Hotels and Web 2.0

‘Social Media Marketing, A Consumers Insight’

DECLARATION

I declare that this Dissertation is the result of my own individual effort and that it
conforms to university, departmental and course regulations regarding cheating and
plagiarism. No material contained within this Dissertation has been used in any other
submission, by the author, for an academic award.

Tejveer Singh Bedi
(H-1274)

31st May, 2008

-I- Bedi, T.S.


ACKNOWLEDGEMENT

I would like to take this opportunity to express my sincere gratitude and
acknowledgement towards the following people who have made this dissertation
successful and memorable.

Firstly, I would then like to express my extreme gratitude to Dr. Veenapani, my
dissertation guide for being a constant support and source of inspiration and for
providing me with priceless inputs constantly during the course of the dissertation.

I would like to thank Mr. Satish Jayaram, Principal, Institute of Hotel Management,
Aurangabad (IHM-A) for giving me this opportunity to work on this dissertation and
Mr. Anand Iyengar for his inputs on research methodology.

I would also like to extend my gratitude to Dr. Hagen Wagek and the IBM Institute of
Business Value, for taking out the time and resources to help me with my research

Last but not the least I would like to thank not my colleagues but my friends Pingaksha
Vidisha, Aditya and Karan who invested their invaluable time in some way or the other,
in this research.

- II - Bedi, T.S.


TABLE OF CONTENT

SYNOPSIS ...................................................................................................................VII

CHAPTER ONE .............................................................................................................1
CONCEPTUALIZATION OF THE PROBLEM ........................................................1
1.1 INTRODUCTION ..................................................................................................1
1.2 ISSUE IDENTIFICATION.....................................................................................1
1.3 STATEMENT OF AIM ..........................................................................................2
1.4 STATEMENT OF OBJECTIVES ..........................................................................2
1.5 SCOPE OF THE DISSERTATION........................................................................3
1.6 LIMITATIONS OF THE DISSERTATION ..........................................................3
1.7 DISSERTATION STRUCTURE............................................................................3
1.8 CONCLUSION .......................................................................................................4

CHAPTER TWO ............................................................................................................5
LITERATURE REVIEW...............................................................................................5
2.1 INTRODUCTION ..................................................................................................5
2.2 OPEN SOURCE MOVEMENT .............................................................................6
2.2.1 BUSINESS MODEL FOR WEB 2.0 .................................................................7
2.2.2 EMERGENCE OF SOCIAL MEDIA................................................................9
2.3 USER GENERATED CONTENT (UGC) AND WEB 2.0 ..................................11
2.3.1 INTERPERSONAL INFLUENCE ..................................................................11
2.3.2 WORD OF MOUTH (WOM) COMMUNICATION .......................................12
2.3.3 WEBLOGS .....................................................................................................14
2.3.4 ONLINE COMMUNITIES .............................................................................15
2.3.4.1 Functions of Virtual Communities from the Users’ Perspective ............16
2.4 EFFECTIVENESS OF MEDIA............................................................................18
2.5 CREDIBILITY OF MEDIA .................................................................................19
2.5.1 TYPES OF CREDIBILITY .............................................................................19
2.5.2 CREDIBILITY AND AUTHORITY.................................................................20
2.5.3 CREDIBILITY AND TRUST ..........................................................................20
2.5.3.1 Trust ........................................................................................................20
2.5.4 CREDIBILITY AND PERSUASION...............................................................21

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2.5.5 MULTIDIMENSIONAL APPROACHES TO CREDIBILITY.........................23
2.5.5.1 Information Seeking and Retrieval .........................................................23
2.5.5.2 Online Consumer Behaviour...................................................................23
2.5.5.3 Evaluation of Websites ...........................................................................24
2.6 CREDIBILITY OF USER GENERATED CONTENT........................................24
2.6.1 CHANGING WEB ENVIRONMENT .............................................................24
2.7 CHALLENGES AND OPPERTUNITIES OF eWOM FOR MARKETERS ......28
2.7.1 STRATEGIES FOR MANAGING eWOM IN HOSPITALITY INDUSTRY.....29
2.7.2 ETHICAL CONCERNS FOR MARKETERS..................................................30
2.8 CONCLUSION .....................................................................................................32

CHAPTER THREE ......................................................................................................34
RESEARCH METHODOLOGY ................................................................................34
3.1 INTRODUCTION ................................................................................................34
3.2 PURPOSE OF RESEARCH .................................................................................34
3.3 HYPOTHETICO-DEDUCTIVE METHODOLOGY ..........................................35
3.3.1 OBSERVATION .............................................................................................35
3.3.2 PRELIMINARY DATA COLLECTION ..........................................................36
3.3.3 THEORY FORMULATION............................................................................37
3.3.4 DEPENDENT AND INDEPENDENT VARIABLES ......................................37
3.3.5 HYPOTHESIZING .........................................................................................38
3.3.6 FURTHER SCIENTIFIC DATA COLLECTION............................................39
3.3.6.1 Tools Employed for Research.................................................................40
3.3.6.2 The Sample .............................................................................................44
3.3.7 DATA ANALYSIS ...........................................................................................45
3.3.8 DEDUCTION.................................................................................................46

CHAPTER FOUR.........................................................................................................47
DATA ANALYSIS ........................................................................................................47
4.1 INTRODUCTION ................................................................................................47
4.2 DATA ANALYSIS...............................................................................................47
4.2.1 DEMOGRAPHICS COVERED FOR THE STUDY .......................................48
4.2.2 STATISTICAL TOOLS ...................................................................................48
4.2.2.1 Statistical Package for the Social Sciences .............................................49
4.3 QUALITATIVE ANALYSIS ...............................................................................50

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4.4 ANALYSIS OF QUANTITATIVE DATA ..........................................................58
4.4.1 DESCRIPTIVE STATISTICAL ANALYSIS.....................................................58
4.4.2 IMPACT OF TYPE OF ADVERTISEMENT ON APPEAL ............................59
4.4.3 IMPACT OF TYPE OF ADVERTISEMENT ON TRUST...............................60
4.4.4 IMPACT OF TYPE OF ADVERTISEMENT ON PERSUASIVENESS ..........61
4.4.5 COMPARATIVE ANALYSIS OF APPEAL, TRUST AND PERSUASIVENESS
.................................................................................................................................63
4.4.5.1 Correlation Analysis ...............................................................................63
4.4 DISCUSSIONS AND IMPLICATIONS ..............................................................64

CHAPTER FIVE...........................................................................................................67
CONCLUSION AND RECOMMENDATIONS ........................................................67
5.1 INTRODUCTION ................................................................................................67
5.2 CONCLUSION .....................................................................................................67
5.3 RECOMMENDATIONS ......................................................................................69
5.3.1 WEBSITE ENABLED WITH UGC AS eWOM PROPAGATORS ..................69
5.3.2 MANAGEMENT RESPONSES TO FEEDBACK ...........................................69
5.3.3 THIRD PARTY WEBSITES ............................................................................69
5.3.4 BLOGS ...........................................................................................................70
5.3.4 VIRTUAL COMMUNITIES............................................................................70
5.4 SCOPE FOR FUTURE RESEARCH ...................................................................71
BIBLIOGRAPHY .........................................................................................................72

LIST OF FIGURES

Figure 2. 1: The conflict between traditional and new media has resulted in four
business models that will likely coexist for the mid term.................................................7
Figure 2. 2: A conceptual framework of Word-of-mouth (Litvin et al., 2008) ..............13
Figure 2. 3 : A tentative model for the functions of virtual communities from the users’
perspective. (Wang et al., 2002) .....................................................................................17
Figure 2. 4: A Typology of Electric Word-of-mouth (eWOM) Channel........................28

-V- Bedi, T.S.


LIST OF TABLES

Table 3. 1: Discussion Guide and Justification...............................................................44

Table 4. 1: Descriptive statistics for Appeal, Trust and Persuasiveness.........................58
Table 4. 2: Impact of type of advertisement and age on appeal......................................59
Table 4. 3: Impact of Type of advertisement and age on trust........................................60
Table 4. 4: Impact of type of advertisement and age on Persuasiveness ........................61
Table 4. 5: Descriptive statistical analysis of age ad type of advertisement...................62
Table 4. 6: A Correlation Analysis between Appeal, Trust and Persuasiveness ............63

LIST OF ABBREVIATIONS

UGC User Generated Content
FGD Focus Group Discussion
SEC Social Economic Class

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SYNOPSIS

The purpose of this study is to assess the potential of Social media marketing by
studying the consumer’s insight on trust, persuasiveness and appeal on user generated
content enabled websites as compared to traditional company sponsored websites.

The topic is introduced by identifying and discussing the issue briefly and gives a
concise statement of the aim and objectives. Although management feedback was taken
to assess the needs of a hotels marketing initiative, the research limitation to a consumer
focus has been mentioned.

It is an explanatory research which uses an experimental design. Two focus group
discussions and six interviews were held to validate the four hypotheses generated one
each with the variables of appeal, trust and persuasiveness and one relating to the
impact of age. The research is conducted in the capital city of New Delhi due to access
to the facilities required for a focus group discussion and also ready access to the
sample required.

The conclusions drawn show that consumers prefer using user generated content
enabled websites in terms of trust and persuasiveness as compared to traditional
company sponsored websites when searching for travel related information. This was
arrived at upon measuring appeal, trust and persuasiveness for the two advertisement
messages.

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CHAPTER ONE

CONCEPTUALIZATION OF THE PROBLEM

1.1 INTRODUCTION
This chapter elucidates the research topic that deals with the consumer’s perspective of
social media marketing with respect to Trustworthiness, Persuasiveness and Appeal of
the media. The researcher found this issue highly researchable as there is a need gap in
research for credibility assessment of User Generated Content. Furthermore, this
chapter describes the aims, objectives, scope and limitations along with a detailed
structure of the same.

1.2 ISSUE IDENTIFICATION
Identification of the issue was highly intriguing for the researcher. The researcher
wanted to study an issue which would be a part of a consumer’s daily lifestyle and yet
impact the hospitality industry. The researcher is highly interested in the dynamics of
the internet platform and hence observed the lifestyle of various demographics.

In the preliminary observation stages the researcher noted the average time the various
demographical sections spend on the various media platforms, and thus notices a
generic trend or a shift of the amount of time spent on traditional media platforms such
as the television and the radio to the virtual world of the internet.

What specially came into the limelight was the increasing popularity of online
communities through social networking sites like Myspace, Facebook, Orkut and even
Youtube. The researcher noted that members of these websites took a keen interest on
the various applications and communities that were present in this space and spent more
and more time either reading content generated by other users or even enriching the
websites with their own experiences and ideas.

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In order to facilitate a better understanding of the domain of the study, the researcher
carried out a preliminary data collection on the internet. Various online articles, journals
and such were collected and studied.

This is how the researcher came across the web 2.0 platform. Web 2.0 is a term which
signifies basically a platform which allows and encourages user generated content. This
platform is vast and increasingly significant in terms of scale and also influence upon its
users.

Thus the purpose of this study is to assess the potential of Social media marketing
by studying consumer’s insight on appeal, trust and persuasiveness of user
generated content as compared to traditional company sponsored content.

1.3 STATEMENT OF AIM
To assess the potential of Social media marketing by studying consumer’s insight on
appeal, trust and persuasiveness of user generated content as compared to traditional
company sponsored content

1.4 STATEMENT OF OBJECTIVES
• To study the existing literature on Social Media Marketing and to create an
understanding on the user generated content platform
• To review web based credibility and explore the effectiveness of User Generated
Content v/s sponsored internet media
• To assess appeal, trust and persuasiveness of User Generated Content and
company sponsored media from a potential consumer
• To explore a social media marketing strategy for hospitality marketers and
define the scope for further research

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1.5 SCOPE OF THE DISSERTATION
The scope of the dissertation is to study Social Media Marketing and to explore it from
a consumer’s perspective. For that very purpose, the trust and persuasiveness of web
based advertisements was studied under the context of credibility assessment .Appeal
was studied as it is a key component of web based advertisement effectiveness.

The researcher wished to carry out the research in the hospitality industry context. The
scope of the study will be restricted to leisure travellers belonging to Social Economic
Class (SEC-A) (upper middle class demographics) which was divided as per two
demographical sections of younger and older, which have been defined in chapter three.
A qualitative research was carried out by the researcher in the city of New-Delhi.

1.6 LIMITATIONS OF THE DISSERTATION
• The research is carried out in a controlled environment, for only two
demographical sections
• Since a multi-brand environment was not created during primary research, the
study might suffer from a brand-bias
• The research is limited to male participants

1.7 DISSERTATION STRUCTURE
The topic is introduced with the introduction to the issue, aim, objectives, scope and
limitations of the research. The reader is facilitated with a gist of the entire research
through this chapter. This is followed by the literature review initially would give an
overview on the work that has been done in the field of Open Source Movement and
UGC platforms. Then the new model will be discussed as a part of a media model.

Further the researcher would deal with the methodologies used by the researcher to
conduct the research. The researcher would be using the Hypothetico-Deductive
method, which involves finding secondary data and further tallying it with primary
research information. The rationale for various steps in the research would be explained
in this chapter.

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Finally, Data analysis would involve the analysis of the qualitative data. Two Focus
Group Discussions and six personal interviews were held. The FGD’s were divided as
per age demographics and only upper middle class participants were taken due to their
travel habits. The next section of this chapter will deal with the analysis of the collected
data and information. This would further lead to the last part of the dissertation i.e. the
conclusion wherein the research would be concluded with appropriate
recommendations, suggestions and scope for further research.

1.8 CONCLUSION
Consumers today have access to various media channels in order to fulfil their
information seeking needs. Social media marketing, through the UGC platform
facilitates this process by handing over the control of the content to the consumers
themselves. Roles of media generators and message receivers are thus integrating.

This study will deal with the question, whether consumers find this new media platform
and the information it presents as credible and thus effective. The question at hand is of
the effectiveness of word of mouth communication in the World Wide Web, which has
great implications to marketers of the travel and hospitality product.

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CHAPTER TWO

LITERATURE REVIEW

2.1 INTRODUCTION

The Time person of the year, 2006 was ‘You’

In 1919, times magazine came up with the man of the year concept and ever since then,
it comes up annually with a feature cover issue of the most influential personality of the
year. The story is traditionally covered from the perspective of the "Great Man" theory
of history, attributed to the Scottish philosopher Thomas Carlyle, who wrote that "the
history of the world is but the biography of great men". And so, time magazine in 2006
covered a personality that would shape the history of the world, or in other words pave
the path for a great future. The personality is that of every individual human being who
yields great power as a group. This is about community and collaboration on a scale
never seen before. It's about the cosmic compendium of knowledge Wikipedia and the
million-channel people's network Youtube and the online metropolis MySpace and
Facebook. This open source movement is about the many captivating power from the
few, helping one another for nothing in exchange and not only changing the world, but
also changing the way the world changes.

The open source movement is a massive social experiment. There's no road map for
how an organism that's not a bacterium lives and works together on this planet in
numbers in excess of 6 billion. But the World Wide Web gave us some ideas. This is an
opportunity to build a new kind of international understanding, not politician to
politician, great man to great man, but citizen to citizen, person to person. This research
is about this very phenomenon, and its implications on the hospitality sector.

Just as the diffusion of the World Wide Web as a mainstream consumer media in the
mid-1990s had important implications for commerce, another revolution, currently in
progress will potentially have similar effects.

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The Web is evolving from a business-to-consumer marketing media to one where peer-
to-peer generation and sharing of data are the norm. As a result, it has become more
difficult to carefully craft a marketing message and position it in front of the consumer.

The researcher highlights Social Media Marketing as a part of the marketing function of
a hotel .In order to understand the space in which social media marketing will operate
in, it important to comprehend how it falls into the hotels marketing framework. A
social media presence will be a part of a larger Internet Marketing Policy which in turn
will be a part of a hotels distribution channel strategy.

2.2 OPEN SOURCE MOVEMENT
The past ten years have seen the emergence of open source movement that believes that
progress in the digital world is being achieved by sharing intellectual property and
seeing it developed by a much wider community than what the traditional hierarchical
company offers. Although the open source movement originated to facilitate the rapid
growth of open source software, which is computer software whose source code is
available under a copyright license that permits users to study, change, and improve the
software, and to redistribute it in a modified or unmodified form, the researcher wishes
to emphasize that the open source movement is as much about a philosophy of
innovation as it is about developing specific products.

According to Puri (2007), the open source movement has enabled new, more efficient,
ways of communicating; of distributing and accessing information; and of doing
business; helping to act as a dissolver of boundaries and a catalyst to globalisation. It is
thus making methodologies transparent and using the intellectual resources of the
audience to develop and perfect the product. Creativity and product development thus
flow from the openness of the system.

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2.2.1 BUSINESS MODEL FOR WEB 2.0
Based on an analysis of current forecasts by Berman et al., (2007), worldwide revenue
from new media channels such as Internet advertising, mobile music and online games
is expected to reach nearlyUS$55 billion in 2006. Although relatively insignificant to
the US$455 billion in revenue that traditional channels are expected to yield in 2006,
this figure is high for a relatively new marketing media in comparison. New media,
however, is growing much faster than traditional media. Its revenue compound annual
growth rate (CAGR) from 2006 to 2010 is 23 percent versus 6 percent for traditional
revenue streams.

Four primary business models are seen emerging in the near future– traditional media,
walled communities, content hyper-syndication and new platform aggregation

Figure 2. 1: The conflict between traditional and new media has resulted in four business models
that will likely coexist for the mid term
Source: Berman et al., (2007)

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The following is a description of media business models through 2010 in terms of
content source and device platforms.

• Traditional Media: Traditional media is a model that relies on branded content
that has been created by professionals and is delivered through a “walled”,
conditional access environment through devices dedicated for that very purpose.
For instance Paramount Pictures and Warner Bros. exist in this space.

• Walled Communities: Like traditional media, the delivery platform for this
model is a walled or conditional access environment through dedicated devices.
However this is based on distribution of user and community generated content.

These are typically traditional businesses that allow user contributions and non-
traditional features. For instance, the firm Comcast signed an agreement with
facebook.com to produce a television series from user-generated videos.

• Content hyper-syndication: This model allows the use of professionally
produced content in open channels, without dedicated access providers or
devices. For instance, BBC with it’s my BBC interactive media service. A
second example would be Sony Online Entertainment which has multiplayer
online role playing games.

• New Platform Aggregation: This model relies extensively on both user
generated content and open-distribution platforms. This model is the extreme in
the sense that neither incumbent studios nor distributors have legacy advantages
here. This is where pre-dominantly user-driven aggregators like Youtube,
Myspace.com and Second Life as well as a host of less-publicized players such
as Live Journal, XING, mixi, DailyLOL and NetMusicMakers are found.

Although traditional media dominates the market space, there are no clear winners
amongst the four business models. Instead it is expected that different companies will
pursue divergent models and unique combinations that suit their own resources and
environment.

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2.2.2 EMERGENCE OF SOCIAL MEDIA
The media world is currently undergoing a new media revolution, which has its basis
around social computing. As web 2.0 technologies become available, they are rapidly
being embraced by people. According to Buckley & Cooke (2007), as the UK
Telecommunications Regulator, Ofcom identified, the emergence of “A whole new
generation of consumers for whom online is becoming the lead medium and
convergence is increasingly the norm”.

Eric Raymond famously referred to the difference between traditional and social media
as the contrast between the cathedral and the bazaar. To build cathedrals you need strict
central command structures with rules and agreed approaches but bazaars just grow like
topsy from the free flow of ideas as suppliers seek to meet the often changing needs of
their customers. In open source media there is no great plan to which the developers are
working. (Buckley & Cooke, 2007)

This media revolution can be understood in a four basic phases. Firstly, the emergence
of user generated content that is blurring the distinction between professional and
amateur content. According to Bellman et al., (2007), one of the key benefits to open
source media has been the incredible access to information it provides to consumers.

The leads directly to the second point, namely that new media are increasingly being
pulled by consumers, rather than being pushed at them. Consumers decide upon the
success of sites like Youtube and Flickr as it rests upon them, which pictures or videos
to look at rather than broadcasters dictating their viewing.

Thirdly, today’s media is micro-chunked, rather than monolithic. This implies that the
consumer can access packets of information; relative to his/her needs without gaining
access to the whole content. At blogs, posts are being read by consumers and at
Youtube, consumers watch micro-chunked videos. They can watch as little or as much
as they want rather than have the media experience pre-defined by the publisher.

Fourthly, what is the key to understanding the importance of user generated content are
the social interactions that develop around the content. Indeed, it is the facility to rate,
rank, comment on, review, and respond to the new world of media that is driving the
success of these new media properties.

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In short, what is being witnessed is, the emergence of a population that is willing to
record, and share their experiences; and submit them to their friends and other
community members for evaluation which in turn allows their reputation to be built up.
According to Buckley & Cook (2007), it is most evident that the rapid growth of social
computing is facilitating the emergence of social networks. As Sergey Brin, Google's
cofounder said that websites that specialise in social networking and user-generated
content represent a “whole new ecosystem” on the Internet.

One of the key effects of social networks is the support they provide during the
consumer decision making process. According to Puri (2007), there are online forums
for just about any consumer products you can think of, from coffee to consumer
electronics, where consumers discuss their experiences, provide their opinions and
share news and advice.

User generated content enabled websites harness the two-way communication ability of
the Internet to not only allow consumers to read other consumers’ unedited and
unfiltered opinions, but also collect and aggregate data from large numbers of similar
people at a low cost (Hennig-Thurau et al.,2004). As Dellarocas (2003), points out, this
means that for the first time in history, “individuals can make their personal thoughts,
reactions and opinions easily accessible to the global community”.

During the consumer decision making process, potential customers can now access this
vast pool of data to help evaluate alternatives. Their information search process is
facilitated by search engines – websites which act as the front end of complex
categorisation systems that trawl the web categorising every page they encounter. The
ease with which consumers can use such sites to search has turned the web into a user-
driven, non-linear repository of information. As a result, instead of the marketer
dictating how information is presented and consumed, the user is now in control.

Uses and gratifications theory
The uses and gratifications theory proposed by Blumler & Katz (1974), assumes that
media users are goal-oriented. They play an active role in selecting and using the media
to best fulfil their individual needs. The uses and gratifications theory shifts the
emphasis of media communication studies from an effect perspective to an audience
perspective.

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The uses and gratification theory assumes that the media users have a variety of choices
to satisfy their needs and each medium can have different functions. Uses and
gratifications theory is now widely accepted for nearly all kinds of mediated
communication tools (Lin, 1999). Elliott & Rosenberg (1987), remarked that audience’
motivations to use a certain type of mediated communication have been studied through
this theory whenever a new communication technology is introduced. The researcher
will explore the goal orientation of consumers when they contribute to consumer
generated media, through the forthcoming discussion on online communities.

2.3 USER GENERATED CONTENT (UGC) AND WEB 2.0
User generated media content is not a new idea. In fact, the interaction of professional
media producers and their readers, listeners and viewers has a longstanding history
(Schweiger & Quiring, 2006). Schweiger & Quiring (2006), determine that the creation
of media content with the help of users gained importance with the advent of the new
media. Digital age and new media brought some changes for media users and producers
to have interactions in the process of the creation of public content (Walter von,
Quiring, 2004). As outlined the details above, UGC can be the result of process
including the combined forces of media users and providers with the aim to reach the
public.

According to O’Reilly (2006), Web 2.0 is the network as platform, spanning all
connected devices; Web 2.0 applications are those that make the most of the intrinsic
advantages of that platform: delivering software as a continually-updated service that
gets better the more people use it, consuming and remixing data from multiple sources,
including individual users, while providing their own data and services in a form that
allows remixing by others, creating network effects through an "architecture of
participation," and going beyond the page metaphor of Web 1.0 to deliver rich user
experiences.

2.3.1 INTERPERSONAL INFLUENCE
The internet has given to marketers, new means to improve the efficiency and
effectiveness of communication, and has also given them new approaches for the
acquisition and retention of customers (Osenton, 2002).

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The researcher would like to highlight one such aspect of cyberspace that is the
phenomenon of online interpersonal influence (Senecal & Nantel, 2004).

A fundamental principal of consumer behaviour is that consumers have the ability to
exert powerful influences upon each other (Haywood, 1989) and thus it is only natural
for marketers to seek to manage interpersonal influence.

Hospitality and tourism marketers find the issue of managing online personal influence
of critical importance for the following reasons: hospitality and tourism product
offerings, as tangible goods, cannot be evaluated before their consumption, thus
highlighting the importance of interpersonal influence (Lewis & Chambers, 2000).An
example of consumers sharing their hospitality and tourism feedbacks is the website
tripadvisor.com- touted (by the company) as “the largest site for unbiased travel reviews
(which) gives you the real story about hotels, attractions, and restaurants around the
world. Other websites are travelguru.com, igougo.com.

2.3.2 WORD OF MOUTH (WOM) COMMUNICATION
Word of mouth communication can be described as the process that allows the
consumers to share information and opinions that direct the buyers towards and away
from specific products, brands, and services (Hawkins et al., 2004).

In his writings Westbrook (1987), clearly indicates that informal communications are
communications of interpersonal relationships as compared to those through mass-
media channels in which product knowledge is passed from producers to consumers.

It is evident that WOM can be mediated by electronic means. Due to this fact it may be
noted that “informal communications” might not be all inclusive. This is substantiated
from the fact that more and more companies had adopted viral marketing practices
which blurred the boundary between commercial messages and word of mouth
(Lindgreen & Vanhamme, 2005)

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Figure 2. 2: A conceptual framework of Word-of-mouth (Litvin et al., 2008)

Thus, it can be seen that the key defining characteristic of WOM is the perceived
independence of the source of message. It can be context of the internet; WOM can be
broadly described as the communication between consumers about a product, service,
or a company which the sources are considered independent of commercial influence.

After studying the spread of WOM and the motivation behind its spread, it is important
for the purposes of this study to understand the expected outcomes from the
dissemination of WOM. The primary conclusion is that favourable WOM increases the
probability of purchase, while negative WOM has the opposite effect.

This finding has remained largely unchanged since noted by Arndt in 1967. Recently,
however Gruen et al., (2005) upon studying one form of WOM, the online “know-how”
forum”, determined that online WOM impacted not only the receiver’s perception of the
value of a company’s product, but also their loyalty intentions.

Thus, the exchange of product information through WOM empowers consumers and
lessens producer/consumer information asymmetries (Ozcan & Ramaswamy, 2004),
ultimately resulting in an acceleration or deceleration of product acceptance (Bass,
1969).

The applications of word of mouth communication for marketers are many but the
researcher focuses on Interpersonal influence, which flows not only from opinion
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leaders to followers but also spreads as a result of relationships amongst followers.
These are the relationships which need to be harnessed by managers. Marketers do so
by creating a ‘buzz’, defined by Thomas (2004), as the “amplification of initial
marketing efforts by third parties through their passive or active influence.” One way to
accomplish this would be simulation which would include advertising and other
promotional techniques that get consumers talking about brands.

Recent well-documented examples of product proliferation through the power of ‘buzz’
include the diffusion of BOTOX (Ries & Ries, 2002). In Germany, the release of Harry
Potter books was carried out relying solely upon reviews to create awareness and
demand (Fuchs, 2003). It can be seen that in these examples, success was attributed not
to the products traditional advertising or a public relations campaign, but rather to a
creation of ‘buzz’ through the use of non-traditional WOM promotional strategies.

The success of Palisades Interactive Media initiative to establish online awareness and
build up the pre-release excitement for the film Halloween, (2007) is another instance
of Buzz marketing. They aimed to engage with the Youtube Community to create
strong buzz around the film and also create an “after life” for the trailer that would
extend beyond the marketing campaign. The campaign was a success when all the
objectives were met and the film achieved a number one at the box office, (2007).
(www.youtube.com, 2008)

2.3.3 WEBLOGS
A blog is actually short for weblog. According to Mercado-Kierkegaard (2006), Blogs
are websites or personal journals, frequently updated with almost daily new entries in a
reversed chronological order consisting of the most recent post and offer many links to
related information. Thus, they are often rather personal and opinionated and can focus
on one person’s life or on an issue. The journal is listed in a chronological order
consisting of the most recent post.

Unlike websites, blogs are written in an informal style and reflects the interest, view
and personality of the blogger. Litvin et al., (2008) provide a different perspective to
blogs by classifying blogs and virtual communities as asynchronous channels that
writers and readers access at different times; though an active message board can

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provide near synchronous access by its members. Conversely, newsgroups and chat
rooms are synchronous.

Together blogs form an interconnected whole or the intellectual cyberspace which
bloggers occupy called the ‘‘blogosphere’’, formed from the Greek word ‘‘logos’’
(word). Information flow in the blogosphere has its own way: personal, fast, connected
and networked.

With 22 million blogs online at present, the ‘blogosphere’ is growing at an astronomical
rate. Mercado-Kierkegaard, 2006 classifies the reasons for this growth as follows. First,
it is easy to use and bloggers with little know-how can set it up with easily available
blogging software. The basic technology effectively allows access to a website and
thereby people to add content. Secondly, it allows people to have conversation and give
their rapid feedback not only in the same blog, but also in other blogs. Newspapers and
journals are not able to print comments from the readers immediately and reply
instantaneously.

Third, this media is subject to self-correction. Retracting a statement and/or to
providing the parties with their right to reply is relatively easy. It facilitates ease of
publication and correction of information which might be false or damaging and makes
it difficult for bloggers to ignore requests to take down defamatory or illegal materials.
Fourthly as with the web, blogs have a global reach enabling bloggers to link
everywhere around the world.

Fifth, it has the ability to disseminate specialized knowledge, although the accuracy of
the news cannot be guaranteed, unlike conventional news. Blogging combines the
functions of an editor and author.

2.3.4 ONLINE COMMUNITIES
Earls, (2003) captures the essence of virtual communities while addressing a group of
market researchers He says that you (marketers) have “overlooked an important – the
most important – part of what it is to be human: we are herd animals. It has been
argued that this omission seriously undermines the value of our discipline, that for
whatever reason we have persisted in holding on to our individualist based view of

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humanity, we are failing to live up to the standards we aspire to in providing business
with the means for informed decisions about the future”

The most often cited definition of a virtual community is first given by Rheingold
(1994), as: ‘‘social aggregations that emerge from the Net when enough people carry on
those public discussions long enough, with sufficient human feelings, to form webs
of personal relationships in cyberspace. A virtual community is a group of people who
may or may not meet one another face to face, and who exchange words and ideas
through the mediation of computer bulletin boards and networks’’

It is essential to understand members and their needs in virtual community development
since members are the pulse of any community and without them, there is no
community (Preece, 2001).

In 1996 in a conference on the theory and practice of physical and network
communities (Whittaker et al., 1997), a group of human computer interaction
professionals identified the key characteristics of online communities from a
multidisciplinary perspective, and these core attributes of online communities include:

• Members have a shared interest, need, goal, or activity that provides the primary
reason for belonging to the community.
• Members engage in repeated, active participation, and often, intense
interactions, strong emotional ties, and shared activities occur among
participants.
• Members have access to shared resources, and policies determine the access to
those resources.
• Reciprocity of information, support, and services among members
• Shared context of language, social conventions, and protocols (Preece, 2001).

2.3.4.1 Functions of Virtual Communities from the Users’ Perspective
Preece (2001), provides a working definition of online community when she states that
an online community should consist of the following elements: people who interact as
they strive to satisfy their own needs or perform special roles; a shared purpose such as
an interest, need, information exchange, or service that provides a reason for the

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community; policies that guide people’s interactions; and computer systems which
support and mediate social interaction and facilitate a sense of togetherness.

A successful virtual community must attract and keep enough members to make it
worthwhile, and consequently a community builder has to focus on the specific benefits
the members will realize by joining the community.

The researcher cites a model of member s’ needs in virtual communities through
Functional needs, Social needs, and Psychological needs.

Functional Needs
Transaction. Information,
Entertainment,
Convenience, Value

Virtual Community

Psychological Needs Social Needs
Identification, Relationship,
Involvement, Belonging, Interactivity, Trust,
Relatedness, Creativity Communication, Escape

Figure 2. 3 : A tentative model for the functions of virtual communities from the users’ perspective.
(Wang et al., 2002)

Functional needs
Functional needs are met when community members go online to fulfil specific
activities. According to Armstrong & Hagel (1996), it can be a transaction in which
members buy and sell products or services .It also can support information gathering
and seeking for both learning purposes and also for facilitating decision-making. It can

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be entertainment and fantasy or the convenience or value the virtual community
provides to its members where information can be accessed without concerns about
time and geographical limits.

Social needs
Virtual communities are structured in a social format, convey social meaning, and meet
social needs. According to Wang et al., (2002), these social needs may include
relationship and interactivity among members since virtual communities give people
with similar experiences the opportunity to come together, form meaningful personal
relationships and communicate with each other in an interactive way;
it may include trust between members and community owners and among community
members which is the starting point in online communication; it may also include the
fundamental function of any virtual community namely communication.

Psychological needs
Besides fulfilling their functional and social needs, another basic contention of this
model is that virtual communities can also meet some basic psychological needs of its
members and thus make the community a part of their lives. Wang et al., (2002) claim
that it is because of this social psychology that communities have become such a
powerful organizing force in the world of commerce. Specifically, these psychological
needs contain ‘identification’ that answers the question who are they, ‘involvement’
that relates to what connects them, ‘belonging’ that relates to what are they a part of and
‘relatedness’ which signify what relationships matter to them in the world, creative
forms their communications can take, and the ‘there’ provided by virtual communities
in which they can learn new roles, cope with changes, and escape their everyday lives.

2.4 EFFECTIVENESS OF MEDIA
In this section, the author aims to highlight the various factors that constitute the
effectiveness of media advertisements on the internet. The factors include credibility,
persuasiveness, recall and recognition of brand and appeal of the message.

Also according to Dubelaar & Woodside (2003), the focus of studies of media
effectiveness is more likely to centre on the subject's views of the relative merits of each

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advertisement seen for the one brand and not on the persuasiveness of the advertising in
attracting the subject to the brand versus competing brands.

Website appeal has a crucial role in the study of website effectiveness. According to
Chen (2006), a website has its own “personality” and its “physical appearance”. It can
encourage or courage consumer purchase intentions through consumer trust and
acceptance.

This view has port in the early Internet literature, where researchers found that some
web features such as appeal, graphics, readability, and ease-of use had impact on
consumers clicking frequency and directions (Murphy, 1999)

2.5 CREDIBILITY OF MEDIA
The notion of credibility is not new. Credibility has been discussed at least since
Aristotle’s examination of ‘ethos’ and his observations of speaker’s relative abilities to
persuade listeners. According to Rieh & Danielson, (2007) disciplinary approaches to
investigating credibility, however systematically developed only in the last century,
beginning within the field of communication.

2.5.1 TYPES OF CREDIBILITY
Slater & Rouner (1996) advocated that it should be understood the credibility
assessments of sources and messages are fundamentally interlinked and influence each
other, that is, credible sources are seen as likely to produce credible messages and
credible messages are likely to have originated from credible sources.

On the other hand Tseng & Fogg (1999) argued that credibility assessments themselves
may be based upon distinct types of evaluations that have been a focus, among others.
They further proposed four types of credibility in assessing information systems:
(1) Presumed, (2) Reputed, (3) Surface, and (4) Experienced.

Presumed credibility describes how much the perceiver believes someone or something
because of general assumptions in the perceiver’s mind, e.g. people may assume that
their friends tell the truth but view salespeople as lacking in credibility.

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Tseng & Fogg (1999), described reputed credibility as how much the perceiver believes
someone or something because of what third parties have reported. For instance, if
people see assessments made by Consumer Reports or receive recommendations from
friends, they may tend to rely on them as unbiased views.

Further they mention Surface credibility as to believability based on simple inspection,
such as looking at the cover of a book or relying on the type of language people use as
an indicator of credibility. Lastly they referred Experienced credibility as to
believability based on first-hand experience; as people interact over time, their expertise
and trustworthiness can be assessed.

2.5.2 CREDIBILITY AND AUTHORITY
According to Wilson (1983), the theory of cognitive authority is closely related to the
concept of credibility. Wilson (1983) argues that ‘what people know of the world,
beyond the narrow range of their own lives, is only what others have told them.’

He further mentions people do not; however, ‘count all hearsay as equally reliable.’
Only those who are deemed to ‘know what they are talking about’ are recognized as
cognitive authorities.

Thus as Rieh & Danielson, (2007) state, cognitive authorities are valued not just for
their stocks of knowledge (answers to closed questions) but also for their opinions
(answers to open questions) as well as for their advice on the proper attitude or stance
on questions and their proposed answers.

2.5.3 CREDIBILITY AND TRUST

2.5.3.1 Trust
According to Hovland et al., (1953), trust has historically always been a basic construct
in many conceptualizations of credibility. Marsh & Dibben (2003), argue that
trustworthy interfaces become enabling technologies because they lead the user to want
to interact with them, thereby increasing productivity. This view of trust has become
crucial for e-commerce research because consumer trust affects online behaviour. The

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notion of trust in information itself is critical when one considers source, content, intent,
and meaning.

It is important for the scope of this research to understand and distinguish between the
general concept of trust and “trust in information”. According to Tseng & Fogg (1999),
trust is often used with respect to, for instance, reliance on a database system to keep
track of financial transactions but other uses of the term, including “trust in
information” are more clearly understood as being references to credibility. Trust often
refers to a set of beliefs, dispositions, and behaviours associated with the acceptance of
risk and vulnerability whereas credibility refers to a perceived quality of a source,
which might or might not result in associated trust behaviours.

Trust is a crucial part of success of businesses in electronic markets. According to
Hoffman et al., (1999), there is a fundamental lack of trust between consumers and
businesses on the Web. They further proclaim that the trust between two parties is
normally built upon how much confidence each one has of the other party. Adding to
this they argue that trust is associated with the misuse of data, reliable product
information, secure payment, etc.

Further advice by them is, to increase trust between the Web site (seller) and the
customer, several remedial actions can be taken by the offering Web site.
Implementation of elements increasing customers’ trust in the supplier means reducing
perceived risk among the customers purchasing on the Web site. Trust elements make
customers feel they are more in control, and more relaxed and less afraid of making
purchases on the Web site, thus increasing customer convenience.

2.5.4 CREDIBILITY AND PERSUASION
Friestad & Wright (1994) explain the key aspect of consumer credibility assessments of
product claims and signals, is that buyers and sellers (or advertisers) interact in a
context in which persuasion goals are highly salient. Further they mention knowledge
and set of beliefs in turn shape how they respond to persuasive tactics. They advocate
that consumers develop knowledge about the sorts of tactics that agents of persuasion
typically use as well as beliefs about the fairness or manipulative ness of such tactics.

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Further, these tactics may begin to take on a meaning for consumers, i.e. they may come
to believe that certain tactics reliably indicate something about the communicator (e.g.,
‘if a candidate starts mudslinging, he must know he’s probably going to lose the
election’). Moreover, when persuasion goals are salient and consumers have gained
experience in such contexts, consumers can more easily step beyond proximate sources
and think about the goals and biases of the organizations that serve as puppet masters
behind the exchange. This is in contrast to the vast majority of media experiences in
which the motivation to think beyond the proximate source does not exist (Sundar &
Nass, 2000).

Consequently, high source credibility in consumer behaviour contexts can in some
cases exerts little or no effect, or even, potentially, decrease persuasion. When
consumers reflect upon their own purchase behaviours to help them develop attitudes
toward products and brands, for example, the use of highly credible sources in the
brand’s marketing mix can be a liability because consumers may attribute such
behaviours to the advertising tactics rather than attributing it to their own internal
motivations (Dholakia & Sternthal, 1977).

According to Pornpitakpan (2004), organisations need to distinguish between credibility
and its most recognizable outcome, persuasion, as operationalized by message
acceptance. He mentions Aristotle’s discussion of ethos as being widely considered to
be among the first attempts at conceptualizing what is now more commonly referred to
as source credibility, indeed, a short phrase used to refer to the construct, ‘persuasion
through character.’ This can be illustrated as the persuasion captures a number of
underlying assumptions that have long been influential in credibility research.

According to him the most obvious of these is that credibility is intimately tied to
persuasion, but it was not until the twentieth century that researchers began to test this
assumption rigorously and to identify conditions under which source credibility exerts
no effect on persuasion or, paradoxically, decreases the effect. Thus, although source
credibility is a critical determinant of message acceptance, the two constructs are not
equivalent.

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2.5.5 MULTIDIMENSIONAL APPROACHES TO CREDIBILITY

2.5.5.1 Information Seeking and Retrieval
Mizzaro (1997), explains information science as, assessments of information and
sources have often been discussed within the context of relevance judgments. They
mention that it is often believed that users make decisions to accept or reject
information based on whether they judge it to be relevant to their information problem.
Relevance has been considered the primary criterion in selecting information. It is no
coincidence that this topic has steadily gained prominence with the growth of the Web.

2.5.5.2 Online Consumer Behaviour
There are a few primary mechanisms through which these needs are partially addressed.
First, online product information can be both abundant and available for processing at
the consumer’s pace. Such abundant information, however, can come with significant
search costs, particularly for novice Internet users who must possess numerous
information-gathering skills (Burbules, 2001).

Koufaris & Hampton-Sosa, 2002 on empirically testing the empirical role of trust,
found out that trust does indeed mediate the relationship between a website and
consumer behavioural intention. In e-commerce, a trusting consumer usually intends to
• Make future purchases from the website.
• Make Purchase(s) from the website
• Go back to visit and purchase form the same website again
• Follow advise given by the website
• Share his/her personal information with the e-vendor.
• Recommend the website to other people
According to Ward & Lee (2000), because the amount of successful information
gathering is heavily dependent upon user skills and motivation, the extent of reliance on
source credibility and brand reputation can differ among consumers.

This basically implies that a consumers perception of credibility will vary in accordance
with his behaviour online, more specifically , the extent of his experience online, as
well as his motivation in seeking information.

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2.5.5.3 Evaluation of Websites
The issue of credibility has been investigated most thoroughly at this level of analysis.
Here, the individual Web site has been viewed as the source; credibility in this context
is often referred to as Web site credibility. Flanagin & Metzger (2003) conceptualized
users’ perceptions of credibility along three dimensions:
• Message credibility (i.e., the perceived credibility of the information residing on
a Web site)
• Sponsor credibility (i.e., the perceived credibility of the individual whose site is
represented)
• Site credibility (i.e., the perceived credibility of the Web site as a whole).

Abels, White, & Hahn (1997) collected data from various faculty members by asking
them to engage in ‘brainwriting’ during a focus group conducted in an electronic
environment. The six clusters that reportedly influenced the use of Web sites were
appearance, content, linkage, special features, structure, and use. These authors noted
that ‘when a user states that information must be useful, they are referring not only to
topic coverage but also to the source or producer of the information’.

Rieh (2002), in his research results showed that when people made choices about which
Webpage to visit first (predictive judgment), they relied on their previous knowledge.
For instance, the study subjects went directly to sites recommended to them by other
people or to sites they already knew. When people evaluated Web sites during use, prior
knowledge became a less important factor as they paid more attention to the
characteristics of information objects, especially content, graphics,
organization/structure, and type of information object. Interestingly, the characteristics
of sources, i.e. source reputation, type of source and author/creator credentials, were
consistently important for users making both predictive and evaluative judgments.

2.6 CREDIBILITY OF USER GENERATED CONTENT

2.6.1 CHANGING WEB ENVIRONMENT
The Web is viewed increasingly as a means of creating communities and fostering
collaboration rather than simply a means of publishing and delivering documents and
services (Liu et al., 2005). Open source production gives one a sense of community

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membership. For instance, Wikipedia.com is a free, online, open-content encyclopaedia,
in which content results from a community of editors rather than a single individual or
small set of experts. The quality of Wikipedia.com content is much debated. Lih (2004)
insists that an open-editing policy helps to control quality because the contributions
have been evaluated and revised by the thousands of visitors to the site. From the
perspective of credibility assessment, Wikipedia.com certainly offers a significant
research opportunity as it provides a new form of collaborative quality control. In
addition to issues such as quality control, as is discussed earlier, source orientation
becomes critical, as the question of who is ultimately responsible for content becomes
less clear to information seekers.

In order to understand the very platform on which the technology is built, the researcher
now refers to the media models presented earlier in the chapter. User Generated Content
initiatives are a part of the New Platform Aggregation quadrant. In order to gain
comprehension of factors affecting web credibility, it is important understand what
affects their assessment. Danielson (2005), elaborates four general characteristics that
complicate web users’ credibility assessment as:

• The relative lack of filtering and gate keeping mechanisms
• The form of medium, which include interaction techniques and interface
attributes either inherent to the web or emerging from common design principles
• A preponderance of source ambiguity and relative lack of source attributions

These present the novelty of the web as a medium in conjunction with a lack of
evaluation standards. It is clear therefore that conventional methods of assessing
credibility may not be feasible on the web because of its speed, complex features, link
structures, a lack of referencing and organizational conventions. The unique
characteristic of user generated content is that the consumers themselves are the source
as well as the recipients of the message.

Brown et al., (1998) elucidate that it is well established that the elaboration of claims
and importance of source credibility can differ for print, radio, and television ads, as
different media place varying demands on consumer attention and allow for varying
amounts of reflection, claim and counterargument rehearsal, and cognitive elaboration.
Adding to this they secondly mentioned, information technology produces massive

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electronic ‘word-of-mouth’ networks that consumers might access in order to indirectly
assess experience quality claims prior to purchase.

Furthermore according to Klein (2003), although pre-purchase experience qualities may
sometimes drift to search qualities, information systems allow the reverse to occur as
well. For example, a consumer might digitally observe how curtains or wall hangings
could be situated in the home—and thus what is normally an experience quality (the
attractiveness of the curtains in context) becomes an attribute one can examine prior to
purchase. More commonly, consumer use of information technology reduces search
quality verification costs. Reduction of quality verification cost is one of the primary
reasons behind the popularity of the user generated content platform for research on
travel related content.

According to Wang et al., (2002) trust is one of the binding factors in virtual
communities that have clearly stated goals appear to attract people with similar goals
and needs which ultimately influence their online behaviour.

Preece (2001), identified four basic purposes of online communities based on the tasks
in which they are involved: exchange information, by which the primary goal is to get
answers to questions or to send out information which can be either unidirectional or
multidirectional. Provide support, which conveys empathy, expresses emotion verbally
or nonverbally; chat and socialize informally through synchronous communication.

The growth of user generated content is clearly affecting travel consumer decisions.
Gretzel et al. (2007) quote statistics from Complete, Inc that suggest that almost half of
travel purchasers on the internet used consumer generated content in their travel
planning, and nearly one third said that they found the input useful.

According to Gretzel et al. (2007), the perception of most readers is that travel reviews
are being more likely to provide up-to-date, enjoyable and reliable information in
comparison to what is provided by travel service providers. Also frequent travellers in
particular see peer reviews as superior and are more likely to be highly influenced

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Rieh & Danielson, (2007) mention that cognitive authorities are the subset of people or
information perceived to be credible. They not only possess competence and
trustworthiness but also influence thoughts deeply, as people would consciously
recognize as being proper. In virtual communities the role of cognitive authorities is
fulfilled by opinion leaders.

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2.7 CHALLENGES AND OPPERTUNITIES OF eWOM FOR
MARKETERS

Figure 2. 4: A Typology of Electric Word-of-mouth (eWOM) Channel.
Source: Litvin et al., (2008)

EWoM is far different from physical WOM as it has the ability to nurture virtual
relationships and communities that possess influence far beyond the readers and
producers of WOM; it actually creates a new type of reality by influencing readers
during their online information searches. The propagation of web 2.0 which is an effect
of the digitalization of WOM has created both new possibilities and challenges for
marketers. According to Dellarocas (2003), there are three aspects which need to be
looked into.

• Firstly, the cost factor. eWoM can appear in an unprecedented large scale,
potentially creating new dynamics in the market, due to the low cost of access
and information exchange.
• Secondly, though it is broader in scope, the technology allows for greater
control over format and communication types.
• The final point of concern is the identity of the communicators .New problems
may arise given the anonymity of communicators.

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Thus in light of the media’s low cost , broader scope and increased anonymity, there is
high probability , that consumers in increasingly larger numbers will either seek or be
exposed to the advise of online opinion leaders (Hennig-Thurauet al., 2004).

This is clearly evident in the travel and tourism sector, given that travellers are relying
more and more on search engines to locate travel information ( eMarketer, 2006).Thus
eWOM will not only change the structure of travel information but also its accessibility
and subsequently travellers’ knowledge and perception of the various travel products.

2.7.1 STRATEGIES FOR MANAGING eWOM IN HOSPITALITY
INDUSTRY
The unique properties and the environment of the internet as discussed above make
necessary a new view of the dynamics of online eWOM, and thus new strategies put in
place in order to manage them. As with all content on the internet, strategies to manage
eWOM can be broadly classified into two major categories: informational and revenue
generating.

Both these perspectives need well planned out and comprehensive strategies from
hospitality and tourism marketers. From an informational perspective, marketers need
to establish procedures that allow them to harvest discussion and feedback created
online. Hospitality organisations today depend significantly on feedback systems, which
have been successfully implemented in the day to day operations. The harvested
information about the property or even the destination can be successfully used to
accomplish such tasks as discovering what visitors have to say about their experience
thereby solving visitor problems, by rectifying causes for negative feedback. Harnessed
feedback can also be used for analysing competitive strategies and monitoring a
company or a brands reputation.

Of the major chains, Starwood Hotels & Resorts has gone the furthest in experimenting
with Web 2.0. Sheraton Hotels, which promotes a brand identity around the concept of
‘belonging’, started with putting the marketing message in the hands of its guests.

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The researcher further facilitates an example wherein the hotel company in question,
used the technology successfully for a product development purpose. In September
2006, Starwood’s new ‘lifestyle’ select service brand, aloft, which is a less expensive
derivative of the chain’s upscale boutique product, W, entered the online virtual world
of ‘Second Life’ as the Website’s only hotel brand. ‘Second Life’ is a web 2.0 initiative
wherein a virtual reality world exists, not unlike a high resolution video game. The
difference is, second life stimulates real life in a virtual world and characters or
‘avatars’ can actually lead an existence in this world, complete with interactions with
other characters. Starwood’s strategy of introducing aloft to the virtual world before the
hotel brand actually took physical form was to get potential customer feedback on the
on such design features as public spaces, guest rooms and exteriors - everything from
colours to space planning. After reviewing all of the comments, several changes to the
design are a direct result of consumer feedback, and will be reflected in the real-life
aloft hotels. Some of these changes include adding radios in the guest room showers,
providing additional seating in the lobby, and displaying artwork created by local artists
on the walls in the public areas. Finally in July 2007, armed with a raft of feedback,
Starwood announced that aloft’s virtual ‘land’ has been donated to a charity as the
brand was withdrawn from the Internet, in anticipation of the physical opening of the
first hotels, slated for early 2008.(www.starwoodhotels.com,2008)

The need to manage eWOM for purposes of revenue generation is equally important
(Kirkpatrick & Roth, 2005). By providing reinforcing images and opinions, these
efforts can be directed towards spreading good WOM about the property and
destination, thereby helping potential visitors takes a decision. Marketers can enhance
business activity by encouraging or stimulating good eWOM.

2.7.2 ETHICAL CONCERNS FOR MARKETERS
It is very important to understand the very nature of the internet and the user generated
content platform to know that it is not hard for marketers and others to overstep their
ethical boundaries. The researcher again brings focus to the challenges to marketers
which have been discussed above. The very technology on which web 2.0 is based upon
allows for greater control over format and communication types.

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The second point of concern is the identity of the communicators, which is still a
dilemma for marketers as managing any aspect of identity control would nullify the
properties which make the user generated content platform attractive .

The researcher here points out that although the above strategies are presented as
positive and proactive marketing strategies, marketers can exploit their access to control
over format of the website and can also exploit the fact that there is no confirmation for
the identity of the communicators. One of the ways in which marketers and others can
carry out the above is through Stealth Marketing. According to Neisser, (2004) the
practice of stealth marketing is defined as ‘‘employing tactics that engage the prospect
without them knowing they are being marketed”. The use of stealth marketing can be
illustrated through Sony Ericcson’s picture-phone rollout campaign that involved an
actor posing as a tourist, handing out the picture phone to unsuspecting tourists to take a
picture of the actor. In the process the actor demonstrated how easy the phone was to
use and engaged in a discussion about the new technology. In this case the company
defended its actions as being a highly successful public relations campaign (Atkinson,
2004).

Though the above example, falls within every lawful framework they are difficult to
reconcile with the American Marketing Association’s Code of Ethics, which
specifically prohibits the deliberate misleading of consumers (AMA, 2005).

According to Litvin et al., (2008) the most obvious online stealth marketing tactics is
the use of employees to pose online as consumers in order to pose positive comments
on behalf of the company. As discussed above, it is relatively easy to put these postings
up on the company’s website forum or on public bulletin boards and newsgroups.

In order to make the postings effective and trustworthy, employees could be equipped
with pre-scripted postings in order to provide a stream of product reviews and
comments. As these postings are pre-scripted and well researched, they would appear to
come from knowledgeable users and not company ‘shills’. Thus the employees, in
effect the marketers now assume the role of online or e-opinion leaders, generating
enhanced visitor ship from travellers or opinion seekers who rely upon their experience
and expertise.

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According to Flavian & Guinaliu (2005), abuse of virtual communities can take place
along the same lines. An employee can easily infiltrate his/her avtar into an e-
community. Once he/she gains trust amongst the community and becomes an accepted
net citizen, which is only a matter of time and persistence, he/she can interject positive
comments about his/her employer and negative comments about the competitor. If the
person is recognized as a knowledgeable traveller and a trusted opinion leader in the
community, the resulting eWOM could have significant influence on other members
hospitality and tourism purchase decisions.

It is evident that one of the principle attractions of user generated content is intellectual
freedom. However there exists a need to demarcate a well defined boundary between
the ethical practice of management of EWoM and its abuse.

2.8 CONCLUSION
This chapter covers relevant literature about Social Media Marketing. It begins with an
overview of open source movement followed by the model in which web 2.0 exists, that
is the explanation of the New Aggregation platform model. This was followed by a
brief on social media after which User Generated Content and its key components were
studied in detail. The researcher cited a consumer’s perspective to all aspects of the
review. In order to facilitate the comparative nature of the study, Credibility of Web
based media as well as the key factors of trust and persuasiveness were studied and
appeal was identified as a key component of advertisement effectiveness. Finally, as the
consumers’ insight on social media marketing was understood, the challenges and
opportunities regarding the management of eWOM for hospitality managers were
briefly studied alongside an ethical perspective to management of eWOM.

Thus, after viewing views of various authors in the literature review, it is observed that
consumers fulfil various needs when they contribute to social media and even when
they access it for information. But, the verification of the contrasting views of various
authors would be dealt with and tested in the primary research.

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Although the basic characteristics of the Open Source platform have been understood
and mentioned and various reports quote the perceived reliability of user generated
content versus traditional internet media, there is still a research gap in understanding
what constitutes a perceived source. Furthermore, as far as the social media platform is
concerned there exist blurring lines between traditional concepts such as source,
medium and receiver of a message.

The current research aims to explore the appeal, trust and persuasiveness of User
Generated Content over Sponsored Internet Media.

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CHAPTER THREE

RESEARCH METHODOLOGY

3.1 INTRODUCTION
Through this chapter the researcher aims to provide the reader with an understanding of
the research method used to study the effect of social media marketing on consumer
preference. The researcher went about the study of the issue in a structured format and
in this chapter, discusses the methodology adopted and the framework followed in order
to form a hypothesis. It includes a discussion about the concepts and techniques used to
conduct the primary and secondary research.

3.2 PURPOSE OF RESEARCH
The research is Explanatory in nature with an experimental design. An Explanatory
research seeks an explanation of a situation or problem, usually in the form of causal
relationships. (Robson, 1993)

Due to the very nature of this marketing media and the ever increasing significance of
user generated content, the author fixed upon researching this issue. Furthermore,
although this has been identified as a very significant marketing space, hospitality firms
are entering it with scepticism and very limited research has been done in this area. The
researcher was then faced with the question of whether to cover this issue from a
consumer’s perspective or from that of marketers. Upon discussion with various
industry professionals, the researcher came to the conclusion, that a customers
perspective should be studied as they are the proprietors of this media and secondly a
customers perspective would be important for a hospitality firm marketer and would
help him to better manage his/her brand or sell his/her product through social media
marketing.

Thus the purpose of this study is to assess the potential of Social media marketing
by studying consumer’s insight on appeal, trust and persuasiveness of user
generated content as compared to traditional company sponsored websites.

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3.3 HYPOTHETICO-DEDUCTIVE METHODOLOGY
The researcher followed an organized, systematic approach to first, finding a problem,
with the aim of discovering solutions. The identification of the issue has been discussed
above. After the identification of the issue, the author set about the task of preliminary
data collection from various sources. During preliminary data collection, it was noted
by that the initial observations confirmed to the ideas and trends discussed by some
leading authors in the field.

In order to pursue the study, the researcher has adopted the hypothetico-deductive
method as proposed by Sekaran (1992). This method has helped the researcher to funnel
down the area of the study and to form the basis of this research. The method starts with
a theoretical framework, which leads to the formulation of hypothesis and logically
deducts from the results of the study.

3.3.1 OBSERVATION
According to Sekaran (1992) it is in the first stage that one realizes that there are
changing attitudes and behaviours in the surrounding. This step is the main step and if it
is accurate, could lead to a research. The researcher had initially observed from online
journals that there was a high rise in the popularity of social networking sites. Further
articles suggested that this rise in popularity was prevalent across all demographics.

Although the issue of user generated content through the Web 2.0 platform and its
impact was very appealing for research, the researcher sought an issue which would be
more operational for the hospitality industry. Upon further plodding the researcher
came across Social Media Marketing.

In the preliminary observation stages the researcher noted the average time the various
demographical sections spend on the various media platforms, and thus notices a
generic trend or a shift of the amount of time spent on traditional media platforms such
as the television and the radio to the virtual world of the internet.

What specially came into the limelight was the increasing popularity of online
communities through social networking sites like Myspace, Facebook, Orkut and even
Youtube.

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The researcher noted that members of these websites took a keen interest on the various
applications and communities that were present in this space and spent more and more
time either reading content generated by other users or even enriching the websites with
their own experiences and ideas. This is how the researcher came across the web 2.0
platform and Social Media marketing.

3.3.2 PRELIMINARY DATA COLLECTION
Sekaran (1992) mentions that ‘preliminary information gathering’ involves the seeking
of information to know more about what one observes.

Data was collected from various sources. The Athens databank was used extensively
through the Business Source Premier (EBSCO) database, Emerald full text database,
Mintel Reports, Science Direct (Elsevier) database, WARC (World Advertising
Research Centre) database.

Authors like Poynter(2007), Chan(2007), Berman(2007), Hedgebeth(2007),
Pumphrey(2006) were studied for analysis on the open source movement and the new
media channels. Word of Mouth and electronic word of mouth proliferation were
studied from leading authors in the field such as Litwin(2008), Kwan (2005),
Fang(2007), Wang(2004). Finally credibility studies were done with author such as
Rieh (2007).

The keywords used were ‘Open source media’, ‘open source movement’, ‘ open source
media + pdf’, ‘web 2.0’, ‘web 2.0 + pdf’ , ‘ user generated content’, ‘user generated
content + pdf’, ‘ consumer generated media’, ‘ consumer generated media + pdf’ , ‘viral
marketing + pdf’, ‘web + credibility’, ‘ user generated content+ trust’ , ‘travel 2.0’, ‘
travel 2.0 +trust’, ‘consumer preference+ user generated content’, ‘user generated
content + tourism’ + ‘ user generated content + hotels’ , ‘ content analysis + blogs’ .

In a few articles, certain relevant articles written by other authors were noticed in the
references that were retrieved by typing the article title and author’s name in the Google
search engine. The method so used is known as ‘snowballing’.

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For those articles that could not be retrieved in that manner, an email was sent to the
authors requesting for those articles. The emails of the authors were found through
Google by typing ‘author’s name’; ‘author’s name + university’; ‘author’s name +
email’; ‘author’s name + user generated content or ‘any other key word + email’ or
other similar combinations.

3.3.3 THEORY FORMULATION
According to Robson, (1993) this framework helps in illustrating the relationships
between variables and helps certain relationships to improve the understandings of the
situation.

The researcher desires to study the consumer’s preference of Social Media Marketing
v/s sponsored internet media. In order to fulfil this purpose, the researcher studies the
views of various authors on trust, persuasiveness and appeal of different media
including web based media.

3.3.4 DEPENDENT AND INDEPENDENT VARIABLES
Dependent Variable is a variable of primary interest to the researcher and lends itself as a
viable issue for investigation. The Independent Variable (or the predictor variable), on the
other hand, is the one that influences the dependent variable, in either positive or negative
way (Sekaran, 1992).
Independent Variable: Type of Marketing, Social Media Marketing, a marketing
media initiated in the open source movement and a part of New Platform Aggregation
(UGC platform) and Traditional Internet Marketing, specifically company sponsored
websites, a part of traditional media.

Dependant Variables: Appeal, refers to the underlying idea that captures the attention
of a message receiver.
Trust, a complex subject relating to belief in honesty,
truthfulness, competence and reliability of a trusted person or service.
Persuasiveness, the power to induce the taking of a course of
action or the embracing of a point of view by means of argument or entreaty.

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The identification of the variables would further lead to proposal of a hypothesis, which are
mentioned in section 3.3.4.

3.3.5 HYPOTHESIZING
Sekaran (1992) states that a hypothesis is a logical relationship between two or more
variables, which is based on the ‘network of associations’ formulated through the
theoretical research in lay mans terms it may be said that, it is an educated guess about
a problem’s solution. “Hypothesis is a proposition stated in a testable form which
predicts a particular relationship between two or more variables” Sekaran, (1992) In a
Hypothetico-deductive method, the hypothesis is generated in the literature review
phase through the various studies authors have done.

In this case, the researcher has made the following hypothesis:
H1: Internet consumers have greater trust on User Generated Content, than Sponsored
Content

H2: Internet Consumers have greater appeal for Sponsored Content than User
Generated Content

H3: Internet Consumers are more persuaded by User Generated Content than
Sponsored Content

H4: The factor of age significantly impacts an internet consumer’s perception of
Appeal, Trust and Persuasiveness

After developing the hypotheses, the author will validate them in the primary data
collection and analysis phase. If the hypotheses are proved correct the research is
successful and if the hypotheses along with the data analysis do not correspond, they
shall be annulled.

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3.3.6 FURTHER SCIENTIFIC DATA COLLECTION
Scientific data collection is necessary to test the hypothesis that is generated from the
study. This data further forms the basis for the data analysis. (Sekaran, 1992)

The researcher intends to test the proposed hypothesis in the hospitality industry
context. In order to do so, the researcher intends to carry out an explanatory study with
an experimental design. The research clearly has an experimental design where a cause
and effect relationship is being studied as trust, appeal and persuasiveness are varying
for different media.

In order to meet the controlled environment requirements (contrived settings) of the
experiment, the focus group discussions were carried out in New Delhi where the
researcher had access to SEC-A samples as well as the facilities to carry out the
experiment. The research intends on capturing the internet consumers’ insight on which
type of advertisement he/she finds more effective in terms of appeal, trust and
persuasiveness. Since the proliferation of the internet is extensive in the travel and
hospitality industry, the researcher has referred the context of the study to be the hotel
industry.

The researcher has primarily used a qualitative method to conduct the research.
Qualitative methods are often applied to complex, rich-in–interpretation questions and
generally put emphasis on aspects of meaning, process, and context: the why and the
‘how’, rather than the ‘how-many’ (Cohen and Manion, 1994). A qualitative method
was most applicable to fulfill the needs of this research and aptly fit in the research
design. However since a sample size of 18 was chosen, a quantitative analysis using the
measured scores of the three variables of Appeal, Trust and Persuasiveness was
performed.

As the sample size was small for a quantitative analysis, the quantitative data was
used solely to validate the qualitative data analysed. In the analysis significance
values of lesser that 0.1 will only be accepted, otherwise will be rejected. Thus the
data has been analysed for a minimum of 90 percent acceptance level.

- 39 - Bedi, T.S.


3.3.6.1 Tools Employed for Research
Sekaran (1992) defines a scale as a tool or mechanism, which can help in obtaining detailed
information on the dependent and independent variables.
The tools employed are:
• Focus Group Discussions
• Unstructured Interviews
Focus Group Discussions
Krueger (1994) describes a focus group as ‘a carefully planned discussion designed to
obtain perceptions on a defined area of interest in a permissive, non threatening
environment’, where participants share and respond to comments, ideas and
perceptions.

According to Gibbs (1997) focus group research is useful for revealing through
interaction the beliefs, attitudes, experiences and feelings of participants, in ways which
would not be feasible using other methods such as individual interviews, observation or
questionnaires. FGD’ s are basically useful for gaining information on participants’
views , attitudes , beliefs , responses , motivations and perception on a topic ; ‘why’
people think or feel the way they do. Litosseliti (2005)

Qualitative Analysis through FGD’s

Key:
FGD Blogs Vs CSW
OLDER FGD: Focus Group Discussion

C.S.W: Company Sponsored
FGD Websites
YOUNGER Blogs Vs CSW

For the purpose of the study, which was exploratory in nature, the researcher felt that
Focus Group discussions would be the apt research tool which would fit into the
research design of the Dissertation.

- 40 - Bedi, T.S.


The researcher wished to explore the preference of hospitality and travel industry
product consumers towards Social Media Marketing. For this purpose the researcher
held two focus group discussions (of 6 participants each) where he measured the group
dynamics as well as the individual responses of the each of the twelve participants.

In each of the FGD’s, the researcher assumed the role of the moderator also. As a
moderator, the researcher had the advantage of in depth knowledge of the issue and was
in a position to direct the discussion when it went out of context.

The moderator directed questions which measured the preference of the group towards
firstly, a company sponsored web advertisement, then secondly, towards a social media
marketing initiative or a website supported by user generated content.
(www.tripadvisor.com).

Then a comparative analysis of both the messages was held. The moderator directed the
discussion with questions that measured credibility of both the messages separately.
Credibility was identified as the key issue leading to consumer preference of marketing
media on the internet. In order to measure credibility, the key questions asked,
measured trust and persuasiveness. Recall and appeal were also measured as they are
the key components of measuring advertisement effectiveness.
For these reasons, the researcher wished to collect data from FGD’s as well as
Individual interviews.

Discussion Guide and Justification

Measuring/Purpose Questions
A Moderator is Building context for the FGD - Please tell me a little about
yourself

Familiarization with the topic and stating - I would like to talk to you
purpose for research about the internet and various
websites today

Opening question encourages dialogue and - Do you like to travel
fosters group dynamics.

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