The Effect of Information Processing Confidence and Consumer Susceptibility to Peer Influence of Online Review toward Consumer Perception and Its

The Effect of Information Processing Confidence and Consumer Susceptibility to Peer Influence of Online Review toward Consumer Perception and Its Implication to Usage Behavior; a Study of Indonesian Digital Native 4 TH GADJAH MADA INTERNATIONAL CONFERENCE ON ECONOMICS AND BUSINESS 2016 YOGYAKARTA, 25-26 TH NOVEMBER 2016

1 Research Background Background Let s start the research

Research Background Nowadays, more and more customers use information from online reviews to mitigate transaction risk, especially those made online Mitigate transaction risk

Research Background More reliable, valuable, & increase purchase intention Online reviews made by consumers are believed to be more reliable than advertising (Dellarocas, 2003; Sher & Lee, 2009), considered even more valuable (Goldsmith & Horowits, 2006), furthermore can increase purchase intention (Yao et al., 2009)

Research Background Lack of empirical research Despite increasingly considered important and widely used, there are still lack of empirical research that directly examines the benefits and costs of consumers on the use of online consumer review, its antecedents, and also the implications for marketers

Research Purpose EVIDENCE IN A DIFFERENT CONTEXT ACCOMMODATE THE DEMOGRAHIC DIFFERENCES Providing additional empirical evidence in a different context toward its original research as contribution to the model generazation of antecedents and implications of perceived benefits and perceived cost of online consumer review An attemps to answer the limitations of previous studies (Lee & Ma, 2012), which does not yet accommodate the demographic differences in their model, particularly by providing empirical evidence on digital natives

2 Research Background Framework Let s build the theory and framework

Research Model Information Processing Confidence H1 Benefit H5 H2 (-) Consumer Susceptibility to Interpersonal Influence H3 H4 (-) Cost H6 (-) Attitude toward Online Consumer Review H7 Frequent Usage Behavior Source : Lee & Ma, 2012

Research Concept INFORMATION PROCESSING CONFIDENCE The level at which consumers are confident in their ability to evaluate message, think quickly, and point out weakness when the information posted on a virtual review portal is not consistent (Weinberg & Davis, 2005) PERCEIVED BENEFIT Individual evaluations of utility to achieve a goal (Gutman, 1982, Lee & Ma, 2012) CONSUMER SUSCEPTIBILITY TO INTERPERSONAL INFLUENCE Individual s tendency to seek information from others who are significant for them to learn about products, brands, and services when making purchasing decisions (Bearden et al., 1989, Mourali et al., 2005) PERCEIVED COST Individual assessments of time and or efforts devoted to achieve certain outcomes (Betman, 1979, Lee & Ma, 2012) ATTITUDE TOWARD ONLINE CONSUMER REVIEW One s cognitive and affective orientations with respect to some stimulus object or behavior (Fishben & Ajzen, 1975, Lee & Ma, 2012) FREQUENT USAGE BEHAVIOR Individual s intentions to perform behavior (Lee & Ma, 2012)

3 Research Background Methodology Let s start with how we do the research

Target Population

Research Design SAMPLING UNITS Female/male, digital natives, 18-29 years old, registered as Zomato member, read Zomato online review at least in last 2 weeks EXTENT Jakarta, Bogor, Depok, Tangerang, Bekasi (Jabodetabek) TIME FRAME 4 th April 5 th September, 2016 SAMPLE SIZE 155 respondents

Research Design SAMPLING TECHNIQUES Non probability sampling techniques, judgemental sampling QUANTITATIVE RESEARCH DESIGN Descriptive Research Survey Structured questionnaire DATA ANALYSIS SEM (Structural Equation Modeling (SEM) with AMOS software

4 Research Result and Background Analysis Let s discuss the result

Result Information Processing Confidence H1: 0.654*** Benefit H5: 0.556*** H2: 0.084 H3: 0.480*** Attitude toward Online Consumer Review H7: 0.948*** Frequent Usage Behavior Consumer Susceptibility to Interpersonal Influence H4: -0.098 Cost H6: -0.122* Source : Lee & Ma, 2012

Discussion Information Processing Confidence H1: 0.654*** Benefit H5: 0.556*** H2: 0.084 H3: 0.480*** Attitude toward Online Consumer Review H7: 0.948*** Frequent Usage Behavior Consumer Susceptibility to Interpersonal Influence H4: -0.098 Cost H6: -0.122* Source : Lee & Ma, 2012 Average perceived costs of online review in the context of Zomato is 2.71 on scale of 7 (the one-sample t test indicated a significant difference under 4 for the six indicators of perceived costs). This indicates that digital natives, especially in the age range 18-29 years, did not significantly perceived costs (psychological costs adding to the confusion, information inconsistency, and wasted time). Digital native has the knowledge and skill related to information technology (Bennett et al., 2008). Furthermore, they are can manage information very quick, they also like doing work in parallel (Prensky 2001). This of course does not mean the cost aspect is not exist in reality, however, digital native has an ability to manage technology and digital information which can reduce perception of such costs.

Theoritical Implication 1. Results of this study contribute to aspects of generalization on previous research results related to the effect of the benefit and cost of online consumer reviews that are perceived by consumers and their implications on the usage behavior of online reviews.

Theoritical Implication 2. This study answer the call of previous studies to conduct studies related consumer response patterns of online review on a different demographic segments, in this case the additional facts obtained in the group of digital native who was born in the range of 1980-1994 (Bennett et al., 2008). The results of this study weakens the previous findings related to the impact of consumer susceptibility to interpersonal influence the perceived costs, confirming the absence of previous empirical facts on the relationship (Lee & Ma 2012). The research also found no evidence on relationship between information processing confidences to the perceived costs amongst digital natives.

Managerial Implication Online reviews platforms provider can focus on efforts to provide higher benefits toward digital native, such as : versatility of the platform breadth and diversity of the content of the information provided sorting and filtering facilities toward existing information content reputation mechanism (King et al., 2014) to allow users to focus on the things they need and can help them to make a decision. These efforts escalate the benefits perceived by the user of the digital native while reducing the perceived cost perceived by users of previous generations.

Future research suggestion For future research, there is an opportunities for comparative testing between generations associated with the formation pattern of the perceived benefits and perceived costs of online review platform along with its marketing implications. Another thing that might potential is testing specific demographics and culture as moderator antecedents and marketing consequences of perceived benefits and perceived costs of online review platforms.

Researchers : ANNA RIANA PUTRIYA, SE., M.Si Management Department Faculty of Business Universitas Multimedia Nusantara (UMN) www.umn.ac.id e-mail : anna@umn.ac.id Dr. WHONY ROFIANTO, ST., M.Si Management Department Indonesia Banking School (IBS) www.ibs.ac.id e-mail : rofianto@ibs.ac.id