The Impact of Free Sampling of Information Goods on the Dynamics of Online Word-of-Mouth and Retail Sales
نویسندگان
چکیده
Free sampling of information goods has become a common business practice in expectation of reducing consumers’ uncertainty of product quality and helping product diffusion, yet receiving limited investigation of how consumers process free sampling and online word-of-mouth (WOM) and its consequences on retail sales. In this research, we examine the impact of free sampling of information goods on the dynamics of online WOM and retail sales by analyzing a simultaneous equation system in a Bayesian hierarchical framework in online software market. We find that free sampling of information goods asymmetrically moderates the positive feedback mechanism between online WOM and retail sales. More adoptions of free trial not only directly lead to more retail sales but also enhance online WOM effect. Nevertheless, more adoptions of free trial generate fewer WOM and weaken the impact of past sales on WOM, which could potentially have a negative impact on future sales.
منابع مشابه
An Empirical Study on How Third-Party Websites Influence the Feedback Mechanism between Online Word-of-Mouth and Retail Sales
Firms use social media marketing to promote products and collect consumer feedback for the product development process. Their practice of investing in retailer-hosted Word-of-Mouth (internal WOM) is supported by a positive feedback mechanism between internal WOM and retail sales. Internal WOM is a sales influencer: consumers can get informed about a product by a large volume of internal WOM. It...
متن کاملThe interplay between free sampling and word of mouth in the online software market
Free sampling in digital format has become a common business practice in the online market offering consumers first-hand experience with products, due to its low marginal cost and extensive online distribution. At the same time, online word of mouth (WOM) has also been a prevalent strategy on the Internet for increasing product visibility and providing trustworthy product information. Those two...
متن کاملThe Influence of Online Word of Mouth on Product Sales in Retail E-commerce: An Empirical Investigation
Deepak Khazanchi College of Information Science and Technology University of Nebraska at Omaha khazanchi@ unomaha.edu The ability to exchange opinions and experiences online is known as online word of mouth (WOM). Due to the high acceptance of consumers and their apparent reliance on online WOM it is important for organizations to understand how it works and what kind of impact it has on produc...
متن کاملA model of brand competition for durable goods supply chains in a dynamic framework
Game theory is an efficient tool to represent and conceptualize the problems concerning conflict and competition. In recent years and especially for durable products, competition between domestic and foreign brands for gaining market share has received a considerable attention. This paper study electronic commerce concepts by differential game theory and introduce a novel and comprehensive mode...
متن کاملThe Effect of Word-Of-Mouth Advertisements on the Responses of Clients (Case Study: Mobile Operators)
Customer reviews in social media contain valuable electronic word-of-mouth (eWOM) information of products, which facilitates firms’ business strategy and individual consumers’ comparison shopping. This study examined the effects of eWOM motivations on customers’ behavioral intentions in the Mobile operators setting. eWOM advertising is very important because nowadays many customer buying decisi...
متن کامل