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Individual and situational factors influencing negative

word-of-mouth behaviour

Canadian Journal of Administrative Sciences, Sep 2001 by Geok Theng Lau, Sophia Ng

Abstract

Negative word-of-mouth is one form of consumer response to dissatisfaction that hasreceived little attention from business firms, yet it is a silent and potent force that is capableof wreaking havoc on a firm's bottomline. This study examines the influence of someindividual and situational factors affecting negative word-of-- mouth behaviour. The resultsreveal that product involvement, purchase decision involvement, self-confidence, perceivedworthiness of complaining, and proximity of others affect negative word-of-mouth behaviourin both Singapore and Canada. Two additional factors, attitudes towards business in generaland the perceived reputation of the firm, affect negative word-of-mouth behaviour in theSingapore sample, while an additional factor, sociability, affects negative word-of-mouthbehaviour in the Canadian sample.

Resume

Le bouche a oreille negatif est une forme de reponse des consommateurs a leur propreinsatisfaction qui a renu peu d'attention de la part des entreprises, et qui cependant, representeune force silencieuse et puissante, capable de noire aux succes de l'entreprise. Cette etudeexamine l'influence de facteurs individuels et situationnels sur les comportements de bouchea oreille negatif. Les resultats revelent que le degre de contact avec le produit, le degred'implication dans la decision d'achat, la confiance en soi, la perception qu'a le consommateurdu suivi donne a one eventuelle plainte, et l'influence d'autrui affectent les comportements debouche a oreille negatif aussi bien a Singapour qu'au Canada. Deux facteurs supplementaires,l'attitude vis-a-vis du monde des affaires en general et la reputation de l'entreprise, affectentle bouche a oreille negatif dans l'echantillon singapourien, alors qu'un facteur supplementaire,la sociability, influence le bouche a oreille negatif dans l'echantillon canadien.

Informal conversation is probably the oldest mechanism by which opinions on products,brands, and services are developed, expressed, and spread. Whyte (1954) found the presenceof a vast and powerful network consisting of neighbours exchanging product information incontexts such as "over the clothesline" and "across backyard fences." Subsequentinvestigations of the word-of-mouth (WOM) phenomenon presented evidence that WOM isimportant in the purchase decisions and choice behaviour in the following areas: householdgoods and food products (Katz & Lazarsfeld, 1955); dental products and services (Silk, 1966);physicians (Coleman, Katz, & Menzel, 1957); farming practices (Katz, 1961); voting

(Lazarsfeld, Berelson, & Gaudet, 1944); razor blades (Sheth, 1971); automobiles (Newman &Staelin, 1972); adoption of new products (Engel, Keggereis, & Blackwell, 1969; Rogers,1983; Sheth, 1971), and services (Mangold, Miller, & Brockway, 1999). Tan and Dolich(1983) found that the general public in the U.S. and in Singapore receives relatively moreinformation via WOM than from the mass media, indicating that WOM is a phenomenon thatis not limited by cultural barriers.

The business community is also keenly aware of the power of WOM. As Gorden Weaver,executive vice president of Paramount Pictures said, "Word of mouth is the most important


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marketing element that exists" (Alsop, 1984). Not only is there a proliferation ofadvertisements which stimulate or simulate WOM, but firms are also competing to become

sponsors of various activities and events. These companies hope that when the activities orevents become hot topics for discussion, their respective brands will also be mentioned. As

such, sponsorships can generate WOM.

Earlier research on personal influence has been more concerned with the influencers thanwith those influenced. One well-known hypothesis is that of the two-step flow ofcommunication. It asserts that the mass media influence a small group of individuals calledopinion leaders, who in turn influence the masses to adopt the innovation (Katz, 1957). Theemphasis of the research then was to determine and identify the characteristics of thecommunicators or opinion leaders.

In subsequent research, the two-step model was felt to be an inaccurate portrayal of the flowof information and influence, and a multi-step flow of communication was proposed. Thetwo-step model assumes that the audience is passive but evidence suggests that receivers alsotake the initiative to seek information from the opinion leaders (Cox, 1963; Katz &Lazarsfeld, 1955). The focus of research then shifted to the WOM receivers. The motivations

behind the influencees seeking information, the characteristics of these receivers, and howthey affect the exposure to and impact of WOM have received much research.

Despite numerous studies on WOM in the last few decades, most writers have consideredonly positive and not negative WOM. WOM is usually discussed in terms of informing othersabout new products rather than consumer communications about existing products. WhileArndt (1968) has concluded that WOM can accelerate or retard the acceptance of a newproduct, this has shed little light on negative WOM as a dissatisfaction response. Fewpublished research projects have examined why some dissatisfied consumers engage inWOM while others do not. Richins (1983) found that problem severity and blame attributionsare crucial determinants of the amount of effort a consumer is likely to expend in response toa dissatisfaction, while the choice between WOM and complaint behaviour is influenced bythe perception of retailer responsiveness. This study seeks to explore the extent of negativeWOM and to investigate some factors that may influence negative WOM and the likelihoodof repeat purchase after a customer has given negative WOM.

Literature Review

Mechanism of Influence of WOM

WOM has been referred to as product-related conversation, personal recommendations,informal communication, and interpersonal communication. There are two distinctionsbetween WOM activities and commercial mass communication. First, the WOM

communicator is in direct, face-to-face contact with the receiver while mass communicationrelies on different types of media to transmit information. Second, as WOM is a consumer-dominated channel of information, the communicator is thought to be independent of themarketer (Arndt, 1967a; Silverman, 1997). As a result, it is perceived as a more reliable,credible, and trustworthy source of information. It provides information concerning productperformance and the social and psychological consequences of a purchase decision (Cox,1963).


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WOM can convert lower order cognition and affect to higher order cognition and affect,which in turn can lead to committed behaviours (Bristor, 1990). The credibility of WOM,

coupled with the probability that a receiver will be more highly involved in a WOM messagethan an advertisement, lends itself to the formation of such higher order beliefs and cognition.

Through multiple dyads and retransmission, one message can reach and potentially influencemany receivers.

The effectiveness of WOM can also be explained by the accessibility-diagnosticity model(Feldman & Lynch, 1988; Herr, Kardes, & Kim, 1991). Several findings suggest that vividly(face-to-face) presented information is more accessible from memory and is weighed moreheavily in judgement (Herr et al., 1991; Kisielius & Sternthal, 1984; McGill & Anand, 1989).As information accessibility increases, the likelihood that this information is used as an inputfor judgement and choices also increases (Biehal & Chakravarti, 1986).

WOM has been studied both as an input into consumer decision-making (Bloch, Sherrell, &Ridgeway, 1986) and as an outcome of the purchase process (Richins, 1983). In the pre-purchase stage, as a riskreducing strategy, consumers seek product information byparticipating in the WOM process. Positive and negative WOM are examples of exit

behaviours exhibited by consumers at the conclusion of a service encounter (File, Cermak, &Prince, 1994; File, Judd, & Prince, 1992) or usage of a product (Bone, 1992).

From the above discussion, we define WOM as follows for this study: oral, person-to-personcommunication between a perceived non-commercial communicator and a receiverconcerning a brand, a product, or a service offered for sale.

Negative WOM

The action most frequently reported by consumers who are dissatisfied with a purchase orwho have rejected or discontinued using a product is telling friends about the experience andurging them to avoid it (Day, 1978; Leonard-Barton, 1985). Many researchers have suggestedthat negative information tends to lead to greater attention to and weighting of thatinformation (Lutz, 1975; Miserski, 1982; Wright, 1974). Arndt (1967c), for example, foundthat negative WOM retarded sales of a food product more than twice as strongly as positiveWOM promoted sales of that product. Negative WOM has also led to the failure of manymotion pictures. Richins (1984) argues that negative WOM will be communicated to morepeople than positive WOM. Based on anecdotal evidence about the spread of rumours, it issuggested that a negative message may travel farther than a positive message throughretransmission.

In earlier research, the influencer was often thought to be an opinion leader. However, adissatisfied customer who initiates negative WOM need not be an opinion leader, and yet his

opinions can have adverse effects on the marketer (Blodgett, Granbois, & Walters, 1993).Therefore, this research will focus on this group of consumers to understand what the factorsare that will influence negative WOM behaviour.

Factors Motivating WOM

According to Dichter (1966), WOM involves two parties: the speaker (communicator) andthe listener (receiver). WOM will only occur if the communicator is motivated to speak and


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the receiver is motivated to listen. Thus, in order to understand how the process works, it isvital that we understand the inherent motives.

In the case of the WOM receiver, motivation to listen may be influenced by: (a) source

credibility (Dichter, 1966; Robertson, Zielinski, & Ward, 1984; Rogers, 1983); (b) homophilyand interpersonal ties between the WOM giver and receiver (Brown & Reingen, 1987; Engel,

Blackwell, & Miniard, 1986); (c) product and buying situation characteristics such as highperceived risk (Arndt, 1967b; Cox, 1967), newness (Rogers, 1983), .and intangibilityassociated with services (Ziethaml, 1981); and (d) situational factors such as circumstanceswhere product information may be difficult or impossible to obtain from the marketer, orwhere there is a shortage of time.

In the case of the WOM giver, motivation to speak may be influenced by: (a) the personalityof the communicator, for example, self-confidence (Cox & Bauer, 1964) and sociability(Lawther, 1978); (b) the attitudes of the communicator, for example, a desire to help others(Arndt, 1967a; Richins, 1984) and attitude towards complaining (Singh, 1990); (c)involvement with the product (Richins & Root-Shaffer, 1988) and with the purchase decision(Landon, 1977); and (d) situational factors such as proximity of others during dissatisfaction

(Bell, 1967).

In this study, we focus on the communicator of negative WOM and we examine someindividual and situational variables that may influence negative WOM behaviour. We alsoexamine repeat purchase behaviour as a consequence of negative WOM behaviour.

Individual Factors

It is possible that, when confronted with a dissatisfaction situation related to a product, brand,or service, people with some personality characteristics (for example, the quiet type) may notspeak up while others (for example, the sociable type) may readily engage in negative WOM.Three personality constructs, namely self-confidence, sociability, and social responsibility,are examined in this study. Three attitudinal constructs-- attitude towards complaining,attitude towards business in general, and the perceived reputation of the firm-are included inthe model. A construct related to the enduring aspect of involvement, namely productinvolvement, is also examined in this study.

Self-confidence. Self-confidence can be classified into two different forms: general andspecific. The latter is related to the performance of a specific task, while the former is relatedto a person's overall self-confidence. General self-confidence is defined as the extent towhich an individual believes himself to be capable, significant, successful, and worthy(Coopersmith, 1967). This aspect of self-confidence is felt to have a relationship withnegative WOM behaviour. Past research in this area has revealed the effects of self-

confidence on persuasibility (Cox & Bauer, 1964), television advertising influence (Barach,1967), and information-seeking in consumer risk reduction (Locander & Hermann, 1979). Ithas also been suggested that consumers who complain tend to be more self-confident andassertive (Day, 1978). Bearden, Teel, and Crockett (1980) found that consumers from highersocial classes are more selfconfident and tend to perceive less risk of embarrassment incomplaining. The desire to engage in negative WOM is frequently at odds with self-presentation needs. Individuals normally wish to present themselves in as positive a fashionas possible (Goffman, 1959). Telling others that a product one purchased was unsatisfactory


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is, in essence, admitting failure as a consumer. Thus, we propose that those high in self-confidence would have sufficient assurance to discuss negative experiences freely with others.

The Research Framework

H1: Consumers who are more self-confident are more likely to engage in negative WOM

than those who are less self-confident.

Sociability. A sociable person is one who is outgoing, enjoys being with others, and has a

participative temperament. Arndt (1967b) has found that people who are well integrated intothe social structures are more likely to receive WOM and adopt a new product earlier.

Lawther (1978) found that consumers who are less socially integrated are less prone to makeovert complaints than the more integrated consumers. WOM is a social phenomenon and it is

expected that social networks will play a very important role in the occurrences of WOM. If aperson is sociable, he will tend to be in contact with more people, increasing his likelihood of

discussing negative product experiences.

H2: Consumers who are more sociable are more likely to engage in negative WOM

behaviour than those who are less sociable.

Social responsibility. Socially responsible people tend to help people even when there isnothing to be gained from others. They evidently expend effort because of a strong standardof right and wrong (Berkowitz & Lutterman, 1968). King and Summers (1967) found thatconcern for others may precipitate talk by the innovator because he can thereby share hissatisfactions resulting from use of the product or service. Dichter (1966) also mentionedother-involvement as a motivator of WOM, where consumers engage in WOM with the intentto help others. Similarly, synthesis of the rumour and WOM literature suggests that oncedissatisfaction occurs, a desire to prevent others from experiencing a similar fate may promptone to engage in negative WOM. It is believed that since socially responsible individuals areconcerned about the welfare of people around them, they would be more likely to givenegative WOM to warn others about the unsatisfactory product, brand, or service.

H3: Consumers who are more socially responsible are more likely to engage in negativeWOM than less socially responsible consumers.

Attitude towards complaining. Three domains of attitude towards complaining emerged in anempirical analysis by Richins (1982). The first domain is norms related to complaining, thatis, concern of the consumer as to whether complaining is appropriate behaviour. The seconddomain relates to the expectation of the societal benefits of complaining. While someconsumers may feel that if enough people complain about a product, it will eventually beimproved or removed from the marketplace, other consumers may feel that complaining will

lead to no change in the product. The last domain relates to the cost of complaining. Thedegree to which a consumer may complain depends on his or her judgement regarding theworth of the trouble involved. It has been found that the more the consumers perceive thatcomplaining is worthwhile, the greater the tendency to engage in complaint behaviour(Bearden & Mason, 1984; Gronhaug & Zaltman, 1981; Richins, 1983; Singh, 1990).

This study hypothesizes that if a consumer has a negative attitude towards complaining, hewill avoid complaining but may engage in negative WOM instead. If a consumer perceivesthat seeking redress through complaining is useless, he or she may choose to stop purchasing


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the product and suffer in silence. He or she may also tell others about the dissatisfaction andthis will help him release the frustration and resentment that he is feeling. As it does not take

much effort to engage in negative WOM, we propose that an unhappy consumer will engagein negative WOM rather than suffer in silence.

H4: Consumers who have more negative attitudes towards complaining are more likely to

engage in negative WOM than those who have less negative attitudes towards complaining.

Attitude towards business in general. The consumer's attitudes toward business are related tothe likelihood of complaint behaviour (Barnes & Kelloway, 1980). This relationship isexpected to extend to negative WOM givers as well. This is because a person who has anegative attitude towards business is more ready to attribute the cause of dissatisfaction to thecompany. Thus, he is more likely to engage in negative WOM to reinforce his negativeperceptions of the business community.

H5: Consumers who have more negative attitudes towards business in general are more likelyto engage in negative WOM than those with less negative attitudes towards business in

general.

Perceived reputation of the firm. In the event of dissatisfaction, consumers may be less likelyto spread negative WOM if they have purchased the product from a reputable firm. They mayattribute the blame to themselves or some situational factors, rather than the firm, which maybe perceived to have a good track record (Folkes, Koletsky, & Graham, 1987). Furthermore,they may not want to appear to contradict the perception of the general public who may notshare their sentiments. On the other hand, if a firm does not have a longstanding record ofreliability, image of quality, or customer responsiveness, then consumers may be more likelyto tell others about their unhappiness since they tend to perceive the firm to be at fault.Consumers may feel angry and desire to hurt the firm's business when failure is firm-relatedand consumers perceive the firm to have control over the reason for negative productexperiences (Folkes, 1984).

H6: Consumers who have more negative perceptions of the reputation of the firm are morelikely to engage in negative WOM than those with less negative perceptions of the reputationof the firm.

Product involvement. A person can be involved with advertisements (Krugman, 1977), withproducts (Howard & Sheth, 1969; Hupfer & Gardner, 1971), or with purchase decisions(Clarke & Belk, 1978). Day (1970) defines involvement as the general level of interest in theobject or the centrality of the object to the person's ego-structure. Mitchell (1979) definesinvolvement as an internal state variable that indicates the amount of arousal, interest, ordrive evoked by a particular stimulus or situation. Houston and Rothschild (1977) and

Rothschild (1984) make a distinction between enduring and situational involvement.Enduring involvement represents an ongoing concern with a product that transcendssituational influences while situational involvement is the degree of involvement evoked by aparticular situation such as a purchase occasion.

In this study, the enduring aspect of involvement examined is product involvement.Consumers who are highly involved in the product tend to seek information on an ongoingbasis, have considerable product knowledge and expertise, influence other people's behaviour,and buy new products (Venkatraman, 1988). It has been found that product involvement has


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links with some forms of positive word-of-mouth (Bone, 1995; Richins & Root-Shaffer,1988). Therefore, it is expected that when product dissatisfaction is encountered, the

consumer will share such information with friends and other users and disseminate negativeword-of mouth.

H7: Consumers with higher product involvement are more likely to engage in negative WOM

than those with lower product involvement.

Situational Factors

Engel, Kollat, and Blackwell (1969) urged that both individual and situational factors must be

considered in order to explain consumer choices. Two situational variables are examined inthis study: purchase decision involvement and proximity of others.

Purchase decision involvement. Analogous to the situational involvement of the Houston andRothschild (1977) framework, this is a temporary phenomenon (Laurent & Kapferer, 1985)that wanes soon after a purchase has been completed and the outcome resolved. Nevertheless,consumers are likely to exhibit situational involvement after purchase for at least a brief

period because of excitement generated by the purchase or possible cognitive dissonance(Menasco & Hawkins, 1978). People usually get very involved with a purchase decisionwhen they perceive significant financial risk, functional risk, or social risk (Bloch, Sherrell,& Ridgeway, 1986).

Purchase decision involvement is defined as the extent of interest and concern that aconsumer brings to bear upon a purchase decision task (Mittal, 1989). Landon (1977)proposed that purchase decision involvement can influence the level of dissatisfaction with aproduct and the propensity to complain once dissatisfaction occurs. In fact, it has been foundthat situational involvement results in word-of mouth behaviour (File et al., 1992; Richins &Root-Shaffer, 1988). Thus, it is expected that when a person is highly involved in a purchasedecision, he will likely disseminate negative word-of-mouth if dissatisfaction occurs.

H8: Consumers who are highly involved in their purchase decisions are more likely to givenegative WOM than those who are less involved in their purchase decisions.

Proximity of others. Evidence of situational influence surrounding a purchase abounds. Forexample, Belk (1971) found that one-third of the conversations about a new freeze-driedcoffee took place where the prior conversation concerned food, and that another third of theconversations began while drinking coffee. In retail settings, the mere presence of children,friends (Bell, 1967), and sales personnel (Albaum, 1967) has been observed to alter purchaseoutcomes.

In this study, the social surroundings, including the presence of other people, theircharacteristics, and their apparent roles are felt to be relevant to negative WOM behaviour.When a consumer encounters a negative product experience, he or she will have an urge toquickly tell others about it to release the frustration that he or she is feeling. Thus, theproximity of others at that point in time will make it easier for him or her to do just that(Bone, 1992).

H9: Consumers in the presence of others are more likely to engage in negative WOM thanthose who are alone.


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Outcome of WOM Behaviour

Repeat purchase behaviour. Customers may continue to purchase those products with whichthey have satisfactory experiences. In telling others about particularly pleasing products,

these customers may also influence the brand perceptions of those with whom theycommunicate. Newman and Werbel (1973) noted that consumers not fully satisfied with a

brand are less likely to repurchase that brand than satisfied customers. This has sparkedwidespread interest in customer satisfaction among marketing researchers. Only throughsatisfying customers do marketing firms ensure repeat purchase, which translates into greatersales for the firm.

One study (Technical Assistance Research Programs, 1979) reported that those dissatisfiedcustomers who made a complaint about their dissatisfaction reported higher repurchaseintentions than those who did not complain, even if their complaints were not satisfactorilyaddressed. However, no study has examined the effect of negative WOM behaviour onrepurchase intentions. It is believed that consumers who engage in negative WOM behaviourare likely to feel more strongly about the dissatisfaction than non-givers of negative WOM.Yet, these are the same consumers whose dissatisfactions are not attended to. Hence, the

likelihood of repurchase in this case is apt to be low (Blodgett et al., 1993).

H 10: Consumers who engage in negative WOM are less likely to repurchase the productthan those who do not.

The conceptual model for this study is shown in Figure 1.

Methodology

Research Design

Survey research for this project was carried out through the use of a self-administeredquestionnaire distributed through the researchers' friends, relatives, and colleagues.Numerous reasons accounted for the choice of this research method. First, it allows largeamounts of information to be obtained at a relatively low cost. Second, more accurateresponses are obtained because interviewer bias is avoided. Finally, the number of non-usablequestionnaires is reduced since the personal contacts tend to make respondents morecooperative in completing the questionnaires.

Sample

The sampling frames are the general Singapore population and Canadians residing inVancouver. Care was taken to make sure that consumers of different ages, genders,

occupations, educational backgrounds, and income groups were adequately represented. Onehundred and fifty questionnaires were distributed in both Singapore and Canada. Data werecollected from the two locations due to the existence of close contacts. There was nointention to make cross-cultural comparisons in this study.

Operationalization of Constructs


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Some measures for the variables were established measures, while others were modified andadapted from previous studies, and the rest were developed specially for this study after a

review of the relevant literature.

Respondents were asked to recall an experience within the last six months when they werenot satisfied with a product, brand, or service. The degree of their dissatisfaction was

measured using a seven-point scale. An adaptation of the Bearden and Teel (1983) and Singh(1988) frameworks was used to examine their complaint behaviour in five categories.

Negative word-of-mouth behaviour. A single dichotomous (yes/no) question: "Did you tellyour friends or relatives about the bad experience?" from Singh (1990) was used to measure

negative WOM behaviour. In addition, the respondents were asked to indicate theapproximate number of people they told about the bad experience and the strength of the urge

to tell others about the experience (the latter measured with a 7-point scale with bi-polaradjectives of "very strong" and "very weak").

Personality constructs. A condensed scale of 10 items was used to measure self-confidencebased on Janis and Field (1959) and Day and Hamblin (1964). Six items were extracted fromthe California Psychological Inventory (Consulting Psychologists, 1959) to measuresociability. Eight items taken from the Social Responsibility Scale (Gough, McClosky, &Meehl, 1952; Berkowitz & Lutterman, 1968; Harris, 1957) were adapted to measure socialresponsibility in this study.

Attitudinal constructs. Attitude towards complaining was measured on three domains with 11items (Richins, 1982). Nineteen items were adapted from the Consumer Discontent Scaledeveloped by Lundstrom and Lamont ( 1976) to measure attitude towards business in general.Two sets of questions were formulated to measure the perceived reputation of the firm. First,respondents were asked to rate the firm on nine attributes that were consistently mentioned byconsumers who were interviewed on qualities they look for in companies they patronize.Second, respondents were asked to rate the reputation of the firm on a seven-point intervalscale.

Involvement constructs. The Revised Product Involvement Inventory (McQuarrie & Munson,1992) contains separate sub-scales that measure two facets of consumer product involvement:perceived importance and interest. The Purchase Decision Involvement Scale developed byMittal (1989) was included in this study. Seven additional items for measuring purchaseinvolvement were created for this study.

Proximity of others. This variable was measured using a single dichotomous question: "Was

there anyone with you when the dissatisfaction occurred?," followed by an additionalquestion, "Who was with you?," with six given options as answers.

Repeat purchase behaviour. This was measured with a single-item seven-point interval scalewhere respondents had to indicate their likelihood of future dealings with the firm.

Questionnaire Pre-Testing and Field Procedure


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A few professionals were interviewed to assess the face validity of the measures. Thequestionnaire was then pilot tested on a convenience sample of 10 consumers from different

demographic backgrounds.

Ten administrators each from Singapore and Canada were recruited and given explicitinstructions on how to conduct the survey. The questionnaires were distributed to the

administrators' family members, friends, relatives, neighbours, colleagues, or anyone whomthey came into contact with in their daily lives. Efforts were made to ensure that the samplewas representative of the population in the two areas through a loose quota-sampling plan.

For the Singaporean sample, 138 questionnaires were returned, yielding a response rate of92%. However, after the elimination of incomplete questionnaires, 129 usable ones remained.In Vancouver, 118 questionnaires were obtained, giving a response rate of 78.7%. Of these,12 were incomplete, leaving a sample size of 106 for analysis.

Data Analysis and Research Results

Profile of Respondents

The profiles of the respondents are shown in Table 1. The Singaporean sample had fewerfemale respondents (48.8%) compared to the Canadian sample in which female respondentsmade up 57.5% of the entire sample. The Singaporean sample was slightly younger than theCanadian sample. The Canadian sample was more educated with a higher percentage ofrespondents holding an undergraduate or postgraduate degree (49%), while Singaporeans inthis category made up 29.5% of the sample.

More respondents in the Canadian sample hold managerial, professional, supervisory, ortechnical positions, while more Singaporeans are employed in clerical, sales, or productionjobs. This reflects the difference in employment composition of the countries, as theCanathan economy is more service-oriented and has more knowledge workers than theSingaporean economy. In addition, the higher level of entrepreneurship in Canada is reflectedin the higher percentage of respondents being self-employed or engaged in the familybusiness.

More Canadian respondents fall into higher income categories with 52.7% earning $2,000 permonth and above. This is in contrast to only 38.8% of the Singaporean sample earning asimilar amount. Several things may account for this observation. First, the Canadian sampleis older and has higher educational qualifications. Second, Canada has a higher minimumwage than Singapore. Overall, both samples cover varied segments of the population in termsof gender, age, education, occupation, and income.

Validity and Reliability

Factor analysis was carried out to examine the underlying structure of the constructs. Overall,the results of the factor analysis appear satisfactory, and most measurement items loadedstrongly on the constructs they are supposed to measure. An exception applies to themeasurement items for the construct of social responsibility. These items loaded strongly onmore than one factor. As such, this construct was dropped from further analysis. The item "Itis extremely uncomfortable to accidentally go to a formal party in street clothes" was deletedfrom the construct "self-confidence" due to its weak loading on the construct. This action led


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to a larger Cronbach alpha coefficient for this construct. The items "socially responsible" and"environmentally friendly" were deleted from the construct "perceived reputation of the firm"

due to weak loadings and this action led to a larger Cronbach alpha coefficient for thisconstruct. The item "Many people think ill of those who make complaints to stores, even

when the complaint is reasonable" was deleted from the construct "norms concerningcomplaint" due to negative factor loading.

Cronbach's coefficient alpha was used to assess the reliability of the measures. Table 2 showsthe reliability of the measures in this study. According to Nunnally (1978), the Cronbachcoefficient alpha should exceed 0.7 for a scale to be reliable. Except for the constructs under"attitude towards complaining," all the other constructs appear to be reliable. The construct"norms concerning complaining" was dropped from further analysis as the Cronbach alphawas felt to be too low. Caution should be exercised in the interpretation of research resultsrelated to the other two constructs under "attitude towards complaining."

Negative WOM Behaviour

The data revealed that, in the event of a dissatisfaction, the respondents told a mean number

of five people about it while 80% of the respondents told at least three people about thedissatisfactory experience (rounded off to the nearest whole number). The above findingregarding the extent of negative WOM dissemination was supported by both the Singaporeanand Canadian samples and was higher than the figures reported in past research.

T-tests were performed on the two groups (those who gave negative WOM and those who didnot) from both samples. It was found that respondents who engaged in negative WOMexperienced a higher level of dissatisfaction than those who did not. For the Singaporeansample, negative WOM givers had a mean level of dissatisfaction of 5.7087 (out of 7 points)compared to 4.4615 for non-givers (significant at p

Proximity of Others

To determine whether proximity of others is related to consumers giving negative WOM, thedata were analyzed using cross-tabulation since both are categorical variables. The chi-squarestatistic is significant at the 0.05 level (see Table 3). As such, the hypothesis that consumersare more likely to give negative WOM when there are others around than when they are alone(H9) is supported.

Personality, Attitudinal, and Involvement Constructs

Discriminant analysis was carried out with negative WOM givers and non-givers as thesingle categorical dependent variable. The following are the metric independent variables: (a)

self-confidence, (b) sociability, (c) attitude towards complaining, (d) attitude towardsbusiness in general, (e) perceived reputation of the firm, (f) product involvement, and (g)purchase decision involvement. The simultaneous method was chosen instead of the stepwisemethod as the number of independent variables is not very large and we felt that allindependent variables should be included.

One condition for the use of discriminant analysis is that there should be no multicollinearityamong the independent variables (Hair, Anderson, Tatham, & Black, 1995). Correlationanalysis among the independent variables showed coefficients of less than 0.70 (Berry &


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Feldman, 1986). Most coefficients were in the range of 0.01 to 0.30. As such, we felt thatmulticollinearity was not a problem.

Another key assumption for discriminant analysis is equal dispersion and covariance

structures (matrices) for the groups as defined by the dependent variable (Hair et al., 1995;Klecka, 1980). The Box M's test is used to test the equality of group covariance matrices. The

significance level is 0.1486 for the Singaporean sample and 0.1870 for the Canadian sample.Since both significance levels are greater than 0.05, the group covariance matrices are notsignificantly different. Hence, discriminant analysis can be adopted.

The next stage of discriminant analysis is validation of the results. The most frequentlyutilized procedure in validating the discriminant function is to divide the groups randomlyinto analysis and holdout samples. This involves developing a discriminant function with theanalysis sample and then applying it to the holdout sample. However, in this study, thesample size was too small to hold back part of it for validation. According to Hair et al.(1995), the ratio of the sample size to the number of predictor variables should be about 20.To split an already small sample will cause the results to be unstable. Thus, the entire samplewas used to develop the discriminant function, as well as to test the predictive ability of the

function. This method was adopted by Richins (1983). Nevertheless, it should be noted thatsuch a procedure may introduce an upward bias in the predictive accuracy of the discriminantfunction. Another reason why hold-out samples were not applied was because randomizationis recommended as the method to divide the total sample into analysis and hold-out samples.However, some researchers believe that it may not be possible to ensure that the division iscompletely random and that both the analysis and hold-out samples are equally representativeof the total sample. Hence, the hold-out sample may be very different from the analysissample, making such a validation technique inaccurate.

Table 4 shows the results of the discriminant analysis. For the Singaporean sample, thediscriminant function is significant at p

To determine the relative importance of each independent variable in discriminating betweenthe groups, structure coefficients were used instead of standardized coefficients. This isbecause standardized coefficients are subjected to considerable instability (Hair et al., 1995;Pedhazur, 1982). As a general rule of thumb the absolute values of the structure coefficientsshould be at least 0.30 to be considered meaningful for interpretation purposes (Pedhazur,1982). For the Singaporean sample, attitude towards business in general is the most importantpredictor of negative WOM behaviour, followed by product involvement, self-confidence,purchase decision involvement, worthiness of complaining, and perceived reputation of thefirm. For the Canadian sample, the most important predictor of negative WOM behaviour issociability, followed by product involvement, worthiness of complaining, self-confidence,and purchase decision involvement. The predictive accuracy is measured by the hit ratio,

which is obtained from the classification matrix. When analyzing the predictive accuracy, thea priori chance of classifying individuals without the aid of a discriminant function should beconsidered. Since the group sizes were unequal, the proportional chance criterion was used tocalculate the chance classification. The formula for this criterion is Cpro = p2 (1 - p)2 whereCpo = proportional chance criterion, p = proportion of individuals in group 1, 1 - p =proportion of individuals in group 2.

Hair et al. (1995) noted that no general guideline has been developed to determine how highthe classification accuracy should be, relative to chance. They suggested that the


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classification should be at least 25% greater than that achieved by chance for the discriminantfunction to be meaningful for interpretation. With this suggested criterion, and using the

above formula, the criterion level works out to be 62.5%. Table 5 shows the classificationresults. For the Singaporean sample, the percentage of cases correctly classified was 71.32,

which is higher than the criterion level of 62.5%. For the Canadian sample, the percentage ofcases correctly classified was 81.13, which is higher than the criterion level of 62.5%.

Repeat Purchase Behaviour

T-tests were carried out to examine the differences of the means of the likelihood torepurchase between negative WOM givers and non-givers. The means were not significantlydifferent for both the Singaporean and Canadian samples. Thus, HIO is not supported.

Managerial Implications

The research results have shown a high incidence of negative WOM behaviour whendissatisfaction occurs. Negative WOM can be a powerful and detrimental consumer responseand should not be ignored (Silverman, 1997). Companies should first take steps to lower the

level of dissatisfaction, since the incidence of negative WOM is lower when lessdissatisfaction occurs. They can do this by improving product quality, communication withcustomers with regard to product usage and functions, anticipation and responsiveness tolikely customer concerns and problems, and so on.

Companies should also make it easy for consumers to complain to them directly (for example,through a tollfree telephone number) and handle such complaints effectively, since themarketing intermediaries are often not committed to handling customer complaintseffectively. This study has found that when consumers feel that it is not worthwhile tocomplain, they tend to engage in negative WOM behaviour. Companies should, therefore,make consumers perceive that it is worthwhile to complain to them directly.

Being responsive to consumers and their dissatisfaction may also enhance the image ofbusiness firms in general and, specifically, the reputation of a firm. This is especiallyimportant for the Singapore market since the research results have shown that a poor attitudetowards business in general and a weak perception of the reputation of a firm tend toencourage negative WOM behaviour in the Singaporean sample.

Companies can also identify consumers who are most likely to engage in negative WOMbehaviour and pay special attention to these consumers. From the research results, it appearsthat consumers with high self-confidence and high sociability (the latter, applicable to theCanadian sample) tend to engage more in negative WOM behaviour.

The research results have also shown product and purchase decision involvement to beimportant determipants of negative WOM behaviour. Firms selling products that entail highlevels of investment and consideration (for example, automobiles) should be more vigilant ofpossible areas of customer dissatisfaction. They can achieve this by calling customers whohave purchased products from them to elicit feedback and respond quickly to any problemsthat have occurred. Relationship marketing is a key to guarding against adverse effects ofnegative WOM. Businesses can identify customers who tend to be highly involved in specificproduct decisions and pay special attention to this group of consumers. For example, therelevant consumer group for car companies may be car enthusiasts, for computer firms it may


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be computer buffs, while for the fashion retailers it may be either trend-setters or those whoare fashion conscious.

Since the presence of others can also encourage negative WOM behaviour in the event of

dissatisfaction, it may be beneficial for business firms to train their employees to obtainfeedback at the point of consumption so that any dissatisfaction can be resolved immediately.

In the case of products not consumed immediately, a phone call may be made to theconsumer to elicit feedback.

Research Limitations and Future Research Directions

The sample sizes of those who engaged in negative WOM and those who did not differedquite widely. This imbalance may impact the estimation of the discriminant function and the

classification of observations. This is because during the classification stage larger groupsmay have a disproportionately higher chance of classification. As a result of the small sample

sizes, a holdout sample was not applied to test the predictive accuracy of the discriminantfunction. Although this may bias the predictive accuracy upwards, careful interpretation of

this figure may be superior to applying a holdout sample, which may not be completely

random in its selection and, thus, not representative of the entire sample. Nevertheless, if thesample sizes are large enough, validation using a holdout sample and the total sample can becarried out at the same time for comparison of results.

A loose quota sampling approach was used in this study. The Singaporean and Canadiansamples may not be totally representative of their respective populations. The samples are notquite comparable, thus it is not possible to make cultural comparisons with respect to theeffects of individual and situational factors on the propagation of WOM in the two cultures.Future research can look into this issue by collecting data from comparable samples indifferent cultural contexts.

The research data are based on self-reports and may be subject to problems associated withmemory and retrieval of experiences occurring over a six-month period. Caution should beexercised in the interpretation of the research results.

The reliabilities of the measures for two constructs, social responsibility and attitude towardscomplaining, were low. Better measures need to be developed for these constructs. Inparticular, the domains of the "attitude towards complaining" construct need to be established.The construct "proximity of others" was measured with the question "Was there anyone withyou when the dissatisfaction occurred?" As there may be a gap between the point in timewhen the dissatisfaction occurs and the point in time when negative WOM takes place, thismeasure may not have fully captured the elements of the construct.

This study has examined only a small number of personal and situational factors affectingnegative WOM behaviour. Additional factors such as altruism and importance of the situationcan be examined in future research. The use of stratified sampling can enable researchers toassess the effect of socio-demographic factors on negative WOM behaviour.

This study has only examined repeat purchase intention as a consequence of negative WOMbehaviour. Future research can examine other consequences of negative WOM behavioursuch as switching to competitive products. This research has revealed some factors that affectnegative WOM behaviour in the Singaporean sample but not in the Canadian sample, and


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vice versa. This could be due to contextual or cultural reasons. Future research can examinethese contextual or cultural reasons, which may result in different negative WOM behaviour

in different parts of the world.


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Geok Theng Lau Sophia Ng

National University of Singapore

Address all correspondence to Geok Theng Lau, Department of Marketing, NationalUniversity of Singapore, FBA1, 15 Law Link, Republic of Singapore 117591. Tel: (65) 874-3179. Fax: (65) 779-5941. E-mail: [email protected]

We thank the two anonymous reviewers for their constructive and useful comments and

suggestions. We also thank the National University of Singapore for funding this researchunder the Academic Research Fund.

Copyright Administrative Sciences Association of Canada Sep 2001Provided by ProQuest Information and Learning Company. All rights Reserved

Geok Theng Lau "Individual and situational factors influencing negative word-of-mouthbehaviour". Canadian Journal of Administrative Sciences. FindArticles.com. 04 Mar, 2011.http://findarticles.com/p/articles/mi_qa3981/is_200109/ai_n8991441/

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Provided by ProQuest Information and Learning Company. All rights Reserved

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