Academy of Marketing Studies Journal (Print ISSN: 1095-6298; Online ISSN: 1528-2678)

Research Article: 2020 Vol: 24 Issue: 3

A Conceptual Framework on the Influence of Authenticity in Advertising and Positive Electronic Word of Mouth on Customer Satisfaction

Ragu Prasadh Rajendran, Loyola Institute of Business Administration

C. Joe Arun, Loyola Institute of Business Administration

Abstract

Being authentic in advertising and using electronic word of mouth (eWOM) to satisfy customers pose significant challenges to managers. Drawing from prior literature, social influence theory, and the anchoring effect this study offers a framework to develop and apply authenticity in advertising and to use eWOM as marketing tools to satisfy customers. Consistent with prior literature, this framework identifies four dimensions of authenticity in advertising when implementing it as a strategy in marketing: brand essence, brand heritage, realistic plot, and message credibility. Firms may choose to attach importance to any of the dimensions of authenticity. Depending on the firm’s strategy, managers can use this framework to aid firms to examine and use authenticity in advertising. The authors formulate hypotheses to suggest that depending on the firm’s strategy, the effect of each of the four dimensions of authenticity on positive eWOM can be managed differently. Since few studies have focused on the impact of positive eWOM on customer satisfaction, this study addresses the issue by also considering the moderating effect of perceived trustworthiness. This study will help managers to get a better idea regarding how to execute authenticity in advertising and to use positive eWOM to satisfy customers.

Keywords

Authenticity, Electronic Word-Of-Mouth, Perceived Trustworthiness, Customer Satisfaction.

Introduction

Businesses are using social media to promote their products or services. The way in which firms communicate with customers about their brands has changed. Customers do not merely stop with receiving information but they tend to share the information that they receive with other customers. The new way of communicating through online is known as electronic word of mouth (eWOM) (Yang, 2017). Customers communicate through social media, blogs, websites etc., because of why the academic interest in eWOM has increased (e.g. Hennig-Thurau et al., 2004). Online platforms have come into existence and customers are using eWOM as a principal information source when deciding to buy products or use services (Abubakar & Ilkan, 2016).

Managers need to get a better picture of things that are happening in social media. They need to closely watch the activities of customers, competitors, and their environment online and need to take necessary actions to woo customers (Gallaugher & Ransbotham, 2010). This is not a simple task. Managers need to understand what is influencing eWOM behaviour of the customers. It is our view that effective advertising can have a significant effect on the eWOM behaviour of the customers. Effective advertising can generate positive eWOM. In the advertising industry, authenticity has become one of the most important buzzwords. Marketing managers agree that to effectively advertise, an authentic ad plays a significant role (Morhart et al., 2015).

To the best of our knowledge, very few studies have investigated the effect of positive eWOM communication on customer satisfaction. Managing authenticity in advertising and eWOM communication is complex. Hence the authors argue in favour of a framework that gives directions to execute authenticity and positive eWOM to satisfy customers. Previous literature has addressed the dimensions of authenticity, but a framework that strategically suggests how to use to both authenticity and positive eWOM to satisfy customers has not been presented. Using literature review and theory, this article introduces a framework that will be of high value to managers. The moderating effect of the perceived trustworthiness of positive eWOM has also been considered. Firms with different strategic orientations will use the framework differently, as not all firms will focus on all the dimensions of authenticity.

Literature Review

Authenticity

Authenticity plays a significant role in influencing many practices in marketing (Grayson & Martinec, 2004; Holt, 2002). Many scholars agree that authenticity is an important concept but there is no consensus on the definition of authenticity. Two research streams dominate when we talk about authenticity in marketing. The first stream focuses on consumers (e.g., Beverland & Farrelly, 2010; Grayson & Martinec, 2004) and the second stream focuses on brands (Beverland, 2005; Keller, 1998). In the first stream, consumers make a judgement regarding whether the experience and/or object is authentic. In the second stream, a brand’s success depends on authenticity as an authentic brand contributes towards forming a unique brand image.

In the advertising industry, authenticity is one of the important words. Creatives and marketing managers agree that to effectively advertise they must carry out an authentic ad (Beverland et al., 2008). There are many benefits to a firm if it executes the authentic ad properly. Authentic advertising leads to consumers believing that the brand is trustworthy (Anderberg & Morris, 2006), helps in the connection between consumers and brand (Holmes, 2015), induces the feeling of sympathy (Stern, 1994), and helps to clear consumer doubts about the ads (Darke & Ritchie, 2007). To help clear consumer doubts about the ads is very important as consumers are increasingly concerned about the marketers’ persuasive tactics that they are witnessing in the digital age (Campbell & Kirmani, 2000). The above findings are based on anecdotal evidence.

There is consistency in prior literature stating that

“Authenticity encapsulates what is genuine, real, and/or true” (Beverland & Farrelly, 2010).

There is no agreement regarding how to carry out an authentic ad. Marketing researchers and managers differ in that they refer to various features of an authentic ad when executing the same. Stern (1994) stresses on the trustworthiness of the spokesperson, Deighton et al. (1989) stress on the realistic plot, while Beverland et al. (2008) suggest that ad must accurately represent the brand. In other words, an authentic ad can have various dimensions of advertising execution. There is ambiguity over which dimensions of authenticity accentuates the advertising effectiveness. In line with Becker et al. (2019), the authors consider four different dimensions of authenticity (brand essence, brand heritage, realistic plot, and message credibility). In the following section, we discuss what these dimensions entail.

Dimension one: Brand Essence

Brand essence refers to important values that brands represent (Keller, 1998). If the ad execution needs to be authentic, the ad needs to correctly represent the brand (Gilmore & Pine, 2007). Brand Essence helps in creating and reinforcing a distinct and non-forgettable image (Brown et al., 2003), which aids consumers to comprehend the position of the brand. If a consistent brand image is conveyed, the reliability of the brand as perceived by the customers will get enhanced (Park et al., 1986). Consumers are more likely to know the brand when the ads uphold the brand essence. If consumers correctly recognize the advertised brand or correctly connect the ad to a concerned brand, there will be no wastage of marketing investments (Rossiter & Bellman, 2005).

Dimension two: Brand Heritage

Managers can elicit authenticity by making reference to the heritage of the brand. Studies show that consumers tend to perceive the brands to be more authentic if brands show allegiance to history and tradition (e.g., Brown et al., 2003). History, place of origin, traditional production methods or brand’s traditions are some of the features that advertisers might link to advertising to show brand heritage (Beverland, 2005). Research studies show if advertisers give importance to brand heritage, the advertising efficiency gets enhanced (Merchant & Rose, 2013). Brand Heritage serves the purpose of certifying the brand, providing evidence that the brand is original and not a fake (Newman & Dhar, 2014). If marketing managers can remind consumers regarding the lastingness of the brand, it might result in consumers perceiving the brand as reliable and competent (Beverland, 2006). Consumers may feel that there is an enhancement in the emotional commitment to those brands that highlight heritage associations (Newman & Dhar, 2014).

Dimension three: Realistic Plot

Ordinary, non-idealized characters (e.g. Stern, 1994) can provide a realistic plot and because of this advertising can be perceived as more authentic. Advertisements refer to something closely related to real-life but it may not be the “real thing” (Grayson & Martinec, 2004). If the ads resemble reality, consumers perceive the ad as authentic even though they know that the ad is performed on a stage. The realistic plot helps consumers to associate themselves with the ad’s character because of the familiarity of the portrayed situation and because it resembles their own experiences (Stern, 1994). Consumers may be able to correctly identify and interpret the product benefits conveyed by the ad if the realistic plot depicts a familiar situation (Warlaumont, 1997). Feelings of sympathy and empathy can be elicited by realistic plots and these feelings can improve consumers’ attitude towards the ad (Escalas & Stern, 2003).

Dimension four: Credible Advertising Message

Realistic nonexaggerated messages in the ad can bring out authenticity when marketing managers advertise their products or brands. When advertisers try to form advertising messages, there is a possibility that exaggeration might creep in. Literature shows that a high level of credibility plays a big role when consumers try to associate themselves with an authentic ad (e.g. Morhart et al., 2015). The message is the information that the advertisement transmits. The main message is an integral part of each ad. If the ad’s message as perceived by the customers is true and if the message accurately portrays how the brand performs then the message can be considered as having high credibility. Message credibility plays a key role in persuading consumers (Choi & Rifon, 2002). Consumers are sceptical towards the ads and the credibility may help overcome the problem.

Electronic Word-of-Mouth

Steve Jurvetson and Tim Draper proposed the term viral marketing in 1997. Several researchers disagree regarding its definition. Viral marketing is perceived to be word-of-mouth advertising in which consumers tend to pass along their experiences with goods or services to other consumers (e.g., Pastore, 2000). Other researchers argue that viral marketing and word-of-mouth are different. In viral marketing, the original consumer attracts other users to the network and the original consumer shows a great deal of interest in bringing other people to the network (e.g., Modzelewski, 2000). According to Shirky (2000), viral marketing and word-of-mouth advertising will imply the same to most consumers. The concept tells how to acquire new consumers by motivating consumers to interact.

Consumers base their buying decisions on traditional (offline) word-of-mouth (Richins & Root-Shaffer, 1998). Like in traditional word-of-mouth, consumers make positive or negative statements about a product or a company in eWOM. Due to the connectivity nature of the Internet, consumers can easily pass along their experiences with goods or services to other consumers through online discussion forums. The Internet has enabled consumers to gather accurate information about products and services and offer their feedback by engaging in eWOM. Internet communication has some distinct features like anonymity and availability. It can also be directed at multiple individuals. Due to the above-mentioned reasons, eWOM garners serious attention of marketing managers (Hennig-Thurau et al., 2004).

Consumers seek information about products and services to help them in their purchase decision-making process. Advertising and sales promotion are some of the tools marketers use to make sure that product information reaches consumers. However, consumers consider the information they receive from other consumers or friends as more trustworthy (Dellarocas et al., 2007; Liu, 2006). The social media has grown in popularity in a way that consumers choose to rely on eWOM to gain more knowledge on products and services (Zhu & Zhang, 2010). Recent statistics show that more than 90% of consumers choose to rely on eWOM and about 40% of them form opinions by reading reviews (Shrestha, 2016).

Keller & Fay (2009) report a positive relationship between advertising and WOM. They find that across a wide range of product categories, advertising influenced conversations are more likely to influence others to buy or try a brand than other WOM discussions about brands. So, the authors argue that advertising, especially authenticity in advertising has a great potential to influence positive eWOM. These reasons allow the formulation of authors’ first four hypotheses. The conceptual framework is provided in Figure 1.

decision-sciences-Conceptual-Framework

Figure 1: Proposed Conceptual Framework

H1: Brand essence is positively related to positive eWOM.

H2: Brand heritage is positively related to positive eWOM.

H3: Realistic plot is positively related to positive eWOM.

H4: Message credibility is positively related to positive eWOM.

Customer Satisfaction

Academics would agree that customer satisfaction is a central construct in marketing. To evaluate the overall performance of the firm, it is necessary to focus on customer satisfaction. To measure customer satisfaction, it is necessary to consider the overall judgement of a firm’s product instead of considering a particular customer’s judgement of a particular transaction (Fornell et al., 1996). Overall Customer satisfaction has links to behavioural and economic consequences that are helpful to the firm and is considered to be the main indicator of the firm’s performance (Anderson et al., 1994). Past research studies show greater customer satisfaction leads to greater customer loyalty (Yi, 1990). Because satisfaction leads to loyalty if the customers are satisfied it can help firms to generate future revenues. If the customers are satisfied, it will result in the reduction of costs of future transactions (Reichheld & Sasser, 1990). Even if there is a change in the price for a given product, the marketplace will be less reactive if the company has satisfied customers (Anderson, 1996). If the quality falls below the desired threshold satisfied customers will not look for alternatives in the marketplace (Anderson & Sullivan, 1993).

Internally, if the firms can improve customer satisfaction it will lead to a reduction of costs associated with faulty goods and service such as field service, replacing faulty goods, and managing complaints (Garvin, 1988). Word-of-mouth from satisfied customers increases the firm’s reputation and decreases the cost of acquiring new customers, while that of dissatisfied customers decreases the firm’s reputation and increases the cost of acquiring new customers (Anderson, 1994; Fornell, 1992). In operations research and production management, the relationship between customer satisfaction and productivity is positive. The resources that firms which achieve higher levels of customer satisfaction need to allocate are less to handle warranties and complaints. This leads to reduced costs which lead to improved productivity (Crosby, 1979; Deming, 1982; Juran, 1988).

In services context, Reichheld & Sasser (1990) argue that the reduction of defective customers leads to greater customer loyalty. Lower costs of future transactions, favourable word-of-mouth, achieving price premium are some of the positive effects of customer satisfaction. Positive customer satisfaction results in customer behaviour which has positive effects on the results of the business (Keiningham et al., 2003). To manage customer satisfaction has become a strategically important tactic for most firms (Mittal & Kamakura, 2001). Finally, customer satisfaction is an important cornerstone for many companies operating in different industries whose business practices keep the customer as the primary focus (Szymanski & Henard, 2001).

Social Influence Theory and The Anchoring Effect

In social influence, an individual’s emotions, opinions, or behaviours are affected by other people (Turner, 1991). Social influence can affect an individual’s attitude in many forms including compliance, identification, and internalization. Compliance occurs when one appears to have the same opinion that of his/her peers but keeps his/her disagreeing opinions confidential, identification occurs when someone comes under the influence of another person he/she admires and acclaims, and internalization occurs when one comes into an agreement about a belief or behaviour and agrees both openly and confidentially (Kelman, 1958). In this article, the authors argue that internalization could influence consumers’ beliefs and behaviour through the eWOM before purchase. This is because eWOM plays a significant role in helping to form opinions about products and services (Liu, 2006) and making purchase decisions (Cheung et al., 2008).

The authors also argue that due to the anchoring effect, positive eWOM could play a crucial role in impacting customer satisfaction with the purchased product. Anchoring and adjustment heuristic postulates that prior information (i.e. an anchor value) plays a bigger role than others in influencing the decisions of the people (Tversky & Kahneman, 1974). Initial anchor value tends to influence the direction of the individuals’ final judgment or estimation (Jacowitz & Kahneman, 1995). Externally provided anchor plays a significant role than a self-generated anchor and has more weight and validity and therefore is assumed to be closely related to the correct answer (Epley & Gilovich, 2001). EWOM is considered to be an important source of information as it is created by other customers and the anchoring effect would fit this scenario as well. Initial anchor tends to influence the customers’ estimation and the authors propose that if customers get exposed to positive eWOM then there is a possibility that they would evaluate the purchased product positively. If consumers evaluate a purchased product, it could influence their product satisfaction, since consumers compare their expectation toward the product to post-purchase experience (Oliver et al., 1997). When the perceived product performance meets or exceeds the customer’s expectation, consumers tend to be satisfied. As a consequence, if customers become exposed to positive eWOM before purchase, it would increase their satisfaction. Due to the above-mentioned reasons, we hypothesize that

H5: Positive eWOM is positively related to customer satisfaction.

Perceived Trustworthiness

Having trust is a prerequisite in every buyer-seller relationship to ensure that the business transaction takes place. There are a lot of uncertainties in the marketplace due to the latest developed and advanced technologies (Poel & Leunis, 1999). Due to this reason, trust has evolved as the main topic in the studies of “relationship marketing” (Geyskens et al., 1996). In current business practices, trust has become an important factor than it was in past business practices. Trust is about the relationship between different parties. This relationship consumes time to build as well as to nurture. Tangible and/or intangible favours are exchanged during the relationship. Trust is necessary whenever parties feel that there is a risk or uncertainty. When trust exists, there is a possibility that the exchange will take place smoothly. Trust is a critical element for the success of the business (Hosmer, 1995). Research suggests that trust and satisfaction are related (Bitner, 1995). Satisfaction leads to repeat purchases which in turn build familiarity and relationships (Mai & Ness, 1999).

Trust is studied in fields like marketing, sociology, psychology and in different contexts like buyer-seller relationships, organizations, and romantic relationships. Trust has many definitions. Many scholars agree that trust tends to occur whenever there is uncertainty about the consequences when the interaction takes place, whenever there is a possibility that personal harm may occur when the interaction takes place, whenever there is no control over the outcomes (Petermann, 1996). Researchers have conceptualized trust as both a trait and a state. Two different ideas have evolved in state conceptualization of trust (Schlosser et al., 2006). The first idea suggests that trust is about willingness to take risks in a relationship (Mayer et al., 1995). The second idea suggests that trust is a set of beliefs that the trustor holds about certain qualities that the trustee possesses or lacks (McKnight et al., 1998). The belief-based conceptualization of trust is referred to as perceived trustworthiness.

Perceived trustworthiness of the website greatly influences the purchase decisions of the customers. In the online environment, trust plays a significant role as customers do not have access to large tangible and verifiable cues regarding the capabilities and intentions of the service provider. Perceived trustworthiness is a significant variable in influencing the attitude towards E-Commerce. Past research studies have argued that trust plays a crucial role in influencing online customer satisfaction (e.g. Urban et al., 2000). Hence higher the perceived trustworthiness of positive eWOM, stronger is the relationship between positive eWOM and customer satisfaction. Accordingly, we propose the following hypothesis:

H6: The perceived trustworthiness moderates the relationship between positive eWOM and customer satisfaction

Conclusion

This paper contributes to the current knowledge on authenticity, eWOM, and customer satisfaction by proposing theoretical links between the four dimensions of authenticity in advertising (brand essence, brand heritage, realistic plot, and message credibility), positive eWOM, perceived trustworthiness, and customer satisfaction. This study has the potential to deliver valuable theoretical and practical implications for marketing managers. With customers engaging in eWOM communication very frequently, determining the factors that influence their eWOM behaviour is of great relevance to marketing managers. The authors believe that the four dimensions of authenticity have a great potential to influence positive eWOM behaviour. The authors also believe that positive eWOM will influence customer satisfaction. By considering the moderating effect of perceived trustworthiness on the relationship between positive eWOM and customer satisfaction, the authors propose that higher the perceived trustworthiness of positive eWOM, stronger is the relationship between positive eWOM and customer satisfaction. Marketing managers can develop relevant and effective strategies by developing an authentic ad and ensuring that these ads result in positive eWOM behaviour. Lack of empirical evidence is the limitation of this study. Researchers can use structural equation modelling to empirically test the model. Repurchase intention and consumer loyalty are the other important factors for developing consumer-retailer relationships. Future research should examine the effect of eWOM on repurchase intention and consumer loyalty.

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