Abstract
One area of e-business that has visibly changed in the last few years is the capacity of the Internet for supporting consumer-to-consumer information sharing. By using a variety of social media software applications such as online reviews, blogs, social tagging, and wikis, consumers are increasingly able to generate and share content about the products and services that are available in the marketplace. Collectively the labor expended by consumers in generating such content is considerable, influencing other consumers’ perceptions of these products and services and informing their purchasing decisions. It has been estimated for example that more than 5 million customers have reviewed products on the Amazon.com site, with many more making purchasing decisions informed by reading such reviews (Amazon, 2008). According to the findings of a recent Pew Internet & American Life Project survey, consumer generated information sources such as product reviews and blogs are also considered equally as important as commercial information, e.g. manufacturers’ specifications, when making a purchasing decision (Horrigan, 2008). This article aims to provide an up-to-date review of the practice of consumer information sharing. First the different kinds of information sought by consumers are identified; second the social media software applications that consumers use to create, organize and share information with other consumers are discussed; and finally consideration is given to the marketing implications of consumer information sharing and how e-businesses can utilize social media for developing and managing relations with their customers.
TopConsumers seek information in order to reduce any uncertainties or risks associated with an intended purchase (Conchar, Zinkhan, Peters, and Olavarrieta, 2004). Consumers also seek information in order to make sense of a product or group of products. The kinds of information sought by consumers typically relate to product attributes (e.g. specification, price, quality standards), expert and consumer opinions, and vendor reputation. Identifying relevant information sources involves the consumer either in an internal search of their prior knowledge of the same or similar products, and/or an external search of new information sources. An internal search is said to occur when consumers rely on their personal knowledge and experience of a product, while an external search occurs when consumers look for information beyond their own personal knowledge and experience. The range of external consumer information sources includes: store representatives, salespersons, and company websites; commercial media (e.g. magazines, advertisements), expert reviews; social sources (e.g. word of mouth, family and friends) and recommendations; and an increasing range of social media (e.g. blogs, social bookmarking tools, social shopping sites, and wikis) that consumers use to generate, organize, and communicate information about products and services. In sum, consumers seek a range of different kinds of information in order to reduce the uncertainties and risks associated with making a purchasing decision and to make sense of the products. Information sources can be both internal and external to the consumer and span a spectrum that includes ratings, reviews and recommendations on the one hand, more interactive resources e.g. blogs, and opportunities for fuller participation in consumer wikis and customer communities.
Key Terms in this Chapter
Customer decision process: The set of stages that consumers pass through when deciding to purchase products or services. When purchasing products, consumers typically pass through a prepurchase stage that involves recognition of need, information gathering, and the evaluation of different product alternatives; a purchase stage in which a decision to purchase is taken; and a postpurchase stage during which customers evaluation the purchase, consider becoming a loyal customer; and finally, dispose of the product.
Social media: socially rather than commercially-owned media enabling its users to rapidly publish and distribute ideas and opinions, primarily although not exclusively, to a peer audience. Examples of social media include: weblogs, social tagging systems, and wikis.
Information sharing: an umbrella term for the processes involved in the creation, exchange and use of information. Information sharing includes the sharing of pre-defined information, and discussion of the information once shared.
Social tagging: in contrast to the pre-defined categories and terms of a classification scheme, social tagging systems enable users to create and assign tags that meaningfully organize the content of a website. Aggregation of tags leads to the generation of a folksonomy, a socially-owned socially owned vocabulary, whose terms define and organize the content of a website from the perspective of members of the user community rather than that of experts.
Consumer generated content: content generated by consumers’ use of social media. Examples include reviews, ratings, tags, and weblog or wiki entries.
Consumer information: the information needed by consumers when researching, purchasing, and completing a purchase. Examples of consumer information needs include: product attributes (e.g. specification, price, quality standards), expert and consumer opinions, and vendor reputation.
Recommender system: Recommender systems in e-commerce identify a similarity in the preferences or tastes of one consumer and others (e.g. goods purchased, products viewed); and make recommendations for new purchases drawn from the set of other goods bought or viewed by each of the like-minded consumers.