Introduction to Marketing Management
In this chapter the present will be portray the background to the necessity of adding online customer review feature on the online store for the IKEA in the UK and the impact of its absence. It will also give the study aim, the objectives and the foreword to the layout of the report.
1.1 Background to the study
Customers of different products usually search for quality information when buying products. With the growth of the Internet’s popularity, online consumer reviews have turned out to be an essential tool for the clientele that are looking out to discover the quality of a product (Gullin 2009 pg 23). A survey currently carried out by com Score, a research company that does Internet marketing established that 24% of users of the Internet gain access to online reviews before getting to pay for a service offered off line (Banks 2008 pg 33). For that reason, several firms are making use of online consumer reviews as a recent tool for marketing (Dellarocas 2003 pg 21). Other studies have shown that, firms do not only make their goods and services data and promotional information on the online media like the USENET (Mayzlin 2004 pg 34), but also preventively persuade their customers to disseminate the word on their products on the online environment (Chevalier and Mayzlin 2003 pg 32).
The foundation of such a belief on such strategies is that online consumer reviews can greatly influence the purchasing decision of the clientele. A study by Harries and McColl (2008) indicates that professional reviews can extensively impact on the decisions of consumers. With the increase of online review systems, several individuals hold onto the faith that online reviews by consumers could be a better substitute for the overall word of mouth and could further affect the decisions made by the consumers. Empirical findings such as those conducted by Chevalier and Mayzlin (2003) established a close relationship between the online WOM and the viewer ship of Television shows. Dellarocas et al. (2007) also found out that including online movie assessments to their model of revenue-forecasting exceedingly expands the model’s likability.
Such studies generally put forward that many customers make off line buying decisions depending on information available on the online platforms and at least some concepts of online word of mouth are substitutes for the general word of mouth.
The efficiency of online reviews is on the other hand scarce. To begin with, online reviews may stand in for the customers’ preferences. They may foretell product sales but have minimum influence on decisions of the consumers. In the words of Zicherman (2010), online reviews, in such a case act as the predictors rather than influencer of the sales of product. Secondly, interested people can easily alter online platforms.
Dellarocas (2006) and Mayzlin (2006) hypothetically assess the environments in which organizations can anonymously write online reviews to give compliments to their products as well to heighten the level of awareness about them. Chevalier and Mayzlin (2006) establish hat online consumer rankings greatly influence the sales of product in the market of books and that the clientele truly read review text as well as the reviews’ summary statistics. Zhang and Dellarocas (2006) also got the same results in the movie industry.
An online review that may appear negative to an individual person could be positive in different person’s point of view. Take for instance an online review of a motel that depicts it as not suitable for children. To a couple searching for a romantic weekend place would not view this as a hindrance to booking the same motel, and would probably welcome this as a motivating factor. For the travel firms that really want to maximize their clintele reviews today and in the future, will be those that take into mind how to enhance their relevance for every online visitor. The more applicable and suitable the reviews posted on the website are to the targeted customers, the higher the impact is on the process of booking (No, 2007). Therefore the application for Review and Ratings can be included on any part of a website, to see to it that the most important reviews are ever present on the conforming pages on a website. The application could also enable firms to choose the level of moderation that they preferred and thus the firms could opt to have the capacity to endorse comments, reviews, and negotiations before they are accessed on their website. This allows clients to cautiously monitor the people’s say on their products and services, and thus allowing for a quick reaction to any issues that may come up. (Funk, 2009 pg 45)
Interesting to note is that, we also establish that the impact of online reviews gets greater after the initial months of their introduction. This study is among the initial ones conducted to empirically illustrate the differential effect of consumer reviews on products in the same group of products. The findings of other studies have suggested that organizations’ online marketing techniques may not be efficient for all kinds of products, despite the fact that they may be in the same category (Bly 2009 pg 24).
This inference contradicts with the present view that organizations require to actively supervise online word of mouth, bearing in mind the great proficiency of the Internet in dissemination of word of mouth. The study also states that role producers and producers who do sales through online media should concern themselves with online consumer reviews and alternatives of online review structures, as they greatly impact on their sales.
As the multiplication of online markets has resulted into the advent of several niche producers, an occurrence often termed the ‘long tail,’ the findings of this study have important consequences for their survival as it addresses the impact of its absence (Khosrowpour, 2007 pg 64).
Reviews form the most popular kinds of online research that increase browse time on the website by to 100 per cent. According to Swipeeleen (2005), over 50 per cent of all holiday bookings in the United Kingdom are carried out online. Furthermore, across all organizations, a study conducted by Light speed Research established that almost 62 per cent of consumers read reviews oonline as compared to 49 per cent who investigated competitor’s locations. Their in-house research established that an effective review system greatly increases their browse time. In total, our customer’s report is that their online guest browsing time doubles.
1.3 The study aim
It has been noted that obtaining feedback from consumers of goods and services is essential to the improvement of the good or the service. The introduction of the internet and web-technology, however, formed a chance for market researchers to get consumer feedback from large number of customers. Online feedback is therefore, a recent and modern way of obtaining views, opinions and experiences of consumers on the goods and services. The analysis founded on evidence from different studies indicates that online customer reviews have an impact on purchasing decisions, but it might not have a direct impact on sales volume of businesses. However, in the case of furniture retailers like Argos and IKEA, it is difficult to conclude whether online reviews have any influence on sales volume and buying decisions. The study will therefore aim at establishing why the IKEA consumers need the online review systems as the retailers are currently not offering the online service.
1.4 objectives of the study
The study is set to:-
1. find out the understanding of the concept of online review on the online store for IKEA customers in the United Kingdom 2. Investigate on the methods employed for gathering feedback on the online store for IKEA customers United Kingdom 3. Find out the influence of the online feedback mechanisms on the behaviors of consumers for IKEA in the United Kingdom 4. Establish the problems experienced by the customers of the online store for IKEA in the United Kingdom as a result of the absence of the online review feature.
1.5 introductions to the format of the report
The rest of the report is organized in the following format:- the Literature review part which is divided in to a small introduction, the concept and background of feedback, the ways of getting feedback, the internet and customer feedback and the influence of online feedback on behaviors as well as a small conclusion of the chapter.
The research methodology will explain the methodological techniques that will be employed in the research and for this study; the kwiksurvey method will be used. A questionnaire will be formulated, which will then be emailed to the respondents.
The process of data analysis and discussion will be done by the quantitative techniques such as graphs, charts and statistics thus enabling the exploration, presentation, description and examination of relationships and trends within our data. Qualitative techniques will also be used. The practical and ethical issues will be identified, and a discussion of the ethical issues involved in undertaking the research. At the end of it all will be a list of the references used in secondary data collection.