Chapter 1: Introduction
1.0 Chapter overview
This research is to investigate the determinants factor influencing e-WOM: the role of generation Y Internet Experience. The whole study context will be presented and explain in this chapter which include the background of the study, the problem statement, the research objectives, both general and specific objectives, the research hypothesis, the conceptual framework, dependent and independent variable, the significant of the study, the definition of term and the conclusion.
Generation Y’s consumption behaviours have received tremendous attention from hoteliers and hospitality practitioners, very little research has focused on this particular group.
Therefore, this study is made to determine and to fill the void by exploring and validating the factors that determine Generation Y’ role on the e-WOM through social media and mobile technology.
1.1 Background of the Study
In this wold of globalization, hospitality and tourism industry is one of the worlds largest and fastest growing industries. It creates 328 million jobs and supporting 10% of the worlds workforce by the of 2020 (iNurture, 2016).
In Malaysia, this sector was identifies as one of the major contributors to the economic success of the nation. Over the years, many significant milestones have been achieve by this sector, by both locally and internationally. Apart from that, Malaysia being ranked among the worlds top 10 tourist destinations Hospitality. (n.d.). Retrieved from ( According to Monster Employment Index (MEI), hospitality and travel roles were the most in demand profession among occupation groups for the third consecutive month, that is up to 7% year on the year in July 2018 (n.d) Retrieved from ( n.d.) Thus, this creates not only new types of jobs in the hospitality and travel industry, but also fuels the demand for talent that learns how to work with people and technology.
With the existence of blogs, online reviews and social networking enable consumers to virtually connect and share information, opinions and knowledge on all types of goods, services and brands (McLeay and Filleri, 2013). Web 2.0 applications enable the interaction and collaboration between online users and influence how consumers can create, exchange and use information correctly (Sigala, Christou, and Gretzel 2012; OConner 2008). According to Bronner and de Hoog (2011), some of these application promote word of mouth on the web, or recognize as e-WOM. Santo (2006) indicates that word of mouth cuts through and rises beyond messages noise as it is sent form a source such as a friend or colleague.
Word of mouth is a primary factor behind all purchasing decision by 20% to 50% (Aky?z, 2013). According to Bughin et al., (2010), its effect is greatest when consumers first buy a product or when products are relatively expensive, and some other factors that tend to make people make research more and seek more opinions on the product or services.
Over the years, traditional WOM has become an important topic for researchers and many definition regarding this concept can be discovered. (Aky?z et al., 2013). Arndt (1967) defined traditional WOM as: Oral, person-to-person communication between a recipient and a communicator perceived by the recipient as non-commercial about a brand, a product or a service. In another definition, Dwyer (2007) stated that WOMs social aspect an defined it as: Word of mouth is a network phenomenon where people create ties with another by exchanging discourse units that link to create an information network while people create a social network.
While WOM has always played an important role in building consumer opinions, it has become an even more powerful source over the past decade due to the technological explosion of informal channels of communication such as the Internet, Instant Messaging and Blogging (Allsop, 2007). E-WOM, the extension of the traditional WOM can be defined as positive or negative statement made by potential, actual or former customers about a product or a service made by company available through the Internet to a multitude of individuals and institutions (Hennig-Thurau, 2004). Aky?z (2013) mentioned, communication with e-WOM can take place in different settings. Thadani and Cheung (2010), specify that consumers can post on blogs, social networking sites, discussion forums and reviews websites about their opinion and review about a product or a service.
Word of Mouth (WOM) is characterized as the demonstration of trading promoting data among buyers and assumes a fundamental part in changing shopper states of mind and conduct towards items and administrations (Lazarsfeld & Katz 1955). Word of mouth (WOM) as stated by Price & Feick (1987), is created and delivered by a more trustworthy source of information about products and brands than company generated persuasive messages where consumers often rely on it when they search for information on which to base their purchase decisions. Therefore, the significance of word of mouth (WOM) in influencing consumer decision making has been well recognized in marketing and advertising literature (Gilly et al., 1998; Engel et al., 1969). Hennig-Thurau et al. (2004) characterized e-WOM as ‘any constructive or adverse articulation made by potential, real, or previous clients about an item or organization, which is made accessible to a huge number of individuals and foundations by means of the Internet’. Thus, e-WOM occurs on a wide range of online channels, such as blogs, emails, consumer review websites and forums, virtual consumer communities, and social media such as Facebook, Twitter, and Instagram. (Phelps et al. 2004; Dwyer 2007; Rodgers & Thorson 2006; Li & Hung 2007).
The emergence of e-WOM has fostered an unprecedented scale of the powerful WOM effect. There are major factors that contribute to the rapid growth of the activities and influences of e-WOM. First, e-WOMs huge actual and potential are the vast population of internet users. Approximately there are 24.5 million Internet users in Malaysia which equals to 76.9% of the population in Malaysia. These statistics are gathered from MCMC (Malaysian Communications and Multimedia Commission), Facebook, Department of Statistics Malaysia. According to the research by MCMC, from 32 million peoples in Malaysia, 24.5 million users (76.9%) have access to the Internet, and the others 7.5 million (23.1%) do not have access to the Internet. The smartphone is the main medium of how Malaysia access the Internet. There are 89.4% (21.9 million peoples) access their smartphone, compared to another medium such as the laptop, netbook and PC desktop. After smartphone, it is followed by Netbook/Notebook/Laptop that is 36.3%, PC/Desktop is 29.3%, Tablet is 18%, Feature Phone 9.4%, Smart TV 6.7%, TV streaming box 5.6% & lastly game console 2.5% (cited from – iamk, 2018).
E-WOM communications enabled by the Internet are no longer restricted by the geographical location or social network of a e-WOM participant (XingWei, 2007). E-WOM globally reach particularly meets the need of consumers engaging in transactions on electronic commerce platforms with foreign exchange partners (XingWei et al., 2007). Social networking sites (SNS) are always the main platform when it comes to Internet activities. According to the research above, there are 97.3% of Malaysian Internet users do have at least a Facebook account. Based on the data statistic, 23.83 millions of Malaysians that do have a Facebook account. As for Instagram, there are 13.74 million Instagram users in Malaysia, increase from 46.7% (2016) to 56.1% (2017). YouTube has at least 45.3% Malaysian using it and followed by WeChat Moments that has 43.7%. Goggle has 28.3% and Twitter has 26.6%. LinkedIn, Snapchat, LINE Timeline, Tumblr has the least usage by Malaysians where their percentage of usage is below 10%. (cited from – iamk, 2018)
A majority of technology experts believe that Generation Y will lead society into a new world of personal information sharing and disclosure using social media and mobile technology (Apresley, 2010; Bilgihan et al., 2013). Generation Y is the unique cohort that many firms have invested in heavily to understand their attitude and behaviours. Generation Y is a priority market segment that businesses cannot ignore. In this research, the consumer of Generation Y will be taken into account. This is because consumers of this generation have emerged as a significant force in the global market place (Noble, Haytko, & Philips 2009). Generation Y consists of different age classes. According to Brosdahl and Carpenter (2011) and Bolton et al, (2013), they categorized Generation Y who born after the year of 1981. However, there is no broad agreement on the exact age range for a generation (Zhang, Omran, and Cobanoglu 2016).