Examining the relationships between e-WOM, consumer ethnocentrism and brand equity

Abstract

Electronic word-of-mouth (e-WOM) plays an important role in influencing Chinese consumers’ brand perceptions. While domestic social media managers are keen to understand how to protect their brands, their foreign counterparts are keen to reduce consumer ethnocentrism in order to gain a foothold in the Chinese market. This study uses an online survey to investigate whether positive and negative e-WOM enhance or weaken consumer ethnocentrism and brand equity towards domestic and foreign smart phone brands. Findings suggests that both positive and negative e-WOM influence consumer ethnocentrism and that these effects are contingent upon brand origin. Furthermore, findings show that the effects of positive and negative e-WOM on brand equity are consistent, irrespective of brand origin. Interestingly, consumer ethnocentrism has a positive effect on brand equity for domestic brands, but does not have a negative effect on brand equity for foreign brands. The study further discusses theoretical and practical implications of the findings.