Role of Brand Familiarity on the Influence of Electronic Word-of-Mouth and Customers' Behavioral Intentions

Despite the increased confidence in e-commerce, consumers remain skeptical when shopping online and therefore rely on electronic word-of-mouth generated by other consumers to aid their brand or store choice. Because eWOM can have detrimental or beneficial effects on brands and is beyond the control of firms, measuring the extent to which consumers use this information source to inform their decisions is a major challenge facing scholars and practitioners. This study examines the influence of eWOM on customers' behavioral intentions and tests the role of brand familiarity. Five hypotheses are developed and tested based on the accessibility-diagnosticity theory and the elaboration likelihood model. A sample of 432 participants was recruited from a university in Southeastern Nigeria to participate in a 2x3 between-subject factorial experiment. The results show that the positive or negative sentiments conveyed in eWOM messages and the familiarity of a brand affect customers' behavioral intentions independently, and that the volume of eWOM messages interacts with brand familiarity to impact these behavioral intentions such that unfamiliar brands benefit more from high volume than familiar retailers do. The implication is that firms can overcome the problem of familiarity and performance risk by motivating and displaying as many eWOM communications as possible in their social media and advertisements.