Customer Review Provision Policies with Heterogeneous Cluster Preferences

Companies often post user-generated reviews online so that potential buyers in different clusters (age, geographic region, occupation, etc.) can learn from existing customers about the quality of an experience good and cluster preferences before purchasing. In this paper, we evaluate two common user-generated review provision policies for selling experience goods to customers in different clusters with heterogeneous preferences. The first policy is called the association-based policy (AP) under which a customer in a cluster can only observe the aggregate review (i.e., average rating) generated by users within the same cluster. The second policy is called the global-based policy (GP) under which each customer is presented with the aggregate review generated by all users across clusters. We find that, in general, the firm benefits from a policy that provides a larger number of “relevant reviews” to customers. When customers are more certain about the product quality and when clusters are more diverse, AP is more profitable than GP because it provides cluster-specific reviews to customers. Otherwise, GP is more profitable as it provides a larger number of less relevant reviews. Moreover, we propose a third provision policy that imparts the union of the information by AP and GP and show that it is more profitable for the firm. Although the third policy always renders a higher consumer welfare than GP, it may generate a lower consumer welfare than AP. This paper was accepted by Martínez-de-Albéniz Victor, operations management.

The Use of Mobile Payment Systems in Post-COVID-19 Economic Recovery: Primary Research on an Emerging Market for Experience Goods

This study investigated whether mobile payment services could drive post-COVID-19 pandemic recovery in the ‘experience goods’ sector (e.g., tourism) utilising Bandura’s self-efficacy or social cognitive theory. It explored the factors influencing the intention to continue using mobile payment services and the intention to recommend these to others. An empirical survey was conducted to assess the study variables, and the data obtained therefrom were analysed using the industry-standard Cross-Industry Standard Process for Data Mining method. The study results suggest that personal innovativeness and perceived trust influence consumers’ intention to continue using mobile payment services and that perceived trust, personal innovativeness and outcome expectancy influence consumers’ intention to recommend the use of such services to others. The research findings have filled a research gap in emerging markets and can serve as the basis for formulating a winning marketing and operational strategy for nascent technologies such as mobile payment services. It would be naïve to extract findings from mature markets such as East Asia, the European Union and the United States and to apply these to developing markets. In addition, this study’s investigation of the variables that can influence the intention to continue using mobile payment services and to recommend the use of these to others goes into the heart of the sustainability issue because the study’s findings can help mobile payment service providers sustain the use of their applications and thus also sustain the advantages as such.

Pricing of higher education: The case of top-ranked MBA programs

Tuition fees of full-time MBA programs with similar structure can vary greatly from around USD $20,000 to USD $220,000. This paper explores the effects of post-graduation salary, reputation, and their interaction on such high discrepancy in MBA tuition. Using a unique dataset of international MBA programs, we found that program value is positively correlated with post-graduation salary. This relationship is stronger for more prestigious programs whose values are impacted more by graduate outcomes. In addition, this relationship is greater for North American programs, but smaller for European programs, suggesting a geographical effect. These results provide managerial implications for program administrators and universities offering professional business programs. These insights can be extended to other industries of intangible experience goods.

Analyzing the Impact of Live Chat Service Implementation on Customer Online Shopping Satisfaction

A live chat service is a tool embedded in an online shopping website that allows online vendors to instantly communicate with consumers. Empirical quantification of how live chat affects customer satisfaction in an online shopping scenario facilitates the calculation of the return of investment of the implementation of the live chat service. To this end, this paper obtained 84405 pieces of purchase-and-comment data during 2010-2012 from a major online shopping websites in China, which implemented its live chat service in January, 2012. Results suggest that implementing live chat service can indeed improve customer satisfaction. Meanwhile, such effect is more pronounced for third-party brands, experience goods purchases, high perceived risk products, and cross-buying. This study contributes by pioneeringly conducting before-and-after comparison based on real implementation data, as well as offering critical suggestions to online shopping website managers regarding the decision and optimization of live chat service implementation.

Buying Perfume in the Digital Age: A Study on E-Shoppers’ Perceptions and Typologies

Manuscript type: Research paper Research aims: This study aims to shed light on the factors that facilitate online purchase of perfume. It specifically: 1) explores the antecedents of online purchase behaviour in the case of experience goods; 2) analyses the motivations, perceived benefits and perceived risks associated with online purchase of perfume; and 3) identifies perfume e-shoppers’ profiles. Design/Methodology/Approach: A qualitative research approach involving interviewing 27 perfume e-shoppers from Brazil, Iran and Portugal was adopted. Research findings: The findings of this study reveal that there are three types of perfume e-shoppers: 1) experienced e-shoppers, 2) bargain e-seekers, and 3) expert e-shoppers. Competitive prices, enjoyable online experiences and greater varieties of perfumes are among the perceived benefits that motivate the online shoppers. The inability to test the perfumes, particularly those that are never tried before, appears to be the major drawback. Theoretical contribution/Originality: This study provides interesting cues on a topic that has so far been disregarded by the literature despite its growing importance as a business sector—online purchase of perfumes. It offers the categorisation of three e-shopper profiles, based on consumers’ narratives, and highlighted the importance of further addressing the dynamic nature of consumer behaviours, particularly in the online context. Practitioner/Policy implications: The findings show that the main trigger of buying perfume online is the price discounts, which is particularly important to less experienced Web shoppers. This indicates that experience goods such as perfume should, at the initial stage, be sold in stores that offer an assortment of products. Online perfume stores should consider alternatives to provide perfume testing. Research limitation/Implications: Purposive sampling does not allow results’ generalisation; hence future research is needed to further validate the findings.

Wellbeing Measurement and Policy Design—Measures, Key Findings, and Wellbeing Frameworks

The second chapter is targeted at readers who wish to know what matters for subjective wellbeing, and in particular for those who wish to design policies in order to improve it. It begins with an extensive discussion on the direct measurement of wellbeing, covering both prevalent current measures and promising future measures, after which it presents some key findings and rules of thumb on what influences wellbeing. It then organizes the wellbeing lessons for governments by discussing the relation between wellbeing and four areas where government is very active: the provision of basic comforts, the regulation and production of experience goods and skills, the importance of status concerns, and social identities. This come with rules of thumb on how to recognize possible improvements and some indication as to what would be good value for money in terms of interventions. This chapter also discusses frameworks of wellbeing to aid appraisals, evaluations, and overall policy thinking in different areas. It presents a mental framework that embeds wellbeing into the whole economy (a capital framework) and then apply the theories and general framework to mental health and relationship-type interventions. The chapter ends with a taxonomy of thinking about wellbeing in government departments, including departments directly oriented towards some aspect of wellbeing (like health) and others that are oriented towards enabling the government to function (like tax authorities) or towards identity (like culture).

Do online reviews have different effects on consumers’ sampling behaviour across product types? Evidence from the software industry

Previous research shows that online reviews may have different effects for search goods and experience goods. However, as a typical type of experience goods, software can be further divided into different categories based on product characteristics. Little research has been conducted regarding the different effects of online reviews for different types of software. Furthermore, to offer free samples is another common practice of software firms to alleviate consumer uncertainty prior to purchase. To fill the corresponding research gap, this research focuses on the interaction effects between online reviews and free samples for different types of software. Through our empirical analysis, we find that user ratings significantly increase consumers’ sample downloads. Furthermore, consumers download more samples for some categories than for others. Finally, user and editor ratings might have differential effects for different types of software.

Reputation and Advertising of Collective Brand Members in the Wine Industry: The Moderating Role of Market Share

This paper analyzes the nonlinear relationship between the advertising investment and reputation of collective brand members in an experience goods industry, as well as the moderating role of their market share within the collective brand. The central assumption is that the quality reputation of collective brand members has a positive effect on their advertising investment until a reputation threshold is reached, after which the effect on advertising investment becomes negative. This change in the slope is explained by the information sets (firm reputation and collective reputation) used by consumers to reduce uncertainty, which leads to a weaker motivation for the firm to invest in advertising. In addition, scale economies of advertising mean that the market share of collective brand members negatively moderates the curvilinear relationship between quality reputation and advertising investment. The results for a sample of 176 companies in a Spanish experience goods industry (i.e., winemaking) between 2004 and 2014 show an inverted U-shaped relationship between the advertising investment and reputation of collective brand members. The results also show that market share negatively moderates this curvilinear relationship. (JEL Classifications: M31, M37, Q13)