The Relationship Between Online Referral Marketing and Price Promotion: Evidence from a Large E-Commerce Platform

• 成果类型: Article
• 署名作者: Cao, Zike; Chu, Junhong; Hui, Kai-Lung; Xu, Hong
• 署名单位: Zhejiang University; National University of Singapore; Hong Kong University of Science & Technology
• 刊物名称: JOURNAL OF MANAGEMENT INFORMATION SYSTEMS
• ISSN/ISSBN: 0742-1222
• DOI: 10.1080/07421222.2021.1962597
• 发表日期: 2021
• 页码: 855-888
• 关键词: word-of-mouth; reward programs; uncertainty; BEHAVIOR; IMPACT; perceptions; incentives; customers; QUALITY; sales

摘要

We empirically examine the effectiveness of referral marketing and price promotion in generating sales in a large e-commerce platform. Our results show that although referral marketing increases sales, its effect is attenuated by price promotion. We argue that price promotion arouses quality concerns and undermines the credibility of online paid referrals in a weak-tie environment. This finding implies diminishing marginal returns for referral marketing and price promotion spending. We conduct a battery of validation tests to support our argument. Our research highlights the importance of scrutinizing the complementarity of marketing promotions in the unique context of the Internet. Depending on the persuasiveness of the brand and the promotional channel, promotional strategies may conflict in addressing consumers' quality concerns. Our findings suggest that marketing managers should use discretion in combining online referral marketing and price promotion. We advise sellers against using both marketing tactics if they lack a strong brand image.