Dynamic interplays between online reviews and marketing promotions

Yufei Zhang (), Clay M. Voorhees () and G. Tomas M. Hult ()
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Yufei Zhang: University of Alabama-Birmingham
Clay M. Voorhees: University of Alabama
G. Tomas M. Hult: Michigan State University

Journal of the Academy of Marketing Science, 2024, vol. 52, issue 6, No 15, 1820-1841

Abstract: Abstract Customer reviews, price discounts, and free shipping are powerful drivers of online purchases. Prior research demonstrates their direct effects on consumer behavior, usually with the assumption that they operate independently. By examining the interplays of online reviews and marketing promotions, this study offers a richer, more comprehensive perspective on how these drivers work together to shape consumers’ preferences and influence product sales. The authors examine these effects using both an online experiment (Study 1) and an analysis of a secondary data set (Study 2). Results demonstrate that when developing promotional schedules for e-commerce sites, managers must account for both the volume and valence of their products’ reviews; failing to address these dynamics may lead to reduced profit margins. A key insight is the limited performance of price discounts when a critical number of reviews accumulates, resulting in margin erosion without demand creation. The implications of these results are discussed.

Keywords: Online reviews; Marketing promotions; Information integration; Information-varying models (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s11747-024-01025-w

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