How consumers respond to incentivized word of mouth: An examination across gender

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Australasian Marketing Journal j o u r n a l h o m e p a g e : w w w. e l s e v i e r. c o m / l o c a t e / a m j

How consumers respond to incentivized word of mouth: An examination across gender Christiana Yosevina Tercia a,*, Thorsten Teichert b a b

Universitas Prasetiya Mulya, School of Business and Economic, Edutown, KavlingEdu 1 No. 1, BSD Raya Barat 1, BSD City, Tangerang 15339, Indonesia Hamburg University, Von-Melle-Park 5, D-20146 Hamburg, Germany

A R T I C L E

I N F O

Article history: Received 7 August 2016 Revised 16 January 2017 Accepted 19 January 2017 Available online Keywords: Incentivized WOM Mobile couponing Gender TPB (theory of planned behavior)

A B S T R A C T

While word-of-mouth (WOM) activities may be planned by marketers, customers have to execute them. And although marketers may attempt to encourage customers to do so by providing either unconditional or conditional incentives, customers have the ultimate control whether or not they execute WOMrelated activities. WOM senders’ actions might be somewhat aligned with a company’s objectives, but marketers have even less control over the responses of WOM receivers. Thus, from the receivers’ perspective, this paper examines how incentivized WOM should be designed to boost the success of a marketing program. The theory of planned behavior serves as a framework to explain both the internal and the external drivers that determine receivers’ reactions to WOM stimuli. An experimental design is applied to investigate different modes of mobile coupons as a novel tool of WOM. Gender is identified as a major source of heterogeneity in receivers’ responses. Results show that incentives’ conditionality exerts a negative impact on receivers’ responses. The inequality of incentives does significant harm to WOM campaigns that are aimed at male consumers. By contrast, external drivers exert a particularly strong influence on females’ reaction to WOM stimuli. Situations of reciprocity reduce women’s perceived behavioral control and thereby increase their likelihood to execute the desired WOM action. Research findings hint at the need to design gender-specific incentive schemes to foster WOM. © 2017 Australian and New Zealand Marketing Academy. Published by Elsevier Ltd. All rights reserved.

1. Introduction At present in the digital era, consumers can easily receive and provide information on products and services they are interested in. The transformation from WOM to e-WOM (Chu and Kim, 2011) and ultimately to mobile WOM, or M-WOM (Okazaki, 2009), has enriched the possible media that consumers can use to express WOM. The use of smart phones makes it more convenient for consumers to send, search, comment, and collect information about products and services they are interested in (Wiedemann, 2007). Here, M-WOM or mobile viral marketing relies on the consumers’ intention to transmit WOM’s content via mobile devices. To provide a description of M-WOM, Palka et al. (2009) developed a mobile marketing framework consisting of various techniques to conduct promotion through mobile devices. They provide a grounded theory framework that elaborates the mobile viral effects

* Corresponding author. Fax: +62 (0)21 604 50 505. E-mail addresses: [email protected] (C.Y. Tercia); [email protected] (T. Teichert).

and identifies determinants of reception, usage, and forwarding of mobile viral content. According to them, the objectives of mobile marketing include building brand awareness, changing brand image, promoting sales, enhancing brand loyalty, building a customer database, and making the information contagious by utilizing mobile devices. Furthermore, according to Pousttchi and Wiedemann (2006), there are four types of mobile marketing tools that can be utilized to achieve those mobile marketing objectives: (1) mobile information, (2) mobile entertainment, (3) mobile raffle, and (4) mobile coupons, e.g. by giving incentives to someone to send a coupon to others. While the development of mobile technology supports consumers’ WOM activities, firms are becoming more able to measure and manage the potential effect of consumers’ WOM activity (Verlegh et al., 2013). The typical approach of companies to generating WOM is to provide incentives for consumers involved in WOM activities while managing the information flow of the WOM (Stephen et al., 2012). Previous research has shown that giving incentives for WOM activities leads to an increasing likelihood that people will participate in this incentivized WOM (Buhler, 1992; Wirtz and Chew, 2002; Yang and Zhou, 2011). This study investigates how WOM incentives should be designed so that they positively influence consumer intention to

http://dx.doi.org/10.1016/j.ausmj.2017.01.003 1441-3582/© 2017 Australian and New Zealand Marketing Academy. Published by Elsevier Ltd. All rights reserved.

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participate in WOM activity. The behavior of both senders and receivers has to be taken into account while ensuring that the responses from all participants are positive. While previous studies have focused on the sender’s perspective and linked WOM messages to different motivations to engage in e-WOM (Yap et al., 2013), we focus on respondents’ actions as a final behavioral consequence when redeeming a mobile WOM coupon. The theory of planned behavior (TPB) developed by Ajzen (1991) serves as the theoretical basis. It has been widely adopted to test consumers’ behavior intention in general and has also been applied to previous studies on WOM (Becker et al., 2010; Clement et al., 2012; Kang et al., 2006). The current study extends TPB to the context of incentivized WOM by adding the distribution of incentives and reciprocity as new dimensions to the model. It provides both theoretical insights about the possibilities of marketing to influence consumers’ motivation to engage in WOM and practical guidance for marketers to steer mobile WOM, especially in the context of designing mobile coupons. A mobile coupon is a particular WOM application that is gaining interest in business: McDonald’s, Starbucks, Burger King, and Red Bull are some of the well-known firms that utilize mobile coupon as a mobile marketing strategy. AC Nielsen (2015) concluded that European customers have the lowest mobile coupon–claimed usage level; however, more than half (an average of 55%) of customers are willing to try mobile coupons. This result shows the potential growth of mobile couponing. While most WOM studies focus on sharing information in positive or negative valence (Yap et al., 2013) and recommending products and services (Chevalier and Mayzlin, 2006), our study aims to utilize mobile coupons as a novel tool for e-WOM that can be disseminated by forwarding it to others. e-WOM has been examined by Hsueh and Chen (2010), who propose peer-generated targeting to address receivers of mobile coupons. The authors identified basic mechanisms to link senders through mobile coupons with receivers and to steer their joint action. To advance this line of research, our study investigates the influence of gender. We assume it to be a key determinant of WOM behavior, as previous studies revealed a large influence on consumer decision-making styles in general (Mitchell and Walsh, 2004).

2. Incentive Monetary incentives are widely used by marketers to encourage consumers to generate WOM. Tuk (2008) stated that a consumer can get a monetary reward through e-coupons or mobile coupons by providing the name and/or address (e.g. email address) of friends whom they consider to be potential customers for these companies. Furthermore, according to Buhler (1992), persons rewarded for their action are more likely to behave in the same way again in the future. In line with Tuk (2008) and Buhler (1992), Gupta and Shaw (1998) argue that monetary incentives can be used to develop a certain behavior. Marketers use incentives such as paybacks or discounts to increase the likelihood of a person to act in the company’s interest (for example, by communicating positively about its product and/ or services). Consequently, incentives, particularly monetary ones, have been employed by many business entities to steer consumers’ actions. However, the effectiveness of such incentives to increase consumers’ participation in WOM remains unaddressed. Latham and Locke (1991) stated that incentives should motivate people to behave in a particular way, while Lepper et al. (1973) found that incentives may decrease a person’s intrinsic motivation. Research in the field of mobile WOM – and mobile coupons, in particular – provides only a limited understanding of the factors determining the consumer responses that are triggered by mobile

coupons (Banerjee and Yancey, 2010). Some researchers have explored the attributes (e.g. technical format, configuration channel, and personalization) of m-coupons (Wehmeyer and Müller-Lankenau, 2005), service perspectives (e.g. type of messages, time of delivery of messages and product relevancy) of m-coupons (Bacile and Goldsmith, 2011), or the message timing and product category (Banerjee and Yancey, 2010), and how these factors influence consumers’ intention to redeem an m-coupon. An initial study of receivers’ intention concerning incentivized WOM through mobile devices was done by Yang and Zhou (2011). Their research concluded that subjective norms, perceived costs, and perceived pleasure significantly influence receivers’ intention to respond to WOM content. The study shows that entertaining and useful messages are distributed differently and are based on different motives. It demonstrates that WOM messages are only likely to be forwarded by young consumers if they connect them with their own personal interests. Thus, when incentives are involved in WOM activity, firms should design the incentive in such a way that it influences the behavior and elicits positive responses from the receiver. However, firms need to ensure that the incentives are not only effective but also efficiently designed. Thus, from a managerial point of view, budgetary aspects play a major role when providing incentives. Marketers need to decide about the size, distribution, and conditionality of incentives. Consequently, this paper investigates two core components of incentive strategy – incentive differentiation and incentive conditionality – in order to improve receivers’ attitudes to mobile coupons and their behavioral intention to redeem such coupons.

2.1. Incentive differentiation The company or marketer needs to determine the number of incentives provided to both senders and receivers. Both are key parameters for the marketing manager, who has to decide about the allocation of money to the WOM campaign. The distribution of the differentiated incentive of senders and receivers can follow one of three generic patterns: The incentives are equal for both parties, the senders obtain bigger part of the incentive, and the senders obtain less than the receivers. The incentive differentiation between senders and receivers is not a simple decision for any company. Xiao et al. (2011) argued that senders cared about the impression the receivers have of them, e.g. “helping a friend”. When an incentive is introduced into referral programs, senders are concerned about the possibility of making a negative impression on the receivers. Additionally, receivers might perceive the senders of incentivized WOM as a non-credible source. Accordingly, in their research regarding strategies for a company to generate electronic referrals, Ahrens and Strahilevitz (2007) found that providing the same incentive to senders and receivers leads to a higher number of successful referrals. If an incentive is unequally distributed between the two WOM actors, the best strategy for business entities is to give the larger part of the incentive to the sender rather than the receiver because senders tend to make more referrals if they are granted with a larger share of the incentive (Ahrens et al., 2013). The distribution of the incentive between two parties is in line with the game-theoretic framework of the “ultimatum game” (Thaler, 1988). The framework states that a receiver of an unexpected gain perceives it to be fair if the sender obtains a somewhat larger share of the overall gain (up to 70–80%). Referring to these conflicting views on impression versus fairness, we manipulate the incentive differentiation strategies to be either different (with the sender obtaining a higher incentive than the receiver) or not different (with the incentives of the senders and receivers being equal).

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2.2. Incentive conditionality In their analysis of customer referral programs, Biyalogorsky et al. (2001) suggested that confronting potential sender with a condition for obtaining their incentive will be more profitable for firms than just giving them a price discount. A type of conditionality that firms often use is to allow consumers an incentive only after they have provided the name, email address and/or telephone number of a friend or a family member deemed a potential customer for the company (Ryu and Feick, 2007). Furthermore, in the context of m-coupons, companies generally set particular conditions before someone can claim the incentive. In this paper, the conditionality of an incentive refers to the circumstances under which senders can claim the incentive only after the corresponding receivers have redeemed their m-coupon. Hence, the receivers’ use of their coupon is used as a prerequisite for granting the senders their respective incentive. The unconditionally of an incentive refers to a situation in which the senders can claim the incentive as soon as they send the m-coupon to someone else. This is known as the “pay-per-lead” method, an affiliated marketing concept (Libai et al., 2003). In the “pay-per-lead” method, consumers are paid for referrals regardless of the result – whether or not their referrals lead to a new buyer. However, the effects of incentive (un-)conditionality on the receivers’ perception of the received WOM stimulus and on their resulting (re-)action are as yet unexplored. Given that personal relations between senders and receivers matter, it is likely that receivers consider the implications of their own actions on the senders’ benefits. To investigate this, we manipulate the incentive conditionality to be either unconditional (the senders obtain their incentive regardless of the receivers’ actions) or conditional (the senders obtain their incentive only if the receivers redeem their m-coupon). 3. Theory framework and hypotheses The study focuses on consumer intention to participate in incentivized WOM by redeeming the obtained mobile coupon

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(m-coupon). In order to get a robust view of the effect of incentive differentiation and incentive conditionality on intention, we adopted Ajzen’s (1991) theory of planned behavior. The research model is presented in Fig. 1. 3.1. Revisiting the theory of planned behavior (TPB) In the context of WOM in general, the influence of interpersonal communication on attitude, behavioral intention, and actual behavior has been discussed for a long time by physiologists and sociologists. Hovland (1948) stated that four important things are included in social communication, namely communicators, stimuli (i.e. messages), receivers, and responses. Among these four, the response from a receiver is the most difficult thing for the firms to measure and control. In WOM activity, both online (e-WOM) and via mobile devices (m-WOM), a receiver can become a sender, too. This change of roles needs to happen through a process. The basic model of WOM through mobile devices, which Palka et al. (2009) developed, described three steps in WOM activity, namely “Receipt”, “Usage,” and “Forwarding.” Persons are called “receivers” when they are in the usage and recipient stage, while the receivers act as senders themselves if the receivers forward the coupon to other people. However, there are several psychological conditions to receiving and sending WOM content (particularly when incentives are involved) that affect participants’ real behavior to use WOM content. With the theory of planned behavior (Ajzen, 1991), we attempt to explain the psychological conditions that affect the real behavior of consumers. According to Clement et al. (2012), the TPB postulates that knowledge or beliefs, if not accompanied by other factors, will not suffice to drive a particular behavior (e.g. to engage in incentivized WOM). In this study, the term “beliefs” refer to the components of an incentive, namely incentive differentiation, incentive conditionality, and incentive in m-coupons, as well as to the particular behavior expected to take place, i.e. redeeming the m-coupon. There are several psychological constructs between knowledge and behavior, such as attitude, subjective norms, and perceived behavioral

Fig. 1. Conceptual model.

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control. The term “attitude” refers to the perception of a particular object (i.e. WOM contents), “subjective norm” refers to how other persons perceive of a particular behavior (e.g. engaging in incentivized WOM activities), and “perceived behavioral control” refers to the receivers’ perception of control that they have concerning the redemption of any m-coupon. All of these constructs (attitude, subjective norms, and perceived behavior) influence the receivers’ behavioral intention of redeeming the m-coupon. This behavioral intention ultimately influences the receivers’ actual behavior with regard to redeeming this m-coupon. Gender can have a profound influence on individual perceptions, attitudes, and the entire decision-making process (Venkatesh et al., 2000). This holds true especially for the relative impact on internal and external factors in the TPB framework (Morris et al., 2005). Thus, we consider the role of gender in shaping attitude, as well as perceived control, which in the end influences the behavioral intention to redeem an m-coupon. Finally, we note that WOM communication is always embedded in the social context of interpersonal communication between sender and receiver. Therefore, it is important to include reciprocity as a key variable describing and predicting human interactions because the receivers’ actions might be based on their previous experience with the senders (Falk and Fischbacher, 2006; Fehr and Schmidt, 2001).

et al. (2006), we also assume that receivers tend to have a low capacity to make a particular decision because they have to consider the incentive’s components in the m-coupon, as well as the reciprocal motive that they might have when they make a decision to redeem the m-coupon. Given that the receivers tend to have a low capacity to shape behavior, we propose the following hypothesis: H2. Subjective norms positively impact receivers’ behavioral intention to redeem the obtained m-coupon.

As suggested by Ajzen and Fishbein (1980), when a person determines his or her intention to perform a particular action, he or she will consider the cost and benefit of doing so. The consideration of cost and benefit leads to a positive or negative attitude toward the object and accordingly to a positive and negative intention to engage in a particular activity. Furthermore, Ajzen and Fishbein (1980) also stated that attitude is the result of an individual’s expectation and value judgment of the objects or behavior in question. As a person holds a positive attitude, he or she tends to have a positive intention to engage in a certain behavior. By contrast, if a person holds a negative attitude, he or she is less likely to engage in such behavior. Widespread empirical research has proved that a positive attitude leads to positive behavioral intentions in various contexts (see for example Becker et al., 2010; Clement et al., 2012). In line with these previous research findings, we formulate the following basic hypothesis:

Perceived control of one’s own behavior or “perceived behavioral control,” as Ajzen (1991) labeled it, is an important variable in TPB. It indicates the extent to which a person can perform alternative actions when responding to a specific situation; thus, perceived behavioral control refers to the presence or absence of factors enabling or hindering an action. Examples are the availability of money, time, or required skills necessary to perform a certain task (Taylor and Todd, 1995), as well as individuals’ self-confidence regarding their ability to act accordingly (Cheng et al., 2006; Conner and Abraham, 2001). According to Ajzen (2002), perceived behavioral control (PBC) is not primarily concerned with the possible dichotomy of internal and external factors that influence a certain behavior. A high degree of PBC is achieved if a person has the necessary internal resources and opportunities (skill, time, and money), and if the external obstacles that this person might encounter are perceived as manageable. By contrast, if a person believes that he or she lacks resource or ability or that the external environment will obstruct a certain action, this person shows a low level of PBC. Furthermore, Conner and Abraham (2001) stated that people’s behaviors are influenced by their self-confidence regarding their ability to perform a certain action. Someone’s self-confidence in performing a particular action is usually derived from his or her measurement or judgment regarding the cost and benefit, the difficulties, and the available resources to perform such an action (Taylor and Todd, 1995). The effect of PBC on a person’s behavioral intention has attracted the attention of many researchers from various fields. For instance, a person’s behavioral intention to spread negative WOM (Cheng et al., 2006), intention to use an e-coupon (Kang et al., 2006; Lee, 2009), intention to engage in an online game (Lee, 2009), and intention to download legal music (Clement et al., 2012). To support and to complement the results of previous research, but in the context of incentivized WOM, we propose the following hypothesis:

H1. Attitude toward m-coupons positively influences receivers’ behavioral intention to redeem m-coupons.

H3. Perceived behavioral control positively impacts a receiver’s behavioral intention to redeem an obtained m-coupon.

TPB posits that knowledge or beliefs (in this case, “beliefs” refer to the cost and benefit of engaging in incentivized WOM) alone do not drive behavior (redeeming the m-coupon) (Becker et al., 2010; Clement et al., 2012). Besides attitude, subjective norms supporting or impeding such behavior also lie between knowledge and behavior. In this study, we assumed that along with the components of incentive, namely incentive differentiation and incentive conditionality, receivers will recognize the cost and benefit when engaging in incentivized WOM. To confirm their belief regarding the cost of the benefit, another opinion becomes the relevant influence for them to shape and to approve the behavior. Ajzen and Fishbein (1980) defined subjective norms as the perceived social pressure to perform or not to perform the particular behavior. In the context of redeeming an m-coupon, subjective norms become important, particularly when receivers have a low capacity (e.g. when they have limited resources such as time or money) to perform a particular behavior so that they have to rely on others’ opinions (Kang et al., 2006). In this study, in accordance with Kang

3.3. Specific effects of incentive differentiation on the receiver’s possible actions

3.2. General influencing factors on receivers’ action based on TPB framework

According to research in the field of behavioral economics, people will be more motivated to behave in a particular way if they receive a significant incentive to do so (Ahrens et al., 2013). Owing to budget restrictions, companies find themselves in a dilemma as to whether they should provide incentives only to one party or to both the sender and the receiver of incentivized WOM, i.e. whether they use a “reward both” program. As discussed above, both parties would behave differently if a company provided equal incentives to both the sender and the receiver, instead of distributing the incentive unevenly between the two. Getting a new customer as a result of engaging in incentivized WOM activities is the desired effect of stimuli like incentives. This is what happens in “reward both” programs in particular: Receivers typically obtain smaller incentives than senders do (Ahrens et al., 2013). However, it is necessary to explore the psychological conditions affecting the receivers’ real behavior. Adopting Ajzen’s TPB,

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we assume that receivers’ attitude toward the m-coupon is directly (and negatively) influenced by different incentives for both parties. Incentive differentiation is closely related to the feeling of (un)fairness. For males, fairness seems to be defined in absolute terms and as a matter of principle: “one is, or is not, fair” (Eckel and Grossman, 1996). By contrast, fairness does not appear to be a moral imperative for women, and their judgment of fairness is not driven by a rigid ethical code. However, experimental studies by Eckel and Grossman (1996) suggest that both men and women are concerned with fairness. The abovementioned gender-specific difference leads to the following hypothesis: H4. Incentive differentiation, by which a sender receives a larger share than the receiver, negatively influences both male and female receivers’ attitudes toward the obtained m-coupon. As incentive differentiation is about the feeling of fairness, the psychological conditions affected by unfairness relate more to people’s attitude than to their PBC. Since PBC is about the perceived controllability of a behavior (Armitage et al., 1999), incentives that are evenly or unevenly distributed between two parties will not necessarily impact people’s controllability. Receivers can still make a personal decision to redeem an m-coupon, as long as they have enough resources such as time and money. Their decision to redeem will not change the situation that the incentive is differently distributed between sender and receiver. This leads to the following hypothesis: H5. Incentive differentiation provided for both sender and receiver will have no influence on receivers’ perceived behavioral control.

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hypothesize that male and female receivers will develop the same attitude. For this reason, we postulate that: H6. Incentive conditionality negatively influences both male and female receivers’ favorable attitudes to m-coupons. In the context of this study, the receivers find themselves in a position where their (in-)action might influence both their own and others’ welfare. By redeeming their m-coupon, the receivers enable the senders to enjoy their own incentive for engaging in the WOM activity. In such a situation, the receivers’ perceived control of their behavior is not just influenced by internal concerns (i.e. whether or not they have the necessary resources to perform a certain way) but also by external concerns (i.e. considering the effect of their actions on the senders’ welfare). The receivers’ ability or inability to perform a particular action is related to their perceived control of their own behavior (Kang et al., 2006). There is still a considerable lack of research on the PBC of receivers when they engage in incentivized WOM activities while at the same time considering the PBC not only in terms of each person’s belief regarding his or her own capabilities but also in terms of the others’ well-being. Considering the possibility of a divergent response between men and women with regard to incentive conditionality, we refer to Baron-Cohen (2004) and Okazaki and Hiroze (2009), whose studies show that on average men tend to have a strong drive to systemize (e.g. to analyze the situation and to try to predict and control it), while women tend to empathize (e.g. concern about others’ feelings). Accordingly, we can assume that men tend to be less (emotionally) affected by incentive conditionality and, thus, less influenced by it in their own decision-making process. Thus, we postulate that:

3.4. Specific effects of incentive conditionality on receiver’s action As an important component of incentives, companies regularly include the condition that a provided incentive has to be redeemed. Biyalogorsky et al. (2001) showed that there are several conditions with respect to incentives that firms often use; for instance, BMG music used the following incentive: “Get 4 free CDs when you bring your friend to the club”; telecommunication companies usually offer discounts and other rewards to customers who have referred new customers who in turn sign up with these companies. These examples illustrate the difficulty of choosing an adequate incentive that arises when two parties are involved (e.g. existing and potential customer or sender and receiver). In “pay per lead,” senders obtain their incentive as soon as they forward the respective m-coupon to others; meanwhile, in “pay-perperformance” programs, senders obtain their incentive only when the receivers act accordingly, e.g. when they redeem an m-coupon. In the latter case, potential receivers’ decisions will have consequences for the sender. For the receivers, it does not make a monetary difference if an incentive provided to a WOM sender includes a condition. Receivers will still obtain their own part of an incentive in both “pay-forperformance” and “pay-per-lead” programs. However, when receivers are aware that their decision (not) to engage in incentivized WOM activities influences senders’ chance to get their incentive, receivers might have to deal with some burdensome psychological conditions that may negatively influence their attitude to the m-coupon. Previous research from the field of psychology states that women tend to experience emotions stronger than men (Croson and Gneezy, 2009; Harshman and Pavio, 1987). Men tend to show concern mainly for themselves, whereas women are concerned about themselves and others (Meyers-Levy, 1988). However, in the case of incentive conditionality, where receivers need to redeem their obtained m-coupon so that the senders can get their incentive, we

H7. Incentive conditionality impacts the receivers’ PBC to redeem m-coupons more negatively if the receivers are women. 3.5. Specific effects of reciprocity on the receivers’ actions As key actors, senders and receivers play different roles and have different motives when they become involved in incentivized WOM activities. They react differently depending on the stimuli affecting them. From the receivers’ perspective, their own action might be based on previous experience with the senders. This stimulus can be identified as reciprocity (i.e. receivers need to return a favor to the senders, and vice versa). People usually reciprocate actions based on personal motives: for example, to reduce the feeling of being treated unfairly, to punish the opposing party for unfair treatment, and to return a favor to someone (Falk and Fischbacher, 2006). This means that, regardless of their gender, people try to reach a feeling of fairness (Walster et al., 1973). Others’ opinions are a social factor that can create pressure on a person to perform or not to perform a particular behavior. Ajzen (1991) labeled the effect of this pressure on behavior as “subjective norms.” The receivers’ intention to redeem the obtained m-coupon may be based on the notion of reciprocity. If this is the case, the receiver might perceive strong social norms to act accordingly. Furthermore, Walster et al. (1973) stated that even if others’ opinions do not matter to the receiver, because they have a reciprocity motive, they still perceive social norms as important. Therefore, we postulate that: H8. A situation determined by reciprocity positively influences subjective norms concerning the redemption of the m-coupon. Several previous studies have linked reciprocity to areas such as enforcement to perform an activity (Fehr and Falk, 1999) and gift giving (Ruffle, 1999). Other studies (e.g. Falk and Fischbacher, 2006)

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consider the action of “kindness” to be based on the fairness of each actor and interpret reciprocity as a reward for kindness or a punishment for unkindness. This can also be called positive or negative reciprocity (Fehr and Gächter, 2000). In the context of incentivized WOM, reciprocity might arise if receivers feel obliged to return some kind of favor or if they expect something in return from the sender. This reciprocity situation will be especially strong when the receivers know that the senders’ welfare depends on their action. Thus, reciprocity is about equilibrium and fairness hence “tit-for-tat” becomes the receivers’ first reaction. Whether the receivers have to return a favor by redeeming the m-coupon or whether the receivers expect the senders to thank them if they redeem the m-coupon, the particular situations will influence the receivers’ PBC. Even though receivers have enough resources to engage in incentivized WOM (e.g. by redeeming the m-coupon), it does not guarantee that they will do so. The reciprocity situation can reinforce or impede receivers’ control over their behavior to engage in incentivized WOM activities. As women tend to experience emotion stronger than men do (Croson and Gneezy, 2009; Harshman and Pavio, 1987), and women tend to be nervous or fearful about a negative outcome to a greater extent than men (Fujita et al., 1991; Croson and Gneezy, 2009), in a situation characterized by reciprocity women tend to consider many possible outcomes before making a decision based on the reciprocity motive. Thus, our hypothesis is the following: H9. The negative impact of situation characterized by reciprocity on receiver’s perceived behavioral control will be stronger to women than men. 4. Method An experimental study was performed with the objective of investigating all hypotheses. Using an experimental design, we jointly manipulated the variable incentive differentiation (different versus no different) and incentive conditionality (conditionally versus unconditionally). Effect coding was utilized with different and conditionally coded as 1 and no differing and unconditionally coded as −1. 4.1. Survey setup and scenarios The experimental design was applied to focus on the variables of interest, to ensure an unbiased estimation of effects (by avoiding any correlation between the independent variables), and to exclude possible random noise due to situational effects and/or different social environments. To limit an unrealistic impression (a potential drawback of experiments), the study was set up to be as realistic and specific as possible. Therefore, the survey consists of three consecutive sections. In the first section, the names of the receivers’ friends were elicited during the “mentioning name” method. These names are used in the following sections as hypothetical senders of m-coupons. Based on the procedure applied by Granovetter (1973), participants are asked to mention two names each in response to (a) two questions about joint activities that are typically linked with strong ties (talk about personal matters, looking after apartment during leave, asking for money) and (b) two questions typically linked with weak ties (casual conversation, job or school assignments). This approach elicited the names of eight individuals (P1–P8) that subsequently represent the simulated senders of an m-coupon. We utilized two product categories in the fast-food sector (McDonald’s and Starbucks) as prototypical examples in our experiment. This allowed the sampling of multiple (4) observations per respondent without encountering larger boredom effects due to several

repetitions. A balanced incomplete block design varied the sequence of both product categories. As we were only interested in generalized results, we do not differentiate between the results for Starbucks and those for McDonald’s. We assessed covariates at the respondents’ individual level. Receivers’ overall attitude regarding both brands (Starbucks and McDonald’s) was determined with a single-item question. In the next section each participant received four relevant m-coupon scenarios whose incentive differentiation and incentive conditionality varied as independent variables. Incentive differentiation refers to the incentives that were either distributed equally between senders and receivers or split unevenly with the sender receiving the larger share of the incentive. Incentive conditionality refers to the incentives provided to the senders and the incentives that were either labeled as “unconditional” or as “conditional” upon redemption on behalf of the receivers. The scenarios were presented in a realistic visualization (Fig. 2). The header informed the participants of the specific person who sent the m-coupon. The names of P1 to P8 were automatically inserted and appeared in the questions. For each scenario, participants answered 16 questions regarding their attitudes, subjective norms, feelings of reciprocity, and intention to redeem the m-coupon. Additionally, simple questions were added to verify the respondents’ understanding of the specific coupon. All measurements of dependent variables, as well as covariates, were based on established scales. 4.2. Measures In addition to the experimental factor, we included five constructs in our model: attitude, PBC, subjective norms, intention, and reciprocity. We developed three items to measure the intention to redeem an m-coupon based on the research by Ajzen (1991). Two items to measure PBC were adapted from Clement et al. (2012) and Pavlou and Fygenson (2006). The three items to measure subjective norms were derived from research by Shimp and Kavas (1984). Meanwhile, to measure attitude, we adopted three items from Huff and Alden (1999). We measured intention, reciprocity, and PBC with five-point Likert scales: strongly disagree (1), disagree (2), neither agree nor disagree (3), agree (4), strongly agree (5). With respect to attitude and subjective norms, we employed five-point semantic scale. For attitude construct, the semantic scale ranged from useless (1) to useful (5); unpleasant (1) to pleasant (5); and unfair (1) to fair (5). For the subjective norms construct, the semantic scale spanned from waste of time (1) to wise use of time (5); worthless (1) to worthy (5); and useless (1) to useful (5). 4.3. Data collection An online survey was conducted based on a convenience sample of German university students. Restricting the survey to this subgroup limits various sources of potential heterogeneity, for example, familiarity with mobile messages or the financial attractiveness of coupons. This helps to disentangle the effects of interest even in a smaller sample. The survey resulted in a net response of 83 participants. Each respondent participated in four scenarios out of a total of eight. After verifying that they fully understood the provided stimuli using the manipulation check, we obtained 184 usable responses from the group of women and 148 usable responses from the group of men. We tested the proposed hypotheses with structural equation modeling in order to disentangle the direct from the indirect effects. Partial least squares estimation is used with SmartPLS 3.0 (Ringle et al., 2015) to obtain the parameter estimates for measurement and the structural model. The model’s overall goodness of fit serves as a starting point for the model assessment and, according to Henseler et al. (2016), the

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Fig. 2. Example of scenario in m-coupon format.

approximate model fit criterion is used as an indicator to assess the model fit. The approximate model fit criterion for PLS path modeling is the standardized root mean square residual (SRMR) with a cut-off value of 0.08 (Hu and Bentler, 1999). The obtained SRMS value

Table 1 Composite reliability and average variance extracted. Constructs

Attitude Intention Subjective norms Reciprocity

AVE

CR

Cronbach’s alpha

Male

Female

Male

Female

Male

Female

0.76 0.93 0.86 0.69

0.71 0.97 0.86 0.77

0.91 0.98 0.95 0.90

0.88 0.99 0.95 0.93

0.85 0.96 0.92 0.85

0.80 0.98 0.92 0.90

AVE, average variance extracted; CR, composite reliability.

of 0.05 indicates a nearly perfect fit of the model. Table 1 summarizes the further measures concerning the quality of construct measurements. Hence, it was found that the composite reliability scores for all of the constructs exceeded the cut-off value of 0.7, as Nunnally and Bernstein (1994) proposed. All values obtained for AVE exceed the cut-off value of 0.5, as Fornell and Larcker (1981) suggested. Finally, we tested for measurement invariance between the two groups of respondents by comparing the result of loading factor between the group of men and the group of women, and as we can see in Table 2, all factor loadings are invariant across groups. 4.4. Findings To make a distinction between the causal effects across gender, the entire sample is split into two subsamples of male and female

Table 2 Measurement instrument. Items

Attitude The m-coupon that I received from (sender’s name) is … Useless – Useful Unpleasant – Pleasant Unfair – Fair Intention There is a strong possibility that I will redeem the m-coupon from (sender’s name) I highly intend to redeem the m-coupon from … (sender’s name) I intend to redeem this kind of m-coupon in the near future Subjective norm Most people who are important tome would think that it is … to redeem this m-coupon: A waste of time – A wise use of time Worthless – Worthy Useless – Useful Reciprocity I expect the sender to do the same if I redeemed this m-coupon. I expect the sender to thank me nicely if I redeemed this m-coupon. I will redeem this m-coupon because I return a favor the sender has done to me. I redeem the m-coupon because the sender always treats me well. Perceived behavioral control (PBC) I feel free to redeem the m-coupon because it is my own decision. I am in control when I have to redeem the m-coupon because I only redeem the m-coupon if it is valuable to me.

Standardized factor loadings Male

Female

0.90 0.91 0.81

0.90 0.90 0.72

0.97 0.97 0.95

0.98 0.99 0.98

0.89 0.94 0.95

0.89 0.95 0.95

0.80 0.70 0.89 0.91

0.87 0.89 0.87 0.86

0.88 0.92

0.89 0.81

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Table 3 Results for structural model. Hypothesis

H1 H2 H3 H4 H5 H6 H7 H8 H9

Relationship among constructs

Attitude → Intention Subjective norms →Intention Perceived behavioral control → Intention Incentive differentiation → attitude Incentive differentiation → Perceived behavioral control Incentive conditionality → Attitude Incentive conditionality → Perceived behavioral control Reciprocity → Subjective norms Reciprocity → Perceived behavioral control

Path coefficients (β)

P-value

Male

Female

Male

Female

Male

Female

0.62 0.34 −0.15 −0.15 0.07 −0.11 −0.09 0.34 −0.11

0.67 0.16 −0.14 −0.11 −0.01 −0.07 −0.18 0.41 −0.27

0.00 0.00 0.00 0.02 0.26 0.07 0.19 0.00 0.13

0.00 0.00 0.00 0.06 0.86 0.19 0.01 0.00 0.00

Accepted Accepted Accepted Accepted Rejected Accepted Rejected Accepted Rejected

Accepted Accepted Accepted Accepted Rejected Rejected Accepted Accepted Accepted

respondents. Two causal effects models are executed (Table 3), followed by a statistical two-group comparison (Table 4). Hypothesis 1 is accepted in both the group of men and the group of women. In Hypothesis 1, we assumed that positive attitude leads to a positive intention, and we obtained a positive significant result in both the group of men (β = .62, p < .01) and the group of women (β = .67, p < .01). The results (see Table 3) indicate that when receivers have a positive attitude to using an m-coupon, they will also have a positive intention to redeem the obtained m-coupon. In Hypothesis 2, we proposed a positive relationship between subjective norms and intention, and the results from the group of men and the group of women supported the proposed hypothesis. We obtained a positive significant result in both the group of men (β = 0.34, p < 0.01) and the group of women (β = 0.16, p < 0.01). The result indicates that when other people give a positive suggestion regarding the act of redeeming an m-coupon, it will result in a positive intention from the receiver to redeem the m-coupon. However, informed by additional analysis to measure the different possible responses between the two groups (refer to Table 4), we found that there is a significant difference between men and women regarding their response to opinion from other person which later on the opinion from other will influence their intention to redeem M-coupon. The result from the multi-group analysis with the Welch– Satterthwaite test suggested that other opinions will influence men more strongly than women (βdifferent = 0.18, p < 0.05). In Hypothesis3, we proposed the positive relationship between perceived behavioral control and Intention. In support of Hypothesis 3, we obtained a negative significant result in both the group of men (β = −0.4, p < 0.01) and the group of women (β = −0.14, p < 0.01). Therefore, in general, the result indicates the receivers who have control over their behavior will not have the intention to redeem the obtained m-coupon. With a coefficient of −0.15, the path between incentive differentiation and attitude for the group of men is significant (p < 0.05); for the group of women, we obtained a significant result of p < 0.1 with β = −0.11. Thus, the result supported Hypothesis 4. Receivers will have

Results

an unfavorable attitude if they received an m-coupon through an incentive scheme, and if they obtain incentives smaller than the incentive obtained by the sender. The multi-group analysis based on the Welch–Satterthwaite test indicates that the negative impact of incentive differentiation on attitude is consistent in both the group of men and the group of women (βdifferent = 0.04, p > 0.1). Thus, the additional test of multi-group analysis based on the Welch– Satterthwaite test supported Hypothesis 4. However, the assumed relationship between incentive differentiation and perceived behavioral control is not significant in either of the two groups. We found a positive but insignificant result in the group of men (β = 0.07, p > 0.1) and a negative insignificant result in the group of women (β = −.04, p > 0.1). This finding rejects Hypothesis 5. The result indicates that providing a different amount of incentives to the sender and the receiver will not necessarily weaken receivers’ PBC to redeem the obtained m-coupon. For Hypothesis 6, we generally found that the conditionality of incentive in m-coupon (after the receiver redeemed the obtained m-coupon, the sender could claim the incentive) will weaken the receiver’s favorability attitude toward an m-coupon. Considering the variation in the responses between men and women, we also found out that incentive conditionality will weaken the favorability attitude toward an m-coupon more for male receivers (β = −0.11, p < 0.1) than for female receivers (β = −0.07, p > 0.1). However, the result of the multi-group analysis suggested that there is no difference between the responses of men and women regarding the relationship between incentive conditionality and attitude toward m-coupons (βdifferent = 0.05, p > 0.1). We proposed a direct relationship between incentive conditionality on perceived behavioral control in Hypothesis 7, and our findings suggested that generally the conditionality of incentive weakens receivers’ PBC. Among the group of men, we acquired a negative insignificant result regarding the relationship between incentive conditionality and perceived behavioral control (β = −0.08, p > 0.1), while in the group of women we obtained a negative significant result (β = −0.17, p < 0.1). Even though the results of the male and the female

Table 4 Results of multi-group analysis based on the Welch–Satterthwaite test. Hypothesis

Relationship among constructs

Differences of path coefficients (Male − Female)

t-value (Men vs. Women)

P-value (Men vs. Women)

H1 H2 H3 H4 H5 H6 H7 H8 H9

Attitude → Intention Subjective norms → Intention Perceived behavioral control → Intention Incentive differentiation → Attitude Incentive differentiation → Perceived behavioral control Incentive conditionality → Attitude Incentive conditionality → Perceived behavioral control Reciprocity → Subjective norms Reciprocity → Perceived behavioral control

0.066 0.182 0.032 0.043 0.078 0.048 0.085 0.043 0.280

0.908 2.471 0.547 0.423 0.994 0.538 0.864 0.481 2.917

0.365 0.014 0.585 0.673 0.322 0.591 0.389 0.631 0.004

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groups were different with respect to each other, the multi-group analysis using the Welch–Satterthwaite test suggested that there is no difference in response between the two groups (βdifferent = 0.09, p > .1). Therefore, in the context of the relationship between incentive conditionality and PBC, we cannot differentiate the result based on gender. Hypothesis 8 predicts a positive relationship between reciprocity and subjective norms. When dealing with a reciprocity situation, the receiver tends to rely on others’ opinions regarding the best action for a receiver to take. The positive significant result in both the group of men (β = 0.34, p < 0.01) and the group of women (β = 0.41, p < 0.01) supported Hypothesis 8. The result indicates that, when dealing with a reciprocity situation, both male and female receivers tend to rely on others’ opinions concerning the redemption of an m-coupon. Hypothesis 9 predicts a direct relationship between reciprocity and perceived behavioral control. In the group of men, we obtained a negative insignificant result with β = −0.11 (p > 0.1), and in the group of women we obtained a negative significant result (β = −0.27, p < 0.01). The result indicates that a situation characterized by reciprocity (i.e. receiver needs to return a favor to the sender, or the sender owes the receiver a favor) tends to weaken receivers’ PBC to redeem the obtained m-coupon more strongly among women than is the case among men. This result is also supported by the results of a Welch–Satterthwaite test in the multi-group analysis (βdifferent = 0.28, p < 0.01). Refer to Table 4 for the comprehensive results of the multi-group analysis based on the Welch–Satterthwaite test. 5. Conclusions and implications 5.1. Conclusions The objective of this study was to investigate receivers’ perspective on incentivized WOM while taking the possibility of different responses between male and female receivers into consideration. By highlighting receiver perceptions about the incentives provided to both the sender and the receiver, we used the theory of planned behavior (Ajzen, 1991) as a theoretical foundation. An experimental study simultaneously investigates two major components of incentive, namely incentive differentiation and incentive conditionality, by utilizing mobile coupons as a novel tool of incentivized WOM. Findings show that marketers have to take care when designing incentives in m-coupons: Both incentive differentiation and incentive conditionality might be detrimental to the success of a WOM campaign. The study shows that receivers, regardless of their gender, develop an unfavorable attitude toward an m-coupon containing an incentive that is unevenly distributed between the sender and the receiver. This study supports the findings of Eckel and Grossman (1996); according to them gender does not fully differentiate between the actors’ perception of fairness. Men and women are both concerned with fairness; however, men value fairness based on a system of rules and laws, whereas women value fairness more on the basis of cost and benefit (Eckel and Grossman, 1996). Furthermore, connecting the component of incentive with another predictor in Ajzen’s TPB, namely perceived behavioral control, this study finds that m-coupons with a conditionality of incentive (senders can claim their incentive only after receivers have redeemed the coupon) tend to weaken receivers’ behavioral control to redeem the obtained m-coupon; this is particularly true for female receivers. Following the study by Mayer-Levy and Sternthal (1991), we understand that men tend to be more concerned with themselves while women tend to be concerned with both themselves and others. Accordingly, it is not surprising to find that when there is incentive conditionality men feel more in control concerning redemption of the obtained m-coupon. In addition, Fujita et al. (1991)

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and Croson and Gneezy (2009) stated that women tend to feel more nervous and fearful than men while anticipating negative outcomes. Thus, we can deduce that when receivers’ actions have an impact on senders’ gains, female receivers are likely to be concerned with this impact and might therefore perceive the situation as one that restricts their own decision making. This weakens their PBC to perform a particular action (e.g. to redeem an m-coupon). This study also reveals the effects of the relationship between sender and receiver by connecting reciprocity with one of the predictors in TPB namely subjective norms. The nature of the sender– receiver relationship influences the perceptions of costs and benefits from both sides. According to Frenzen and Nakamoto (1993), people tend to be concerned with the welfare of others and respond to others’ needs, but they do not expect anything in return when they have a close relationship. However, Ryu and Feick (2007) stated that reciprocity is important with any type of acquaintance: People prefer a balanced situation and tend to adjust it if they perceive it as unbalanced. Reciprocity is an important aspect in the relationship between senders and receivers in incentivized WOM. This has already been shown in previous research exploring the relationship of reciprocity and tie strength (Frenzen and Nakamoto, 1993; Ryu and Feick, 2007). In this study, we uncovered an additional insight concerning reciprocity situations: When receivers deal with a reciprocity situation, they tend to rely on others’ opinions regarding the best decision regarding whether or not to redeem the m-coupon. We show that a situation characterized by reciprocity influences female receivers’ PBC more strongly is the case for men. Fairness from the male perspective might be viewed as a matter of principle: It is either fair or not fair, while for women, fairness depends on the circumstances around the specific decision (Gilligan, 1982; Eckel and Grossman, 1996). Therefore, we can understand that a situation involving reciprocity is simply fair or not fair to men, while it does not weaken their PBC. However, with all the circumstances surrounding the decision for women, it makes sense that a “tit-fortat” situation is not simply fair or not fair but more complex which causes female receivers to have less PBC when it comes to redeeming the m-coupon. On a more general level, our work contributes to theory testing because it applies the theory of planned behavior to WOM receivers’ response patterns and provides a gender-enriched perspective. According to the theoretical framework as outlined by Ajzen (1991), attitude, PBC, and subjective norms together influence a receiver’s intention to redeem an m-coupon. In line with Dickinger and Kleijnen (2008), our results show that – unlike other predictors in TPB, such as subjective norms and PBC – receivers’ positive attitude toward m-coupons have the strongest impact on the intention to redeem an m-coupon. This result is consistent for both men and women. The influence of social norms on intention is only half as large as the impact of attitude on intention for both genders; however, it is still highly significant. This result is comparable to the findings of Ashworth et al. (2005), who found that consumers are really concerned about what other people might say regarding the use of m-coupons. Finally, our results reveal the unexpected effects of PBC on the receiver’s intention to redeem an m-coupon. Receivers tend to have a weak intention to redeem this coupon if they perceive themselves to be fully in control when it comes to redeeming an m-coupon or not. This fact hints at a low willingness of the German respondents to utilize coupons, probably because of a cultural setting that is largely located outside the coupon-prone US consumer culture. Comparing differences between the two genders in this study with each other, we also find that women who experience weaker behavioral control tend to develop a more unfavorable attitude toward the obtained m-coupon when they have to make a decision involving the interests of others.

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5.2. Implications This paper contributes to the existing scientific literature, as well as managerial issues, in various ways. For scientific literature, we provide a holistic view of the effects of incentivized WOM on receivers’ attitudes, their PBC, and their behavioral intention to redeem an incentivized WOM coupon. We add a new point of view by comparing male and female perspectives on incentivized word-ofmouth. The study focuses on the key component of an incentive being distributed among senders and receivers, and an experiment was executed using an m-coupon as a novel tool of incentivized WOM. Marketing managers can use the findings to allocate resources adequately among participants in incentivized WOM activities. We utilize the theory of planned behavior as a conceptual framework to provide in-depth insights on how incentives lead to either a favorable or an unfavorable attitude toward m-coupons and how they facilitate or impede the receivers’ ability to engage in incentivized WOM activities by redeeming an m-coupon. The findings show that m-coupons containing unevenly distributed incentives between senders and receivers result in the receivers having an unfavorable attitude toward their obtained m-coupon. The same holds true for both sexes and for m-coupons containing a conditional incentive. Furthermore, and regardless of gender, incentives that are unevenly distributed between senders and receivers do not weaken receivers’ perceived behavioral control. However, receivers (women, in particular) perceive lower behavioral control when they have to redeem an m-coupon containing a conditioned incentive (senders can claim their incentive only after the receivers have redeemed the m-coupon). As women tend to have strong empathy toward others and process information in greater detail than men do (Okazaki and Hiroze, 2009), we can understand that women tend to have weaker perceived behavioral control than men do, particularly when the decision that the female receiver makes has an impact on others. Dickinger and Kleijnen (2008) postulate that a person should have a positive intention to redeem anm-coupon, if he/she has positive perceived behavioral control regarding his/her ability and resources to redeem it. However, the results of this study show that receivers with strong perceived behavioral control (those who have time, money, and knowledge) tend to have a lower intention to redeem an obtained m-coupon. The reason for receivers’ intentions not to redeem the obtained m-coupon despite having the resources to do so might be other considerations, such as fairness. Thus, the results in this study add to Ajzen’s TPB (1991): Perceived behavioral control is not only influenced by one’s own ability (e.g. time, money, knowledge) but also by external considerations (e.g. other’s prosperity, fairness). The study’s limitations suggest opportunities for further research. A key limitation of our study is related to the sample: The pilot test and the main study used a convenience sample of university students. Therefore, the generalizability of the findings to all potential consumers is limited, and for future research we suggest making the sample more heterogeneous. Besides contributing to scientific knowledge, this study has several practical implications. Previous research has shown that marketers can utilize WOM to support sales in two ways: either by accelerating the purchases of (existing) customers or by expanding them, i.e. getting new customers to buy the product (Libai et al., 2013). Given that WOM has both informational and normative influences (Filieri, 2015), it is especially helpful in convincing consumers to try out new product offerings (López and Sicilia, 2013). Here, mobile couponing schemes might be used in integrated marketing campaigns to complement other marketing measures (Batra and Keller, 2016). We specifically recommend coupling WOM with first-usage incentive schemes to foster the effectiveness of WOM in areas such as early product diffusion.

Our results suggest that firms need to be careful in establishing “reward both” strategies to ensure an ongoing trustful relationship between sender and receiver. The magnitude and distribution of the offered incentive matter a lot: If senders obtain a larger incentive than the receivers, this will lead to an unfavorable attitude toward the obtained m-coupon. A solution may be to not disclose the senders’ incentives to the receivers. When receivers do not have any information regarding the incentive that the sender will receive or has already received, marketers can expect that receivers’ favorable or unfavorable attitude toward the m-coupon will not be determined by the design of the applied incentive scheme. Our findings have further and novel implications for the design of incentivized WOM. Incentive conditionality, as economically feasible as it may look from a budget perspective, might cause a reaction and thus impede a consumer’s desired action. This stands in stark contrast to Biyalogorsky et al. (2001), who suggest conditionality on the incentivized WOM as the best strategy for firms to reduce the “free riding” problem. However, our findings show that firms need to understand receivers’ response to the conditionality and nonconditionality of incentives. Incentive conditionality weakens receivers’ attitude toward m-coupons. Thus, m-coupons should carefully implement incentive conditionality because receivers do not intend to redeem an m-coupon if they are not strongly in favor of doing so. By contrast, incentive conditionality does not constitute a larger problem for m-coupons aimed exclusively at consumers who are women. In this case, incentive conditionality negatively affects the perceived behavioral control that, in the case of female receivers, leads to a stronger intention to redeem the obtained m-coupon.

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