Toward an Understanding of Consumer Feedback in the Online Environment: Does Managerial Participation Help?

Abstract

The monitoring and management of consumer generated WOM present major challenges for firms (Stewart and Kamins 2002). More specifically, the prevalence of electronic Word-of-Mouth (WOM) and the potential implications of consumer generated information for the attitude and behavior of other consumers substantiate the need for firms to identify and manage the effects of information exchange in online review forums. Traditionally, to minimize the proliferation of negative information among consumers, and to the advantage of their brands, firms have responded to consumer discontent with direct communications as well as through consumer informed product related improvements (Stewart and Kamins 2002; Chen et al. 2003; Sproull and Arriaga 2007). The marketing literature indicates that such responses have led to improvements in brand perception, and increased sales (Albrecht and Zemke 1985; Bitner et al. 1990; Chen et al. 2003; Haugtvedt et al. 2005; Roehm and Brady 2007). In online forums consumers are not directly expressing their discontent to the organization, but such expression is generally between consumers and conducted in public, in the sense that the organization as well as other consumers can observe and react to it. This level of opinion exchange and its rapid spread in the online environment present new challenges to the organization and these issues have not been fully addressed by current theoretical and empirical work.