1. Instructor: Dr. Pi-Ying Teresa Hsu
Word-of-Mouse vs Word-of-Mouth: The Effects of the Internet on Consumer's Pre-purchase Information-search Activities
Instructor: Dr. Pi-Ying Teresa Hsu
Presenter: Stan Chung
Date: April. 27, 2009 1

2. Martin, D. , & Lomax, W. (2001). Word-of-mouse vs
Martin, D., & Lomax, W. (2001). Word-of-mouse vs word-of-mouth: The effects of the internet on consumer's pre-purchase information-search activities. Occasional Paper Series, 45. Retrieved March 29, 2009 from

3. Contents Introduction Research Questions Methodology Results
Reflection

4. Introduction
This paper is aimed to compare Word-of-Mouth and Word-of-Mouse towards consumer pre-purchase information search.

5. Consumer’s behavior of seeking information
Attempting to purchase
Perceiving risk, anxious
Minimizing the risk
Seeking information

6. Introduction Information sources Internal External
The knowledge a consumer already has
External
Marketer dominated or personal and interpersonal information
(Cox, 1967)

7. Introduction
Word-of-mouth is the most influential factor in consumers’ choice.
(Engel, Blackwell, & Kegerreis, 1969; Herr et al., 1991)

8. Introduction
Word-of-mouth was the most important risk reducing source.
(Cox, 1963; Lutz & Reilly, 1973)

9. Purchase Scenarios (Murray, 1991) High Risk Purchases
Medium Risk Purchases
Low Risk Purchases
Smoke detector/ alarm
New car exhaust- parts and fitting
Car interior valeting service
Meal in a fine restaurant
TV and video rental
Personal income tax advice
Professional interior decoration advice
Car engine tuning service
Eye test
Dental check-up
Pocket camera
Tennis racquet
Small vacuum cleaner
Barbequeue set
Raincoat
(Murray, 1991)

10. Research Questions
Do consumers use Internet based sources as part of their pre-purchase information search strategies?
Which of the Internet based sources (marketer-controlled or consumer-controlled) are more popular in pre-purchase information searches?
Does the use of Internet information sources depend on the products or services being purchased?

11. Research Questions
How much confidence do consumers have in Internet sources relative to other sources?
Is this confidence dependant on the purchase being considered?
Is use of an Internet based source indicative of confidence in that source?

12. Methodology Sampling Snowball Participant High risk purchase 82
Age
Gender
Method
Snowball
High risk purchase
Medium risk purchase
Low risk purchase
Total
21-30 (70%); (30% = ?)
More than 60% were female
　　 Questionnaire (Likert 7-point scale)
　１　　　　　　　　　　　　　　　　７
Most likely to use Most unlikely to use
Most confidence Most not confidence

13. Snowball Sampling

14. Results
Do consumers use the Internet as a source of pre-purchase information?
Yes. (only 2% said no)
Which Internet based information sources (marketer controlled or non-marketer controlled) are more popular in pre-purchase information sources?
No difference. The use of is greater.

15. Results
Does the use of Internet based sources depend on the products and services purchased?
No difference.
How much confidence do consumers have in Internet sources relative to other sources?
Consumers have significantly less confidence in Internet sources of pre-purchase information.
The confidence in Internet WOM sources is significantly lower than in other WOM sources.

16. Results Is this confidence dependant on the purchase being considered?
Although there is a significant link between confidence and use of a particular source, this relationship is relatively weak in the Internet sources.
Is use of an Internet based source indicative of confidence in that source?
Yes. Confidence in Internet WOM was higher in high-risk purchases.

17. Reflection The paper didn’t present detailed statistical data.
Some of the results might be different nowadays.

18. Thanks for your listening!