Abstract
Electronic word-of-mouth (e-WOM) plays an important role in influencing Chinese consumers’ brand perceptions. While domestic social media managers are keen to understand how to protect their brands, their foreign counterparts are keen to reduce consumer ethnocentrism in order to gain a foothold in the Chinese market. This study uses an online survey to investigate whether positive and negative e-WOM enhance or weaken consumer ethnocentrism and brand equity towards domestic and foreign smart phone brands. Findings suggests that both positive and negative e-WOM influence consumer ethnocentrism and that these effects are contingent upon brand origin. Furthermore, findings show that the effects of positive and negative e-WOM on brand equity are consistent, irrespective of brand origin. Interestingly, consumer ethnocentrism has a positive effect on brand equity for domestic brands, but does not have a negative effect on brand equity for foreign brands. The study further discusses theoretical and practical implications of the findings.
1. Introduction
With the rapid development of social media and usage of smart phones, electronic word-of-mouth (e-WOM) is ubiquitous (King, Racherla, & Bush, 2014; Okazaki, 2009; Zhang, Abound Omran, & Cobanoglu, 2017). In contrast to traditional word-of-mouth (WOM), eWOM allows customers to receive real-time and real-life information from previously unavailable sources. Social media networks allow consumers to easily share and collect brand-related information in a timely and cost-efficient manner, thus speeding up the diffusion of eWOM (Burnasheva, Suh, & Villalobos-Moron, 2019). Consequently, eWOM influences consumers’ brand related attitude and behavior (Chiu, Wang, Ho, Zhang, & Zhao, 2019; Erkan & Evans, 2016; MartínConsuegra, Faraoni, Díaz, & Ranfagni, 2018; Okazaki, 2009).
6. Limitations and future research directions
This research is also not without limitations, thus offering interesting avenues for future investigations. First, this study did not account for the source of either positive or negative e-WOM. Source credibility and ties with the source have been shown to affect consumer evaluations of e-WOM (e.g., King et al., 2014). Therefore, future studies should control for different types of sources, while considering weak versus strong ties between the sender and receiver. Such an approach would allow exploring potential contingencies in the effects tested in the current study. Second, this study uses China as an emerging market context. It would be of interest to test the proposed relationships in other emerging markets such as India.
