An approach to initiating eWOM intentions: A study on the effects of reference price and value homophily

Abstract

Purpose

The purpose of this paper is to examine the effects that reference prices and associated information sources (websites that consumers use to explore and their friends who have similar perspectives on value) have on deal evaluation and intention to disseminate electronic word of mouth (eWOM).

Design/methodology/approach

A stratified survey is conducted to empirically test the relations between reference prices, associated information sources (the top five Consumer-to-consumer (C2C) websites and top five Facebook friends with similar perspectives and values on consumption), deal evaluation, and eWOM intention. The study uses a Facebook API to help participants pick five Facebook friends to act as their favorite sources for advice on shopping.

Findings

The results suggest that consumers’ deal evaluations (as shaped by the recency effects of previous exposure to prices and the influence of Facebook friends and C2C websites) have carry-over effects on their eWOM intentions. The influence of Facebook friends and C2C websites on deal evaluation is as powerful as that of reference price, especially concerning the mean and the lowest prices.

Practical implications

The findings encourage marketers to invest their resources in targeting online groups, and suggest that C2C website marketers should set their offer prices between the mean and the lowest prices.

Originality/value

This study extends prior research on the motives for eWOM dissemination and elaborates an approach to initiate eWOM intention through deal evaluation.

Citation

Lo, L.Y.-S. and Lin, S.-W. (2017), "An approach to initiating eWOM intentions: A study on the effects of reference price and value homophily", Internet Research, Vol. 27 No. 2, pp. 277-302. https://doi.org/10.1108/IntR-05-2015-0132