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 has

received little attention from business firms, yet it is a silent and potent force that is capable
of wreaking havoc on a firm's bottomline. This study examines the influence of some
individual and situational factors affecting negative word-of-- mouth behaviour. The results
reveal that product involvement, purchase decision involvement, self-confidence, perceived
worthiness of complaining, and proximity of others affect negative word-of-mouth behaviour
in both Singapore and Canada. Two additional factors, attitudes towards business in general
and the perceived reputation of the firm, affect negative word-of-mouth behaviour in the
Singapore sample, while an additional factor, sociability, affects negative word-of-mouth
behaviour in the Canadian sample.

Resume

Le bouche a oreille negatif est une forme de reponse des consommateurs a leur propre
insatisfaction qui a renu peu d'attention de la part des entreprises, et qui cependant, represente
une force silencieuse et puissante, capable de noire aux succes de l'entreprise. Cette etude
examine l'influence de facteurs individuels et situationnels sur les comportements de bouche
a oreille negatif. Les resultats revelent que le degre de contact avec le produit, le degre
d'implication dans la decision d'achat, la confiance en soi, la perception qu'a le consommateur
du suivi donne a one eventuelle plainte, et l'influence d'autrui affectent les comportements de
bouche 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, affectent
le 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 presence
of a vast and powerful network consisting of neighbours exchanging product information in
contexts such as "over the clothesline" and "across backyard fences." Subsequent
investigations of the word-of-mouth (WOM) phenomenon presented evidence that WOM is
important in the purchase decisions and choice behaviour in the following areas: household
goods 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 more
information via WOM than from the mass media, indicating that WOM is a phenomenon that
is 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
marketing element that exists" (Alsop, 1984). Not only is there a proliferation of
advertisements 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 or
events 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 than
with those influenced. One well-known hypothesis is that of the two-step flow of
communication. It asserts that the mass media influence a small group of individuals called
opinion leaders, who in turn influence the masses to adopt the innovation (Katz, 1957). The
emphasis of the research then was to determine and identify the characteristics of the
communicators or opinion leaders.

In subsequent research, the two-step model was felt to be an inaccurate portrayal of the flow
of information and influence, and a multi-step flow of communication was proposed. The
two-step model assumes that the audience is passive but evidence suggests that receivers also
take 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 how
they 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 considered
only positive and not negative WOM. WOM is usually discussed in terms of informing others
about new products rather than consumer communications about existing products. While
Arndt (1968) has concluded that WOM can accelerate or retard the acceptance of a new
product, this has shed little light on negative WOM as a dissatisfaction response. Few
published research projects have examined why some dissatisfied consumers engage in
WOM while others do not. Richins (1983) found that problem severity and blame attributions
are crucial determinants of the amount of effort a consumer is likely to expend in response to
a dissatisfaction, while the choice between WOM and complaint behaviour is influenced by
the perception of retailer responsiveness. This study seeks to explore the extent of negative
WOM and to investigate some factors that may influence negative WOM and the likelihood
of 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 distinctions
between WOM activities and commercial mass communication. First, the WOM
communicator is in direct, face-to-face contact with the receiver while mass communication
relies 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 the
marketer (Arndt, 1967a; Silverman, 1997). As a result, it is perceived as a more reliable,
credible, and trustworthy source of information. It provides information concerning product
performance and the social and psychological consequences of a purchase decision (Cox,
1963).
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 message
than 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 influence
many 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 more
heavily 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 input
for 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 by
participating 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-person
communication between a perceived non-commercial communicator and a receiver
concerning 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 or
who have rejected or discontinued using a product is telling friends about the experience and
urging them to avoid it (Day, 1978; Leonard-Barton, 1985). Many researchers have suggested
that negative information tends to lead to greater attention to and weighting of that
information (Lutz, 1975; Miserski, 1982; Wright, 1974). Arndt (1967c), for example, found
that negative WOM retarded sales of a food product more than twice as strongly as positive
WOM promoted sales of that product. Negative WOM has also led to the failure of many
motion pictures. Richins (1984) argues that negative WOM will be communicated to more
people than positive WOM. Based on anecdotal evidence about the spread of rumours, it is
suggested that a negative message may travel farther than a positive message through
retransmission.

In earlier research, the influencer was often thought to be an opinion leader. However, a
dissatisfied 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 factors
are that will influence negative WOM behaviour.

Factors Motivating WOM

According to Dichter (1966), WOM involves two parties: the speaker (communicator) and
the listener (receiver). WOM will only occur if the communicator is motivated to speak and
the receiver is motivated to listen. Thus, in order to understand how the process works, it is
vital 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) homophily
and interpersonal ties between the WOM giver and receiver (Brown & Reingen, 1987; Engel,
Blackwell, & Miniard, 1986); (c) product and buying situation characteristics such as high
perceived risk (Arndt, 1967b; Cox, 1967), newness (Rogers, 1983), .and intangibility
associated with services (Ziethaml, 1981); and (d) situational factors such as circumstances
where product information may be difficult or impossible to obtain from the marketer, or
where there is a shortage of time.

In the case of the WOM giver, motivation to speak may be influenced by: (a) the personality
of 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 some
individual and situational variables that may influence negative WOM behaviour. We also
examine 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 not
speak 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 in
the model. A construct related to the enduring aspect of involvement, namely product
involvement, is also examined in this study.

Self-confidence. Self-confidence can be classified into two different forms: general and
specific. The latter is related to the performance of a specific task, while the former is related
to a person's overall self-confidence. General self-confidence is defined as the extent to which
an individual believes himself to be capable, significant, successful, and worthy
(Coopersmith, 1967). This aspect of self-confidence is felt to have a relationship with
negative 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). It
has also been suggested that consumers who complain tend to be more self-confident and
assertive (Day, 1978). Bearden, Teel, and Crockett (1980) found that consumers from higher
social classes are more selfconfident and tend to perceive less risk of embarrassment in
complaining. 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 fashion
as possible (Goffman, 1959). Telling others that a product one purchased was unsatisfactory
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 into
the 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 make
overt 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 a
person 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 is
nothing to be gained from others. They evidently expend effort because of a strong standard
of right and wrong (Berkowitz & Lutterman, 1968). King and Summers (1967) found that
concern for others may precipitate talk by the innovator because he can thereby share his
satisfactions resulting from use of the product or service. Dichter (1966) also mentioned
other-involvement as a motivator of WOM, where consumers engage in WOM with the intent
to help others. Similarly, synthesis of the rumour and WOM literature suggests that once
dissatisfaction occurs, a desire to prevent others from experiencing a similar fate may prompt
one to engage in negative WOM. It is believed that since socially responsible individuals are
concerned about the welfare of people around them, they would be more likely to give
negative WOM to warn others about the unsatisfactory product, brand, or service.

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

Attitude towards complaining. Three domains of attitude towards complaining emerged in an

empirical analysis by Richins (1982). The first domain is norms related to complaining, that
is, concern of the consumer as to whether complaining is appropriate behaviour. The second
domain relates to the expectation of the societal benefits of complaining. While some
consumers may feel that if enough people complain about a product, it will eventually be
improved 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. The
degree to which a consumer may complain depends on his or her judgement regarding the
worth of the trouble involved. It has been found that the more the consumers perceive that
complaining 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, he
will avoid complaining but may engage in negative WOM instead. If a consumer perceives
that seeking redress through complaining is useless, he or she may choose to stop purchasing
the product and suffer in silence. He or she may also tell others about the dissatisfaction and
this 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 engage
in 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 to
the likelihood of complaint behaviour (Barnes & Kelloway, 1980). This relationship is
expected to extend to negative WOM givers as well. This is because a person who has a
negative attitude towards business is more ready to attribute the cause of dissatisfaction to the
company. Thus, he is more likely to engage in negative WOM to reinforce his negative
perceptions of the business community.

H5: Consumers who have more negative attitudes towards business in general are more likely
to 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 likely
to spread negative WOM if they have purchased the product from a reputable firm. They may
attribute the blame to themselves or some situational factors, rather than the firm, which may
be 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 not
share their sentiments. On the other hand, if a firm does not have a longstanding record of
reliability, image of quality, or customer responsiveness, then consumers may be more likely
to 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-related
and consumers perceive the firm to have control over the reason for negative product
experiences (Folkes, 1984).

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

Product involvement. A person can be involved with advertisements (Krugman, 1977), with
products (Howard & Sheth, 1969; Hupfer & Gardner, 1971), or with purchase decisions
(Clarke & Belk, 1978). Day (1970) defines involvement as the general level of interest in the
object or the centrality of the object to the person's ego-structure. Mitchell (1979) defines
involvement as an internal state variable that indicates the amount of arousal, interest, or
drive 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 transcends
situational influences while situational involvement is the degree of involvement evoked by a
particular 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 ongoing
basis, 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 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 negative word-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 in
this study: purchase decision involvement and proximity of others.

Purchase decision involvement. Analogous to the situational involvement of the Houston and
Rothschild (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 decision
when 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 a
consumer brings to bear upon a purchase decision task (Mittal, 1989). Landon (1977)
proposed that purchase decision involvement can influence the level of dissatisfaction with a
product and the propensity to complain once dissatisfaction occurs. In fact, it has been found
that 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 purchase
decision, 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 give
negative WOM than those who are less involved in their purchase decisions.

Proximity of others. Evidence of situational influence surrounding a purchase abounds. For

example, Belk (1971) found that one-third of the conversations about a new freeze-dried
coffee took place where the prior conversation concerned food, and that another third of the
conversations 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 purchase
outcomes.

In this study, the social surroundings, including the presence of other people, their
characteristics, 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 to
quickly tell others about it to release the frustration that he or she is feeling. Thus, the
proximity 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 than
those who are alone.
Outcome of WOM Behaviour

Repeat purchase behaviour. Customers may continue to purchase those products with which
they have satisfactory experiences. In telling others about particularly pleasing products,
these customers may also influence the brand perceptions of those with whom they
communicate. 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 sparked
widespread interest in customer satisfaction among marketing researchers. Only through
satisfying customers do marketing firms ensure repeat purchase, which translates into greater
sales for the firm.

One study (Technical Assistance Research Programs, 1979) reported that those dissatisfied
customers who made a complaint about their dissatisfaction reported higher repurchase
intentions than those who did not complain, even if their complaints were not satisfactorily
addressed. However, no study has examined the effect of negative WOM behaviour on
repurchase intentions. It is believed that consumers who engage in negative WOM behaviour
are 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 product
than 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-administered
questionnaire distributed through the researchers' friends, relatives, and colleagues.
Numerous reasons accounted for the choice of this research method. First, it allows large
amounts of information to be obtained at a relatively low cost. Second, more accurate
responses are obtained because interviewer bias is avoided. Finally, the number of non-usable
questionnaires is reduced since the personal contacts tend to make respondents more
cooperative in completing the questionnaires.

Sample

The sampling frames are the general Singapore population and Canadians residing in
Vancouver. Care was taken to make sure that consumers of different ages, genders,
occupations, educational backgrounds, and income groups were adequately represented. One
hundred and fifty questionnaires were distributed in both Singapore and Canada. Data were
collected from the two locations due to the existence of close contacts. There was no
intention to make cross-cultural comparisons in this study.

Operationalization of Constructs
Some measures for the variables were established measures, while others were modified and
adapted 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 were
not 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 tell
your 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 the
approximate 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-polar
adjectives of "very strong" and "very weak").

Personality constructs. A condensed scale of 10 items was used to measure self-confidence

based on Janis and Field (1959) and Day and Hamblin (1964). Six items were extracted from
the California Psychological Inventory (Consulting Psychologists, 1959) to measure
sociability. Eight items taken from the Social Responsibility Scale (Gough, McClosky, &
Meehl, 1952; Berkowitz & Lutterman, 1968; Harris, 1957) were adapted to measure social
responsibility in this study.

Attitudinal constructs. Attitude towards complaining was measured on three domains with 11
items (Richins, 1982). Nineteen items were adapted from the Consumer Discontent Scale
developed 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 by
consumers 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 interval
scale.

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 by
Mittal (1989) was included in this study. Seven additional items for measuring purchase
involvement 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 additional
question, "Who was with you?," with six given options as answers.

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

Questionnaire Pre-Testing and Field Procedure

A few professionals were interviewed to assess the face validity of the measures. The
questionnaire 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 explicit
instructions on how to conduct the survey. The questionnaires were distributed to the
administrators' family members, friends, relatives, neighbours, colleagues, or anyone whom
they came into contact with in their daily lives. Efforts were made to ensure that the sample
was 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 of
92%. 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 fewer
female respondents (48.8%) compared to the Canadian sample in which female respondents
made up 57.5% of the entire sample. The Singaporean sample was slightly younger than the
Canadian sample. The Canadian sample was more educated with a higher percentage of
respondents holding an undergraduate or postgraduate degree (49%), while Singaporeans in
this category made up 29.5% of the sample.

More respondents in the Canadian sample hold managerial, professional, supervisory, or

technical positions, while more Singaporeans are employed in clerical, sales, or production
jobs. This reflects the difference in employment composition of the countries, as the
Canathan economy is more service-oriented and has more knowledge workers than the
Singaporean economy. In addition, the higher level of entrepreneurship in Canada is reflected
in the higher percentage of respondents being self-employed or engaged in the family
business.

More Canadian respondents fall into higher income categories with 52.7% earning $2,000 per
month and above. This is in contrast to only 38.8% of the Singaporean sample earning a
similar amount. Several things may account for this observation. First, the Canadian sample
is older and has higher educational qualifications. Second, Canada has a higher minimum
wage than Singapore. Overall, both samples cover varied segments of the population in terms
of 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 loaded
strongly on the constructs they are supposed to measure. An exception applies to the
measurement items for the construct of social responsibility. These items loaded strongly on
more than one factor. As such, this construct was dropped from further analysis. The item "It
is extremely uncomfortable to accidentally go to a formal party in street clothes" was deleted
from the construct "self-confidence" due to its weak loading on the construct. This action led
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 this
construct. 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 concerning
complaint" due to negative factor loading.

Cronbach's coefficient alpha was used to assess the reliability of the measures. Table 2 shows
the reliability of the measures in this study. According to Nunnally (1978), the Cronbach
coefficient 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 alpha
was felt to be too low. Caution should be exercised in the interpretation of research results
related 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 the
dissatisfactory experience (rounded off to the nearest whole number). The above finding
regarding the extent of negative WOM dissemination was supported by both the Singaporean
and 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 did
not) from both samples. It was found that respondents who engaged in negative WOM
experienced a higher level of dissatisfaction than those who did not. For the Singaporean
sample, 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, the
data were analyzed using cross-tabulation since both are categorical variables. The chi-square
statistic is significant at the 0.05 level (see Table 3). As such, the hypothesis that consumers
are 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 the
single categorical dependent variable. The following are the metric independent variables: (a)
self-confidence, (b) sociability, (c) attitude towards complaining, (d) attitude towards
business in general, (e) perceived reputation of the firm, (f) product involvement, and (g)
purchase decision involvement. The simultaneous method was chosen instead of the stepwise
method as the number of independent variables is not very large and we felt that all
independent variables should be included.

One condition for the use of discriminant analysis is that there should be no multicollinearity
among the independent variables (Hair, Anderson, Tatham, & Black, 1995). Correlation
analysis among the independent variables showed coefficients of less than 0.70 (Berry &
Feldman, 1986). Most coefficients were in the range of 0.01 to 0.30. As such, we felt that
multicollinearity 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 not
significantly different. Hence, discriminant analysis can be adopted.

The next stage of discriminant analysis is validation of the results. The most frequently
utilized procedure in validating the discriminant function is to divide the groups randomly
into analysis and holdout samples. This involves developing a discriminant function with the
analysis sample and then applying it to the holdout sample. However, in this study, the
sample 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 sample
was 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 that
such a procedure may introduce an upward bias in the predictive accuracy of the discriminant
function. Another reason why hold-out samples were not applied was because randomization
is 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 is
completely random and that both the analysis and hold-out samples are equally representative
of the total sample. Hence, the hold-out sample may be very different from the analysis
sample, making such a validation technique inaccurate.

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

To determine the relative importance of each independent variable in discriminating between

the groups, structure coefficients were used instead of standardized coefficients. This is
because 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 coefficients
should 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 important
predictor of negative WOM behaviour, followed by product involvement, self-confidence,
purchase decision involvement, worthiness of complaining, and perceived reputation of the
firm. For the Canadian sample, the most important predictor of negative WOM behaviour is
sociability, 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, the
a priori chance of classifying individuals without the aid of a discriminant function should be
considered. Since the group sizes were unequal, the proportional chance criterion was used to
calculate the chance classification. The formula for this criterion is Cpro = p2 (1 - p)2 where
Cpo = 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 high
the classification accuracy should be, relative to chance. They suggested that the
classification should be at least 25% greater than that achieved by chance for the discriminant
function 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 classification
results. 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 of
cases 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 to
repurchase between negative WOM givers and non-givers. The means were not significantly
different 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 when
dissatisfaction occurs. Negative WOM can be a powerful and detrimental consumer response
and 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 less
dissatisfaction occurs. They can do this by improving product quality, communication with
customers with regard to product usage and functions, anticipation and responsiveness to
likely 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
the marketing intermediaries are often not committed to handling customer complaints
effectively. This study has found that when consumers feel that it is not worthwhile to
complain, 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 of
business firms in general and, specifically, the reputation of a firm. This is especially
important for the Singapore market since the research results have shown that a poor attitude
towards business in general and a weak perception of the reputation of a firm tend to
encourage negative WOM behaviour in the Singaporean sample.

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

The research results have also shown product and purchase decision involvement to be
important determipants of negative WOM behaviour. Firms selling products that entail high
levels of investment and consideration (for example, automobiles) should be more vigilant of
possible areas of customer dissatisfaction. They can achieve this by calling customers who
have purchased products from them to elicit feedback and respond quickly to any problems
that have occurred. Relationship marketing is a key to guarding against adverse effects of
negative WOM. Businesses can identify customers who tend to be highly involved in specific
product decisions and pay special attention to this group of consumers. For example, the
relevant consumer group for car companies may be car enthusiasts, for computer firms it may
be computer buffs, while for the fashion retailers it may be either trend-setters or those who
are 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 obtain
feedback 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 the
consumer to elicit feedback.

Research Limitations and Future Research Directions

The sample sizes of those who engaged in negative WOM and those who did not differed
quite widely. This imbalance may impact the estimation of the discriminant function and the
classification of observations. This is because during the classification stage larger groups
may 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 discriminant
function. 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 the
sample sizes are large enough, validation using a holdout sample and the total sample can be
carried out at the same time for comparison of results.

A loose quota sampling approach was used in this study. The Singaporean and Canadian
samples may not be totally representative of their respective populations. The samples are not
quite comparable, thus it is not possible to make cultural comparisons with respect to the
effects 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 in
different cultural contexts.

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

The reliabilities of the measures for two constructs, social responsibility and attitude towards
complaining, were low. Better measures need to be developed for these constructs. In
particular, 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 with you when the dissatisfaction occurred?" As there may be a gap between the
point in time when the dissatisfaction occurs and the point in time when negative WOM takes
place, this measure may not have fully captured the elements of the construct.

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

This study has only examined repeat purchase intention as a consequence of negative WOM
behaviour. Future research can examine other consequences of negative WOM behaviour
such as switching to competitive products. This research has revealed some factors that affect
negative WOM behaviour in the Singaporean sample but not in the Canadian sample, and
vice versa. This could be due to contextual or cultural reasons. Future research can examine
these 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, National

University of Singapore, FBA1, 15 Law Link, Republic of Singapore 117591. Tel: (65) 874-
3179. Fax: (65) 779-5941. E-mail: fbalaugt@nus.edu.sg

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 research
under the Academic Research Fund.

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Geok Theng Lau "Individual and situational factors influencing negative word-of-mouth
behaviour". Canadian Journal of Administrative Sciences. FindArticles.com. 04 Mar, 2011.
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