The role of company reputation in mitigating negative word of mouth
Abstract
The study aims to investigate whether a company reputation can be used to reduce the impact of negative electronic word of mouth (eWOM). We conducted experimental research in two studies along with 225 college students, who at least have two accounts in different social media, as participants. We use both qualitative and quantitative methodologies. Qualitative research was carried out with focus group interviews to decide the number of high or low negative reviews as well as the level of credibility. Quantitative research used cross-sectional field design by pilot study and the main study. The model was tested and developed using data collected by questionnaires in paper surveys. The results of study 1 suggest that negative eWOM reduces purchase intentions mediated by the subjective norms and perceived behavior control. High negative eWOM reduces purchase intention more than low ones. Study 2 found out that in a condition of high negative eWOM, good company reputation’s perception affected purchase intention mediated by attitude. Furthermore, purchase intention is higher when a good company reputation’s perception is stronger. Therefor Organizations should convey its company reputation to their customer visually to get a good perception. Further research to investigate another variable that the company has is required.
Keyword : company reputation, mitigation, negative electronic word of mouth, purchase intention, theory of planned behavior
How to Cite
Rahmani, S., Halim, R. E., Gayatri, G., & Furinto, A. (2021). The role of company reputation in mitigating negative word of mouth. Business: Theory and Practice, 22(1), 109-120. https://doi.org/10.3846/btp.2021.12983
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
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Baron, R. M., & Kenny, D. A. (1986). The moderator-mediator variable distinction in social psychological research: Conceptual, strategic and statistical considerations. Journal of Personality and Social Psychology, 51(6), 1173−1182. https://doi.org/10.1037//0022-3514.51.6.1173
Becker, K., & Lee, J. W. (2019). Organizational usage of social media for corporate reputation management. The Journal of Asian Finance, Economics and Business, 6(1), 231−240. https://doi.org/10.13106/jafeb.2019.vol6.no1.231
Bhandari, M., & Rodgers, S. (2018). What does the brand say? Effects of brand feedback to negative eWOM on brand trust and purchase intentions. International Journal of Advertising, 37(1), 125−141. https://doi.org/10.1080/02650487.2017.1349030
Brown, J., Broderick, A. J., & Lee, N. (2007). Word of mouth communication within online communities: Conceptualizing the online social network. Journal of Interactive Mark, 21(3), 2−20. https://doi.org/10.1002/dir.20082
Brown, T. J., & Dacin, P. A. (1997). The company and the product: corporate associations and consumer product responses. Journal of Marketing, 61(1), 68−84. https://doi.org/10.1002/dir.20082
Chatterjee, P. (2001). Online reviews − do consumers use them?. In M. C. Gilly & J. Myers-Levy (Eds.), Advances in consumer research. Association for Consumer Research.
Cheung, C. M., & Lee, M. K. (2008). Online consumer reviews: does negative electronic word-of-mouth hurt more? In Paper presented at Proceedings of the 14th Americas Conference on Information Systems. Toronto, Canada.
Cheung, C., & Tadani, D. (2012). The impact of electronic wordof-mouth communication: A literature analysis and integrative model. Decision Support Systems, 54, 461−470. https://doi.org/10.1016/j.dss.2012.06.008
Chen, Z., & Lurie, N. H. (2013). Temporal contiguity and negativity bias in the impact of online word of mouth. Journal of Marketing Research, 50(4), 463−476. https://doi.org/10.1509/jmr.12.0063
Chen, M. (2017). Modeling an extended theory of planned behavior model to predict intention to take precautions to avoid consuming food with additives. Food Quality and Preference, 58, 24–33. https://doi.org/10.1016/j.foodqual.2017.01.002
Chevalier, J., & Mayzlin, D. (2006). The effect of word-of-mouth on sales: online book reviews. Journal of Marketing Research, 43(3), 345−354. https://doi.org/10.1509/jmkr.43.3.345
Cui, G., Lui, H., & Guo, X. (2012). The effect of online consumer reviews on new product sales. International Journal of Electronic Commerce, 17(1), 39−58. https://doi.org/10.2753/JEC1086-4415170102
DeCarlo, T., Laczniak, R., Motley, C., & Ramaswami, S. (2007). Influence of image and familiarity on consumer response tonegative word-of-mouth communication about retail entities. Journal of Marketing Theory and Practice, 15(1), 41−51. https://doi.org/10.2753/MTP1069-6679150103
Doh, S., & Hwang, J. (2009). How consumers evaluate eWOM (electronic word-of-mouth) messages. Cyber Psychology & Behavior, 12(2), 193−197. https://doi.org/10.1089/cpb.2008.0109
East, R., Hammond, K., & Gendall, P. (2006). Fact and fallacy in retention marketing. Journal of Marketing Management, 22(1−2), 5−23. https://doi.org/10.1362/026725706776022245
Engel, J. F., Kollat, D. T., & Blackwell, R. D. (1968). Consumer behavior. Holt, Rinehart & Winston.
Fombrun, C., & Shanley, M. (1990). What’s in a name? Reputation building and corporate strategy. Academy of Management Journal, 33(2), 233. https://doi.org/10.5465/256324
Fombrun, C. J., & Rindova, V. P. (2001). Fanning the flame: Corporate reputations as social constructions of performance. In J. Porac & M. Ventresca (Eds.), Constructing markets and industries. Oxford University Press.
Fombrun, C., Gardberg, N., & Sever, J. (2000). The reputation quotient SM: A multi-stakeholder measure of corporate reputation. Journal of Brand Management, 7, 241–255. https://doi.org/10.1057/bm.2000.10
Gemunden, H. G. (1985). Perceived risk and information search. A systematic meta-analysis of the empirical evidence. International Journal of Research in Marketing, 2(2), 79−100. https://doi.org/10.1016/0167-8116(85)90026-6
Guoqing, G., Zhongke, Z., Kai, C., & Xiaofan, W. (2009). The influence of WOM on consumers’ intention of brand switching: The mediate role of subjective norms. In Proceedings of the Summit International Marketing Science and Management Technology Conference (pp. 48–54). Beijing, China.
Hayes, A. F. (2018). Introduction to mediation, moderation and conditional process analysis: A regression-based approach. The Guilford Press.
Hennig-Thurau, T., Gwinner, K., Walsh, G., & Gremler, D. (2004). Electronic word-of-mouth via consumer-opinion platforms: what motivates consumers to articulate themselves on the internet?”. Journal of Interactive Marketing, 18(1), 38−52. https://doi.org/10.1002/dir.10073
Herhausen, D., Ludwig, S., Grewal, D., Wulf, J., & Schoegel, M. (2019). Detecting, preventing, and mitigating online firestorms in brand communities. Journal of Marketing, 83(3), 1–21. https://doi.org/10.1177/0022242918822300
Hofstede, G. (1993). Cultural constraints in management theories. The Academy of Management Executive, 7(1), 81−94. https://doi.org/10.5465/ame.1993.9409142061
Hogg, A. M., & Vaughan, G. M. (2005). Social psychology (4th ed.). Prentice-Hall.
Hsu, C. L., Lin, J. C., & Chiang, H. S. (2013). The effects of blogger recommendations on customers’ online shopping intentions. Internet Research, 23(1), 69−88. https://doi.org/10.1108/10662241311295782
Jalilvand, M., & Samiei, N. (2012). The impact of electronic word of mouth on a tourism destination choice: testing the theory of planned behavior (TPB). Internet Research, 22(5), 591−612. https://doi.org/10.1108/10662241211271563
Kitchen, P. J., & Laurence, A. (2003). Industry survey corporate reputation: an eight-country analysis, Corporate Reputation Review, 6(2), 103–117. https://doi.org/10.1057/palgrave.crr.1540193
Kotler, P., & Keller, K. L. (2012). Marketing management (Vol. 14). Pearson Education, Prentice Hall.
Kudeshia, C., & Kumar, A. (2017). Social eWOM: does it affect the brand attitude and purchase intention of brands? Management Research Review, 40(3), 310−330. https://doi.org/10.1108/MRR-07-2015-0161
Lange, D., Lee, P. M., & Lee, Y. D. (2011). Organizational reputation: A Review, Journal of Management, 37(1), 153−184. https://doi.org/10.1177/0149206310390963
Lau, G. & Ng, S. (2001). Individual and situational factors influencing negative word-of-mouth behaviour. Canadian Journal of Administrative Sciences, 18(3), 163−178. https://doi.org/10.1111/j.1936-4490.2001.tb00253.x
Lee, C., & Cranage, D. (2014). Toward understanding consumer processing of negative online word-of-mouth communication: the roles of opinion consensus and organizational response strategies. Journal of Hospitality & Tourism Research, 38(3), 330−360. https://doi.org/10.1177/1096348012451455
Lee, J., Park, D. H., & Han, I. (2008). The effect of negative online consumer reviews on product attitude: An information processing view. Electronic Commerce Research and Applications, 7, 341–352. https://doi.org/10.1016/j.elerap.2007.05.004
Lin, C., Chen, S., Chiu, C., & Lee, W. (2011). Understanding purchase intention during product-harm crises: moderating effects of perceived corporate ability and corporate social responsibility. Journal of Business Ethics, 102(3), 455−471. https://doi.org/10.1007/s10551-011-0824-y
Lu, H., Hou, H., Dzwo, T., Wu, Y., Andrews, J. E., Weng, S., Lin, M., & Lu, J. (2010). Factors influencing intentions to take precautions to avoid consuming food containing dairy products: Expanding the theory of planned behaviour. British Food Journal, 112(9), 919−933. https://doi.org/10.1108/00070701011074318
Mazzocchi, M., Lobb, A., Traill, W.B., & Cavicchi, A. (2008). Food scares and trust: A European study. Journal of Agricultural Economics, 59(1), 2–24. https://doi.org/10.1111/j.1477-9552.2007.00142.x
Park, D. H., Lee, J., & Han, I. (2007). The Effect of on-line consumer reviews on consumer purchasing intention: the moderating role of involvement. International Journal of Electronic Commerce, 11(4) (Summer, 2007), 125−148. https://doi.org/10.2753/JEC1086-4415110405
Saxton, M. K. (1998). Where do reputations come from? Corporate Reputation Review, 1(4), 393–399. https://doi.org/10.1057/palgrave.crr.1540060
Saputri, D. V., & Wandebori, H. (2014). Consumer socialization: a comparison between Indonesian Third Culture Kids (TCKs) and Non-TKCs. Journal of Business and Management, 3(6), 612−619.
Sharp, B. (2010). How brands grow: What marketers don’t know. Oxford University Press. https://doi.org/10.5860/CHOICE.48-3373
Shapiro, C. (1983). Premiums for high quality products as returns to reputations. The Quarterly Journal of Economics, 98(4) (Nov., 1983), 659−680. https://doi.org/10.2307/1881782
Sniehotta, F. F., Presseau, J., & Araujo-Soares, V. (2014). Time to retire the theory of planned behaviour. Health Psychology Review, 8(1), 1−7. https://doi.org/10.1080/17437199.2013.869710
Sparks, B. A., & Bradley, G. (2017). A “Triple A” Typology of responding to negative Consumer-generated online reviews. Journal of Hospitality & Tourism Research, 41(6), 719–745. https://doi.org/10.1177/1096348014538052
Sparks, B. A., & Browning, V. (2011). The impact of online reviews on hotel booking intentions and perception of trust. Tourism Management, 32(6), 1310−1323. https://doi.org/10.1016/j.tourman.2010.12.011
Spreng, R. A., & Page, T. J. (2001). The impact of confidence in expectations on consumer satisfaction, 18(11), 1187–1204. https://doi.org/10.1002/mar.1049
Taylor, S., & Tood, P. (1995). An integrated model of waste managient behavior: A test of household recycling and composting intentions. Journal Environment and Behavior, 27(5), 603−630. https://doi.org/10.1177/0013916595275001
Thomas, M., Wirtz, B. W., & Weyerer, J. C. (2019). Determinants of online review credibility and its impact on consumers’ purchase intention. Journal of Electronic Commerce Research, 20(1), 1–20. http://www.jecr.org/sites/default/files/2019vol20no1_Paper1.pdf
Vermeulen, I., & Seegers, D. (2009). Tried and tested: The impact of online hotel reviews on consumer consideration. Tourism Management, 30, 123–127. https://doi.org/10.1016/j.tourman.2008.04.008
Weinberger, M., Allen, C., & William, D. (1981). Negative information: perspectives and research directions. In B. Kent & A. A. Monroe (Eds.), NA – Advances in Consumer Research, Vol. 08 (pp. 398−4040). Association for Consumer Research.
Wallace, D. S., Paulson, R. M., Lord, C. G., & Bond Jr, C. F. (2005). Which behaviors do attitudes predict? Meta-analyzing the effects of social pressure and perceived difficulty. Review of General Psychology, 9(3), 214–227. https://doi.org/10.1037/1089-2680.9.3.214
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