Source:
Journal of Management Information Systems, Volume 23, Issue 2, p.149-171 (2006)
Keywords:
differentiation, online reviews, product positioning, product
Abstract:
We analyze how online reviews are used to evaluate the effectiveness of
product differentiation strategies based on the theories of hyperdifferentiation and
resonance marketing. Hyperdifferentiation says that firms can now produce almost
anything that appeals to consumers and they can manage the complexity of the increasingly
diverse product portfolios that result. Resonance marketing says that informed
consumers will purchase products that they actually truly want. When
consumers become more informed, firms that provide highly differentiated products
should experience higher growth rates than firms with less differentiated offerings.
We construct measures of product positioning based on online ratings and find supportive
evidence using sales data from the craft beer industry. In particular, we find
that the variance of ratings and the strength of the most positive quartile of reviews
play a significant role in determining which new products grow fastest in the marketplace.
This supports our expectations for resonance marketing.
Notes:
A previous version appeared in the Proceedings of the 37th Annual Hawaii International Conference on System Sciences, Honolulu, HI