The Sales Impact of Word-of-Mouth Distribution across Retail and Third-Party Websites

With online search tools and users’ Internet experiences, online consumers are shown to rely on Word-of-Mouth (WOM) information hosted by both retail and third-party websites. Nevertheless, will online consumers conduct the same comprehensive level of WOM search, if the distribution of WOM across websites differs? This study is intrigued by this question to propose that the distribution of WOM across websites affects the search cost of WOM information during consumers’ decision making, and thus influences online retail sales. By using sales and WOM data of software programs from Amazon and a third-party website download.com, we find negative sales impacts of WOM volume dispersion and valence variation. Our results show that less dispersed WOM leads to more sales. And it is even more beneficial for a product’s sales if having this less dispersed WOM distribution skewed towards retail websites. In addition, more consistent consumer evaluations across websites encourage online purchase decisions

Product Variety, Online Word of Mouth and Long Tail: An Empirical Study on the Internet Software Market

This study examines the impact of both demand and supply side factors on long tail and superstar effects in the context of online software download. Our descriptive analysis suggests the coexistence of a steeper head and a longer but slimmer tail. Employing a novel empirical approach via the quantile regression model, we find a significant interaction effect between the demand-side factor (online user reviews) and the supply-side factor (product variety) on users’ software download. The influence of the two factors and their interplay on long tail and superstar effects vary significantly across different product popularity level. The results highlight the importance of incorporating both supply and demand factors in long tail research. The findings also offer an explanation for the mixed results reported in extant studies on the influence of online user reviews

DOES IT MATTER WHERE THE WORD-OF-MOUTH OCCURS?: AN EMPIRICAL STUDY ON THE SALES IMPACT OF THE DISTRIBUTION OF ONLINE USER REVIEWS

Consumers consistently resort to online Word-of-Mouth (WOM) in online shopping, thanks to the reach of the Internet and various web tools. Nevertheless, they are confronting relatively different levels of search costs for WOM information available on the Internet, depending on the distribution of WOM across websites. This study investigates the sales impacts of dispersion of WOM volume and variation of WOM valence by using sales and WOM data of software programs from Amazon and download.com. Our results suggest that less evenly distributed WOM leads to more sales, conditional on the total number of WOM conversations across websites. And it is even more beneficial for a product’s sales if having this less dispersed WOM distribution skewed towards retailing websites. In addition, more consistent consumer evaluations across websites encourage online purchasing decisions. By comparing the volume dispersion and variance variation, we find that receiving one hundred reviews of 5-star average rating on Amazon leads to sales almost six time greater than receiving fifty reviews of 5-star average rating on Amazon and another fifty reviews of 5-star average rating on download.com

Online User Reviews and Professional Reviews: A Bayesian Approach to Model Mediation and Moderation Effects

We propose a Bayesian analysis of mediation and moderation effects embedded within a hierarchical structure to examine the impacts of two sources of WOM information — online user reviews and professional reviews in the context of software download. Our empirical results indicate that the impact of user reviews on software download varies over time and such variation is moderated by product variety. The increase in product variety strengthens the impact of positive user reviews, while weakening the impact of negative user reviews. Furthermore, professional reviews influence software download both directly and indirectly, partially mediated by volume of online user reviews. Receiving positive professional reviews leads to more software download, yet receiving very negative professional reviews has a negative impact on the number of download. The increase in professional ratings not only directly promotes software download but also leads to more active user WOM interactions, which in turn leads to more download

The Impact of Free Sampling of Information Goods on the Dynamics of Online Word-of-Mouth and Retail Sales

Free sampling of information goods has become a common business practice in expectation of reducing consumers’ uncertainty of product quality and helping product diffusion, yet receiving limited investigation of how consumers process free sampling and online word-of-mouth (WOM) and its consequences on retail sales. In this research, we examine the impact of free sampling of information goods on the dynamics of online WOM and retail sales by analyzing a simultaneous equation system in a Bayesian hierarchical framework in online software market. We find that free sampling of information goods asymmetrically moderates the positive feedback mechanism between online WOM and retail sales. More adoptions of free trial not only directly lead to more retail sales but also enhance online WOM effect. Nevertheless, more adoptions of free trial generate fewer WOM and weaken the impact of past sales on WOM, which could potentially have a negative impact on future sales

The Impact of Third-Party Information on the Dynamics of Online Word-of-Mouth and Retail Sales

Consumers have been widely searching information on third-party and retail websites before making product choices, yet receiving limited systematic investigation of how consumers process third-party information and retailer-hosted (internal) word-of-mouth (WOM) and its consequences on retail sales. In this research, we examine the impact of third party information on the dynamics of internal WOM and retail sales by analyzing a simultaneous equation system in a Bayesian hierarchical framework in online software market. We find that third-party information moderates the positive feedback mechanism between internal WOM and retail sales. Receiving third-party reviews positively interact with retail sales to increase volume of internal WOM, thus leading to more sales; whereas consumer adoption of free-trial services negatively moderates the impact of retail sales on internal WOM, which may potentially have a negative impact on future sales indirectly. The findings imply that third-party information interact with retail website information in influencing consumers’ product choices

Business Plan for Sustainable Ethanol Cooking Fuel in Developing World

Ethanol cooking fuel has great promise in developing countries, especially in South Asia and Africa, because it can yield significant economic, environmental and health benefits. This business plan aims to find a clean and ideal solution to promote ethanol cooking fuel and stoves cost-effectively for a representative developing country—Kenya. This plan compares the biological features of a couple of potential feedstock of ethanol and chooses sweet sorghum because of its great adaptability to semi-arid climate and short harvesting cycle. Next, by assessing the technical and economical feasibility of a local small-scale ethanol plant and bringing forward integrated solutions throughout the entire supply chain from the feedstock production to the retail of ethanol fuel products, this business plan indicates that ethanol cooking fuel and stoves can substitute prevalent fuel-wood and three-stone fire cost-effectively. The local production of ethanol can yield income benefits to local farmers by purchasing local feedstock, healthy benefits to local residents, especially women and children, and job-creating benefits to local communities by involving retailers, delivers and farmers into this business. Besides, if the investor further takes carbon credit generated from ethanol plant, byproducts of ethanol production and potential government subsidies or financial incentive policies into consideration, the profitability of this business could be improved additionally