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The Impacts Of Online Word-of-mouth Based Open Interaction On The Performance Of Service Firms

Posted on:2015-12-31Degree:DoctorType:Dissertation
Country:ChinaCandidate:Q LuFull Text:PDF
GTID:1109330422492431Subject:Management Science and Engineering
Abstract/Summary:PDF Full Text Request
With the rapid growth of Web2.0technology, the interaction between customers and firms has become common and important in the e-commerce context. User-generated-content, including online word-of-mouth (online WOM) and online reviews is one of the most popular medias during this interaction. It changes the way information is generated and transmitted, resulting in affecting customer behavior and firm performance significantly. Prior research suggests online WOM is more influential to service firms such as hotels due to the unique features of experience products they provide. Most current studies focus on the single and direct relationship between online WOM and firms, or other customers, lacking a reverse and interactive view of how firms make managerial response to the online WOM.This paper explores the open interaction between online WOM effect and online service recovery with information sharing under the Internet context. Based on signaling theory, search cost theory and perceived quality theory, this paper first investigates how online WOM impacts service firms performance and then looks into how firms should make managerial response to online WOM accordingly to motivate their performance based on justice theory, expectation disconfirmation theory and peer-induced fairness.This paper collected hotel information from major online travel agents including Ctrip, Elong and Expedia using a data collecting system developed in Java, and made a series of empirical analysis applying panel data models. Firstly, the results reveal the valence, volume and variance of online WOM have positive effect on hotel online bookings. Secondly, this paper reveals how information cues, such as star rating and price, influence online WOM effect, and confirms the informational role of price to perceive product quality and the signaling role of hotel star rating. These two factors play a moderating role on the online WOM effect, and online WOM is more influential on firms with lower star rating and price, with hotel star rating being more significant. Different from prior research using proxy variables to represent firm performance, we used the actual online booking number to measure hotel sales in the Expedia research, which provides more value for the theoretical and practical implications. Thirdly, this paper investigates the dynamic relationship between online service recovery and customer satisfaction. This study built a dynamic model of customer satisfaction. The finding shows that customer satisfaction will be affected by his prior service experience and online service recovery is most effective on the least satisfied customers. Thus online managerial recovery should be customized to serve different types of customers. Lastly, this paper investigates the impact of online managerial response as a new form of service recovery strategy on firm performance. Based on perceived justice theory, this paper analyzed the interaction between online service recovery and online WOM. The findings show that online managerial response does enhance firm performance. Firms with faster respond speed to customer reviews gain better performance, but there is no significant linkage between the length of response content and firm performance. Service firms should deploy their resource strategically to avoid inefficient service recovery. To optimize performance, firms should make proper recovery strategies accordingly.The findings provide valuable theoretical and methodological contributions to future online WOM research. The implications of this paper will help firms better understand online WOM, make rational business strategies and win the competitive advantages eventually.
Keywords/Search Tags:Online Word-of-Mouth, Service Recovery, Online ManagerialResponse, Performance, Service Firms
PDF Full Text Request
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