The Impact of “Word-of-Mouse” on Individual Choice Decisions

Abstract

Online word-of-mouth (called “word-of-mouse”) is an important phenomenon in individual choice. Despite its im-portance, many firms struggle with how social influence can be applied to their marketing strategy, and when and how much it should be involved in their communication. The objective of this research is to address the limitations of previous research on word-of-mouse by proposing a new conceptual framework of how word-of-mouse impacts individual decisions processes in comparison with word-of-mouth. In addition, the proposed framework explains how the information source (peer consumer vs. expert), information valence (negative vs. positive), and attribute characteristics (subjective vs. objective) have different influences on consumer decision-making when relying on word-of-mouse. This approach is expected to provide managerial implications by explaining under which circumstances word-of-mouse is more effective, and what is the proper marketing strategy for a given situation.