Impact of Word-of-Mouth on consumer decision-making: An information processing perspective in the context of a high-involvement service

This doctoral study conducts an empirical analysis of the impact of Word-of-Mouth (WOM) on marketing-relevant outcomes such as attitudes and consumer choice, during a high-involvement and complex service decision. Due to its importance to decisionmaking, WOM has attracted interest from academia and practitioners for decades. Consumers are known to discuss products and services with one another. These discussions help consumers to form an evaluative opinion, as WOM reduces perceived risk, simplifies complexity, and increases the confidence of consumers in decisionmaking. These discussions are also highly impactful as WOM is a trustworthy source of information, since it is independent from the company or brand. In responding to the calls for more research on what happens after WOM information is received, and how it affects marketing-relevant outcomes, this dissertation extends prior WOM literature by investigating how consumers process information in a highinvolvement service domain, in particular higher-education. Further, the dissertation studies how the form of WOM influences consumer choice. The research contributes to WOM and services marketing literature by developing and empirically testing a framework for information processing and studying the long-term effects of WOM. The results of the dissertation are presented in five research publications. The publications are based on longitudinal data. The research leads to the development of a proposed theoretical framework for the processing of WOM, based on theories from social psychology. The framework is specifically focused on service decisions, as it takes into account evaluation difficulty through the complex nature of choice criteria associated with service purchase decisions. Further, other gaps in current WOM literature are taken into account by, for example, examining how the source of WOM and service values affects the processing mechanism. The research also provides implications for managers aiming to trigger favorable WOM through marketing efforts, such as advertising and testimonials. The results provide suggestions on how to design these marketing efforts by taking into account the mechanism through which information is processed, or the form of social influence.

Exploring the impact of celebrity endorsement and product class involvement on advertising effectiveness: an eye tracking approach

Celebrity endorsement has increased in popularity over the past decades and companies are willing to spend increasingly excessive amounts of money into it. Even though multiple studies support celebrity endorsement, further research on its impact on advertising effectiveness is called for. Fur-ther, the role of consumers’ product class involvement in advertising needs to be further studied. The purpose of this study is to explore if consumers’ product class involvement and exposure to celebrity endorsers affect consumers brand recall. Supported by earlier studies, brand recall was used as a measure for advertising effectiveness in this study. In general, a psychological approach was chosen for building the theoretical framework. Concept of classical conditioning was presented in order to understand why people act how they do. Balanced theory and meaning transfer model were presented in order to study how celebrities can be used effectively in advertising context. Further, the importance of product class involvement in advertising effectiveness was evaluated. Hypotheses were formulated based on a literature review of the existing research. Because of the versatility of the research design, a mixed methods approach for this study was adopted. Empirical part of the study was conducted in three stages. First, a pre-test was conducted in order to choose suitable product endorsers for the advertisement stimuli used in the experiment. Second, an eye-tracking experiment with 30 test subjects was conducted in order to study how people view advertisements and whether the familiarity of the product endorser and consumers’ product class involvement affects brand recall. For the experiment, a fictional brand was created in order to avoid bias on brand recall. Third, qualitative interviews for 15 test subjects were conducted in the post-experiment stage in order to gain deeper understating of the phenomenon and to make sense of the findings from the experiment. Findings from this study support celebrity endorsement by suggesting that a famous spokesperson does not steal attention from brand information more than a non-celebrity product endorser. As a result, the use of a celebrity endorser did not decrease brand recall. Results support earlier research as consumer’ higher product class involvement resulted in a better brand recall. Findings from the interviews suggest that consumers have positive perceptions of celebrity endorsement in general. However, the celebrity–brand congruence is a crucial factor when creating attitudes towards the advertisement. Future research ideas were presented based on the limitations and results of this study