How Do Offline Restaurant Competition Affect Online Word-of-Mouth

In the era of continuous development of internet technology,online word-of-mouth(WOM)has gradually become one of the most important marketing tools for companies.Word-of-mouth is the behavior of consumers spreading information about goods to others.The way of spreading information of traditional word-of-mouth mainly depends on the communication between people,so it will be greatly limited by interpersonal relationships.However,with the development of the Internet and the improvement of the technology in recent years,online word-of-mouth has gradually played an increasingly important role in consumer purchase decisions.The internet can provide a convenient platform for online word-of-mouth to break through the barriers of time and distance for traditional word-of-mouth.Besides,traditional word-of-mouth information is usually transmitted from one person to another and then from the second person to a third one.In the process of indirect communication,the authenticity of information will be greatly reduced.However,with the help of the Internet,once the online word-of-mouth is published,no matter where other consumers are located,they can receive the first-hand information released by others anytime and anywhere,ensuring the authenticity of the word-of-mouth information.According to statistics,more than 60%of consumers tend to refer to the product information provided by online word-of-mouth when making purchasing decisions.and it is widely believed that online word-of-mouth has higher credibility than advertising and product information provided by other manufacturers.Therefore,online word-of-mouth now plays an increasingly important role in consumers decision-making.With the steady development of the economy in our country and the continuous improvement of people's living standards,people's consumption power is gradually increasing,which also promote the development of the catering industry.At the same time,the development of the catering industry has also brought fierce competition,which has led to an increase in the industry elimination rate.Online word-of-mouth can help companies stand out in the increasingly competitive restaurant industry.This study focus on the impact of offline restaurant competition on online word-of-mouth.Specifically,we analyze the relationship between offline restaurant competition and online word-of-mouth through the two dimensions of WOM volume and WOM valence.Based on the data of Dianping.com,we collect objective data of more than 10,000 restaurants in Beijing and Shanghai through web crawling,and built regression models to systematically study the empirical relationships between offline restaurant competition and online word-of-mouth.The empirical results show that the number of offline restaurant competitors can have a significant impact on the WOM volume and WOM valence.Specifically:(1)In terms of the WOM volume,the total number of offline restaurant competitors can increase the WOM volume,but the result is affected by the type of offline competitors.The number of competitors of the same type will reduce the WOM volume.The number of different types of competitors will significantly increase the WOM volume;(2)In terms of the WOM valence,the total number of offline restaurant competitors will reduce the WOM valence,and for both the same type of competitors and different types of competitors,this result remains unchanged.In summary,the more restaurants of the same type,on the one hand,it will increase the number of WOM volume,increasing the footfall of the restaurant.On the other hand,it will lower the WOM valence of the restaurant,that is,reduce the favorable rate on the network of consumers.Second,the more different types of restaurants,not only reduce the number of WOM volume,but also reduce the WOM valence.Therefore,companies need to carry out the trade-off between the influencing factors above when selecting a place for restaurant.The company should consider the impact of competition on online word-of-mouth carefully,so as to have better marketing management.