Electronic Word of Mouth and its Effects on the Consumer Purchasing Decision

Word of Mouth (WOM) plays an important role in shaping the consumers’ attitudes and behaviors. Social media and social networks have made it possible to express WOM online, which is referred to as electronic word of mouth (e- WOM). Social media and online social networking sites generally involve a collection of user profiles/consumers where they can share information with others. Previous scientific models on WOM behavior and the social relations behind it were not constructed for e-WOM and social media. Very little is known about the dynamics within this new way of communication and the purpose of this thesis was to investigate how e-WOM affects the customer’s purchasing decision in the mobile phone industry. One research question was proposed:• How does e-WOM affect the customer’s purchasing decision?Based on the research question, a literature review of previous, significant studies was performed, ending in a conceptual framework to guide this study’s data collection. This thesis is primarily descriptive and has a qualitative and deductive approach. The research method chosen for this study was a case study that uses Phone House with its customers as its object of study. The data was collected through focus group interviews with customers of the company.It was found that in the purchasing decision process, the tie-strength between the person spreading the e-WOM and the person receiving it is crucial regarding the degree of influence on the receiver. Moreover, the perceived knowledge of the source spreading the e-WOM is also an important factor. The data also suggests that the age and what stage in life that the source is in correlates with what kind of information the source shares with their friend network. The data also proposes that special offers, which are presented exclusively for the company’s followers on social media, are an incitement for attracting new people to join the company network online.Validerat; 20140928 (global_studentproject_submitter