Negative online reviews, brand equity and emotional contagion

Abstract

Purpose Despite the growing consensus that consumers extensively use online reviews and that negative reviews can significantly damage brand equity, it remains uncertain whether negative online reviews that focus on different aspects of a service have a similar or differential effect on brand equity. This study aims to fill this gap and explores the mediating role of emotional contagion and what kind of response helps better deter their negative effect. Design/methodology/approach This research is conducted through a one-panel study and three experimental studies. SAS enterprise miner is used for text mining analysis and Analysis of variance (ANOVA) and Process macro models are used to analyze the experimental data. Findings Negative reviews related to the tangibility, responsiveness and empathy dimensions have a more detrimental effect on brand equity than negative reviews related to the assurance and reliability dimensions. The results also provide evidence that emotional contagion is more prevalent when consumers read reviews that are specific to the empathy and responsiveness dimensions. Finally, accommodative responses from the service provider are more effective in deterring the effect of a negative online review on brand equity. Research limitations/implications The generalizability of this study is limited to the restaurant and hotel industry. Practical implications The findings will also help the brand manager in understanding the comparative effect of service quality-specific negative reviews on brand equity and also the type of responses that brand managers should give to negative reviews. Originality/value Despite online reviews receiving increased attention in academic research, Service quality (SERVQUAL) dimension-specific reviews have not been studied until now. This study contributes to the service quality-related literature by providing evidence that not all negative online reviews related to different Service quality (SERVQUAL) dimensions equally affect brand equity.

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