
feels when they read reviews and make purchase decisions; hence most of the data
gathered is contextual in nature.
The primary data gathered helps us to assign a percentage value to questions which help us
understand how EWOM affects their purchase decisions and how important it is for a
brands product or service to have good ratings.
To dig deeper and structure this research further, we tried to address a few more pertinent
questions and sought answers for the behaviours exhibited by consumers when making
purchases online, we also sought past reports and studies conducted about the importance
of brand image in online retailing and understand what purchase intention is, what factors
affect purchase intention and whether reviews received is one of the data points tapped by
the consumer and the concept of brand image and whether reviews (EWOM) has an impact
on Brand Image.
For us to understand whether EWOM has an impact on consumer purchase decisions, we

first researched what the current e-commerce landscape is like and what behaviours
customers currently exhibit online when purchasing. How often they purchase, what type of
products / services they purchase and what is the role of EWOM in these purchases.
The steps to conduct this research have been provided below:
 We will understand why customers purchase online and the behaviour they exhibit
when purchasing online. This was an important step in the research process as it
helped understand the motivations that drive people to purchase online and helped
us link the concept of value consciousness to the research, through the behaviour
that they exhibited.

Current E-
Commece
Landscape.
How prevalent is
online shopping
What type of
goods are
purchased
Do they conduct
research before
they buy
 We researched exactly what the EWOM phenomenon is in detail. The research on

this segment aims to find the outlets that are available to the consumers to post
their opinions on. This segment helps understand what media is used, what the
different formats of EWOM are and how prevalent it is along with the role that it
plays in influencing consumer purchase decisions.
What is
EWOM.
EWOM VS
WOM
Where is it
most
prevalent
Types of
EWOM
Role played by
EWOM within
the current E-
Commerce
Landscape
This helped us understand how the concepts of E-Commerce and EWOM interact with one

another.
 In order to understand consumer perceptions of brand image, we need to define

exactly what brand image is from the perspective of online purchasing. We sought
answers for how much of a role brand image plays in purchase decisions and how
consumers arrive at conclusions about brands with context to EWOM.
What is Brand
Image
Consumer
perception of
Brand Image
Why is it
considered
important from an
EWOM context
How do brands
enhance their
image online and
how is it received
 The next part of our research was to understand the impact of official brand
communication against EWOM. We sought answers to the trustworthiness that
consumers have towards official brand communication and how that compares to
EWOM. The intention behind researching this was to understand the degree to
which consumers trust official brand communication when making their purchase
decisions online.

Measures taken by
brands
Official Brand
Communication vs
EWOM
 The next part of our research was to understand what purchase intention is. What
helps a consumer build purchase intention when shopping online and what role
EWOM plays in helping a person build purchase intention?
What is Purchase
Intention
How does a
consumer build
purchase intention
The role of EWOM

in Purchase
Intention
 We conducted research about how the concepts of EWOM, Brand Image and
Purchase Intention are correlated and how they interact with each other. An
understanding of how these concepts interact is the stepping stone for us to
understand as to whether brand image offers a counter effect even if the product
has received negative reviews and to what extent the consumer purchase decision is
based on brand image.

EWOM and Brand
Image
EWOM and
Purchase
Intention
Brand Image and

Purchase
Intention
 After establishing that EWOM does have an impact on brand image and purchase
intention, we research the factors that lead people to post reviews online and what
are the key drivers that encourage people to post online. We researched what is
Positive EWOM and what factors motivate people to share positive reviews and vice
versa for Negative EWOM.
Key Motivating
Factors
What is Positive
EWOM
What is
Negative EWOM
 Understanding how consumers interpret different types of messages helps gather

information for our secondary objective which is to gauge if negative reviews have
an overbearing effect on consumer purchase decisions. Our research focussed
around the idea of human psychology and the absorption of positive and negative
information. This helped us understand how people receive and interpret different
kinds of information.

How consumers
interpret messages
Positive
vs
Negative
Literature Review and Hypothesis Development:
The IAMAI estimates number of online retailers to be over 25 Million across wide range of
categories. This testifies to the efficiencies, lower capital costs and deep out reach that
online market place provides to the retailers. Indian online retail space is following global
trajectory and proving to be sustainable and profitable marketing and distribution model.
IAMAI said that, while technology platforms tend to be run from city centres, the bulk of
logistical management such as go downs and deliveries are being handled from tier 2 and
tier 3 cities. (Varma and Agarwal, 2014).Total number of Facebook, Twitter and LinkedIn
users in India are 270, 27 and 47 million respectively as of July 2018
(http://www.statista.com). As per the Newzoo’s Global Mobile Market Report (2018), with
386.9 million smartphones user and 28.5% smartphone penetration, India is the world’s
second largest smartphone market as of May 2018.
The above data reinforces the fact that Mumbai is an ever increasing hub for ecommerce,
from the buyer’s side as well as the seller’s side and the value of transactions is also ever
increasing.
The Nielsen Global Online Shopping Report 2012 looks at how consumers shop online: what
they intend to buy, how they use various sites, the impact of social media and other factors
that come into play when they are trying to decide how to spend their money.
Summary of the Key Findings
 More than eight out of ten Indian online consumers purchase online.
 More than a quarter indicate that they spend upwards of 11 % of their monthly

shopping expenditure on online purchases
 71 % Indians trust recommendations from family when making an online
purchase decision, followed by recommendations from friends at 64 % and
online product reviews at 29 %
 Half the Indian consumers (50%) use social media sites to help them make online
purchase decisions.
Referring once again to the study conducted by the Boston Consulting Group, utilitarian
goods such as household items and fashion and accessories are the types of goods that
Indian Consumers purchase most. Hedonic goods such as Luxury items and electronics are
also purchased.
Through numerous studies, the buying patterns exhibited for Indian Households especially
nuclear working families showed that women usually are in-charge of online shopping and
ordering at households.
If we consider that analogy, as per factor analysis conducted smart shopping orientation
created maximum impact for women shopping online. Multiple regression results showed
smart-shopping orientation had maximum impact, while enjoyment-orientation; brand-
orientation and fashion-orientation had the least impact. It was found that women in
Mumbai are smart shoppers, and they shop online to save time and money. (Pardeshi and
Khanna, 2021)
With a staggering amount of people purchasing products online and having value conscious
purchase behaviour, the current scenario of the ecommerce industry in general is extremely
competitive and the consumer usually has information at their fingertips.
The amount of information available online is one of the major factors influencing consumer
purchase decisions. More than what is available; with the amount of information being
actively created by brands for products they offer consumers face absorption fatigue which
inadvertently makes them shut off and research information themselves.
The value conscious driven behaviour by consumers makes them take actions that help
them make more informed purchase decisions, be it when purchasing every day household
products or fashionable and luxury items where brand name and image are also some of the
influencing factors.
When buying products online consumers look for information regarding the products which
have been posted online. EWOM is prevalent when communication is posted online using
text, images, multimedia by one consumer and is accessed by another potential consumer
when gathering information to make a purchase decision.
Being consumer based and consumer driven, EWOM is prevalent across all platforms
relevant to where consumers are. This would include Social Media Networks, E-Commerce

aggregators, Brand Websites, Multimedia and Video Streaming Sites, Mobile Apps.
Product reviews and online consumer to consumer communication is a widely

acknowledged as a non-commercial and trustworthy source of information that has a
massive effect on consumer attitude formation and purchase behaviour.
Another Perspective being that, with the rapid growth of the internet, eWOM has emerged
as a way for consumers to engage in non-commercial advertising, share and discuss direct
experience about the specific product and brand (Chevalier & Mayzlin, 2006).
When eWOM about a product is positive, consumers are likely to consider the product for
the consumption purpose and vice-versa (Park and Lee, 2008).
In general, communication theory posits that EWOM can function as both informants and
recommenders because they may provide user-oriented product information as well as
recommendations by previous consumers (Park, Lee, & Han, 2007). The aspect of
recommendations by previous consumers is data point that is actively sought by consumers
who are making a purchase. Information distribution and recommendations for brands are
usually driven by Influencers who have a large following across different channels and ones
which are encouraged by brands to share reviews. The context to how both these types of
communication are perceived by actual consumers is something which has been addressed
within the later parts of this paper.
These inform and recommend functions can play a powerful role because eWOM are
consumer-governed channels, sender is independent, information is considered as more
trustworthy (Brown et al., 2007), effectiveness is higher than the traditional marketing
activities (Trusov et al., 2009) and reduces the consumer’s risk (Hennig-Thurau & Walsh,
2004).
Social media and product reviews are the most prevalent form of eWOM and consumers
seek such platforms when gathering pre-purchase product information and forming
purchase intentions (Schindler and Bickart, 2005; Sen and Lerman, 2007; Adjei et al., 2009;
Zhu and Zhang, 2010).
Researchers argued that marketers must pay attention to eWOM because of a wide
coverage for an unlimited period of time (Hennig-Thurau, et al. 2004), cost-effective
(Dellarocas, 2003), prompt communication (Huang et al. 2011), and thus can improve brand
awareness and image among consumers (Yang, 2013b).
EWOM is extremely popular, and thus if eWOM is managed well, it has a huge potential to
transcend a product from a small market to a much larger one (Park & Kim, 2008)
Brand image is a crucial competitive advantage that helps in creating value through
differentiating the brand, forming purchasing rationales, constructing sense and feeling, and

a significant value for organizations (Aaker, 1996; Keller, 2009).
It is established when consumers develop ideas, feelings, and expectations towards certain
brands as they learn, memorize and become accustomed to them (Keller, 1993). Since the
fundamental purpose of a brand is to provoke confidence, feeling of trust, strength,
durability, security and exclusivity (Aaker, 1996; Keller, 1993), thus it can be considered an
important means of decreasing uncertainty and providing useful information that can help
in directing consumer decision-making processes (Erdem et al., 2002).
Keller (2003) advocated that a positive brand image can be established by connecting the
unique and strong brand associations with consumers' memories about the brand and
supported by effective marketing campaigns.
Purchase intention can be considered as one of the main components of consumer cognitive
behaviour that shows consumer’s conscious plan to make an effort to purchase a product
(Spears and Singh, 2004)
Jalilvand and Samiei (2012) examined the effect of eWOM on brand image and purchase
intention in Iranian automobile industry and found that eWOM is one of the most effective
factors influencing brand image and purchase intention. They advocated that positive
eWOM helps in increasing customers’ purchase intentions, creating a favourable image of
the organization and its brand, and reducing promotional expenditures. However, while in
principle this theory suggests the influence of positive eWOM over negative eWOM, it is
interesting to note that automobiles are hedonic products and past studies conducted show
that the perception that consumers have towards reviews about hedonic products as
against utilitarian products are different as we have gathered from the data we have
collected.
Researchers indicated the presence of a significant relationship between brand image and
purchase intention (Shukla, 2010; Wu et al., 2011; Lien et al., 2015). It is interesting to note
then, that many a times consumers seek out information as per the brand that they might
have heard of and in that sense, it becomes even more important for the brand to manage
consumer reviews which complement the brand image that the brand maintains.
As per a study by Moe and Schweidel, 2013 a majority of the people who access online
EWOM are lurkers, they usually only access information to read what others have posted
and do not usually post online. They only gauge what the general opinion is and read
reviews before purchasing. While with traditional word of mouth, if a person was
dissatisfied with a product or service, they would speak with their friends and family and tell
them to not purchase the product or something on those lines. But it has been noticed with
EWOM that consumers tend to post a lot of positive reviews online as well.
When eWOM about a product is positive, consumers are likely to consider the product for

the consumption purpose and vice-versa (Park and Lee, 2008). Positive EWOM can be
considered consumer generated content that relates to brand and product experiences in a
positive way whereas negative eWOM is when consumer generated content is consumed by
other consumers and the sender related to negative brand and product experiences.
Psychologically, Negative patterns have longer lasting effects on the human mind and tend
to have recall. We have seen this with how media houses and news channels continue to
portray news negatively, the scientific explanation being they target the viewers Amygdala
which is built to absorb negative information faster than positive information. This same
effect can be considered as being evident in online purchasing as well.
Baumeister, Bratslavsky, Finkenauer and Vohs (2001) argued that “bad things will produce
larger, more consistent, more multifaceted, or more lasting effects than good things.
The greater power of bad events over good ones is found in everyday events, major life
events (e.g., trauma), close relationship outcomes, social network patterns, interpersonal
interactions, and learning processes
Thus it is Hypothesized that:
H1 –EWOM has an impact on consumer purchase decisions.
H2 – Negative EWOM has a longer lasting impact than Positive EWOM.

Data collection and analysis:
Primary Data Gathering: Consumer Perspective.
In order to collect primary data, a survey questionnaire was created and distributed to
respondents from the target demographic.
These respondents were chosen at random through the researcher’s personal network and
included individuals from similar strata of society. The one condition exploited was for them
to be active across social media and active purchasers of online goods and services.
The questionnaire was distributed to 100 respondents out of which 52 responses were
received. 7 were dismissed as being not admissible.
All respondents come from diverse backgrounds and are working professionals.
The questions that were asked in the survey are as follows:
How often do you purchase goods online?
All respondents have a fixed income and the frequency of online purchasing helps us discern
a part of the behaviour exhibited by consumers when purchasing online.
The advancement in technology and the corresponding increase in information about

ecommerce aggregators and brands, and most importantly the convenience that shopping
online offers and the frequency of purchase helps raise a good argument that even the

smallest of daily household items are purchased by users online.
In order for us to draw effective conclusions about how much of an impact reviews have,
we needed to understand how often people purchase goods online.
A higher frequency of goods purchased online each month would indicate that the customer
spends a considerable amount of their time purchasing online and they buy a major portion
of things for daily use online.
This helps us understand contextually how engrained online purchases are amongst
customers and helps us draw conclusions about the perception of online purchases amongst
customers.
Out of the responses received,
 11% indicated they purchase online once a week,

 62% users indicated they purchase online multiple times in each month and
 20% indicated that they buy something online at least once a month.
What type of goods do you purchase online?
We asked respondents what type of goods they most frequently purchased online in order
to understand the types of goods that users shop for most online.
The aim is to identify what type of goods the respondents purchased online. This helps us
understand the extent to which the type of goods purchased online impact the daily lives of
these respondents and what is the degree of importance of that purchase.
The respondent’s feedback was a healthy mix of household and personal use items.
The internet has made it very easy to represent visually the motivations which can drive
people to purchase products online which has led to a diverse amount of purchases made.
The types of goods purchased online are fairly distributed and there exists a healthy mix of
different product categories. It is interesting to note that these are daily use items and a
majority are personal use items for which one of the biggest motivations would be to find
the best fit to enhance the consumers lifestyle and image.
What is the maximum amount you have spent on online transactions thus far?
The size of the online transaction helps us understand the degree of trust which needs to be
established for the consumer to part with their money in order to purchase online.
Lack of trust is one of the most frequently cited reasons for consumers not shopping on the
Internet (Lee and Turban, 2001)
One of the criteria for collecting survey responses was that responses be received from

working class professionals who have a ceiling on the amount of income they receive.
The larger the size of the transaction, the more likely it is for them to conduct appropriate
research before purchasing online.
The currency measured is INR as the survey respondents are from India.
 60% participants spend more than 10,000 rupees purchasing goods online.
 24% spend is between 5000 – 10000
 11.1% said they spend above 1000
What kind of brands do you purchase from online? Big or Small?
To address the matter of brand image and the role that it plays in the consumer purchase
decision, we asked the respondents whether they purchase only from known brands with a
big social media presence and community or do they also purchase from small brands which
are new and are currently in the process of building their brand image.
We wanted to gauge how big a role brand image plays when a consumer decides that they
are going to purchase a product or service online.
The idea was to understand whether they prefer only the large brands that have large
advertising spends backing their efforts or would they go with even the smaller brands.
This in turn would help us gauge what impact large advertising spends has on purchase
decisions and whether EWOM is a bigger driver in people making purchase decisions online.
93% respondents purchase from either, depending on the product being purchased. This
indicates that there exists an even playing field now and the main driver for purchase
decisions comes down to something else besides brand image and having large advertising
spends.
Do you compare multiple brands selling the same or similar products before purchasing?
To understand the value consciousness involved within the purchase decisions, we asked
respondents on whether they compare different brands before purchasing online.
The objective was to find out if they exhibit smart shopping orientation for the purchases
they make online basis the products that they purchase, which are mostly utilitarian in
nature.
As they are expected to part with their income, whether or not they compare different
brands offering the same or similar product / service before purchasing helps us understand
whether or not consumers conduct thorough research before purchasing anything online.
 66.7% people compare multiple brands before purchasing online

 29% conduct research if the purchase is expensive.
The limitation here is how the term expensive is defined by each individual is very difficult to
gauge on account of different incomes.
What is the biggest factor that helps you distinguish between multiple brands being
considered?
In order to understand what the biggest data point is that helps respondents distinguish
between the brands that they purchase from, gathering information on the sources that the
consumers use was important.
The respondents were asked to choose from multiple options which range from Product
Reviews to Brand Image and size to brand packaging.
The above question was left open ended by adding a response where the consumer could
add their own input.
The response received indicates that product reviews are the major driver in helping
consumers distinguish between different brands with 64% respondents choosing that
option.
It was interesting to note that the second highest response is the past experience received
from one brand as compared to the other.
How important are product reviews when you are purchasing online?
While we did understand that product reviews are one of the key drivers when consumers
make online purchase decisions, we also wanted to understand how important consumers
think product reviews are.
 67% respondents consider product reviews very important when purchasing

 30% say they are important but not compulsory.
 3% said they were not important.
Do you actively research reviews when purchasing products or do you accept what it
mentioned on the page at face value?
We wanted to check how active consumers are to search for reviews when they purchase
online. If consumers actively search for reviews online about a product or service, that
would corroborate the data collected so far and state to a larger degree the importance of
electronic word of mouth in influencing purchase decisions.
 69% respondents indicated that they actively search for reviews online
 31% read the reviews which were on the page itself

How many reviews for you read before purchasing?
The amount of reviews consumers read before making a purchase decision would tell us
how much time and effort consumers invest within making a purchase decision.
This once again indicates the value consciousness involved within the purchase decision and
the amount of time consumers spend making that purchase decision.
 78% respondents read between 5-10 reviews at least before making a purchase
decision.
 16% respondents read at least 5 reviews before them purchase online.
This further corroborates the importance of product reviews on online purchases.
On a scale of (1-5), 5 being the highest, how important is it for a brand to have a 3+ rating
online before you purchase?
We used a Likert-type scale to understand how important the rating that the brand has to
the intention to purchase exhibited by the customer.
Ratings online are collected through the reviews that customers leave for a brand or
product online.
Online platforms and reviews websites then collate the data and give the brands average
ratings.
 Over 50% of the respondents chose 5 and indicated that it is very important for a
brand to have a 3+ star rating online for them to purchase.
 The next biggest statistic is 15 respondents picked 4 which is also considered as
being extremely important.
This indicates that brand ratings have a major role to play in influencing purchase decisions
and having a rating below 3 can be detrimental to the brand with the consumers thinking
the brand is not good enough and deciding not to purchase from it.
On a scale of (1-5), 1 being the lowest, how likely are you to purchase from a brand that
you have purchased from in the past but has since received bad reviews about its
product?
Again using a likert-type scale, we tried to understand whether consumers would still
purchase from the brand if it has not received favourable reviews but they themselves have
used the brand product/service in the past and have had a favourable experience.
The responses received indicated that if their personal experience has been pleasant
enough, then they would not mind purchasing from the brand once again. Out of 45
responses received,

 16 selected 4
 7 selected 5
 13 selected 3
 4 selected 2
 5 selected 1
How often do you post a review about products you purchase online?
The respondents were asked how likely they were to post reviews online after purchasing
the product.
It would help us understand how widespread the use of EWOM is from a senders
perspective and also help us check whether consumers were more likely to post negative
product reviews as against positive ones on account of unfavourable experiences with the
brand.
This would help us understand whether the phenomenon of posting negative feedback is
more widespread and motivation driven than posting positive reviews.
The respondents gave mixed responses, with the largest chunk of
 42% respondents saying that they are likely to post reviews only when the product
is not up to the mark and their personal expectations.
 13% respondents post reviews always,
 8.9% join conversations already taking place and
 36% respondents never post reviews.
Brands invest money to have influencers try and review their products on their blogs, how
much of an impact does such a review have on your purchase decisions?
Brands have implemented the practice of having online influencers review their products or
services.
Online influencers usually are people with large followings of consumers who trust their
judgements when it comes to product reviews.
Our intention behind asking this question is that while this can be considered electronic
word of mouth as well, we wanted to understand how this practice is perceived by
consumers and whether it creates an impact on purchase decisions when measured against
reviews from actual consumers who have used the product and have posted reviews about
the product.
The trust element plays a big role in online purchase decisions.
We wanted to find out to what degree consumers who purchase products trust influencer
reviews when compared with reviews by actual product users.

The respondents indicate that the impact of influencers is very measured to say the least.
 31% respondents do not trust those reviews at all

 36% respondents receive those reviews but still depend on reviews from others
like them.
 27% respondents depend only on reviews from actual product users.
Do you actively recommend brands and products that you personally use to your friends
and family?
As stated earlier, the concept of WOM is how brands gain recognition and the degree to
which respondents are likely to recommend brands and products they have personally used
to friends and family plays a big role in brands and products gaining adoption.
This would indicate whether pleasant brand experiences help mitigate risks involved from
getting unfavourable brand responses and whether brands need to assign a greater
emphasis to customer satisfaction and service.
The responses received were fairly balanced.
There is a limitation to gauging what these responses mean and secondary data gathered
will tell us whether that mitigates the risk of negative electronic word of mouth and more
emphasis should be laid on customer satisfaction and service by brands.
If you were asked to choose either or, Official brand communication or Brand / Product
reviews left by users, which one would you trust more?
This is a key indicator whether a larger chunk of digital strategy for brands should be
focussed towards building a more positive online reputation as against spending a larger
chunk of their focus and resources towards conventional and online advertising.
In an age where technology is evolving rapidly, the concept of EWOM is taking on new forms
daily.
From just ratings, it has evolved to text, visual and video content and it is important to
understand if the trend is slowly moving towards brands including it as a major portion
within their overall communication strategy online.
The respondents overwhelmingly state that brand/product reviews online by users are a far
better indicator for them to form a perception about a brand when gauged against official
brand communication.
Since the surveyed respondents are a small group we will gather secondary data to further
corroborate this finding.
If a brand is offering a 50% discount on a popular product category, but the reviews for

the product are <3*, would you take the risk and try out the product?
We wanted to check if price can be one of the measures in helping brands mitigate the
impact created by negative electronic word of mouth.
As indicated, a large chunk still might only maybe purchase the product.
This is limited however and we will gather data from secondary sources to understand
whether price is a factor in mitigating the risk involved with negative reviews.
Primary Data Gathered: Brands Perspective
While understanding whether EWOM is a relevant and impactful tool within the e-
commerce industry in India, it was not only important to understand the consumers
perspective but also brands perspectives.
Brands which are within the ecommerce space were provided a survey and telephonic
interviews were conducted in order to understand their perspective.
Brands operating within diverse industries were asked to participate through a series of
telephonic interviews and email survey responses.
While a total of 20 brands were interviewed through both these mediums, online responses
received were only 11.
The criterion set makes this information admissible.
All these brands have a marketing budget upwards of INR 5,00,000 per month and occupy a
large share of voice within their respective industries.
The brands interviewed included
 The Whole Truth Foods

 Tuborg Beer
 Naagin Hot Sauce
 Boheco Naturals
 Nykaa
The questions asked were as follows:
On a scale of 1-5, how important are user reviews for your brand?
This helped us understand the degree to which leading brands in their respective industries
are giving importance to the concept of EWOM.
9 out of the 11 respondents picked 5 and the remaining 2 picked 4.

It is estimated, every 10 positive reviews lead to a 5% increase in sales, do you agree?
The intention was to understand if brands believed positive reviews lead to an increase in
sales.
 5 respondents picked 3
On a scale of (1-5), how much of an impact do Negative reviews create on Brand Image
according to you.
In order to get some information about the extent to which negative reviews do affect
brand image according to established brands, this question was put forth to brands.
The responses from majority of the respondents indicated that they believe negative
reviews do create an impact on brand image.
According to you which kind of review is considered as being most helpful for the brand?
 Review by Influencer (Paid)

 Review by Micro Influencer (Unpaid)
 Review by actual product user
82% of the respondents said a favourable review by an actual product user is most helpful
for their brand. 18% said an unpaid review by a micro influencer is most helpful.
The brands also attested that they have used the reviews received as content for their
marketing efforts and actively invest budgets in using user reviews as the actual content for
their marketing campaigns.
By doing so, they notice an increase in the engagement and sales that the brand receives
online thus further emphasizing the importance of consumer reviews.
Secondary Data Gathered
In order to further study the effect of EWOM on consumer purchase decisions, our research
included gathering data from various past studies where experiments have been conducted
to test the efficacy of online reviews and specifically the impact of EWOM and if Negative
reviews have a higher impact on consumer purchase decisions than positive reviews.
Our secondary research was focussed more towards understanding consumer psychological
forces that are usually at play when a consumer does decide to purchase anything online.

While past studies conducted on the subject of EWOM specifically are limited, there is a vast
amount of material available to ascertain consumers attitude towards the trust in the
information received, how messages are decoded by consumers and how they perceive
such messages.
Through primary research, the intention is obviously to understand such patterns, but since
the size of the respondents is limited, secondary research helps ascertain the same from a
wider lens.
The secondary data gathered was as follows:
The role of trust in online purchase decisions.
Trust constitutes a major psychological barrier to the adoption of electronic commerce.

Prior studies (Cheung and Lee, 2006; Gefen, Karahanna and Straub, 2003; Pavlou, 2003;
Pires, Stanton and Eckford, 2004) have demonstrated, with empirical evidence, the
importance of trust in online purchasing. Komiak and Benbasat (2006) further built on
belief-attitude-intention framework and proposed a trust model of electronic commerce
adoption.
They distinguished two types of trust, namely cognitive trust and emotional trust. Cognitive
trust basically comprises of the beliefs of online shopping, while emotional trust reflects the
trusting attitude.
Nielsen’s (2015) global consumer survey showed that 66% of consumers trust other
consumers’ opinions in the form of online consumer reviews, or electronic word of mouth
(eWOM).
Scholarly findings show that eWOM can influence consumers’ perceptions and behaviours
online – including their brand trust and purchase intentions (e.g. Cheung and Thadani 2012;
Sparks and Browning 2011).
In a study conducted by Jang, Prasad and Ratchford in 2012, they found that consumers
make use of product reviews more actively at the consideration stage than at the choice
stage. The results of that study indicated that managers should make product review
information available at the beginning of the search process and encourage satisfied
customers to post reviews.
Valence is a key concept used in eWOM studies (King, Racherla, and Bush 2014).
In a study conducted by Maslowska, Malthouse and Vishwanathan at the Northwestern

University in 2017, they found a a four-way interaction with the effect of valence on
purchase probability strongest when (1) there are many reviews, (2) the customer reads
reviews, and (3) the product is higher priced.
Negative valence, defined as unfavourable feelings expressed toward the product or brand,
leads to negative brand evaluations and lower purchase intentions (e.g. Cheung and Thadani

2012; Lee, Rodgers, and Kim 2009; Lee and Youn 2009; Sparks and Browning 2011).
Much of the studies examining the effects of valence in product reviews have examined
consumer processing and effects of negative valence.
The perception of consumers towards online product reviews
Consumers hesitate to buy experience products online because it is hard to get enough
information about experience products via the Internet. Online consumer reviews may
change that, as they offer consumers indirect experiences about dominant attributes of
experience products, transforming them into search products. In an experiment conducted
by Bae and Lee in 2011, they found that online reviews from the community are considered
the most credible sources of information for consumers when trying experience based
products such as services, hotels etc.
For utilitarian products, through multiple studies conducted, it has been found that while
consumers do use online reviews actively and they influence their purchase decisions
consumers perception towards online reviews is in context with whether the consumer
perceive the review as being from an actual product user.
Consumers have become too seasoned in online purchases and information absorption
which helps them perceive reviews better. This has led to consumers being able to
distinguish between reviews by an actual product user as against a review posted by a brand
through an influencer.
In one such study conducted by S.Ansari and S.Gupta in 2021, the results indicated that
reviews which articulately put into focus flattery and less contextual text tend to come
across as deceptive.
The impact of Negative EWOM vs Positive EWOM
As per a study conducted by Zhou, Liu and Tang, in 2013, consumers tend to show a
negativity bias when negative reviews dominate the foreground of the product page.
Weisstein, Fei L.,Song, Lei ,Andersen, Peter , Zhu, Ying in 2017 proposed that negative
reviews tend to have a stronger impact on consumers who have a purchase intention than
with consumers who are just browsing. But considering, conversions for a brand are the end
goal, it can be assumed that the former is more detrimental to a brand than the latter.
As negative reviews usually are emotionally charged highlighting consumers’ experiences

the receivers of such messages tend to connect more on a personal level with such reviews.
While the same can be said about positive reviews.
The theory is that psychologically, negative effects across a broad range of subjects have a
higher impact on consumers and people in general that positive effects. To elaborate
further, through multiple studies conducted in the past to do with human psychology, we
can justifiably argue that anything negative has far wider reaching effects than positive and

it tends to penetrate the mind deeper. The human mind is built to absorb negative
information first as its defence system and it tends to process negative information far
stronger than positive information.
Baumeister, Bratslavsky, Finkenauer and Vohs (2001) argued that “bad things will produce
larger, more consistent, more multifaceted, or more lasting effects than good things.
The greater power of bad events over good ones is found in everyday events, major life
events (e.g., trauma), close relationship outcomes, social network patterns, interpersonal
interactions, and learning processes. Bad emotions, bad parents, and bad feedback have
more impact than good ones, and bad information is processed more thoroughly than good.
In the information processing literature, Fiske (1980) showed that negative information is
more influential than positive information. However, there exists little quantifiable research
on consumer perceptions of positive versus negative eWOM as yet. The impact of negative
electronic word-of-mouth on consumer purchasing decision is not very well understood.
As per a research paper released by Cheung and Lee in 2008, they compared positive and
negative review impacts through a laboratory experiment and found that Consumers tend
to pay more attention to Negative online reviews than positive ones.
Past research on traditional word of mouth has shown that consumers pay more attention
to negative information than positive information. They also tend to weight negative
information more than positive information during evaluation (Herr, Kardes and Kim, 1991).
How is Negative EWOM received and deciphered by consumers?
There have been select studies conducted in the past that allow us to decipher how
consumers receive the online reviews posted about a brand. Specifically if we were to
consider negative online reviews posted, past studies conducted indicate that consumers
tend to receive online reviews about utilitarian products as being driven by external forces
such as the product actually being bad and tend to sympathise with the reviewer, thus
believing that the negative reviews are to do with dissatisfaction from the product and not
out of something personal.
Utilitarian products are those products which are used by consumers as routine products for
everyday use.
When a customer posts reviews about hedonic products, negative reviews are received in a
way where consumers believe that it is more to do with how the product has been received
by the consumer and motivation for the review is driven more internally than anything to do
with the company or the brand. In this case depending on the product that is being sold, the
brand can to a considerable extent mitigate risks by maintaining a strong brand image.
Hedonic products are those products which can be considered as being luxury and are
purchased out of choice.

In a study conducted in 2007 by Sen and Lerman, they tested this theory through a couple of
laboratory experiments. Both types of studies showed that product type moderates the
effect of review valence, and readers exhibit a negativity bias for utilitarian product reviews
only. Furthermore, the lab studies showed that the reader’s attributions about the
motivations of the reviewer mediate the effect of this moderation on their attitude about
the review. They found that compared with the utilitarian case, readers of negative hedonic
product reviews were more likely to attribute the negative opinions expressed, to the
reviewer’s internal (or non-product related) reasons; and therefore are less likely to find the
negative reviews useful. However, in the utilitarian case, readers were more likely to
attribute the reviewer’s negative opinions to external (or product related) motivations, and
therefore find negative reviews more useful than positive reviews on average.
Hedonic goods tend to provide a lot more scope to brands to communicate as they invite
consumers’ attention when they purchase and consumers tend to research relevant
material actively before making a purchase. Utilitarian goods tend to attract a lesser
investment of time on behalf of the consumer, in which case the dependency on product
and customer reviews is high. In that case, negative reviews are automatically perceived as
being a product of faults by the brand selling the product / service.
What motivates consumers to post online about Brands and is the impact created by
negative reviews higher?
While through our primary research, we have gathered to a certain extent that consumers
of products/services purchased online tend to exhibit a bias towards posting only when they
have had an unfavourable experience with the brand, we gathered secondary data to
further corroborate our findings.
As per a study by Moe and Schweidel,2013 a majority of the people who access online
EWOM are lurkers, they usually only access information to read what others have posted
and do not usually post online. They only gauge what the general opinion is and read
reviews before purchasing. While with traditional word of mouth, if a person was
dissatisfied with a product or service, they would speak with their friends and family and tell
them to not purchase the product or something on those lines. But it has been noticed with
EWOM that consumers tend to post a lot of positive reviews online as well. Here is where it
gets interesting.
They ran a test through which they created two environments, one was a favourable
environment with positive reviews and the other was a non-favourable environment with
negative reviews. Each of these two environments had low involvement reviewers and high
involvement reviewers. They observed that in a non-favourable environment when low
involvement consumers would post a negative review about a brand/product, there was a
high number of positive reviews from high involvement reviewers. The same trend was
noted in a positive environment where when low involvement reviewers would post a
positive review about a brand the high involvement reviewers would negate that with a
negative review.
The motivation found was that high involvement reviewers exhibit a certain bias towards

being projected as experts and hence tend to contradict what the general consensus built
about a certain product is.
The high involvement reviewers tend to have a higher number of followers, and when they
do post negative reviews about the brand, it not only has far reaching effects for the brand
when their followers see the same, but also as they position themselves as experts, their
review showing on the page can create a large impact on brand image and purchase
intention.
Revisiting why consumers refer to online reviews.
eWOM provides information about brands experiences that hardly are available from
organisation-controlled sources, which makes this source of information particularly useful.
When eWOM communication about a brand is favourable, customers are expected to
consider the brand for the consumption purpose and vice-versa (Park and Lee, 2008). In
general, communication theory hypothesises that eWOM provides user-oriented product
information, reviews and recommendations by previous shoppers and thus, can act as both
informant and recommender (Park et al., 2007).
These inform and recommend function can play a powerful role because eWOM are
consumer governed channels, sender is independent, information is considered as more
trustworthy (Brown et al., 2007) effectiveness is higher than traditional marketing activities
(Trusov et al., 2009) and reduces the consumer’s risk (Hennig-Thurau and Walsh, 2004).
Social media and product reviews are the most prevalent form of eWOM and consumers
seek such platforms while collecting initial purchase information about the product and
forming purchase intentions (Schindler and Bickart, 2005; Adjei et al., 2009; Zhu and Zhang,
2010). Researchers argued that marketers must pay attention to eWOM because of a wide
coverage for an unlimited time span (Hennig-Thurau et al., 2004), cost-effective (Dellarocas,
2003), prompt communication (Huang et al., 2011), and thus, can improve brand awareness
and image among consumers (Yang, 2013). eWOM is extremely prevalent, and thus, if this
form of communication is managed effectively, it has an enormous potential to transcend a
product from a small market to a significantly larger one (Park and Kim, 2008).

Findings
H1 –EWOM has an impact Consumer Purchase Decisions.
Through the primary data gathered from the consumer’s side, it becomes evident, that
while consumers are extremely active with online purchases, they are also value conscious.
Today’s consumer can be considered as being bold and open to trying new products and
experiencing trendy and fashionable brands, but they expect to get value for the money
that they spend.
This value consciousness drives consumers to research before making any purchases.
In conducting this research, consumers have many sources that they can access to get that

information.
Brands invest millions of rupees each year in content creation which helps them distribute
details regarding prepositions that the customers might have and helps them address the
What, Why, How about their product.
Brands also invest in online advertising, a medium that has revolutionized the way
advertising takes place. This has led to consumers being fed information constantly about
multiple products by multiple brands.
Consumers online are also exposed to reviews and product updates by influencers that are
sanctioned by brands to speak about the product.
All of this information is put across in different formats using attractive text, static imagery
and dynamic multimedia.
With how seasoned consumers have become with online purchasing consumers discern and
receive this information and subject it to more scrutiny than before.
Other factors at play are the number of brands and competition within every industry and
the trust factor involved in purchase decisions by these value conscious consumers.
Consumers hence, usually turn to reading the reviews which the product has received as the
final data point before making a purchase decision.
It is found, that the trust factor involved with reviews posted by an actual product user
tends to be higher with consumers due to an emotional connect that develops between a
person who has already used the product and a person who might want to buy that
product.
There are some considerations however, as brands have become creative with their
marketing initiatives. Several studies conducted posit that besides consumer product
reviews, product price points tend to influence purchase decision and also counter influence
buying decisions.
Hence it can be plausibly hypothesized, that EWOM does have an impact on consumer
purchase decisions and influences consumers more than Brand to Consumer
communication but dependent on the product type that can change.
The highest impact of EWOM has been noticed in experience based industries and utilitarian
products. In the case of hedonic products the impact of EWOM is limited and brand image
tends to take precedence as it becomes a statement of luxury.
With respect to Mumbai, it becomes evident from Primary data gathered that this
hypothesis is correct as stated by the respondents. They tend to refer to product reviews
before making online purchases and online reviews tend to influence their purchase

decision.
H2 –Negative EWOM have a higher impact than Positive EWOM?
The ratio of Negative reviews received by a product tend to be low as compared to the
positive ones. It can be said that consumers who are visiting the page with an intent to buy
tend to get deterred, if negative reviews dominate the first few reviews.
However, it cannot be conclusively stated and quantified that the effect of the negative
review is higher than that of the positive review. Consumers exhibit behaviours where they
do appreciate the honesty of reviews by actual product users and in that sense, it becomes
plausible, that both positive and negative reviews can be looked at objectively by
consumers.
Brands work very hard to offset the impact of negative reviews by discounting measures
and selling product benefits. They also encourage users to post reviews about their
experiences.
It cannot be conclusively ascertained if Negative reviews have a higher impact than positive
reviews, hence this hypothesis is not correct.
Suggestions and recommendations
In order to counter act these impacts, there are certain measures that brands can
implement within their workflow
 A very strong customer retention framework and customer service should always be
the key driver with regards to any dispute.
 Actively ask users to share reviews about their products and be active across
platforms to respond to any queries that users might have.
 Take active measures to maintain a very strong presence online and offline.
 Customer retention is key and consumers tend to be loyal to products they use
regularly especially in the case of utilitarian goods, hence it is important to take
active measures to keep in touch with users through media available.
The sources of these recommendations are a part of the primary data gathered.
Bibliography
The impact of online customer reviews (OCRs) on customers' purchase decisions: An

exploration of the main dimensions of OCRs
The Impact of User – Generated Content (UGC) on Product Reviews towards Online
Purchasing – A Conceptual Framework

Product type and consumers’ perception of online consumer reviews
Do the characteristics of online consumer reviews bias buyers’ purchase intention and
product perception? A perspective of review quantity, review quality and negative review
sequence
Do review valence and review volume impact consumers’ purchase decisions as assumed?
Customer perception of the deceptiveness of online product reviews: A speech act theory
perspective
The Role of Company Reputation in Mitigating Negative Word of Mouth
Ten trends that are altering consumer behaviour in India – Boston Consulting Group
Electronic Word-of-mouth marketing in E-commerce based on Online Product Reviews
The Influence of Electronic Service Quality and Electronic Word of Mouth (eWOM) toward
Repurchase Intention (Study on E-Commerce in Indonesia)
How consumers evaluate E-WOM messages
The Influence of E-Word-Of-Mouth on the Consumer’s Purchase Decision: a Case of Body

Care Products
E-commerce in India - statistics & facts – Statista Report
Number of digital buyers in India from 2014 to 2016, with forecasts until 2020 – Statista
Report
Is negative eWOM more influential than negative pWOM?
Organizational Usage of Social Media for Corporate Reputation Management
Word of mouth communication within online communities: Conceptualizing the online

social network

Temporal Contiguity and Negativity Bias in the Impact of Online Word of Mouth
The Effect of Online Consumer Reviews on New Product Sales
Influence of Image and Familiarity on Consumer Response to Negative Word-of-Mouth

Communication About Retail Entities
Fact and Fallacy in Retention Marketing
Cross‐cultural examination of the relationships among firm reputation, e‐satisfaction, e‐

trust, and e‐loyalty
Market Mavens in Social Media: Examining Young Chinese Consumers' Viral Marketing
Attitude, eWOM Motive, and Behaviour
The Digitization of Word of Mouth: Promise and Challenges of Online Feedback Mechanisms
Electronic word-of-mouth via consumer-opinion platforms: What motivates consumers to

articulate themselves on the Internet?
The effect of electronic word of mouth on brand image and purchase intention: An empirical
study in the automobile industry in Iran
Effects of Word-of-Mouth versus Traditional Marketing: Findings from an Internet Social

Networking Site
Positive, Negative or Not at All? What Drives Consumers to Post (Accurate) Product
Reviews?
The impact of brand credibility on consumer price sensitivity
Annexure

Primary Data Gathered | Consumers

Primary Data Gathered | Brands


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A study of the effects of E-WOM on

Consumer Purchase decisions of

Irfan Morbiwala | Tingtong.marketing 1

Irfan Morbiwala | Tingtong.marketing 2

Sr No. Particulars Page No.

Irfan Morbiwala | Tingtong.marketing 3

Primary Objective: To study the impact of E-WOM on consumer purchase decisions of

Irfan Morbiwala | Tingtong.marketing 4

Irfan Morbiwala | Tingtong.marketing 5

Why 25-45 years?

The targeting of the sample population is based on the following parameters:

 Access to smartphone and internet

Irfan Morbiwala | Tingtong.marketing 6

The scope of the Primary Data gathering is designed to find out

 They depend on reviews when making their purchases online

 Gathering relevant info that helps explain EWOM better

Limitations of the study:

 Sample population is size is small in comparison to the overall number of users.

Irfan Morbiwala | Tingtong.marketing 7

That was before advertising and print media came along.

This phenomenon is known as Electronic Word of Mouth (E-WOM); Electronic word of

Irfan Morbiwala | Tingtong.marketing 8

Irfan Morbiwala | Tingtong.marketing 9

These evolutions have given a further rise to entrepreneurship in India.

They advocated that favourable eWOM communications enhance customers’ willingness to

Irfan Morbiwala | Tingtong.marketing 10

Irfan Morbiwala | Tingtong.marketing 11

 The current state of the ecommerce industry in Mumbai

Irfan Morbiwala | Tingtong.marketing 12

All these facts indicate the following:

According to a survey conducted by Boston Consulting Group, utilitarian goods such as

Irfan Morbiwala | Tingtong.marketing 13

1) Primary Research: A survey questionnaire was distributed to 100 participants from

The data gathered has been analysed using qualitative methods

Irfan Morbiwala | Tingtong.marketing 14

As we are studying how messages are interpreted by consumers it is difficult to conduct a

For us to understand whether EWOM has an impact on consumer purchase decisions, we

The steps to conduct this research have been provided below:

Irfan Morbiwala | Tingtong.marketing 15

 We researched exactly what the EWOM phenomenon is in detail. The research on

Irfan Morbiwala | Tingtong.marketing 16

 In order to understand consumer perceptions of brand image, we need to define

Irfan Morbiwala | Tingtong.marketing 17

The role of EWOM

Irfan Morbiwala | Tingtong.marketing 18

Brand Image and

 Understanding how consumers interpret different types of messages helps gather

Irfan Morbiwala | Tingtong.marketing 19

Literature Review and Hypothesis Development:

Summary of the Key Findings

Irfan Morbiwala | Tingtong.marketing 20

Irfan Morbiwala | Tingtong.marketing 21

Product reviews and online consumer to consumer communication is a widely

Irfan Morbiwala | Tingtong.marketing 22

Irfan Morbiwala | Tingtong.marketing 23

Thus it is Hypothesized that:

H1 –EWOM has an impact on consumer purchase decisions.

H2 – Negative EWOM has a longer lasting impact than Positive EWOM.