• Journal of Global Scholars of Marketing Science
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• v.20 no.2
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• pp.188-198
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• 2010

This study attempts to examine the influence that negative WOM (NWOM) has in an online context. It specifically focuses on the impact of the service failure description and the perceived intention of the communication provider on consumer evaluations of firm competence, attitude toward the firm, positive word of mouth and behavioral intentions. Studies of communication persuasiveness focus on "who says what; to whom; in which channel; with what effect (Chiu 2007)." In this research study, we examine electronic web posting, particularly focusing on two aspects of "what": the level of service failure communicated and perceived intention of the individual posting. It stands to reason electronic NWOM that appears to be trying to damage a product’s or firm's reputation will be viewed as more biased and will thus be considered as less credible. According to attribution theory, people search for the causes of events especially those that are negative and unexpected (Weiner 2006). Hennig-Thurau and Walsh (2003) state "since the reader has only limited knowledge and trust of the author of an online articulation the quality of the contribution could be expected to serve as a potent moderator of the articulation-behavior relationship. We therefore posit the following hypotheses: H1. Subjects exposed to electronic NWOM describing a high level of service failure will provide lower scores on measures of (a) firm competence, (b) attitude toward the firm, (c) positive word of mouth, and (d) behavioral intention than will subjects exposed to electronic NWOM describing a low level of service failure. H2. Subjects exposed to electronic NWOM with a warning intent will provide lower scores on measures of (a) firm competence, (b) attitude toward the firm, (c) positive word of mouth, and (d) behavioral intention than will subjects exposed to electronic NWOM with a vengeful intent. H3. Level of service failure in electronic NWOM will interact with the perceived intention of the electronic NWOM, such that there will be a decrease in mean response on measures of (a) firm competence, (b) attitude toward the firm, (c) positive word of mouth, and (d) behavioral intention from electronic NWOM with a warning intent to a vengeful intent. The main study involved a2 (service failure severity) x2 (NWOM with warning versus vengeful intent) factorial experiment. Stimuli were presented to subjects online using a mock online web posting. The scenario described a service failure associated with non-acceptance of a gift card in a brick-and-mortar retail establishment. A national sample was recruited through an online research firm. A total of 113 subjects participated in the study. A total of 104 surveys were analyzed. The scenario was perceived to be realistic with 92.3% giving the scenario a greater than average response. Manipulations were satisfactory. Measures were pre-tested and validated. Items were analyzed and found reliable and valid. MANOVA results found the multivariate interaction was not significant, allowing our interpretation to proceed to the main effects. Significant main effects were found for post intent and service failure severity. The post intent main effect was attributable to attitude toward the firm, positive word of mouth and behavioral intention. The service failure severity main effect was attributable to all four dependent variables: firm competence, attitude toward the firm, positive word of mouth and behavioral intention. Specifically, firm competence for electronic NWOM describing high severity of service failure was lower than electronic NWOM describing low severity of service failure. Attitude toward the firm for electronic NWOM describing high severity of service failure was lower than electronic NWOM describing low severity of service failure. Positive word of mouth for electronic NWOM describing high severity of service failure was lower than electronic NWOM describing low severity of service failure. Behavioral intention for electronic NWOM describing high severity of service failure was lower for electronic NWOM describing low severity of service failure. Therefore, H1a, H1b, H1c and H1d were all supported. In addition, attitude toward the firm for electronic NWOM with a warning intent was lower than electronic NWOM with a vengeful intent. Positive word of mouth for electronic NWOM with a warning intent was lower than electronic NWOM with a vengeful intent. Behavioral intention for electronic NWOM with a warning intent was lower than electronic NWOM with a vengeful intent. Thus, H2b, H2c and H2d were supported. However, H2a was not supported though results were in the hypothesized direction. Otherwise, there was no significant multivariate service failure severity by post intent interaction, nor was there a significant univariate service failure severity by post intent interaction for any of the three hypothesized variables. Thus, H3 was not supported for any of the four hypothesized variables. This study has research and managerial implications. The findings of this study support prior research that service failure severity impacts consumer perceptions, attitude, positive word of mouth and behavioral intentions (Weun et al. 2004). Of further relevance, this response is evidenced in the online context, suggesting the need for firms to engage in serious focused service recovery efforts. With respect to perceived intention of electronic NWOM, the findings support prior research suggesting reader's attributions of the intentions of a source influence the strength of its impact on perceptions, attitude, positive word of mouth and behavioral intentions. The implication for managers suggests while consumers do find online communications to be credible and influential, not all communications are weighted the same. A benefit of electronic WOM, even when it may be potentially damaging, is it can be monitored for potential problems and additionally offers the possibility of redress.

• Journal of Global Scholars of Marketing Science
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• v.18 no.1
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• pp.33-58
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• 2008

Previous research has presupposed that the evaluation of consumer who received any recovery after experiencing product failure should be better than the evaluation of consumer who did not receive any recovery. The major purposes of this article are to examine impacts of product defect failures rather than service failures, and to explore effects of recovery on postrecovery product attitudes. First, this article deals with the occurrence of severe and unsevere failure and corresponding service recovery toward tangible products rather than intangible services. Contrary to intangible services, purchase and usage are separable for tangible products. This difference makes it clear that executing an recovery strategy toward tangible products is not plausible right after consumers find out product failures. The consumers may think about backgrounds and causes for the unpleasant events during the time gap between product failure and recovery. The deliberation may dilutes positive effects of recovery efforts. The recovery strategies which are provided to consumers experiencing product failures can be classified into three types. A recovery strategy can be implemented to provide consumers with a new product replacing the old defective product, a complimentary product for free, a discount at the time of the failure incident, or a coupon that can be used on the next visit. This strategy is defined as "a rewarding effort." Meanwhile a product failure may arise in exchange for its benefit. Then the product provider can suggest a detail explanation that the defect is hard to escape since it relates highly to the specific advantage to the product. The strategy may be called as "a strengthening effort." Another possible strategy is to recover negative attitude toward own brand by giving prominence to the disadvantages of a competing brand rather than the advantages of its own brand. The strategy is reflected as "a weakening effort." This paper emphasizes that, in order to confirm its effectiveness, a recovery strategy should be compared to being nothing done in response to the product failure. So the three types of recovery efforts is discussed in comparison to the situation involving no recovery effort. The strengthening strategy is to claim high relatedness of the product failure with another advantage, and expects the two-sidedness to ease consumers' complaints. The weakening strategy is to emphasize non-aversiveness of product failure, even if consumers choose another competitive brand. The two strategies can be effective in restoring to the original state, by providing plausible motives to accept the condition of product failure or by informing consumers of non-responsibility in the failure case. However the two may be less effective strategies than the rewarding strategy, since it tries to take care of the rehabilitation needs of consumers. Especially, the relative effect between the strengthening effort and the weakening effort may differ in terms of the severity of the product failure. A consumer who realizes a highly severe failure is likely to attach importance to the property which caused the failure. This implies that the strengthening effort would be less effective under the condition of high product severity. Meanwhile, the failing property is not diagnostic information in the condition of low failure severity. Consumers would not pay attention to non-diagnostic information, and with which they are not likely to change their attitudes. This implies that the strengthening effort would be more effective under the condition of low product severity. A 2 (product failure severity: high or low) X 4 (recovery strategies: rewarding, strengthening, weakening, or doing nothing) between-subjects design was employed. The particular levels of product failure severity and the types of recovery strategies were determined after a series of expert interviews. The dependent variable was product attitude after the recovery effort was provided. Subjects were 284 consumers who had an experience of cosmetics. Subjects were first given a product failure scenario and were asked to rate the comprehensibility of the failure scenario, the probability of raising complaints against the failure, and the subjective severity of the failure. After a recovery scenario was presented, its comprehensibility and overall evaluation were measured. The subjects assigned to the condition of no recovery effort were exposed to a short news article on the cosmetic industry. Next, subjects answered filler questions: 42 items of the need for cognitive closure and 16 items of need-to-evaluate. In the succeeding page a subject's product attitude was measured on an five-item, six-point scale, and a subject's repurchase intention on an three-item, six-point scale. After demographic variables of age and sex were asked, ten items of the subject's objective knowledge was checked. The results showed that the subjects formed more favorable evaluations after receiving rewarding efforts than after receiving either strengthening or weakening efforts. This is consistent with Hoffman, Kelley, and Rotalsky (1995) in that a tangible service recovery could be more effective that intangible efforts. Strengthening and weakening efforts also were effective compared to no recovery effort. So we found that generally any recovery increased products attitudes. The results hint us that a recovery strategy such as strengthening or weakening efforts, although it does not contain a specific reward, may have an effect on consumers experiencing severe unsatisfaction and strong complaint. Meanwhile, strengthening and weakening efforts were not expected to increase product attitudes under the condition of low severity of product failure. We can conclude that only a physical recovery effort may be recognized favorably as a firm's willingness to recover its fault by consumers experiencing low involvements. Results of the present experiment are explained in terms of the attribution theory. This article has a limitation that it utilized fictitious scenarios. Future research deserves to test a realistic effect of recovery for actual consumers. Recovery involves a direct, firsthand experience of ex-users. Recovery does not apply to non-users. The experience of receiving recovery efforts can be relatively more salient and accessible for the ex-users than for non-users. A recovery effort might be more likely to improve product attitude for the ex-users than for non-users. Also the present experiment did not include consumers who did not have an experience of the products and who did not perceive the occurrence of product failure. For the non-users and the ignorant consumers, the recovery efforts might lead to decreased product attitude and purchase intention. This is because the recovery trials may give an opportunity for them to notice the product failure.

• Journal of Science and Technology Studies
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• v.8 no.1
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• pp.97-129
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• 2008

We are living in the time of high probability of technological risk due to increased rate of technology development and diffusion of new technologies. Resolving uncertainties, the basic attribution of risk, by accumulating knowledge over the risk factors of certain technology is critical to management of technological risk. In many cases of technological risks, high uncertainty of knowledge is commonly mentioned reason for public controversies on risk management. However, the type of technological risk with low social agreement and low uncertainty of knowledge, the main reason for public controversy is absence of social agreement. Public debates on the risks of mobile phones electromagnetic fields(EMF) to human health comes under this category. The knowledge uncertainty on human health effect of mobile phones EMF has been lowered increasingly by accumulating enormous volume of knowledge though scientists have not reached a final conclusion whether it pose a risk to the physical and mental health of the general population or not. In contrast with civil organizations calling for precautionary approach based regulation, the mobile phone industry is cling to the position of no-regulation-needed by arguing no clear evidence to prove health risks of mobile phone EMF has found. In Korea, government set exposure standards based on a measurement called the 'specific absorption rate'(SAR) and require the mobile phone industry to open SAR information to the public by their own decision. From the view of pro-regulation side based on precautionary approach, technology risk managament of mobile phones EMF in Korea is highly limited and formalized one with limited measuring of SAR on head part only and problematic self-regulated opening of information about SAR to the public. As far as the government keeps having priority on protecting interest of mobile phone industry over precautionary regulation of mobile phones EMF, the disagreement between civil organizations and the government will not resolved. The risk of mobile phones EMF to human health have high probability of being underestimated in the rate and damage of risk than objectively estimated ones due to familiarity of mobile phone technology. And this can be the cause of destructive social dispute or devastating disaster. To prevent such disastrous results, technology risk management, which integrating the goals of safety with economic growth in public policy and designing and promoting risk communication, is required.

• Journal of Legislation Research
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• no.55
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• pp.95-136
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• 2018

Marriage forms a minimal social unit. Marriage can affect not only relative relationship but also possession of property. Regarding legal issues related to marriage, mainly the civil law, especially the family law section, regulates. However, marriage has also a significant legal effect in terms of taxation. This article deals with the taxation of gift tax among them. In Korea, if you give more than 600 million won in assets to your husband and wife, the donee must pay the gift tax. However, there has been little research into the influence of the marital property system on the taxation of gift tax on the donation between married couples. There are two legislative approaches to the attribution of property held by married couples. The one is separate property system, the other is community property system. Under separate property system, husband and wife own property separately. The community property system recognizes marital property of married couple as a common property of married couple. The legal property system in Korea is separate property system. However, married couples can adopt the community property system as a marital property system by their agreement. Currently, most Korean couples are subject to separate property system as a marital property system. There is no legal problem to levy the gift tax on the donation between couples who are subject to separate property system. The problem is the donation of asset between couples who are subject to the community property system. In community property system, most property acquired during marriage (except for gifts or inheritances) is considered community property. community property means property owned jointly by both partners. Some argue that the gift tax can not be taxed between married couples who are subject to the community property system. In this paper, we examine whether these arguments are valid.

• Journal of Global Scholars of Marketing Science
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• v.19 no.3
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• pp.5-16
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• 2009

Corporate social responsibility (CSR) activities have been shown to be potential factors that can improve corporate image and increase the ability of corporations to compete. However, most previous studies related to CSR activities investigated how these activities influence product and corporate evaluation, as well as corporate image. In addition, some researchers treated consumers' perceptions of corporate motives as moderator variables in evaluating the relationship between corporate social responsibilities and consumer response. However, motive-based theories have some weaknesses. Corporate social responsibility activities cause two motives(egoistic vs. altruistic) for consumers, but recently, Vlachos et al. (2008) argued that these motives should be segmented. Thus, it is possible to transform the original theory into a modified theory model (persuasion knowledge model, PKM). Vlachos et al. (2008) segmented corporate social responsibility motives into four types and compared the effects of these motives on customer loyalty. Prior studies have proved that CSR activities with positive motives have positive influences on customer loyalty. However, the psychological reasons underlying this finding have not been determined empirically. Thus, the objectives of this research are twofold. First, we attempt to determine why most customers favor companies that they feel have positive motives for their corporate social responsibility activities. Second, we attempt to measure the effects of consumers' reciprocity when society benefits from corporate social responsibility activities. The following research hypotheses are constructed. H1: Values-driven motives for corporate social responsibility activities have a positive influence on the perceived reciprocity. H2: Stakeholder-driven motives for corporate social responsibility activities have a negative influence on the perceived reciprocity. H3: Egoistic-driven motives for corporate social responsibility activities have a negative influence on perceived reciprocity. H4: Strategic-driven motives for corporate social responsibility activities have a negative influence on perceived reciprocity. H5: Perceived reciprocity for corporate social responsibility activities has a positive influence on consumer loyalty. A single company is selected as a research subject to understand how the motives behind corporate social responsibility influence consumers' perceived reciprocity and customer loyalty. A total sample of 200 respondents was selected for a pilot test. In addition, to ensure a consistent response, we ensured that the respondents were older than 20 years of age. The surveys of 172 respondents (males-82, females-90) were analyzed after 28 invalid questionnaires were excluded. Based on our cutoff criteria, the model fit the data reasonably well. Values-driven motives for corporate social responsibility activities had a positive effect on perceived reciprocity (t = 6.75, p < .001), supporting H1. Morales (2005) also found that consumers appreciate a company's social responsibility efforts and the benefits provided by these efforts to society. Stakeholder-driven motives for corporate social responsibility activities did not affect perceived reciprocity (t = -.049, p > .05). Thus, H2 was rejected. Egoistic-driven motives (t = .3.11, p < .05) and strategic-driven (t = -4.65, p < .05) motives had a negative influence on perceived reciprocity, supporting H3 and H4, respectively. Furthermore, perceived reciprocity had a positive influence on consumer loyalty (t = 4.24, p < .05), supporting H5. Thus, compared with the general public, undergraduate students appear to be more influenced by egoistic-driven motives. We draw the following conclusions from our research findings. First, value-driven attributions have a positive influence on perceived reciprocity. However, stakeholder-driven attributions have no significant effects on perceived reciprocity. Moreover, both egoistic-driven attributions and strategic-driven attributions have a negative influence on perceived reciprocity. Second, when corporate social responsibility activities align with consumers' reciprocity, the efforts directed towards social responsibility activities have a positive influence on customer loyalty. In this study, we examine whether the type of motivation affects consumer responses to CSR, and in particular, we evaluate how CSR motives can influence a key internal factor (perceived reciprocity) and behavioral consumer outcome (customer loyalty). We demonstrate that perceived reciprocity plays a mediating role in the relationship between CSR motivation and customer loyalty. Our study extends the research on consumer CSR-inferred motivations, positing them as a direct indicator of consumer responses. Furthermore, we convincingly identify perceived reciprocity as a sub-process mediating the effect of CSR attributions on customer loyalty. Future research investigating the ultimate behavior and financial impact of CSR should consider that the impacts of CSR also stem from perceived reciprocity. The results of this study also have important managerial implications. First, the central role that reciprocity plays indicates that managers should routinely measure how much their socially responsible actions create perceived reciprocity. Second, understanding how consumers' perceptions of CSR corporate motives relate to perceived reciprocity and customer loyalty can help managers to monitor and enhance these consumer outcomes through marketing initiatives and management of CSR-induced attribution processes. The results of this study will help corporations to understand the relative importance of the four different motivations types in influencing perceived reciprocity.