The Impact of Source Credibility on Electronic Word of Mouth

Chapter 1- Introduction

1.1 Background of the Problem

The recent surge in the telecom industry of Pakistan gave way to the introduction of many new telecom companies. Including the likes of Mobilink as market leader, Telenor and Ufone as the challengers, and Warid and Zong as the followers the market seems saturated. With these companies fighting for the top spot in market share and profitability, one critical success factor for achieving that is to spend handsomely on advertising.

1.2 Identification of the gap

Previous researchers were researching on the effect of advertisement on customers choice. In which dimensions does the advertisement effects the customers. So the researches primary focus was on direct effect of advertisement on customers. However, from last few years as we are observing some companies are doing comparative advertisement in Pakistan. While there is no proper research is done on this new advertisement trend that how it effects the though process and buying behavior of Pakistani customers; core purpose of advertisement. The previous studies also does not tell us either the comparative advertisement have a positive or negative on customers. A trend of comparing one product with another and exploiting it on its weaknesses was already there but this now has crept into almost every ad made by the telecom companies. This comparison gave rise to a new type of advertising known as Comparative Advertisement. So, previous studies do not provide results for effect of comparative advertisement on consumer in different dimension.

1.3 Problem Statement

This research is done to figure out whether comparative advertising is effective in maintaining the bonds with its target audience in the telecom sector of Pakistan. Almost all the companies are involved in this type of advertising but due to limited research on this topic its effectiveness is still not known.

Aim or purpose of study

We are trying to know perception of students of two universities in which one is technically sound and other is not. we want to check that student of these universities how much they pay attention to EWOM and which factors influence them.

Rationale of study
As EWOM is very popular and all business are operating through websites. As students are essential part of our economy and they contribute in society so this study evaluates for students which elements are more influential for effective EWOM.

1.4 Objective (s) of the study

Comparative advertising is a growing phenomenon in the today world and is now frequently used in many advertisement campaigns in Pakistan as well. The objective of this research is to find out the strength of comparative advertisement in telecom industry of Pakistan. The areas that will cover in this research are as follows: To find the consequence of comparative advertisement on brand awareness and brand acknowledgement. To study the importance of showing the product/service premium quality in a comparative advertisement. To examine the effectiveness of comparative advertisement helps the brand in persuading the target audience. To study the impression of comparative advertisement among people from different segments of the population across Pakistan.

1.5 Significance of the Study

This research is significant to study a well established marketing norm of using comparative advertising. This research is based upon how effective is Comparative Advertising in the telecom sector of Pakistan and how do the target audience perceive it. When the consumers are making a decision regarding their preferred mobile service and the selection of different services offered by these companies whether comparative advertising play any role is something of grave importance.

1.6 Research questions

Q1. how electronic word of mouth effective for students? Q2. How much source credibility is influential for effective EWOM? Q3. What is impact of information quality on EWOM?

1.7 Delimitations
we are only proving electronic word of mouth through two variables like source credibility and information quality and we are not using other dimensions such as web site design, attractiveness, message appeal etc.

Delimitations of samples
We are choosing only university students of Szabist islamabad, B.Z.U Multan, Iqra University Islamabad.

Chapter 2 Literature Review

2.1 Literature Review highlighting the variables of interest and their relationship.
The effectiveness of comparative advertising, according to the large body of extant empirical research, is equivocal. Some investigators conclude that comparative advertising provides advantages that are not associated with non-comparative advertising (Droge & Darmon, 1987; Miniard, 1993; Pechmann & Ratneshwar, 1991; Pechmann & Stewart 1990; Rose, 1993). Others report that comparative advertising produces undesirable outcomes (Belch, 1981; Golden, 1979; Goodwin & Etgar, 1980; Levine, 1976; Swinyard, 1981). These conflicting opinions do not seem to deter major consumer goods and service corporations from using comparative advertising in their promotional mix. In recent years this new phenomenon has become pronounced in TV and print advertising. It compares one brand against one or more competitive brands through explicitly naming them in the same ad, on a variety of specific product or service attributes. There were infrequent attempts at comparison advertising in the past, but these comparisons were not as explicit as we find them currently. Today, one notices comparison ads being aired on all forms of goods and services. Since comparative advertising is a potentially growing phenomenon, it has a lot of impact on stimulating brand recall (Subhash & Hackleman, 1978). The effectiveness of comparative advertising has been the focus of several empirical studies (Golden, 1976; Levine, 1976; McDougall, 1976, Prasad, 1976; Pride, Lamb, & Pletcher, 1977; Wilson, 1976). Although these studies have explored several important aspects of comparative advertising, a substantial number of problems of importance to advertising managers have not been researched (Etgar & Goodwin, 1977). Numerous academic and industry studies have investigated comparative advertising effectiveness with mixed results (Rogers & Williams, 1989; Barry, 1993). Some researchers have found comparative advertisements to be effective (Demirdjian, 1983; Earl & Pride,

1980), but others have found them to be no more effective than traditional noncomparative advertisements (Droge & Darmon, 1987; Goodwin & Etgar, 1980). Some researches have found non-comparative advertising demonstrably more effective than comparative advertising (Shimp & Dyer, 1978). The issue of cross-country differences in comparative advertising effectiveness is very important. Donthu (1998) found that although recall of comparative ads was high, consumer attitudes toward comparative ads was not very positive, especially in countries where comparative ads are not widely used or rarely used. It is also argued that the effects of comparative advertising are situation specific (Murphy & Amundsen, 1981). Comparative advertising have failed to find a positive effect on brand attitudes, including those that have demonstrated other positive effects (Gorn & Weinberg, 1984; Sujan & Dekleva, 1987). A study by Putrevu & Lord (1994) found that comparative ads induce more positive brand attitudes for products which elicit cognitive and affective motivations simultaneously. Comparative ads were also shown to positively influence brand switchers and have a negative impact on consumers loyal to competing brands. A meta-analysis was done by Grewal, Kavanoor, Fern, Costley & Barnes (1997) showed that comparative ads are more effective than non-comparative ads in generating attention, message and brand awareness, levels of message processing, favorable sponsored brand attitudes, and increased purchase intentions and purchase behaviors. However, comparative ads evoke lower source believability and a less favorable attitude toward the advertisement. Additional analyses of moderator variables find that market position (sponsor, comparison, and relative), enhanced credibility, message content, and type of dependent measure (relative versus non-relative) affect some of the relationships between advertising format and cognition, brand attitudes, and purchase intentions. New brands comparing themselves to established brands appear to benefit most from comparative advertising.

2.2 Theoretical framework

Figure 2.1 Theoretical Framework of Effectiveness of Electronic Word of Mouth

2.3 Proposed Hypotheses

H1: Source credibility has positive relationship with electronic word of mouth. Ha: Higher expertise, the higher will be the Source Credibility. Hb: The higher the trustworthiness, higher will be source credibility. H2: Information quality has positive relationship on electronic word of mouth. H2a: The more the relevance of information, higher information quality will be perceived . H2b: The more comprehensiveness of information, higher information quality will be perceived.

Chapter 3 - Research Methodology

Proposed methodology Type of study

This study consists on two types these are following

1) Empirical
This is empirical study because it takes data from real life and focus on students .this study is implemented on university students and we are going to know their perceptions about EWOM.

2) Analytical
This study analyze how students adopt EWOM and consider it effective in terms of source credibility and information quality and what are the effective and persuasive dimensions that leads to adopt EWOM

Research approach
It is a quantitative based research because message source credibility and information quality will be measured through its dimensions and statistical analysis will happen to quantify dimensions.

Population of study
University students will be our population of study

Sample study
100 questionnaires will be used to quantify our independent variables

References:
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Shimp, T., & Dyer, D. (1978). The effects of comparative advertising mediated by market position of the sponsoring brand. Journal of Advertising Research, 3, 13-19.

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Field Z. S. Sales Effectiveness of Comparative Advertising: An Experimental The Journal of Consumer Research, Vol. 10, No. 3 (Dec., 1983), pp. 362-364