Decomposing the Effects of Online Customer Reviews on Brand, Price, and Product Attributes

International Journal of Research in Marketing, Forthcoming

42 Pages Posted: 1 Feb 2015

See all articles by Daniel Kostyra

Daniel Kostyra

Goethe University Frankfurt

Jochen Reiner

Goethe University Frankfurt

Martin Natter

University of Zurich

Daniel Klapper

Humboldt University Berlin - School of Business and Economics

Date Written: January 20, 2015

Abstract

Online customer reviews (OCRs) have become a major source of information for customers on the Internet. Understanding the impact of OCRs on customers’ decisions is an important challenge for academics and practitioners. We apply a choice-based conjoint experiment that combines all relevant levels of the OCR dimensions (valence, volume, and variance) and that estimates the effect of OCRs on choice. The experimental setting allows us to estimate the direct effects but also the interaction effects of the OCR dimensions, which have been largely neglected in previous research. The impact of the OCR dimensions are evaluated against the results from a control group that did not face OCRs when making their choices. Therefore, our experiment enables us to investigate the extent to which the presence of OCRs affects customers’ consideration of brand, price, and technical product attributes. In contrast to previous findings, our results show that volume and variance do not affect customers’ choices directly but that they moderate the impact of valence on customers’ choices. Moreover, we find that OCRs decrease the importance of brand for customer purchase decisions, indicating that managing OCRs have become a challenge for brand management.

Keywords: online customer reviews, choice-based conjoint experiment, brand management, pricing, willingness to pay

Suggested Citation

Kostyra, Daniel and Reiner, Jochen and Natter, Martin and Klapper, Daniel, Decomposing the Effects of Online Customer Reviews on Brand, Price, and Product Attributes (January 20, 2015). International Journal of Research in Marketing, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2558032

Daniel Kostyra

Goethe University Frankfurt ( email )

Grüneburgplatz 1
Frankfurt am Main, 60323
Germany

Jochen Reiner (Contact Author)

Goethe University Frankfurt ( email )

Theodor-W.-Adorno-Platz 4
Frankfurt am Main, 60323
Germany

Martin Natter

University of Zurich ( email )

Plattenstrasse 14
Zurich, CH-8032
Switzerland
0041446341307 (Phone)

Daniel Klapper

Humboldt University Berlin - School of Business and Economics ( email )

Spandauer Str.1
Berlin, Berlin 10178
Germany

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