1.

Chapter 1
 1.1. Introduction
The term online customer review can be regarding as growing phenomenon
which plays a significant role in the decisions of both existing and future
customers. With respect to the proliferation of both the internet and
handheld devices, the traditional market has evolved into a ubiquitous
environment in which customers can order a product with only a click, and
share their experience regarding that product with other customers
effortlessly. Since e-commerce is an inevitable practice in the highly
competitive market of today, customer reviews are also unescapable.
However, such reviews can both provide benefit and damage to a company
or business. To be particular, if customers positively review a certain product
implying that they reflect satisfaction in their reviews, more and more
customers will be drawn to that particular service or product as the result of
this positive evaluation. On the other hand, if a customer reflects
dissatisfaction towards a certain product or service, the image of the
company will be harmed leading to a significant decrease in the sales level.
For that reason, it is very apparent that the role of customer reviews in
relation to promoting and sustaining a certain product is very significant. This
paper is concerned with examining the key factors that contribute in online
customer reviews. This paper will argue that online customer review can be
served as a new concept for promoting marketing communication mix and it
can work as a free method to assist customers in identifying the product that
best meets their requirements and usage conditions. However, such practice
may be very difficult or costly to implement for certain products particularly
those which are traditionally traded. On the other hand, such communication
method cannot be regarded as free of cost since in this practice the seller
loses their control over the content that becomes available to other
customers.
Internet together with information technology are providing innovative
opportunities for customers to evaluate products or share their experiences
relating to a certain product over the internet. To be specific, Amazon as one
of the leading companies in e-commerce provides customers with an option
to reflect their experiences or evaluation regarding a certain product and
such reviews are considered as one of the major and most successful feature
in the Amazon website. However, this can only be regarded as one of the
example where customer reviews have been successfully implemented, as
this feature can be regarded as one of the current trends implemented by
the majority of online businesses. To be particular, over the last decade, a
huge number of online businesses embarked on adopting online customer
reviews. Such online businesses invite customers of their products or
services to share their personal experience or evaluations. Such online
customer reviews are very common for the majority of product categories
such as apparel, electronics, games, and more important food and
beverages.

The contemporary research in respect of the effects of online customer

reviews relating to a certain product or service implies that customer reviews
have become an essential factor in customer purchase decision or product
sales. The current studies imply that 50% of individuals who visit online
stores reported that customer reviews are very important as they play a
significant role in the buying decisions. In accordance with the information
disclosed by Amazon in this respect, it has been demonstrated that online
book reviews have a massive impact on selling books. On the other hand, the
online food and beverage industry has been experiencing the same issues as
the majority of customers would like to ensure that the quality and taste of
the food or beverage they would possibly buy is satisfactory.

Online customer reviews can be regarded as a trending product information

resource which is gaining more and more significance and popularity. It has
managed to attract considerable attention in both popular presses and
practitioners. In order to better understand the underlying role of this
trending information resource in the market as well as it strategic
implementation, further academic research is required.

Unlike traditional seller, online businesses can provide two kinds of product
information to their customers of which the first can be regarded as seller
created and the second can be considered as customer created. The most
important difference between these two types of information can be
regarded as the level of credibility associated with the information. From the
perspective of the customer, the information provided by other customers
relating to a product or service are more credible than information created by
the seller since such credibility is usually positively related to the reliability of
the source of information. Various studies in this context have examined
online customer created information from an information credibility
perspective. For instance, the relationship between online customer
feedback and the reputation of the seller has been studied and analyzed.
However, since the domain of online businesses is very broad, it is very
important to study customer reviews and their impact for a particular type of
business in order to achieve the most accurate conclusion.
 1.2. Problem Statement
Businesses are nowadays becoming more and more internet reliant as e-
commerce has become an underlying concept in all markets and food and
beverage industry has not been an exception. Similar to all other businesses,
the majority of restaurants and catering services have been taking
advantage of the potencies of e-commerce through providing online food
ordering. Furthermore, there are various portals which allow for browsing all
restaurants and catering service available in a certain zone, viewing and
comparing their menu, and place orders accordingly. Such portals inherently
allow customers to compare and contrast between menu as well as
evaluating them which leads to a very competitive environment.
Nevertheless, even without such portals, customers can always review
different menus and catering service in their personal blogs which implies
that integration of a customer review feature in all e-commerce applications
is necessary. This is due to the fact that without integrating customer review
features, the control of the seller or the online business over the information
created by the customer will be much weaker which may not be desirable.
On the other hand, customer reviews play a significant role in stimulating
purchase in the highly competitive market of today, and for that reason it is
very important to investigate this concept from various perspectives in order
to uncover all its substantial impacts or benefits on a certain product and
online business. Unquestionably, the concept of customer reviews on its own
would not suffice as a business bust develop strategies on how to effectively
take advantage of this concept in order to promote sales.

Considering the described scenario, it is very apparent an online business

may not be able to sustain their business without integrating the demands
and evaluations of customers into their products in the world of today. This is
due to the fact that information transcribes rapidly over the internet and the
more control an online business can gain over the generated information
regarding their products by customers, the better they can positively use
such content in order to maximize profitability.

The context of this paper is limited to determination the potencies of

customer reviews in the Chinese food and beverage industry. To be
particular, this paper will investigate the relation between customer reviews
and successful sales in the Chinese food and beverage industry in order to
understand how this concept can be applied in order to further the
reputation and profit of catering services. The next chapters of this paper will
provide much greater information in this regard.
 1.3. Research Questions and Research
Objectives
As previously explained in the earlier sections of this paper, the major goal of
this study is to determine the impact of customer reviews in the Chinese
catering industry. However, the next sections of this chapter better elaborate
the aims and objectives of this study.
 1.3.1. Research Objectives
To determine the impact of customer reviews in Chinese catering
industry
To determine the potencies of customer reviews in food and beverage
industry
To determine the best practices and the most effective strategies for
implementing customer reviews.

1.3.2. Research Question

This paper will concentrate on specific and key strategic issues such as:

1- When should an online seller provide customer review to other

customers?
2- How do the decisions of a seller to supply customer reviews interact
with the assortment strategy of their products?
3- How does the strategy of the seller in respect of the supply of
customer reviews interact with their traditional marketing
communication strategy?
4- What timing would the best for the seller to offer customer review
information relating to a particular product?
 1.4. Significance of the Study
This paper will collect information in the described areas in order to conclude
if supplying online customer reviews can provide benefit or harm to catering
companies especially those situated within China. It will be also
demonstrated if the decision of the seller to provide customer review will
increase their incentive to provide more comprehensive product information
to customers through their traditional marketing communication. The next
chapters of this document will provide much greater detail in respect of the
proposed subject.
 1.5. Structure of Dissertation
The proposed study has begun with providing an introduction to the topic as
well as discussing the context of the project relating to the proposed subject
as well as the objectives and questions involved. This paper will proceed with
reviewing the available literature in order to both collect relevant theories
and develop a conceptual model in order to determine the potential impact
of customer reviews in respect of the catering business in China. Once the
literature review has been completely conducted, the research phase of the
project begins in which proper research methods will be used to collected
required data for concluding the study. The following provide a more detail
description over the structure of this dissertation.

Chapter One
o Introducing the proposed topic
o Describing the context of the problem
o Describing the objects and the research questions
o Describing and justifying the significance of the study
o Summarizing the chapter
Chapter Two
o Providing an introduction over the content of the chapter
o Describing independent and dependent variables
o Describing the research frameworks
o Investigating available theories
o Developing Hypotheses
o Summarizing the chapter
Character Tree
o Providing an introduction over the research phase
o Describing research type and approach
o Describing sample and data collection
o Analysis of data
2. Literature Review
 2.1. Introduction
This chapter of the document will focus on conducting a review over the
contemporary literature regarding the relevant factors of online customers
reviews in food and beverage industry. In order understanding these
interrelated factors in the online catering industry, review of terms such as
Word of Mouth, Electronic Word of Mouth, and Online Customer Review is
required. For that reason, this chapter of this document will begin with
reviewing the underlying terms and factors associated with the concept of
online customer reviews and will proceed with investigating the impact of
customer reviews on the overall success of an online business. The next
sections of this chapter will provide much greater information in this regard.
 2.2. Dependent and Independent Variables
The term dependent variable can be defined as what is actually measured
through an investigation or experiment as well as what is affected through
that experiment or investigation. On the other side, an independent variable
can be defined as a variable which is changed or controlled in an
investigation or experiment in order to test the its impact on the dependent
variable. In respect the proposed topic, the conducted investigation has
implied that the dependent variable and independent variables relating to
the context of this research would be as follows.
 2.2.1. Independent Variables
As previously represented in the earlier section of this chapter, the
independent variables relating to the proposed topic can be considered as
the quality, volume, valence, timeliness, and source credibility of the reviews
associated with a particular product or service. These attributes are regarded
as independent variables since the buying decision process in customers
relies on such characteristics of customer reviews. For instance, as
previously explained earlier in this document, the quality and volume of the
reviews associated with a particular product plays a very significant role in
driving the decision of the customer towards making a purchase. A similar
concept applies to other attributes such as valence, timeliness, and source
credibility. Accordingly, it can be concluded that since the buying decision of
customers is impacted as the result of these five attributes, they can be
regarded as the independent variables in this study.

2.2.2. Dependent Variable

With respect to the fact that the proposed topic is focused on studding the
impact of customer reviews on the catering business in China, the only
dependent variable can be regarded as the buying decision of customers
since it depends on the attributes of customer reviews. To be particular, the
major impact of customer reviews can be regarded as stimulating or
discouraging a purchase. Such stimulation and discouragement can be
simplified into the term `buying decision` and it can accordingly be regarded
as the core dependent variable involved in the proposed topic.

2.3. Research Framework

The term research framework can be described as model adopted in order
conduct a research, collect relevant facts, and come up with a conclusion. To
be particular, such model can be adopted in various ways such through
referring to the existing theories in order to conclude an investigation, or
through a conceptual manner in which available resources are used in order
to develop a new theory based on such resources. Both theoretical and
conceptual research frameworks are very similar in various aspects with only
difference in how the investigation is concluded.

In respect of the proposed topic, this paper will adopt both theoretical and
conceptual frameworks in order to collect information regarding the
fundamentals of online customer reviews as well as concluding the potential
impact of such reviews on the catering business in the Chinese market.
Adoption of both these two research frameworks is necessary since it is
required to both review the available theories in this regard while mapping
them in order to determine the potential impact of online customer reviews
specific to the Chinese market.

2.4. Theory
This section of this is concerned with reviewing the available literature
relating to the proposed topic in order to develop relevant hypothesis and
conclusions. The sections of this chapter will provide much greater details in
this regard.

2.4.1. Word of Mouth

The term `Word of Mouth` can be regarded a factor which has been under
considerable focus by both practitioners and academics for many years. It
has been suggested by researchers that information exchange and personal
conversation across acquaintances not only impact the decisions of
customers toward buying a certain product, but also shape the expectations
of customers, pre-use attitudes, and post-use assumption regarding to a
certain product or service. The term word of mouth has been demonstrated
as one of the most effectual resources of the information transmission by the
current literature. To be particular, word of mouth has been defined as an
oral person to person communication across a receiver and a communicator
where the receiver perceives as non-commercial in respect of a brand, a
service, or a certain product. (Buttle et al., 2015)
 2.4.2. Electronic Word of Mouth
The internet has resulted in the emergence of innovative forms of
communication platform which has taken the power of both customers and
providers to the next level smoothing the fundamentals for sharing opinions
and information both from B2C (Business to Customers), and from C2C
(Customer to Customer). The term eWOM or electronic word of mouth can be
accordingly described as any positive or negative statements developed and
shared by substantial, current, or previous customers regarding services or
products that is provided to other potential customers or institutions through
the internet. Electronic word of mouth communication usually happens in
various settings. Customer can share their opinion towards a certain product
or service on social network sites, weblogs, review websites or even direct on
the website of the seller. (Cakim, 2013)

Although electronic word of mouth has the majority of its feature in common
with classical word of mouth communication, in differs in several dimensions
from traditional word of mouth communication. The first difference in this
respect can be regarded as the features of electronic word of mouth that
allows for propagating a large volume of information very fast and
sometimes even instantly in an anonymous manner. (Daffy, 2011)

Electronic word of mouth communication encompasses the exchanges of

information to various receivers in an asynchronous manner. It is not
required that information need to be exchanged at exactly the same time
when all reviewers are actually available. For instance, online customers or
reviewers can write comments which other users can read later. This is while
in classical word of mouth communication, information is generally
exchanged in forms of dialogs in person. (Eley et al., 2009)

In accordance with a study conducted in respect of the prevalence of word of

mouth and electronic word of mouth, it has been determined that traditional
word of mouth communication relating to an unsatisfactory experience
regarding a certain product may average around %9 only while electronic
word of mouth communication constitutes 91%. (Merlo et al., 2014)

The majority of textual information posted on the internet is archived and

accordingly will be available for an unknown period of time. The competence
of search engines has allowed people to easily look up specific information
which they are looking for. (Yang, 2006)

Another aspect which distinguishes electronic word of mouth form its

traditional method can be regarded as that electronic word of mouth is far
more measurable than traditional word of mouth method. The persistence,
quantity, and presentation format of electronic word of mouth has made it
more observable. (Collier, 2013)

Electronic word of mouth communication can be regarded as more

voluminous in quantity in comparison with word of mouth communication in
the offline world. Analyzing the features of electronic word of mouth such as
the format of the message, the number of effective words, the position of the
message, as well as the likes is easier in comparison with traditional word of
mouth. (Cakim, 2013)

The last aspect from which electronic word of mouth differs from traditional
word of mouth can be regarded as the ability to judge the sender as well as
their message based on various factors such as credibility. (Bejou et al.,
2013)
 2.4.3. Service quality and Service Failure
Customer often make assessment based on the quality of the service by
considering if the quality of the service has met or extended their
expectations or not. In respect of service quality, a comparison is often made
between the performance and the expectations regardless of the type of the
service. Customers often develop criteria in order to assess the quality of a
particular product or service. These criteria that are developed and
considered by customer often involve ten categories which are namely as
reliability, responsiveness, competence of the staff and company,
accessibility of the product or service, courtesy, understandable
communication of the service, security, knowing and understanding the
customer, tangibles such as the technical specifications and the appearance
of the product. Such standards are used for determining the quality of a
certain product or service although they may differ in each customer and for
each product or service. To be specific, in respect of the catering industry
what usually seems important to customer can be regarded as the quality,
appearance (i.e. cleanness, tidiness, design, etc.) of the food, delivery time,
responsiveness, etc. (Capelle, 2013)
Satisfaction with either a product or service generally relies on the
experience of the customer relating to that product or service and the
customer can only assess the quality after experiencing the product or
service. For instance, in the hoteling industry, customers can evaluate
various aspects of service only once they check in to their rooms and
experience the quality of provided facilities, tidiness, food and room service
and responsiveness of the staff. The same concept applies to the food and
beverage, and catering industry as the customer can only evaluate the food
and the service once they order something. Accordingly, for the majority of
substantial customers, the search and decision stage in choosing a catering
service or a restaurant entail making some evaluation regarding the existing
quality of the service. (Couzin et al., 2013)

Online reviews provide customers with insights into the service experience
without the need to be actually present. Negative reviews can be particularly
effective as the current and previous studies of the structure and content of
online customer reviews implies that complaints provide customers with
experience through making use of highly descriptive language allowing them
to sense that they are experiencing the actual product or service. (Daffy,
2011)

Service failures which can be regarded as breakdowns in rendering a certain

service which lead to a shortfall in satisfying the demands and expectations
of customers tend to take place in catering and restaurant industry on a
fairly regular basis. Such failures normally entail concerns towards the
quality of service, reservation issues, and the food quality itself and they
result in low customer satisfaction, negative word of mouth, and an
inclination to switch to other catering services or restaurants. (Gilaninia et
al., 2013)
 2.4.4. Attribution Theory
Customers generally decide whether to purchase a product or use a service
based on who they consider responsible for the quality of product and
service. The attribution theory ensures that customers make interferences as
to the causes of quality problems or service problem along three core
aspects. These tree aspects can be regarded as causality, stability and
control. (Goldenberg, 2008)
The aspect of causality relates to whether customers believe the cause lies
with the consumer or the firm. TO be particular, if the customer believes that
responsibility for a bad product quality or service failure likes within the firm,
they would be more likely to express anger and dissatisfaction in order to
expect the firm to take actions to correct the situation. Furthermore,
customers will be more likely to be less willing to continue purchasing a
product or using the service. (Malhotra et al., 2010)

The aspect of stability related to whether the customers looks at the cause of
the quality of service or product that they have experienced as temporary or
predictable and predetermined. The attribution principle of subjective
probability of success or satisfaction after attaining or not attaining a goal
implies that if the customer attribute a result to a stable cause, they are very
substantial to expect the same result in the future. Nevertheless, such
attribution to an unstable cause suggests that the future behaviors may not
be influenced by past experiences which indicates that subsequent results
remain uncertain or that future actions will differ from the past. (Glowa,
2014)

Control attribution or simply controllability can be described as the extent to

which the customer believes that the firm can control the provision of the
quality relating to a product or service. To be particular, customers are more
likely to infer that the company or firm which has provided high quality
products or services in the past would not have much control over more
recent quality problems or failures. (Smith, 2012)

The prior knowledge of the customer relating to a certain product or service

can also impact the ascription of the quality problems or service failure. To
be particular, the image of a firm or brand and the association of the
customer with it affects the evaluation of the brand through the cognitive
mechanism of ascription process. When product or service problems relating
to a reputable restaurant or catering service emerge into the view, the
customer will most probably view the failures or quality problems as a one-
off event. (Buttle et al., 2015)

2.4.5. Customer Buying Decision

The buying decisions of the customer represent a process of five tasks which
are respectively identification of the problem, searching for information,
evaluating alternatives, purchase, and post-purchase evaluation. The
customer generally undergoes this process before making the final decision
towards purchasing a certain product or using a certain service. Despite the
fact that a thorough understanding of this process is required, the majority of
general observations are also related, In the beginning, the actual of act of
purchasing can be considered as only a single stage in this process as the
process starts various stages before the act of purchasing itself. Furthermore,
not all decision processes may contribute to a purchase as at various stages
in this process the customer can change their mind. Finally, the decisions of
the customer do not always involve all these five tasks of the decision
making process. (Program. et al., 2013)

The first activity in this process which is identification and recognition of the
problem normally takes place when the customer finds about various product
differentiations as well as a desired state. For example, a student who
requires to track all colleges and appointments may end of with a diary
which allows them to understand differences between various conditions and
desired states. (Glowa, 2014)
To be particular, people may sometimes happen to have problems which
they may not be aware of. For instance, certain customers are very
concerned about their weight but they may not realize that there are
products which are low in calories and low in sugar. Accordingly, marketers
make use of advertising, promotions, and packaging in order to facilitate
such recognition among the customers. Once the customer realized the
problem or need, the can look for information regarding the product as well
as investigating how that product may solve the problem. This second
activity is generally known as the information search. For instance, after a
person decides to a purchase a new phone, they may look for information
regarding the features, technical specification, or the its usability in everyday
use. There are two key aspects involved in research of information of which
the first can be regarded as the information which can solve the problems in
the mind of the customers. However, when there is not enough information
relating to the product in order to make a decision, the customer will look for
further information through an external search. Such external may comprise
looking for similar brands or prices, searching offers, communicating with
friends or colleagues, referring to social media, or more importantly referring
to online customer reviews. Individual personal contacts can be regarded as
the most viewed materials since they are considered as the most reliable
sources of information from the point of view of the customer. (Buttle et al.,
2015)

As previously mentioned, the contemporary literature suggests that internet

users rust online reviews which have been posted by anonymous customer
more than the traditional media or advertisement. Furthermore, with the
potencies of the internet, customers have been increasingly gaining access
to related product information with respect to the greater volume of
information. Nevertheless, the contemporary literature also suggests that if
customers face an overload of information, they may make poorer choices.
This is to say that enhancing the quality of information can facilitate the
process of decision making in customers to make better buying decisions.
Nevertheless, the way customers utilize and process the information
acquired from online reviews relies on the characteristics of the information
itself. (Buttle et al., 2015)

The third step in making a purchase, as previously explained, can be

regarded as evaluating alternatives. This step takes place when the
customer is evaluating the product and establishes criteria for contrasting
between possible available alternative. Such criteria are characteristics of
features which the customer may require. To be particular, the customer also
assigns a certain level of significance to each criterion which suggests the
fact that certain features are more significant that other one. Both the level
of significance and the criteria are employed to rank various similar products.
Through framing all alternative options, companies and firms can affect the
evaluation of the customer positively. Framing can make particular aspects of
the product more significant and can ease its remembrance. For instance,
through putting emphasis on the term `No-Sugar` in soda drinks, companies
can stimulate the customer to take particular aspects of the product that
seem to be important into the account. (Merlo et al., 2014)

To be specific, the concept of framing influences the buying decision of

inexperienced buyers more than those of experienced buyers. When
evaluating alternative options involve more than one products, the customer
will be ready to step into the buying stage. (Ogbadu et al., 2012)

The fourth stage or the stage in which the customer decides which product
to purchase, can be regarded as mainly the outcome of the evaluation of
alternatives. Nevertheless, it is very important to note that certain other
factors including the availability of the product or the closeness of alternative
shops are of great significance. Through this stage, the customer also selects
a seller from where the product will be bought. Eventually, the customer
makes the final purchasing decision which can be regarded as the last stage
in this process. (Smith, 2012)

The fifth stage or the buying stage can be regarded as the post-purchase
evaluation stage. To be particular, once the customer buys a product, the
start evaluating the product to determine whether the actual performance
and characteristics of the product meets their needs and expectations or not.
The majority of the criteria used during the evaluation process are reviewed
again during stage. The final result will imply if the customer is satisfied with
the product or not, and this will affect future decisions and behavior. The
level of satisfaction that a certain customer may experience will imply
whether they make complaint, communicate with other potential buyers, or
they may buy the product again in the future. (Merlo et al., 2014)

2.4.6. Online Customer Review

The term online customer review can be regarded as one type of electronic
word of mouth which involves both positive and negative statement reflected
by both buyers and experts regarding a certain product or service. Such
customer driven information is very helpful in decision making towards a
purchase since they it allows customer to review the experiences of other
customers. An online customer review has two roles which are informing and
recommending. The first role which is informing can be regarded as the task
of delivering additional customer driven information to other customers. The
latter role which is recommendation provides both positive and negative
signals suggesting the popularity and quality of a certain product and
service. (Buttle et al., 2015)
With respect to the asymmetric information setting of reviews, online
customer review can be regarded as very significant in the context of e-
commerce. This is mainly due the fact that online stores or retailers have
more information regarding the product than any potential customer. In
comparison with traditional shopping, online customers are not able to make
use of all their senses such as touching, feeling, trying, or smelling in order
to evaluate the product when they are purchasing online. This obliges the
buyer to come to a conclusion based on the information provided by the
retailer or the online store as well as the available customer reviews. Online
customer reviews can hugely contribute in providing all the necessary
information to other customer with an indirect product experience. Due to
the fact that online shopping has been increasingly trending since its
introduction, online customer reviews have gained significant importance.
(Bejou et al., 2013)

2.4.7. Online Customer Review Factors

The current literature has provided an integrative framework of the impact of
electronic word of mouth communication in respect of online customer
reviews which can be regarded as the most relevant and helpful to describe
various attributes of online customer reviews which impact the decision
making of the customer. The core assumption of this theoretical framework
can be considered as that social communication is the process by which a
customer conveys incentives to affect the behavior of other individuals. This
integrative framework provides a systematic overview of the main attributes
which affect electronic word of mouth as well as its outcome. It consists of
four key attributes which are respectively the receiver, stimuli,
communicator, and finally the response. The receiver in this context can be
regarded as the individual who reacts to the message. The key effect of the
message may differ from a person to another with respect to the fact that
none of each receiver would be same. The stimulus can be described as the
act of conveying message by the communicator and it affects the response.
The framework identifies volume, argument quality. Valence and timeless as
significant stimuli which associate with the response. The communicator can
be described as the party which conveys the message and the source
credibility of this individual can be regarded as a very important factor.
(Couzin et al., 2013)

The following sections of this chapter will provide more information in

respect of these four factors.
 2.4.8. Argument Quality
The term argument quality can be described as the strength or plausibility of
the convincingness of the argument. To be particular, the quality of the
online reviews of each customer differs due to the fact that each review is
founded on the subjective feeling of the customer. (Couzin et al., 2013)

The contemporary literature implies that the quality of online customer

reviews is a very significant element which impacts the cognitive information
processing of the customer. High quality reviews tend to seem more
convincing and logical. (Daffy, 2011)

The quality theory suggests that the more an online review appears to be
thorough, accurate, and relevant to the requirements of the customer, the
more customers will find such information helpful when deciding to purchase
and item. (Bejou et al., 2013)

Hypothesis 1: The quality of online customer reviews has a great

impact on the buying decisions of customers.
 2.4.9. Volume
The term volume in respect of online customer reviews can be described as
the popularity of the product as it relates to the volume of sales relating to a
particular product. To be specific, the more there are more reviews, the more
popular and important a product becomes. It is very potential that volume
directs customers to rationalize their purchasing decision by considering that
many other customers have purchased a product. Similarly, a high volume of
customer reviews also results in more information used for judging whether
to purchase or not since it is much likelier that customers will find the kind of
information they are looking for. (Couzin et al., 2013)

Hypothesis 2: The volume of online customer reviews has a great

impact on the purchasing decision of customers.
 2.4.10. Valence
The term valence in respect on online customer review can be described as
the way an online review is framed such as positively or negatively. To be
particular, a positively framework customer review highlights the advantages
and merits of a product or service and stimulates other customer to purchase
the product or subscribe to the service while negative online reviews reveal
the disadvantages and weaknesses relating to a certain product or service
and it discourages customers from buying that particular product or
subscribing to that service. (Couzin et al., 2013)

Hypothesis 3: The valence of online customer review has a great

impact on the purchasing decision of customers.
 2.4.11. Timeliness
The term timeliness in respect of online customer reviews is concerned with
the recentness and timeliness of messages. To be specific, the appearance of
products evolves in accordance with the feedbacks of customer or as the
result of technical progress or new techniques. Accordingly, a website cannot
provide expected information relating to a certain product to customer if the
website is not up to date and consistently updated. Furthermore, when,
online customer reviews are not current, customer may assume that the
provide information is out of date and accordingly not trustworthy for making
purchasing decisions. (Couzin et al., 2013)

Hypothesis 4: The timelines of online customer reviews has a great

impact of the purchasing decisions of customers.
 2.4.12. Source Credibility
The term source credibility can be described as a message of the perception
of a receiver of credibility of a message source which reflects nothing about
the message itself. Anonymous individuals normally share their experiences
and opinion outside their personal social network with a huge geographically
dispersed group of strangers. Accordingly, it has been argued by the current
literature that this may have less credibility in contrast with traditional
messages and similarly receivers may have problems in determining the
source credibility of the message. (Couzin et al., 2013)

Hypothesis 5: The source credibility of online customer review has a

great impact on the purchasing decisions of customers.
 2.4.13. Using Categorical Information for Efficiency
Another factor which may impact the evaluation of the customer or decision
is the addition of easy-to-process graphic data such as start ratings or
numerical ratings. It has been implied that customers are more likely to act
as cognitive misers which is to say that they tend to take shortcuts when
making assessment or decisions. (Buttle et al., 2015)

The current literature argues that cognitive misers tend to take shortcuts
when making decisions or judging a product, and they may rely on readily
available information cues. Furthermore, it has also been suggested by the
person perception literature that customers may make use of categorical
thinking processes when making sense of information so as to make an
overall assessment. (Capelle, 2013)

Other studies imply that in the contexts where the customer in in an

objective oriented mode, an easy information processing methods is more
desirable. Relying on easy to assess information such as start ratings
specially for restaurants and catering services may have a more significant
impact on the purchasing decision of customers in comparison with more
details information. Such method can be regarded as an efficiency tools
which can be easily adopted when a customer faces a large volume of
information. A single piece of information which is generally salient on review
websites can be regarding as the rating system which is normally in
numerical form. A typical example in this respect can be considered as a
number out of five or ten. Ratings are inherently more influential in product
choice and the provide substantial customer with a shortcut to evaluate a
product or service. In addition, it has been also suggested that catering
service with higher online stars tend to be more popular. (Bejou et al., 2013)

2.5. Hypothesis Development

The following summarizes the hypotheses which have been formed
throughout the conducted research.

Hypothesis 1: The quality of online customer reviews has a great

impact on the buying decisions of customers.
Hypothesis 2: The volume of online customer reviews has a great
impact on the purchasing decision of customers.
Hypothesis 3: The valence of online customer review has a great
impact on the purchasing decision of customers.
Hypothesis 4: The timelines of online customer reviews has a great
impact of the purchasing decisions of customers.
Hypothesis 5: The source credibility of online customer review has a
great impact on the purchasing decisions of customers.
 3. Chapter Three

3.1. Introduction
This chapter of the document is concerned with elaborating and justifying
the main research approach and methodology for determining the
substantial impact of online customer reviews on the catering business in
China. As previously explained in the earlier chapters of this paper, the
context of this study is the impact of online customer review on catering
businesses in the Chinese market. Taking this subject into the view, it is
apparent that the research phase of this study must primarily focus on
customers and analyze the impact of online customer reviews on catering
services from the perspective of the customers. This is mainly due to the fact
that catering involved two key aspects which are respectively the service
quality and the food quality. Since these two aspects of catering services are
very closely connected to one another, a flaw in one of them can drastically
impact the other one. For instance, even though a catering business may
provide very high quality food, the lack of attention to the servicing quality
such as delivery time or delivery method would cause huge dissatisfaction
among the customers. For that reason, it is more appropriate to view the
impact of customer reviews from the perspective of customers themselves
as catering services may not have proper understanding over the exact
impacts of online customer reviews on their services. The next sections of
this chapter will provide more information in respect of the selected research
methodology and actual approach for conducting the required research.

3.2. Research Purpose

The majority of research can be grouped under the three categories of
exploratory, descriptive, or casual. Each one of such research types serve a
particular purpose and they can be only used in particular ways. For
example, in the online survey realm, mastery of all these three research
types can result in a more comprehensive insight as well as higher quality
information. Nevertheless, it is very important to determine the actual
purpose of a study in order to determine what type of research best applies
to that study. The next sections of this chapter will briefly review these three
research types in order to conclude what type of research applies to the
proposed subject.

3.2.1. Exploratory Research

The term exploratory research can be regarded as an underlying party of the
majority of business or market strategy. This type of research concentrates
on the discovery of insights and ideas as opposed to collecting data which is
statistically accurate and this can be regarded as the core reason why
exploratory research is the fittest as the starting point of the total research
plan. Exploratory research is typically employed in order to further the
definition of company issues, areas for substantial growth, alternative course
of action, or prioritizing areas which need statistical research.

In respect of online survey, one of the most commonly techniques employed

for conducting exploratory research can be regarded as open-ended question
since they provide a richer quality information which result in the discovery
of new problems or initiatives that must be addressed.
 3.2.2. Descriptive Research
The term descriptive research can be regarded as a research type which
takes up the bulk of online surveying and it is regarded as inherently
conclusive with respect to its quantitative nature. In contrast with
exploratory research, descriptive research can be regarded as preplanned
and structured in design so that the collected information can be inferred
statistically on a particular population.

The typical reason behind making use of descriptive research can be

considered as to define an opinion, behavior, or attitude which is held by a
group of people relating to a particular subject in a better way. The best
example in this regard can be considered as multiple choice questions since
they are predefined in nature and the respondent only has to select between
the answers. However, descriptive research will not provide unique insights
on issues in contrast with exploratory research. On the other hand, it can
provide information which is statistically inferable. This allows for measuring
the importance of the result on the general population of the study together
with the changed of the respondents opinions, behaviors, or attitudes over
time.
 3.2.3. Casual Research
Similar to descriptive research, casual research can also be considered as
inherently quantitative as well as being structured and preplanned in design.
Accordingly, it is also regarded as a conclusive research. Nevertheless,
casual research differs in its way of explaining the effect and cause relation
across variables. This is in contrast with the observational style of the
descriptive research since it tried to decipher if a relationship is casual
through experimentation. Eventually, casual research can have two core
objectives which are as follows.

To determine which variable are the effect and which variables are the
cause.
To understand the nature of the relationship across the causal variables
and the effect to be predicted.
 3.2.4. Research Type of This Study
Taking the proposed subject into the account, it can be determined that the
best research type that can be applied in this paper is descriptive research
with respect to the fact that the quantitative nature of descriptive research
both makes analysis of the collected information easier and more accurate
as it can be analyzed using statistical methods. Furthermore, descriptive
research can be more proper in this context since online customers can
precisely state to what extent they refer to customer reviews and they
consider them before making a purchase. This is while such information
would be rather difficult to determine in exploratory and casual research
since they respectively use open-ended questions, and experiments for
conducting a research.
 3.3. Research Approach
The term research methodology can be described as a collection of
structured procedures or instruments used for conducting a research. This
definition can be further described as a framework in which facts are
documented, recorded, and interpreted in form a research. In respect of
research approach, there are two key approaches which are known as
qualitative and quantitative research. The qualitative research approach can
be considered as more descriptive while quantitative approach is more
focused on inferences in accordance with the statistical procedures. To be
particular, quantitative research approach makes use of graphical
presentations or figures in order to conduct analysis over the collected
information.

Adoption of the quantitative research can be regarded as the fittest for the
context of this study with respect to its descriptive nature. As previously
explained, one of the best methods that can be applied in this study in order
to collect required information can be considered as the questionnaire
method which indicates to the quantitative nature of the study. To be
particular, the findings of this study will be based on conducting statistical
analysis over the obtained information as well as visually representing them
in forms of graphs and diagrams which imply that the research inherently will
apply a quantitative approach.

3.4. Population and Unit of Analysis

As explained in the earlier chapters of this document, the proposed subject is
limited to the Chinese market and for that purpose the major target
population of the research as well as the unit or analysis can be regarded
Chinese customers and Chinese catering services. To be particular, the
research will focus on Chinese customers to determine to what extent their
purchasing decisions are affected by online customer reviews in respect of
using online catering services. Accordingly, the core population involved in
the study can be regarded as Chinese individuals who use online catering
services.
 3.5. Sampling Frame, Technique and Size
The following sections of this chapter will discuss the sampling frame,
technique and size associated with the proposed topic.

3.5.1. Sampling Frame

The sampling frame associated with proposed research can be regarded as
all individuals who use catering services in China. This involves employees,
students, households, or workers who use catering service on a daily or
weekly basis.

3.5.2. Sampling Technique

Since the research will be conducted in a descriptive and quantitative way, it
is apparent that ta non-probabilistic sampling method would be the fittest for
the required research. To be particular, volunteer samples will be used since
they are based on human choices rather than random selection and more
importantly the statistical theory is not able to describe how they may
behave and substantial sources of bias are widespread.

3.5.3. Sample Size

A sample size of 150 individuals has been selected in order to conduct the
required research. This sample size has been determined based on the fact
that it can provide adequate information in order to conclude how customer
reviews can impact the catering service in the Chinese market, while being
small enough not cause any complexities or trouble during the analysis.

3.6. Data Collection

There are various methods that can be adopted for collecting data during a
research depending on the nature and purpose of the research. Such
methods involve deployment of questionnaire, conducting interviews,
observing a certain environment, etc. However, not all these methods can be
regarded as suitable for all types of research since they differ in the way they
collect and prepare the raw data required for conducting and analysis.

To be specific, collection of information involves processing data from the

target population implying that particular information relating to certain facts
are collected. Accordingly, development of clear and solid goals can be
regarded as a very significant step prior to collecting information in order to
develop expressive result.

The following sections of this chapter will describe various data collection
methods in order to conclude the best that can be adopted through this
research paper.

3.6.1. Questionnaire Methods

The questionnaire method can be regarded as one of the most effective and
common data collection methods which has been widely used by the
researcher in order to collect data. To be particular, in questionnaire method,
the research designs a series of multiple choice questions and distribute
them among a certain population of individuals. The collected information is
later analyzed in order to conclude the research. To be specific, the efficiency
of this data collection method is due to various reasons such as the
convenience of deploying questionnaires online, and simply conducting
statistical analysis over the findings in order to come up with a conclusion.
Furthermore, since the collected information will be inherently in digital
format when deploying questionnaires online, the analysis process can be
completed very fast as the collected information can be efficiently imported
to different data analysis software such as SPSS and Microsoft Excel.

3.6.2. Interview Methods

Interviews can be regarded as another method in order to collect information
relating to a certain subject. Unlike questionnaires which have a quantitative
nature, interviews are often more oriented toward qualitative research with
respect to the fact that the researcher can contemplate open-ended
questions or the interviewees may express their own particular opinion
toward each asked question. For that reason, employment of statistical
methods would not be proper when making use of interviews for collecting
information.

3.6.3. Observation Method

There are scenarios where neither questionnaires nor interviews can be
helpful in collecting the data required for a particular subject. The best
example in this respect can be regarded as analyzing the social behavior of a
population in a particular environment under certain conditions. In such
situation, the researcher requires to observe the situation or run experiments
in order to be able to collect the required information relating to the context
of the research.
 3.6.4. Selection of the Data Collection Method
In accordance with the described data collection methods, it is apparent that
the best data collection methods that can be adopted in this research paper
is the questionnaire method. This is due to the fact that this data collection
method is both effective and easy to implement while being inherently
quantitative and descriptive which implies that it can be regarded as the
fittest in the context of this research paper. Accordingly, the questionnaire
method will be used in order to collect necessary information for the required
research.
 3.6.5. Data Analysis Technique
The collected information will be imported to SPSS in order to be statistically
analyzed and visualized into charts and graphs. Statistical analysis has been
selected as the research methodology in this paper follows a quantitative
approach implying that a statistical analysis would be the fittest data
analysis techniques. On the other hand, SPSS has been selected as the
analysis software with respect to its robustness and advantages over other
available options such as Microsoft Excel. To be particular, SPSS can be
regarded as one of the most professional statistical analysis software
systems which is capable of processing large volume of data while being able
to run various statistical operations as well as even findings patterns and
trends. Accordingly, SPSS will be used as the main data analysis tool for
processing the collected results.
3.7. Data Analysis
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