Consumer Intention to Participate in Mobile Based Word-of-Mouth Activities : the Role of Incentive and Tie-Strength from Senders and Receivers Perspectives

Abstract

Organizations continually explore the best method to achieve a competitive advantage through word-of-mouth activity. The development of technology and mobile technology in particular, has transformed human life profoundly because people can engage in word-of-mouth communication via mobile phones anytime and anywhere, especially via smart phones or so-called mobile-WOM (M-WOM) activities. The key actors for the success of M-WOM activities are senders and receivers; they are therefore the ones that the organization has to pay attention to. The intention of senders and receivers to engage in M-WOM activity is influenced by specific motivations, one of which is monetary gain. Nowadays, it is quite common for organizations to utilize monetary incentives to induce M-WOM activities, so-called incentivized M-WOM. Consequently, the organization has to consider components of incentives that apply to both the senders and receivers as the key actors in WOM activity. However, previous research has paid little attention to incentivized M-WOM and the role of senders and receivers as key players. The present study aims at investigating the senders and the receivers perspective in incentivized WOM activities by doing a series of experiments. The experiments use M-coupons as a M-WOM tool. The first part of the study looks at the senders perspective and attempts to answer the following questions: To whom should I send the M-coupon? Should it be a strong-tie or a weak-tie receiver? Should it be a deal prone receiver or non-deal prone receiver? For the first part of the study, we employed a 2x2x2x2 research design, the elements of which being ‘incentive differentiation’ (different vs. no different) x ‘incentive conditionality’ (conditional vs. unconditional) x ‘incentive transparency’ (transparent vs. non-transparent) x ‘product’ (McDonalds vs. Starbucks). The second part of the study observes the receivers perspective. We adopt the theory of planned behavior (TPB) to analyze receivers attitudes and their intentions in redeeming the M-coupon, which was designed to have a particular monetary incentive. This second part of the study also utilizes a 2x2x2x2x2 research design using the same set of variables as in the sender study but including the additional variable ‘tie-strength’ (strong vs. weak). Using partial least squares (PLS), this study finds that if senders are asked to share an M-coupon with a differing incentive in it (i.e. senders obtain a higher incentive than the receivers) and if the information on the incentive is revealed for both sides, senders will share this coupon with strong-tie receivers. The Incentive differentiation also leads the senders to focus on targeting deal prone receivers. From the receivers perspectives they tend to have an unfavorable attitude toward incentivized WOM characterized by a differing incentive for senders and receivers, regardless of the relationship they have with the senders of these incentives.