Understanding and Defining E-Word of Mouth Marketing and Its Impact on Hotel Industry in Goa

Understanding and Defining E-Word of Mouth
Marketing and Its Impact on Hotel Industry in Goa

Abstract
This research involves the study of E-word of mouth marketing and its impact on the hospitality
industry in Goa. E-word of mouth marketing has swiftly replaced the traditional forms of word-
of-mouth marketing as technologies advanced. Because of the presence of a number of platforms
on social media, customers are able to express their viewpoints in an efficient manner. People are
now able to share their experiences regarding tourism and hospitality industries with little
inconvenience to potential customers worldwide. In this regard, there are a variety of reviews
available online, including several negative reviews and comments as well. This study focuses
on how these positive as well as negative reviews affect consumer behavior while booking a
hotel. To narrow down the study to a particular area, the hotels in Goa are studied. Data is
collected through questionnaires in which both guests and managers at a hotel are questioned
regarding the impact of social media and online reviews on decision-making. The study has
exemplified that the E-word of mouth has significant impact on the hospitality industry in Goa
because customers now trust more on online reviews. On the other hand, hotel managers also
consider these reviews as reliable sources to understand the satisfaction level of the customers
along with the drawbacks of their customer services. In this way e-WOM is influencing the
hotels imposing competition in the sector.

Acknowledgements
I would like to thank my supervisor ____________________ and co-supervisor
___________________ for their time, guidance and support in this research.
I would also like to thank my family members and friends aswithout their love and support I
would not have been able to complete this study.
I also want to thank all of my classmates as they have been very supportive of all my endeavors
and have helped me throughout the journey.

Table of Contents
Introduction
Literature review
Aims and Objectives of the study
Research questions
Rationale of the study
Methodology
Research reliability
Ethical considerations of the Study
Findings and Discussions
Conclusion
Limitations of the study and recommendations for future research

Chapter 1: Introduction
Introduction
A common concept is that consumers tend to rely more over recommendations, personal advice
as well as suggestions from family members, friends and acquaintances in the process of making
purchasing decisions. This informal personal exchange of communication that the consumers are
sharing with each other has been referred to as the Word-of-mouth (WOM) (Mauri and Minazzi,
2013 and; Sparks et al., 2013). Word of mouth many times takes the form of objective
information about the product along with other subjective personal experiences and opinions.
Consumers tend to imitate one another by following a social paradigm. Explained as e-word of
mouth is a process through which consumers can share their opinions and information on the
internet which directs the buyers towards products and services. Such form of referrals differs
from its counterpart in the sense thatthey are electronic by nature and there exists no face-to-face
communication, the referrals are usually unsolicited which means that they are sent to those
recipients who were not in search for the information and perhaps may not be willing to pay
attention towards them (Godes and Mayzlin, 2004).
It has also been demonstrated by researchers that personal conversation as well as the informal
exchange of information amongst people tend to influence not only the choice of consumers and
their buying decision but, it also has the ability to shape consumer expectations (Anderson and
Salisbury, 2003), attitude before using the service, along with perceptions related to post-usage
of the product or service. One unique factor which distinguishes word of mouth from traditional
marketing aspects is the positive feedback mechanism between word of mouth and product sales.
This means that word of mouth leads to increased sales of products or services which tend to
generate more word of mouth and eventually more sales of the product or service (Godes and
Mayzlin, 2004).
The principle governing word of mouth has rapidly spread in the field of internet marketing and
online-user generated content has replaced professional reviewers. It has become a new source of
obtaining information and is rendered to be electronic or e-word-of-mouth (e-WOM).
Advancement within information technology has bought about several changes in the way of
communication and these changes have imposed a huge impact over consumer behavior as well

as on their purchasing decision dramatically. The World Wide Web serves as an opportunity
where people can buy products or look for information online. Within the context of word of
mouth, internet has changed the way in which people communicate with each other. Electronic
word of mouth is similar to face-to-face or traditional word of mouth except that the
communication takes place online (Huete-Alcocer, 2017; Barreto, 2014; Carr and Hayes, 2014;
Daugherty and Hoffmann, 2014).
As suggested by Petrescu and Korgankar (2017), the internet leads towards increased
communication, interaction engagements as well as towards a higher reach of consumers.
Consumers have increased control and they can choose how they want advertising to be made.
Moreover, they have the power to decide that what type of content is interesting
(PetrescuandKorgankar, 2017).
Electronic word of mouth incorporates several major benefits when compared to traditional word
of mouth. e-WOM is available to everybody as it offers quick access to a huge a variety of
reviews, information and comments. Moreover, consumers need not to know each other
personally for exchanging their opinions and experiences. However, in most cases, this
anonymity can impose negative impacts over the credibility of the sender. Whereas, in the
conventional word of mouth marketing, a personal or real-time based exchange of opinions takes
place which leads to making that source more credible (Huete-Alcocer, 2017, and; Barreto,
2014).
There are many recent studies which quantify the influence of e-WOM has in the hospitality
industry with respect to hotel operations and hotel managers (Anderson 2012, Kim et al., 2015a;
ÖgütandOnur, 2012 and; ye et al., 2014). The report intents to determine the association between
e-WOM and the operations of hotels in Goa.
Hotel industry has now become one of the most mature industrieswhichhave been hugely
impacted by the advent of information technology and the internet.During a trip plan, hotel stay
is rendered to be an essential component. Studies conducted previously identified four varying
factors that impact the decision making process of consumers for different products and services.
With respect to the hotel industry, these variables include price, the service quality, features as
well as the facilities provided (Liu, 2006 and Cantallops and Salvi, 2014).in order to assess the

various alternatives available, travelers tend to seek information from different sources on the
web. as e-WOM tends to spread wider and faster, it imposes a more powerful impact over the
decision-making process of the customers (Litwin et al., 2008). Travelers find for
recommendations or reviews made by other travelers through different online sources such as
review websites, forums and blogs. According to Cantallops and Salvi, (2014), suggests that the
hotel industry is one of the most affected sectors by e-WOM in the tourism and hospitality
industry. In addition to this, Cheng and Zhou (2010), and Tian (2013), e-WOM imposes a very
significant impact over the travelers’ selection of accommodation at the time of planning a trip.
This increasing importance of e-WOM, it is very important for hotel managers to understand the
specific s of e-WOM. A research undertaken by Jeong and Jang (2011) there are very few
researches related to customer motivation about e-WOM. Gaining a clear understanding about e-
WOM allows managers to how to foster or encourage this aspect of effective marketing. This
report will also include those factors that motivate customers towards e-WOM.
There are many industries which are well aware about the importance of consumer experience
(Nasution et al., 2014, Xu and Chan, 2010). Research suggests that the consumption experience
of consumers is a very important source of human motivations. The same research presents the
fact that there exists a positive relationship between consumption experiences and human
motivation for the publishing of e-WOM. In the hotel industry, there are many successful hotel
brands which offers a multidimensional and unique experience to their visitors which effect their
behavioral intentions (Xu and Chan, 2010). In spite of being a very important motivating factor
related to hotel experience and publishing of e-WO, there is very limited researches which aims
in analyzing that what are those hotel experiences which stimulates positive e-WOM on part of
the guests. Positive e-WOM is considered to be a very major factor influencing the purchase
intention of customers. Based upon the dramatic effect of e-WOM on hotel services as well as
understanding the motivators of e-WOM, hotel managers find it important to direct the hotel’s
promotional efforts in an effective manner. The report will determine how hotel experience
motivates customers and they publish positive e-word of mouth for hotels.

Rationale of the Study
Studies in the past reveal that online ratings and reviews have limited effect on consumer
behavior. The limitations presented in past studies include the lack of representation of
consumer preferences in online reviews as well as the fact that the reviewers are not selected
randomly among a population. A study done by Anderson (1998, p.15) reveals that only those
consumers initiate WOM communications who belong to the extreme ends of the spectrum, i.e.
who are either extremely satisfied or extremely dissatisfied. Moreover, bias has been seen in
customer reviews in the product-introduction stages (Li and Hitt, 2008). However, as seen by
recent studies, prior positive ratings can bias future ratings because of their social influence (Aral
and Walker, 2012, p. 337). Moreover, Hu, Bose, Koh and Liu (2012) have showed that various
third parties that are involved in the business may influence the online reviews nd companies can
post positive comments about their services anonymously. Resultantly, potential customers may
disregard such online reviews and comments.
However, Bright Local (2014) suggests that the reliance on online reviews and ratings by other
customers have been increasing year by year and influencing consumer buying behavior. Online
ratings constitute a kind of social influence that includes accepting the information given by
unknown people. Online ratings have become increasingly popular among consumers in the
context of making purchasing decisions, as it describes the services and quality of various
businesses including hotels or restaurants. As a matter of fact, the main difference between a
brochure of a hotel and its website is that the hotel website offers customer reviews and ratings
of their services. Moreover, many managers proactively encourage their customers to review and
rate their services so as to include community content in their website (Godes and Mayzlin,
2004). These practices highlight the underlying belief that such reviews and ratings positively
influence the business’ name and builds brand loyalty in the consumers.
Therefore, this study aims to conduct an in-depth analysis of the relationship between online
reviews and E-word of mouth marketing on the hospitality industry in Goa. The factors that
consumers are more likely to seek and study about are the focus of this study. Moreover, the
influence that reviews and ratings have on the managers and operations in a hospitality industry
is also studied.