The Role of Marketing in Social Media: How Online Consumer Reviews Evolve

32 Pages Posted: 17 Nov 2010 Last revised: 19 Jun 2014

Yubo Chen

Tsinghua University - School of Economics & Management

Scott Fay

Syracuse University

Qi Wang

Binghamton University

Date Written: January 11, 2011

Abstract

Social media provide an unparalleled platform for consumers to publicize their personal evaluations of purchased products and thus facilitate word-of-mouth communication. This paper examines relationships between consumer posting behavior and marketing variables - such as product price and quality - and explores how these relationships evolve as the Internet and consumer review websites attract more universal acceptance. Based on automobile-model data from several leading online consumer review sources that were collected in 2001 and 2008, this study demonstrates that the relationships between marketing variables and consumer online-posting behavior are different at the early and mature stages of Internet usage. For instance, in the early stage of consumer Internet usage, price is negatively correlated with the propensity to post a review. As consumer Internet usage becomes prevalent, however, the relationship between price and the number of online consumer reviews shifts to a U-shape. In contrast, in the early years, price has a U-shaped relationship with overall consumer rating, but this correlation between price and overall rating becomes less significant in the later period. Such differences at the two different stages of Internet usage can be driven by different groups of consumers with different motivations for online review posting.

Keywords: Word-of-Mouth, Online Community, Consumer Reviews, Social Media

JEL Classification: D83, L15, L86, M37

Suggested Citation

Chen, Yubo and Fay, Scott and Wang, Qi, The Role of Marketing in Social Media: How Online Consumer Reviews Evolve (January 11, 2011). Available at SSRN: https://ssrn.com/abstract=1710357 or http://dx.doi.org/10.2139/ssrn.1710357

Yubo Chen (Contact Author)

Tsinghua University - School of Economics & Management ( email )

Beijing, 100084
China

Scott Fay

Syracuse University ( email )

900 S. Crouse Avenue
Syracuse, NY 13244-2130
United States
315-443-3456 (Phone)

HOME PAGE: http://whitman.syr.edu/Directory/ShowInfo.aspx?id=360

Qi Wang

Binghamton University ( email )

PO Box 6001
P.O.Box 6000
Binghamton, NY 13902
United States

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