Abstract:

It’s ubiquitous that new products receive reviews with high variance, which means there exist inconsistent opinions, but does this type of controversy necessarily exert negative effect on consumers’ purchase intention and product performance? Previous research that focus on review variance do not distinguish between existing product and new product and the conclusions are not consistent. Difference between existing product and new product matters because consumers will pay more attention to social value of new product than existing product, which lead to positive effect of high variance of reviews for a new product. We use a field data and two experiments to address this question. In the empirical study in film context, we find that the high review variance increases box office. In order to take into account different types of new product, we introduce the new product type (radical vs. incremental) as a moderating variable. Experiment 1 indicates that high variance of new product reviews has positive effect on purchase intention, and the effect is stronger when the new product is radical (vs. incremental). Experiment 2 shows that perceived social value is the mediator and the new product type have moderating effect on the mediator.

Key words: review variance, new product type, perceived social value, purchase intention