Consumer Herding Behaviour

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Consumer Herding Behaviours in the Hotel Industry
Traditional Word-of-Mouth has been recognized as an effective marketing tool that has a significant impact on customer behaviour. Nowadays, the emergence of the Internet means consumers are now creating and spreading marketing information, easier than before internet existence. Providers and consumers have become highly connected with the Internet environment. The purpose of this study is to find out the way consumer make decisions are influenced by herding effects in the hotel industry. Online herding effects occur when consumers, in an online environment, are confronted with the opinions of preceding customers, or expert experiences. Hotel products and services are intangible, so that the decision to make is highly subjective and difficult to replicate. Because of the emotional involvement, the other consumers opinions play a significant role. (Yeh, Leong, Blecher, & Hu, 2005). The information cascade makes consumers follow previous consumers opinions (Kim, E. K. 2009). Consumers tend to be influenced by the others opinions, no matter if positive or negative. People believe that other consumers have better information than they have, even more because they don’t have a previous experience and the consumers on whose opinions matters have. So, in many situation, consumers follow the previous behaviour of others and disregard their own information (Anderson & Holt, 1997). According to Park, Lee, and Han (2007) study, when people buy products online, consumers generally read five or six reviews of three or four lines each. More, consumers will be influenced by majority of other consumers opinions whether it is positive or negative. On the other hand, given that consumers trust what the majority endorses, the unanimous approval could influence consumers in taking decision more than non-unanimous approval information (Deutch & Gerard, 1955; Pincus & Waters, 1977). A large number of consumer online...
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