Abstract
This study investigates the differential effects of online reviews on actual sales in cases where information regarding source identity and brand equity is accessible. The data were collected from an influential online film review platform in China. Two distinctive features of this study are: (1) source identity is expressed as “verified user” or “unverified user” according to posters' ticket payment status and (2) the interactive effect between source identity and brand equity on box-office success is examined. Using econometric estimations, the results reveal the following: (1) the positive effect of verified users' online review valences on the number of tickets purchased for films decreases in association with high brand strength; (2) the variance of verified users' online reviews positively affects the number of tickets purchased for films with high brand strength, but such an effect is negative with low brand strength; (3) the variance of unverified users' online reviews positively influences the number of tickets purchased for films with low brand strength, but it negatively influences the number of tickets purchased for films with high brand strength. Thus, these findings suggest that it is better for business leaders to understand not only why producers of online reviews are satisfied or dissatisfied, but also how consumers interpret and interact with different types of online reviews and which are important. This requires a smart and flexible collaboration among different business units within film company.
Highlights
On-going discussion regarding the role of online reviews has exerted profound influence on theoretical development in the fields of marketing, information systems, and psychology, marking the beginning of a widening stream of interdisciplinary work on the concept of online customer reviews (OCRs; King et al, 2014)
A robust ordinary least squares estimation was applied in addition to Equations (1–3) in order to examine the differences between the associations of verified users’ and unverified users’ online review valences and their variances with online ticket sales (Table 2, Models 1–3)
The findings demonstrate that total valence, the variance of verified users’ reviews and variance of unverified users’ reviews × strong brand strength have negative and significant effects on box-office sales but the impacts of variance of unverified users’ reviews and variance of verified users’ reviews × strong brand strength are significantly positive
Summary
On-going discussion regarding the role of online reviews has exerted profound influence on theoretical development in the fields of marketing, information systems, and psychology, marking the beginning of a widening stream of interdisciplinary work on the concept of online customer reviews (OCRs; King et al, 2014). The present study suggests that source identity and brand equity play crucial roles in forming consumers’ perceptions of online review credibility and subsequent purchase behaviors and simulates this practical marketing environment To this end, this study employs the psychological choice model (Hansen, 1976), in which the effectiveness of online reviews on consumers’ purchase decisions is moderated by product characteristics (e.g., popularity or brand strength), consumer characteristics (e.g., verified/unverified identity), and external factors (e.g., competition and advertisement; see Figure 1). When the variance in unverified users’ reviews toward a film with strong star power is high, potential customers may consider positive reviews as sensationalism by filmmaking or promotion companies and negative reviews as trolling by other consumers, thereby increasing consumers’ risk perceptions and lowering box-office sales.
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