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MIP
30,4 The effect of electronic word of
mouth on brand image and
purchase intention
460
An empirical study in the automobile
Received 25 April 2011 industry in Iran
Revised 4 July 2011
1 October 2011 Mohammad Reza Jalilvand
30 November 2011
Accepted 18 January 2012
Department of New Sciences and Technologies, University of Tehran,
Tehran, Iran, and
Neda Samiei
Department of Economics, Faculty of Administrative Sciences and Economics,
University of Isfahan, Isfahan, Iran

Abstract
Purpose – Word-of-mouth (WOM) has been recognized as one of the most influential resources of
information transmission. Advances in information technology and the emergence of online social
network sites have changed the way information is transmitted. This phenomenon impacts consumers
as this easily accessible information could greatly affect the consumption decision. The purpose of this
paper is to examine the extent to which e-WOM among consumers can influence brand image and
purchase intention in the automobile industry.
Design/methodology/approach – Measurement items are adapted from existing scales found in
the marketing literature. Academic colleagues reviewed the items for face validity and readability. The
scales are evaluated for reliability, convergent validity, and discriminant validity using data collected
in a survey of Iran Khodro’s prospective customers in Iran. A structural equation modeling procedure
is applied to the examination of the influences of e-WOM on brand image and purchase intention. The
research model was tested empirically using a sample of 341 respondents who had experience within
online communities of customers and referred to Iran Khodro’s agencies during the period of research.
Findings – The paper found that e-WOM is one of the most effective factors influencing brand image
and purchase intention of brands in consumer markets.
Research limitations/implications – The paper outlines ways to promote a brand effectively
through online customer communities, as well as general tips for website and forum moderators for
facilitating such presentation in a manner useful to the members of their online communities. While
there is a substantial research stream that examines the branding of consumers goods and an increasing
literature on product brands, little is known about brand image in the context of online communications.
This paper extends existing measurement of brand image to a new setting, namely e-WOM.
Originality/value – This paper provides valuable insight into the measurement of e-WOM, brand
image, and purchase intention in the automobile industry and offers a foundation for future product
branding research.
Keywords Internet, Consumer behaviour, Word of mouth, Brand image, Social networks, Iran
Paper type Research paper
Marketing Intelligence & Planning
Vol. 30 No. 4, 2012
pp. 460-476 The authors would like to thank the Editor and the two anonymous reviewers for their
q Emerald Group Publishing Limited
0263-4503
constructive suggestions and insightful guidance; their input has resulted in the development of
DOI 10.1108/02634501211231946 a much stronger paper.
1. Introduction Electronic word
Word-of-mouth (WOM) communication is generally acknowledged to play a of mouth
considerable role in influencing and forming consumer attitudes and behavioral
intentions (e.g. Chatterjee, 2001; Chevalier and Mayzlin, 2006; Herr et al., 1991; Kiecker
and Cowles, 2001; Sen and Lerman, 2007; Smith and Vogt, 1995; Weinberger and
Dillon, 1980; Xia and Bechwati, 2008). Research has shown that WOM communication
is more influential than communication through other sources such as editorial 461
recommendations or advertisements (e.g. Bickart and Schindler, 2001; Smith et al.,
2005; Trusov et al., 2009) because it is perceived to provide comparatively reliable
information (Gruen et al., 2006). Consequently, this type of communication is
considered as having a great persuasiveness through higher perceived credibility and
trustworthiness (e.g. Chatterjee, 2001; Godes and Mayzlin, 2004; Mayzlin, 2006).
Whereas WOM communication initially referred to the idea of person-to-person
conversation between consumers about a product (Chatterjee, 2001; Sen and Lerman,
2007), the worldwide spread of the internet brought up a less personal but more
ubiquitous form of WOM communication, so-called online WOM communication
(e.g. Brown et al., 2007; Chatterjee, 2001; Davis and Khazanchi, 2008; Godes and
Mayzlin, 2004; Kiecker and Cowles, 2001; Xia and Bechwati, 2008). This new type of
WOM communication has become an important venue for consumer opinions (Bickart
and Schindler, 2001; Godes and Mayzlin, 2004; Hennig-Thurau et al., 2004; Mayzlin,
2006) and it is assumed to be even more effective than WOM communication in the
offline world due to its greater accessibility and high reach (Chatterjee, 2001). Product
reviews that consumers post on the internet constitute one of the most important forms
of online WOM communication (Schindler and Bickart, 2005; Sen and Lerman, 2007),
and for consumers it is increasingly common to look for online product reviews when
gathering pre-purchase product information (Adjei et al., 2009; Zhu and Zhang, 2010)
and forming purchase intentions (Zhang and Tran, 2009). Furthermore, the issue of
branding has been deemed as primary capital for many industries. Strong brands can
increase customers’ trust in the product or service purchased and enabling them to
better visualize and understand intangible factors. According to Yoo and Donthu
(2001), brand image can influence a company’s future profits and long-term cash flow,
a consumer’s willingness to pay premium prices, merger and acquisition decision
making, stock prices, sustainable competitive advantage, and marketing success.
Based on the argument that especially vividly presented WOM communication has a
strong impact on product judgments (Herr et al., 1991), we argue that online WOM
communications that are posted in such a vivid and interactive medium as the internet
might have strong effects on brand image and as a result, purchase intention. Brand
image is the perceptions about a brand as reflected by the brand associations held in
consumer memory (Keller, 1993). Brand image stems from all of a consumer’s
consumption experiences, and perceived service quality is a function of these
consumption experiences. Thus, customer perception about service quality directly
affects brand image (Aydin and Ozer, 2005). Intangibles such as after sale services
cannot be evaluated before the consumption experience; therefore, purchasing
intangible products and services brings a higher risk, so customers are more dependent
on the interpersonal influence of e-WOM (Lewis and Chambers, 2000; Litvin et al.,
2008). Despite the significant impact of e-WOM in the manufacturing segment, little
research has been done to investigate e-WOM in this field. Based on these findings in
MIP the literature, we understand that e-WOM messages can affect the brand image and
30,4 purchase intention. Since no relevant explanation has been proposed to explain these
effects, this study applied experimental design methodology to explore:
.
the impact of e-WOM communications on image brand;
.
the impact of e-WOM communications on purchase intention; and
462 .
the impact of brand image on purchase intention.

The rest of this paper is organized as below. First, we provide a review on the literature
related to e-WOM and brand image. Second, we introduce hypotheses and the research
model. Next, we describe the research methodology and discuss the statistical results.
Finally, we summarize the findings and discuss the implications for both research and
practice.

2. Empirical background
As no studies exist on the link between online WOM communications, brand image,
and purchase intention, we will provide separate literature reviews of the research
streams on the effects of e-WOM and brand image.

2.1 Previous research on the effects of electronic word of mouth

With the advancement of uinternet technologies, increasing numbers of consumers are
using the internet to seek information about a product or a company, and e-WOM has
emerged as a result. Hennig-Thurau et al. (2004) defined e-WOM as “any positive or
negative statement made by potential, actual, or former customers about a product or
company which is made available to multitude of the people and institutes via the
Internet”. Researchers are interested in investigating the motives for seeking e-WOM
(e.g. Goldsmith and Horowitz, 2006) and for sharing or articulating the e-WOM
(e.g. Hennig-Thurau et al., 2004; Lee et al., 2006), providing implications for marketers
to better understand online consumer behavior. Stauss (1997, 2000) discussed the
threats and opportunities for businesses brought about by the rise in online customer
articulations. A recent survey found that most consumers perceive online opinions to
be as trustworthy as brand websites (ACNielsen, 2007). Rowley (2001) also proposed
that commercial enterprises should try organizing online communities rather than to
simply advertise on the internet. These studies indicate how great of a potential impact
e-WOM can have on the consumer decision process. Senecal and Nantel (2004)
examined how e-WOM influences product choice using an experimental study of
consumers’ use of online recommendation sources. The various platforms themselves
that facilitate e-WOM, such as discussion boards and other online communication
tools, are also increasingly being recognized for how they influence the adoption and
use of products and services (Subramani and Rajagopalan, 2003). Gilly et al. (1998)
indicated that the lack of effective information to distinguish products raises the risk of
purchase. At this moment, a WOM message will be a very important reference for
consumers to establish their purchasing decision-making process. Some related studies
have also indicated that e-WOM messages are an important means whereby
consumers can obtain information about product or service quality (Chevalier and
Mayzlin, 2006). Moreover, this kind of message can effectively reduce the risk and
uncertainty recognized by consumers when purchasing products or services, so that
their purchase intention and decision-making can be further influenced (Chatterjee,
2001). Chevalier and Mayzlin (2006) examined the effects of online product reviews on Electronic word
the relative sales of two online bookshops based on publicly available data from two of mouth
leading online booksellers. The results of their study showed that such online
communications significantly affect other consumers’ purchase behavior. In spite of
the rich literature on the effects of e-WOM on purchase intention, to date no research
has been conducted in order to investigate which e-WOM has strong effects on brand
image. To our knowledge, only one study exists in this area that is related to our 463
purpose. Bambauer-Sachse and Mangold (2011) examined the effects of negative online
product reviews, a specific type of word-of-mouth communication, on consumer-based
brand equity. The results of their empirical study supported the assumed detrimental
effect of negative online product reviews on consumer-based brand equity. The above
studies spell out the reality that e-WOM has become a permanent element of the online
marketing mix by contributing a great deal to the brand image and the purchasing
decisions of online consumers.

2.2 Previous research on brand image and its effects

Over the last decade, firms have markedly increased their investments in the creation
and development of brands. The creation of a brand implies communicating a certain
brand image in such a way that all the firm’s target groups link such a brand (and thus
the services sold using its name) with a set of associations. Aaker (1991, p. 15)
conceptualizes brand equity as “a set of brand assets and liabilities linked to a brand,
its name and symbol that add to or subtract from the value provided by a product or
service to a firm and/or to that firm’s customers”. Building on Aaker’s work, Keller
(1993) develops the behavioral concept of customer based brand equity (CBBE), which
consists of the two dimensions of brand awareness and brand image and is defined as
the differential effect of brand knowledge on customer response to the marketing of the
brand. Brand image comprises the attributes and benefits associated with a brand that
make the brand distinctive, thereby distinguishing the firm’s offer from competition
(Webster and Keller, 2004). Attributes are those descriptive features that characterize a
brand, such as what a consumer thinks the brand is or has and what is involved with
its purchase or consumption. Benefits are the personal value consumers attach to the
brand attributes, that is, what consumers think the brand can do for them (Keller, 1993,
1998). In firm-customer relationships, every interaction between a firm and its
customers becomes an input to brand image. Because a service brand communicates a
commitment to provide a certain kind of experience, it is critical that service firms
assure that everyone in the organization understands the importance of delivering
consistent, predictable, high quality performance to the customer (Webster and Keller,
2004). In B2C exchanges, customers face serious disruptions if product/service
providers fail to meet expectations. Consequently, customers typically rely on a small
number of trusted product/service providers that consistently deliver high quality
precuts or services (Cousins and Menguc, 2006). At the same time, product/service
providers depend on a handful of key customers for a significant portion of their
revenues. The underlying goal is for the brand is to evoke feelings of trust, confidence,
security, strength, durability, speed, status, and exclusivity (Aaker, 1996; Keller, 1993).
Ultimately, a strong product/service brand conveys the core value proposition of both
the organization and its product/service in a way that resonates with customers.
Although empirical evidences indicated that brand equity can affect purchase
MIP intention in the various contexts (Ashill and Sinha, 2004; Chang and Liu, 2009), the
30,4 number of studies which measure the effect of brand image on purchase intention is
limited. Wang and Yang (2010) investigated the impact of brand credibility on
consumers’ brand purchase intention focusing on China’s automobile industry. They
proposed that brand awareness and brand image play a moderating role in this
relationship. However, Bian and Moutinho (2011) examined the impact of perceived
464 brand image, direct and indirect effects (mediator and moderator effects) of product
involvement and product knowledge on consumer purchase intention of counterfeits in
the context of non-deceptive counterfeiting. Their results indicated that brand image is
not a mediator of the effects of involvement/knowledge on purchase intention. Wu et al.
(2011) also investigated the direct effects of store image and service quality on brand
image and purchase intention for a private label brand. Their study revealed that store
image has a direct and positive effect on brand image and purchase intention.
Additionally, they showed that service quality has a direct and positive effect on brand
image. Shukla (2010) indicated that interpersonal influences and branding cues shape
consumer luxury purchase intentions. The results of his study showed that while
normative interpersonal influences were found to be significant across nations, the role
of informational interpersonal influences was significant among consumers. Moreover,
brand image was a significant moderator between normative interpersonal influences
and luxury purchase intentions. Davis et al. (2009) also suggested that brand
awareness, brand image, and brand equity scales are valid and reliable in the context
of logistics services. The arguments presented above lead to our research hypotheses:
H1. Electronic word of mouth has a significant impact on brand image.
H2. Electronic word of mouth has a significant impact on purchase intention.
H3. Brand image has a significant impact on purchase intention.

2.3 Conclusion of the literature reviews

An overview of studies in the field of the effects of online WOM communication has led
to the insight that e-WOM can have effects on variables such as brand image or
purchase intention. In this section we will develop the research model that provides a
basis for the assumed effect and test this effect in a new empirical study. The assumed
link between e-WOM and brand image has not previously been examined empirically
and will be analyzed in the empirical study presented subsequently (Figure 1).

Figure 1.
Research model
3. Methodology Electronic word
3.1 Measurement of mouth
To achieve the study objectives, a self-administered survey questionnaire was
developed based on the findings of the literature review. The questionnaire was
pre-tested and revised. The survey consisted of four parts covering the following
issues:
(1) e-WOM; 465
(2) brand image;
(3) purchase intention; and
(4) demographics.

In the e-WOM section, with six items, respondents were asked about using online
WOM communications (Bambauer-Sachse and Mangold, 2011). In the brand image
section, with three items, respondents were asked to rate their level of agreement on the
importance of brand image regarding automobile X (Davis et al., 2009). In the purchase
intention section, with three items, respondents were asked about their intention to
purchase this automobile (Shukla, 2010). Measurement of “Electronic word of mouth”,
“Brand image” and “Purchase intention” were carried out using a seven-point Likert
scale, ranging from strongly agree (1) to strongly disagree (7). The advantage of using
an interval scale is that it permits the researchers to use a variety of statistical
techniques that can be applied to nominal and ordinal scale data in addition to the
arithmetic mean, standard deviation, product-moment correlations, and other statistics
commonly used in marketing research (Malhotra, 1999). The measures are presented in
Table I. The last section of the questionnaire gathered demographic information
regarding the respondents, such as age, gender, education, and monthly income.

3.2. Data collection and analyses

The questionnaires were distributed based on a cluster sampling method and collected
at Iran Khodro’s (a well-known automobile brand in Iran’s automobile industry)
agencies in Isfahan during the month of March 2011. Four hundred questionnaires
were distributed and 341 usable samples were obtained after excluding incomplete
questionnaires, yielding an 85 percent response rate from those who agree to
participate. Cronbach’s a was used to verify the internal consistency reliability. Data
analysis involved descriptive statistics using SPSS and structural equation modeling
using the AMOS structural equation program. AMOS is designed to estimate and test
structural equation models (SEMs). SEMs are statistical models of linear relationships
among latent (unobserved) variables and manifest (observed) variables. Its purpose is
estimating the coefficients in a set of structural equations. For this research AMOS is
used to investigate the causal relationships, where the path coefficients are tested for
significance and goodness-of-fit. The overall model fit measures were used to evaluate
the fit of the structural model. In estimating the goodness-of-fit indices (GFI) for
measurement and structural models, the x 2 test was used. In addition, the root mean
square error of approximation (RMSEA) was used as an absolute fit index. The
incremental fit index (IFI), the Tucker-Lewis index (TLI) and the comparative fit index
(CFI) were used as incremental fit indices. Standardized estimates were used in
reporting the causal relationships between the exogenous and endogenous constructs.
MIP
Electronic word of mouth (e-WOM1) I often read other consumers’ online
30,4 (Bambauer-Sachse and Mangold, 2011) product reviews to know what products/brands
make good impressions on others
(e-WOM2) To make sure I buy the right product/
brand, I often read other consumers’ online product
reviews
466 (e-WOM3) I often consult other consumers’ online
product reviews to help choose the right product/
brand
(e-WOM4) I frequently gather information from
online consumers’ product reviews before I buy a
certain product/brand
(e-WOM5) If I don’t read consumers’ online product
reviews when I buy a product/brand, I worry about
my decision
(e-WOM6) When I buy a product/brand, consumers’
online product reviews make me confident in
purchasing the product/brand
Brand image (Davis et al., 2009) (BI1) In comparison to other products/brand, this
product/brand has high quality
(BI2) This product/brand has a rich history
(BI3) Customers (we) can reliably predict how this
product/brand will perform
Purchase intention (Shukla, 2010) (PI1) I would buy this product/brand rather than any
other brands available
(PI2) I am willing to recommend others to buy this
product/brand
Table I. (PI3) I intend to purchase this product/brand in the
Measures future

The path diagram of the structural model specified (Figure 1) is proposed based on the
past literature discussed in section 2.

4. Data analysis and results

4.1 Sample profile
Of a total sample of 341 respondents, 64.8 percent (221) were male and 35.2 percent
(120) were female. A large majority of respondents’ ages were in the ranges 26-35 (32.3
percent), 36-45 (36.7 percent) and 46-55 (24.9 percent). The majority of the respondents
(41.1 percent) had a monthly income of more than 600 dollars. In addition, the majority
of the respondents’ education (53.1 percent) was a two year college or associate’s
degree. Descriptive statistics are displayed in Table II.

4.2 Measurement model

The proposed structural model was estimated by structural equation modeling (SEM),
which included a test of the overall model fit and individual tests of the significance of
the relationships among the variables. These tests indicated the relationship between
e-WOM communication, brand image and customers’ purchase intention. The
estimations of the parameters and the overall fit index of the measurement model are
 Electronic word
Characteristic Frequency Percentage CF (percent)
of mouth
Age
25 or under 12 3.5 3.5
26-35 110 32.3 35.8
36-45 125 36.7 72.4
46-55 85 24.9 97.4 467
Above 55 7 2.3 100
Gender
Male 221 64.8 64.8
Female 120 35.2 100
Monthly income
Under $200 21 6.2 6.2
$200-$299 56 16.4 22.6
$300-$600 124 36.4 58.9
Above $600 140 41.1 100
Education
Below high school graduate 5 1.5 1.5
High school 25 7.3 8.8 Table II.
Two-year college or associate’s degree 181 53.1 61.9 Demographic
Bachelor’s degree 91 26.7 88.6 characteristics of
Postgraduate 39 11.4 100 respondents

based on the maximum likelihood (ML) method. The basic conditions assumed for the
use of ML estimation (Byrne, 2001) are met or closely approximated in the study.
Further, the sample is sufficiently large (n ¼ 341 cases), over the recommended size of
200 cases (Medsker et al., 1994), the scale of observed variables is continuous, and no
violations of multivariate normality are found in the survey responses. As presented in
Table III, the reliability of the measurement items was verified using Cronbach’s a to
assess the internal consistency of the constructs in the applied model. The level of
internal consistency for each construct was acceptable, with the value of a ranging
from 0.727 to 0.788, which exceeded the minimum hurdle of 0.60 (Hair et al., 1998). All
measurement items had standardized loading estimates of 0.5 or higher (ranging from
0.518 to 0.702) at the a level of 0.05, indicating the convergent validity of the
measurement model. Construct reliability was verified to estimate convergent validity;
each construct had acceptable construct reliability, with the estimates ranging from
0.801 to 0.836 (Hair et al., 1998).
In addition, because the average variance extracted (AVE) from all three constructs
exceeded the minimum criterion of 0.5 (ranging from 0.593 to 0.670), convergent
validity was assured (Hair et al., 1998). To test the discriminant validity among the
constructs, we estimated correlations among the constructs to determine whether they
were significantly different from 1; the confidence intervals of the correlations,
calculated as correlations ^ 1:96 £ standard error of estimate, did not contain 1, so
these results indicated the discriminant validity of the measurement model. The
correlations for the constructs are shown in Table IV. Overall, these measurement
results are satisfactory and suggest that it is appropriate to proceed with the
evaluation of the structural model.
MIP
Standardized t- Cronbach’s
30,4 Construct Item loading statistic Mean SD a

Electronic word of mouth EWOM1 0.702 9.483 4.72 1.202 0.788

(CR ¼ 0:836, AVE ¼ 0:631) EWOM2 0.591 8.464 4.33 1.175
EWOM3 0.590 8.454 4.65 1.081
468 EWOM4 0.627 8.820 4.41 1.302
EWOM5 0.614 8.693 4.39 1.177
EWOM6 0.573 – 4.38 1.189
Brand image BI1 0.653 9.040 5.35 1.135 0.760
(CR ¼ 0:813, AVE ¼ 0:593) BI2 0.567 8.184 5.32 1.194
BI3 0.604 – 4.86 1.298
Purchase intention PI1 0.518 – 6.16 0.801 0.727
(CR ¼ 0:801, AVE ¼ 0:670) PI2 0.627 7.551 6.22 0.852
PI3 0.520 6.790 6.11 0.828
Table III.
Psychometric properties Notes: CR, construct reliability; AVE, average variance extracted; EWOM, electronic word of mouth;
of measures BI, brand image; PI, purchase intention

4.3 Structural model

Figure 2 shows the overall explanatory power, the standardized path regression
coefficients that indicate the direct influences of the predictor upon the predicted latent
constructs for the model, and associated t-values of the paths of the research model.
The model fit indices of the structural model and the cut-off value of those fit indices
are presented in Tables V and VI. The goodness-of fit statistics show that the
structural model fit the data reasonably well. The three-item model produced a x 2 of
83.2 (df ¼ 51, p ¼ 0:003). While the overall x 2 for this measurement model was
significant (p , 0:05), it is well established that this statistic is sensitive to large
sample sizes (e.g. Hair et al., 1998). To alleviate the sensitivity of the x 2 statistics, the
value of x 2 is commonly divided by the degrees of freedom. The re-estimated x 2 value
was 1.631 and this new value is within an acceptable cut-off value range, from 1.0 to
3.0. The goodness of fit index (GFI ¼ 0:961, with 1 indicating maximum fit),
comparative fit index (CFI ¼ 0:969, 1 ¼ maximum fit), the comparative fit index
(NFI ¼ 0:925, with 1 indicating maximum fit), Tucker-Lewis index (TLI ¼ 0:960,
1 ¼ maximum fit) and the incremental fit index (IFI ¼ 0:970) met the proposed
criterion of 0.90 or higher. Finally, the root mean square error of approximation
(RMSEA ¼ 0:043, with values , 0.08 indicating good fit), one of the indices best suited
to our model with a large sample, indicated that the structural model was a reasonable
fit.
Table V presents the results of the individual tests of the significance of the
relationship among the variables. Among the three relationships tested, one was found
to be significant at the a level of 0.01, and two relationships were significant at the a
level of 0.05. e-WOM had a significantly positive impact on brand image, with
b ¼ 0:866, t ¼ 7:842, and p ¼ 0:000, indicating that customers’ e-WOM
communication was an important antecedent of brand image. e-WOM also had a
strong positive effect on purchase intention (b ¼ 0:574, t ¼ 2:224, p ¼ 0:026). These
results suggest that compared to other promotional media, e-WOM communication
 EWOM1 EWOM2 EWOM3 EWOM4 EWOM5 EWOM6 BI1 BI2 BI3 PI1 PI2 PI3

EWOM1 1.00
EWOM2 0.356 1.00
EWOM3 0.408 0.371 1.00
EWOM4 0.396 0.395 0.381 1.00
EWOM5 0.424 0.321 0.415 0.398 1.00
EWOM6 0.387 0.352 0.347 0.408 0.402 1.00
BI1 0.470 0.403 0.299 0.420 0.277 0.266 1.00
BI2 0.316 0.342 0.306 0.275 0.269 0.244 0.335 1.00
BI3 0.421 0.393 0.288 0.264 0.273 0.243 0.411 0.361 1.00
PI1 0.478 0.269 0.255 0.323 0.332 0.342 0.329 0.299 0.327 1.00
PI2 0.369 0.297 0.292 0.347 0.373 0.310 0.332 0.368 0.307 0.201 1.00
PI3 0.321 0.317 0.289 0.270 0.255 0.176 0.280 0.280 0.274 0.173 0.199 1.00
Note: All of the correlations are significant at the 0.01 level. EWOM, electronic word of mouth; BI, brand image; PI, purchase intention

Correlation matrix
of mouth
Electronic word

469

Table IV.
MIP
30,4

470

Figure 2.
Standardized regression
coefficients proposed
model

Dependant Standardized Standard t-

Independent variable variable Estimate estimate error statistic p

Electronic word of mouth Brand image 0.997 0.866 0.127 7.842 **

Electronic word of mouth Intention to 0.312 0.574 0.140 2.224 0.026 *
purchase
Table V. Brand image Intention to 0.325 0.690 0.129 2.518 0.012 *
Maximum likelihood purchase
estimates for research
model (n ¼ 341) Notes: *Significant at the p , 0:05 level (two-tailed); * *significant at the p , 0:001 level (two-tailed)

Structural model Fit statistics Cut-off value

x2 83.2
df 51
p-value , 0.05
Normed x 2 1.631 1.0-3.0
GFI 0.961 .0.90
NFI 0.925 .0.90
CFI 0.969 .0.90
TLI 0.960 .0.90
RMR 0.48 ,0.50
RMSEA 0.043 ,0.08a
Table VI.
Model fit statistics Note: aIndicates good fit
plays a major role as an important antecedent of customer’s behavioral intentions. Electronic word
Finally, brand image influenced purchase intention, with b ¼ 0:690, t ¼ 2:518, and of mouth
p ¼ 0:012, indicating that brand image was an antecedent of purchase intention. The
statistical results, summarized in Table IV, generated three major findings:
(1) e-WOM communication has a positive impact on brand image;
(2) e-WOM communication has a strong positive impact on purchase intention; and
471
(3) brand image influences purchase intention.

In addition, 45 percent of respondents said they used e-mail for their e-WOM, 40 percent
relied on company websites, and 30 percent used other media (e.g. Facebook.com) for
e-WOM communication.
To examine the interplay between the two variables that affect intention to
purchase, an analysis of the standardized direct, indirect and total effects was
conducted (see Table VII). Of particular interest is the direct effect of e-WOM on
intention to purchase (0.574). The analysis also indicates that e-WOM has an indirect
impact on purchase intention (0.597) through its impact on brand image.

5. Conclusion and implications for further research

The starting point of this paper was the observation that virtual communities
(e.g. Facebook.com) where consumers can disseminate their product/service experience
become increasingly popular. Moreover, both practical experience and previous
research suggested that in an online WOM context, consumers are especially interested
in writing and reading pleasant and unpleasant experiences. Consequently, from a
marketer’s perspective, the question arose of what effects online WOM might have on
response variables that are relevant in marketing. A response variable that plays an
important role in marketing but has not been considered in the context of effects of
online WOM communication yet, is brand image. Therefore, it stood to reason to
extend the existing body of research in the field of effects of online WOM
communication by introducing the concept of brand image in this context and
examining possible effects of e-WOM. This research builds on prior studies and
explores the unique contribution of interpersonal influences on brand image and
purchase intention in automobile industry. Our empirical study shows that e-WOM has
considerable effects on brand image and indirectly leads to intention to purchase,
particularly in the automobile industry. In addition, we showed that e-WOM has a
strong direct effect on purchase intention. This point has been established by
numerous studies prior to our study (e.g. Chevalier and Mayzlin, 2006), but not in the
automobile industry. Our results have several important implications. The finding that
online WOM communication can cause purchase intention is particularly important for
automobile manufacturers. Through mobile internet, which is becoming increasingly

Independent variable Dependent variable Total effect Direct effect Indirect effect
Table VII.
Electronic word of mouth Brand image 0.866 0.866 0.000 Decomposition of total
Electronic word of mouth Purchase intention 1.172 0.574 0.597 effects for research model
Brand image Purchase intention 0.690 0.690 0.000 (n ¼ 341)
MIP popular, customers can read online recommendations for the product they are
30,4 interested in directly at the point of purchase, which might have strong effects on their
purchase decisions. Therefore, managers could initiate point-of-sale activities in the
form of product trials with the objective of motivating online WOM communication by
enabling consumers to form their own impressions. Many studies have investigated
customers’ perceptions of service quality as a predictor of customers’ behavior
472 intentions, such as WOM communication. Boulding et al. (1993) indicated that service
quality positively affects behavioral outcomes such as loyalty and positive WOM.
Zeithaml et al. (1996) proposed a model of the behavioral consequences of service
quality and suggested that perceived service quality was related to positive behavioral
intentions including WOM, purchase intentions, complaining behavior, and price
sensitivity. Based on Zeithaml et al.’s study, Alexandris et al. (2002) indicated that
service quality explained 93 percent of the variance in WOM. In addition, managers
can improve the brand image by increasing product variety, enhancing product
quality, offering the products in the price worthy of value, and pleasantly providing
after sale services. These improvements directly increase the purchase intention of the
products. However, companies with high equity brands should not rely on the benefits
of high brand image such as customer loyalty that can be found in the literature
(Aaker, 1991; Agarwal and Rao, 1996; Keller and Lehmann, 2006). Instead, such
companies should be aware of the risks of negative online WOM communication,
because even high brand equity can be significantly diluted by negative online WOM
and because such detrimental effects will become even more important with increasing
improvements in, and spread of, network technology. In addition, the accessibility,
reach, and transparency of the internet allow marketers and organizations to monitor
the online WOM communication about their brands continuously (Kozinets et al., 2010).
Marketers could develop appropriate communication tools to make consumers more
knowledgeable about specific brand or bank characteristics and try to change some of
the negative associations that consumers have about the brand or the product through
online WOM. It is important to say that positive WOM and e-WOM play an important
role in increasing customers’ purchase intentions, creating a favorable image of the
company and its brand, and reducing promotional expenditures. Furthermore, it would
be interesting to analyze the effects of online WOM communication on brand image for
more brands and in other product categories such as financial services because WOM
communication may have a particularly important influence on consumers’
perceptions of products/services that have high credence qualities (Sweeney et al.,
2008). Finally, it would be useful to test an expanded model that more fully examines
brand image by including functional, experiential, and attitudinal dimensions of brand
image (Keller, 1993). In addition to testing this construct within internet networks,
exploring the antecedents to brand image would provide guidance for managers who
want to strengthen their products’ brands.

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Corresponding author
Mohammad Reza Jalilvand can be contacted at: rezajalilvand@ut.ac.ir

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