ISEM 3120Seminar in ISEM

Chuk Cheuk Ka 12204560

Lau Ming Sze 12202401

Ng Ka Fan 12202967

Tsoi Chak Fei 14204991

Wan Chun Kit 12203033

Wong Tsun Lam 12210498

Gruen T.W., Osmonbekov, T., Czaplewski A. J.(2006), eWOM: The impact of customer-to-customer online know-how exchange on customer value and loyalty, Journal of Business Research 59, 449-456

1. Introduction

2. Research Method

3. Findings

4. Conclusion

Content

1.1 Background

1.2 Definitions & Concept

1.3 Objective

1.4 Rationale

1. Introduction

eWOM: The impact of customer-to-customer online know-how exchange on customer value and loyalty

1.1 Background

Definition eWOM-> Electronic word-of-mouth -Any positive or negative statement made by potential, actual,

or former customers about a product or company, which is made available to a multitude of people and institutions via the Internet.(Hennig-Thurau, T., Qwinner, K.P., Walsh, G., Gremler, 2004)

Customer to Customer(C2C) -A business model that facilitates an environment where

customers can trade with each other. -C2C transactions generally involve products sold through a

classified or auction system. Products sold are often used or second hand.

1.2 Definitions & Concept

1.3 Objective

1.4 Rationale

•WOM is more effective in influencing consumer purchase than advertising or personal selling

•Positive and negative effects of WOM

Previous Researches only show…

2.1 Model

2.2 Questionnaire

2.3 Sampling Techniques & Statistical

Method

2. Research Model

2.Research Model

●Customer-to-customer know-how exchange

●Outcomes of C2C know-how exchange

●C2C know-how exchange and loyalty intentions

●Overall value of the firm’s offering and loyalty intentions

●MOA- theory

Explanation of Customer-to-customer know-how exchange(C2C know-how exhange)

Electronic word-of-mouth- know-how exchange

Know-how is definedas the accumulated practical skill or

expertise that allows one todo something smoothly or efficiently

(von Hippel, 1988).Know-how is a type of knowledge that is

tacit, complex, anddifficult to codify

C2C know-how exchange is viewed as the interactions among individuals thatserve as an information source that

enhances competency andknowledge. Individuals may be involved

in such exchange toacquire ‘‘the skills necessary to better

understand, use, operate,modify and/or repair a product’

Customer gain direct utilitarian value

Customer-to-customer know-how exchange

C2C know-how exchange can provide an additional source

of perceived benefits eWOM- provides users a means to gain additional benefitsfrom the product that may not have been

realized without theC2C exchange.

H1. C2C know-how exchange positively impacts the customer’s

perceived overall value of the firm’s offering

Outcomes of C2C know-how exchange

An individual’s intention for repeat purchase is the plan of

the customer to repurchase or upgrade a product.

The rationale for the proposed direct effect of know-how

exchange on loyalty intentions is supported by the norm of

reciprocity.

C2C know-how exchange and loyalty intentions

Customers engaged in C2C knowhow exchange may develop affective bonds with othercustomers, which in turn may influence their

loyaltyintentions .

H2. C2C know-how exchange positively impacts the customer’s

loyalty intentions.

an individual’s perception of the overall value received from

the firm’s offering will have a major bearing on the

individual’s loyalty intentions

H3. The higher the level of the overall value the customer

receives from the firm’s offering, the greater the level of loyalty

intentions.

Overall value of the firm’s offering and loyalty intentions

Three factors: Motivation, opportunity and ability

Motivation: incorporates readiness, willingness, interest, and desire to engage in information processing

Opportunity: the extent to which a situation is conducive to achieving a desired outcome or the lack of impediments for achieving a desired outcome

MOA- theory

Ability: is the extent to which consumers have thenecessary resources to make an outcome happen

H4a. The higher the level of the member’s motivation, thehigher the level of C2C know-how exchange.H4b. The higher the level of the member’s

opportunity, thehigher the level of C2C know-how exchange.H4c. The higher the level of the member’s ability,

the higherthe level of C2C know-how exchange.

1. Motivation

2. Ability

3. C2C know-how exchange

4. Value of the firm’s offering

Questionnaire

The topics of discussion in the forum are generally relevant to me. 0.658

I am always interested in the issues being discussed on the forum. 0.743

Being on the forum energizes me. 0.777

Motivation

I generally find it easy to exchange ideas with other Internet forum participants. 0.770

I can communicate clearly on Internet user forums. .0775

I am generally good at navigating within the forum. 0.753

I consider myself very skilled in using the forum. 0.701

Ability

Overall, the Forum is an important source of information for me. 0.833

I find the interaction among forum users enhances my knowledge. 0.847

I can depend on the forum to provide answers to my questions. 0.783

In general, the ideas suggested on the forum are reliable. 0.679

C2C know-how exchange

3.1. Theoretical and managerial implications

3.2. C2C know-how exchange, overall value,

and loyalty

Intentions

3.3. MOA and C2C know-how exchange

3.1. Theoretical and managerial implications

Goal of the two major contributions:1. To explore the impact that C2C know-how exchange

has on customer perceived value and loyalty intentions

2. To find a theoretical and practical explanation that would assist researchers and managers as they seek to understand and manage the exchange of know-how among customers

3.1.

Study found in the major contribution:

∗C2C know-how exchange affects managerially relevant outcomes

→namely the value of the firm’s offering and the customers’ future intentions

3.1.

Overall:∗The MOA theory offers a valid approach to provide

theoretical and managerial insight to the phenomenon of C2C know-how exchanges as a specific type of eWOM

3.1.

3.2. C2C know-how exchange, overall value, and loyalty intentions

The study found:1. C2C exchange activities had significant effects

on the overall value of the firm’s offering2. eWOM communication is perceived to be a

reliable source of information by customers3. C2C know-how exchange had a direct

relationship with loyalty intentions4. C2C know-how exchange had an indirect

relationship that was mediated through overall value of the firm’s offering

3.2.

∗The effect of C2C exchange on future purchase intention is completely mediated by overall value of the firm’s offering

3.2.

3.3. MOA and C2C know-how exchange

∗Motivation & Ability → Expected∗Opportunity on C2C know how exchange → X

significant

Why there is a lack of significant effect?

3.3.

It is because…The nature of the context where the ‘‘opportunity’’ toparticipate in C2C exchange is ongoing

3.3.

∗This research paper used a similar approach used by McAlexander et al. (2002)

∗Ran the analysis using the 30% (n=184) of the respondents with the lowest composite opportunity scores (mean = 4.90, std. dev. = 0.78)

3.3.

It shows that:∗The analysis for this group did show a

significant (p < 0.05) positive effect of opportunity on C2C know- how exchange∗But, the standardized effect on C2C exchange

was relatively small (0.10) ,compared with the standardized effect of motivation (0.49) and ability (0.42)

→ Opportunity plays a minor role in the Internet context

3.3.

∗Once a minimum threshold level of opportunity is provided, increasing levels of opportunity no longer have an impact on C2C exchange

3.3.

4.1 Limitations

4.2 Further Research

4. Limitations

•Only a portion of items selected from pretesting were used for estimating the final model

•Only a cross-sectional snapshot–reduces the ability to make definitive causal statements about the findings

Limitations