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. Word of mouth (WOM) is informal advice passed between consumers that may have a quick and powerful influence on consumer behavior. Word of mouth may be positive (PWOM), encouraging choice of a certain brand, or negative (NWOM), discouraging that choice. A study investigated the impact of WOM on brand purchase probability.24 Multiple regression was used to assess the effect of six variables on brand choice. These were room for change (PPP), strength of expression of WOM, WOM about main brand, closeness of the communicator, whether advice was sought, and amount of WOM given. The table below summarizes the results for 903 participants who received NWOM In addition, it is reported that R2 = 0.20.

(a) What percent of the variation in change in brand purchaseprobability is explained by these explanatory variables?

(b) State which of these variables are statistically significant at the 5% level.

(c) The PPP result implies that the more uncertain someone isabout purchasing, the more negative the impact of NWOM. Explain

what the “strength of expression of WOM” result implies.

(d) The variable “WOM about main brand” is an indicator variable.It is equal to 1 when theNWOMis about the receiver’s main

brand and 0 when it is about another brand. Explain the meaning of this result.

 

 

 

 
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