CHAPTER 01 INTRODUCTIONIntroductionThe internet hasdeveloped as a medium which revolutionized the way people normally makes theirpurchase decision. According to Sparks & Browning, (2011) a purchasedecision is influenced by a number of factors like (product attributes, productmarketing, brand Name & Product reviews). Product reviews among all is nowbecoming common especially through platform of social media like, Facebook,Blogs, Online reviews etc Product reviews arebasically experiences of people who have already used that particular product. Researcheshave shown that, people are now actively using these product reviews in orderto make or amend their decision about a product therefore, it has also become amajor factor in making a purchase decision.
The increase in product reviews isdirectly related to the enablement of internet and its availability on mobilephones. The development of platform is mainly because of two things firstly,the internet and secondly, the platform like: Facebook and Blogs have enabledpeople to constantly review about the products of choice (Hu, Pavlou & Zhang, 2006)The Internet has madeit possible for more and more consumers to express and share experiences withother consumers for free. The Internet today allows consumers to connect,communicate, share interests, gather information and even make purchases.
Thesephenomena have become interesting for consumers, appearing as an opportunity toextend their knowledge about products without buying them, helping in refiningtheir purchases. With the sharp technological evolution there has been anincreasing ease of access to content and, consequently, sharing of opinions.John (2014) defines the reason as, consumers are constantly looking for theinformation about the product which they can easily found on social mediaplatform through internet. The increase in online reviews depends upon theincreasing scarce of knowledge and accessibility of internet these days (Duan,Gu & Whinston, 2008). Previously WOMmarketing has gained significant important but, now after enablement ofinternet and social media, product reviews, ratings have gained significantimportance and are also impact the purchase decision. According to a surveycarried out in UK markets, 41% of the shoppers says that, they went to onlinereviews while making a purchase decision, especially when purchasing some newproduct (Ludwig et al.
2013). However, 33% of the people says that, theycontinually post their reviews on different blogs and Facebook sharing theproduct experiences. Purchasers would than directly check these reviews anddecide their purchased action based on such comments. According to marketers,product reviews refine the purchase decision. Similarly, in Pakistan food,Electronics, Cars and Apparel sector are the sectors which are majorlyinfluenced by product reviews.
This researchtherefore, focuses on the food sector and determine the impact of productreviews on purchase decision. Since, in Pakistan the concept of product reviewsis in its development stage and generally people purchase products after havinga look on it physically but, the trend is changing dramatically the newgeneration and age of internet is changing this perspective especially in themarket of Mobile Phones and restaurants. According to Mona, being marketingstrategist, we suggest our clients to develop their online reviews whichultimately turned out to be a massive sales for them. The most important andunique aspect of this product review is that, it is free of cost and can beaccessible anywhere at any time. This readily available within cost review fromlarge number of users tend to influence the purchase decision greatly as wellas, serves as a way to create a close relationship with customers since socialnetworks can capture great number of audience attention within less timeperiod, though helpful for both purchaser and seller (Geirinhas, 2014). BackgroundPurchase decision is aconcept which is composed of different consumer attitudes, behaviour,motivation & influence. Individuals have exposed to different window ofinformation and varieties of products; many great deal of choices and optionsavailable in the market place impulse their purchase decision. Research provesthat, the decision making process is not easy and there are variety of factorswhich together make a decision to purchase for instance, in food sector thefactors includes: reviews from other customers, ambiance of the restaurant,taste and quality of the food, price and outlook of the product etc.
Food industry is asensitive business in which custoemrs while making purchase decision becomes moreconcerned thus, the impact of online reviews will have a positive and negativeinfluence on the restaurants business also. According to Huang & Benyoucef,(2012) due to strong influence and acceptability of online reviews, restaurantsand food making companies have automatically increased their quality because ofthese reviews. According to a research carried out in UK, the increase inmarginal income of people moved them towards increasing their spending on foodsector along with the increased awareness through social media, product reviewsplays an integral role in making purchase decision of food products. Similarly,according to Hussain (2012), in Pakistan product reviews in restaurant businessis the basic and essential aspect of increasing and creating an initial boom inthe business. People check these reviews online through Facebook and othermediums and refines their decision to buy.
According to a consumer survey, 29%of the people normally change their decision to buy a product after having alook on their reviews online. Levy & Gvili (2015)also concluded that, an online review is gaining more and more attentionbecause it is a message transmitted by an anonymous person is more credible andstronger than a message conveyed directly by a company. According to John &Norman (2012) it is communication (messages and reviews) which creates aneffect of persuasion among those who read it.
In the same vein, Geirinhas(2014) concluded that receiving a message through a friend has more impact thanreceiving the same message directly of its commercial source. With the paradigm shiftfrom offline communication to online communication, the importance given to theopinion of others remains the same since the traditional (WOM) has always beena great influence on what people know, feel and do (Buttle, 1998). With greateraccessibility to the internet, e-WOM (Online Reviews) are more accessible toanyone in a shorter period of time (Yoo, Sanders, & Moon, 2013).
Huang& Chen (2006) have proved the commercial importance of sharing of views, haveinfluenced people to make refine and rational decisions. (Bhutta et al., 2014).
According toHennig-Thurau & Walsh (2003), e-WOM can be a positive message or negativefor a wide audience via the internet by a potential, current or former customerabout a product, a company or an institution. This form of information sharinghas become more and more common, since there is currently greater ease ofinteraction between individuals in a virtual way, with the increase of theexistence of platforms that allow the sharing of information or opinions. Thisis the case of social networks; opinion forums; sites; communities amongothers. Vermeulen &Seegers, (2009) states that, with an increase in the number of people who haveaccess to internet it can be said that, more people will share their opinions online.
The research also shows that, in today’s world of technology and internet consumeris more informed and seeks information online about a product or service beforeto make the purchase within less time. This form of information search resultsin more time spent by the client analyzing information and more time toconsider the recommendations made by other willing and motivated consumers toshare information online (Gupta & Harris, 2010). E-WOM tools are changingthe way consumers interact with each other and, in turn, how they interactdirectly with business (Yoo et al., 2013). Food sector in Pakistanis known to be the most thriving business and therefore, role of online reviewshelps in shaping the purchase decision.
The Facebook especially adds theircontribution in making online review integral important for purchase as theyallow to develop own personalized pages for free, with unlimited access. Similaris the case in Pakistan food industry there are several pages like Foodict,SWOT that serves as the major decision turners in purchase decision of people.Normally consumer went online to know about a food product/restaurant andwithin less time period they gather different reviews from a large number ofusers. This helps in refining their decision making process. Thesis StatementCurrently theaccessibility of internet is becoming common among people who are technologyusers however, mobile connectivity and access to internet has although changedthe consumer behavior but, still a lot of people are not aware of these reviewspresent online. The problem actually starts when people don’t go for review ofa product and ends up having a worst or a negative experience. E-WOM comes into refine this decision and situation. The problem lies when consumers purchasesome expensive product without having a review of it from other consumershowever, after purchase all the most he invested in buying such product gonewaste and doesn’t fulfill his objective.
The lowerawareness about such online reviews and accessibility of internet are the majorproblem in having online review of a product. Age factor also is competentfactor and a major road block which ends up in negative experiences. Thisresearch however, try to determine the impact of these reviews on refining thepurchase decision and in the end based on the data gathered from consumersuggest some recommendation which aids in helping the situation. Scope ofResearch The scope ofthis research is limited to the food industry in Pakistan. Although onlinereviews serves as a way to refine purchase in all the sectors leading fromHotel to Aviation but, this research focuses attention to the food industryresided in Karachi. With this scope of research, the research plans to gatherthe data from a sample of respondents and this data would then be used todetermine the impact and relationship which express the impact of onlinereviews on purchase decision in food industry. ResearchObjectives Following is the research objective:· To determine the impact of online reviews onpurchase decision in food industry of Pakistan ResearchQuestions Following are the research questions:· What are the motives of consumers to searchonline reviews? · How do various online review platforms differ? · Which are the various characteristics of reviewfunctions influencing consumer purchasing decisions? · Which review function characteristics can befound on what platforms? · What online consumer review platforms consumerschoose to use as a basis for their purchasing decision? · Which review functions do consumers classify asmost important with regard to their purchasing decision? Definition ofTerms · OnlineReviews: A message or an opinion from stranger on online platform relatedto a product or service. CHAPTER 03: RESEARCH EMTHODOLOGYResearch ParadigmA researchparadigm is defined as the strategy and the area for investigation thus, theresearch carried out in this paradigm is.
Conviction over the methods of data collection for the research questionis called research paradigm or research philosophy. The two main type ofresearch philosophies are a) interpretiveand b) positivism. In thisresearch, the approach used for conducting the analysis would be quantitativeas according to research questions.
For the purpose of data collection Surveyquestionnaire is designed to answer the research questions (Denzin, 2007). Thestudy explore the research questions through distributing survey questionnaireamong the respondents. The research is deductive in nature and explore theinsights from respondents through these surveys which aids in identifying theimpact of product reviews on purchase intention. Research PhilosophyConviction over the methods of datacollection for the research question is called research paradigm or researchphilosophy. The two main type of research philosophies are a) interpretive and b) positivism. Both of the twophilosophies have their own use based on the scope and research questions.Positivism focuses on interpretation through reasoning and logics based on somemathematical technique and it can be described from an objective viewpointwithout prying understudy fact.
Similarly, interpretive philosophy is of theview that, to understand the reality in complete sense it is needed thatreality is seen through a subjective intervention (Bryman, 2011).For this research positivism i.e. critical realism is selected because, theresults are derived with help of statistical tests that provides clear evidenceof determining the relationships.
Research ApproachThe concept ofresearch strategy is a field of study in which researcher intends to develop aconcept generalizability of the research findings. There are majorly two kindof research approaches a) deductive and b) inductive (Bryman, 2007). Accordingto Creswell (2007) A deductive research approach is one in which emphasis isgiven on testing an already defined theory with the help of hypothesis whilstan, inductive approach is used when a new theory. Keeping in view, our researchfollows a deductive approach. In this approach, we intend to develop hypothesisbased on the extracts from literature review for impact of product reviews onconsumer buying decision.
Similarly, in order to understand the impact ofproduct reviews on buying decision of consumer, descriptive method will beused. A descriptive research method aids in determining the impact of productreviews on restaurant industry through social media and different forums, as itplays a major role in customer selection and buying decision. Research TypeThe research isan explanatory investigation. An explanatory research design helps theresearcher to determine the major factors of study in detail. It is a studywhich attempts to connect some ideas in order to understand the cause andimpact relationship among the variables. Therefore, the research is moreconcerned with explaining the phenomenon of the research variables impactingthe buying decision of consumer. A primary research will help in determiningthe factors which have stronger impact on altering the consumer buyingdecision.
Research Methodology/TechniqueThe researchscope suggest that, the research method for this study would be quantitative. Themain objective of this research is to find out and observe the impact ofproduct reviews on consumer buying decision therefore, it is required that,some measurable results and facts would help to determine the case. Consideringthe research scope, Quantitative research method will be the best firmethodology. According to Creswell (2007) there are two main types of researchmethodologies a) Qualitative method b) Quantitative method. A qualitativeresearch is one in which only characteristics of the research are defined whilea quantitative research is one in which, the results are interpreted in factsand figures by using some statistical tests thus, for this research we areusing quantitative methodology i.e.
using some statistical tests in order toclaim the results. Data Collection & SourcesThere are twodifferent methods for collecting the research data. First is the “Primary DataCollection Method” and the second one is “Secondary Data Collection method”.The data collection acts as a foundation for the research analysis. The primary datacollection helps in acquiring the first hand information and it is suitable forresearch surveys, questionnaire in which initial level information is required.
Similarly, the secondary data is also known as desk research in which, the datais collected from previous researches, published records, statements etc.(Creswell, 2009). The scope of this research is to determine the impact ofproduct reviews on consumer buying behavior which can be gathered with the helpof a survey questionnaire distributed among the respondents therefore, primarymethod of data collection would be best fir, easy and less costly.
Population & SamplingThe research populationfor this study is the consumers who came to restaurants of Karachi. Thepopulation is irrespective of age and gender as people having different kind ofbehavior when it comes to buying food products. The focus of this research ison the food industry (restaurants) in residing in Karachi. 3.3.1 SampleFrame For thisresearch the population frame is the respondents or consumers who came to buyfood product in order to materialize this, we tend to focus on restaurants. Thetarget frame of this research is the restaurants residing in Karachi-Do Darya.The survey questionnaire is consulted from the respondents having differentages, gender, geographic location, income etc.
Sample SizeThe sample sizefor this research study includes 200 respondents gathered from the restaurantslocation in Karachi Do-Darya. The respondents are selected on the basis ofsimple random sampling and respondents selected from each restaurant of targetsample frame. The sample of the respondents is based on 95% confidence intervalconsidering an error percentage of 10%.
Sampling MethodThe samplingtechnique for this research is Simple random sampling. According to Creswell,(2009) a simple random sampling technique is one in which every respondentpossess an equal opportunity of being selected. Conceptual Framework IV DV Hypothesis H1: There is significant impact of online reviews ondeveloping consumer trustH2: There is significant impact of online reviews onchanging consumer perceptions about a product Data AnalysisThe data forthis research si analyzed with the help of SPSS. The version used for SPSS is22 and the tests include Pearson moment correlation and Regression analysis.According to Bryman (2011) The Pearson correlation helps in determining therelationship between the variables however, the regression helps in determiningthe model and variables significance.