Abstract
Online review platforms have become very popular in recent years, generating massive numbers of online reviews and thus enticing numerous enterprises to respond to reviews. Although the economic impact (e.g., sales impact) of managerial responses is well recognized, it is unclear whether such an impact is moderated by competitive intensity and market position. This study examines the moderating effects of competitive intensity and market position in the relationship between managerial responses and sales. Using a panel dataset from one of the largest restaurant review platforms in China, this research found that the influence of the volume of managerial responses to positive word-of-mouth (WOM) on sales declined with increasing competitive intensity and decreasing market position. Moreover, we found the volume and degree of personalization of managerial responses to negative WOM to be more important for enterprises with a low market position versus those with a high market position. Our results provide insights into the effectiveness of managerial responses in different environments. We also offer managerial implications to service providers on response strategies.
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