Management Review

›› 2017, Vol. 29 ›› Issue (1): 144-154.

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The Effect of Electronic Word-of-mouth on Sales through Fine-gained Sentiment Analysis

Meng Yuan1, Wang Hongwei1, Wang Wei2   

  1. 1. School of Economics and Management, Tongji University, Shanghai 210000;
    2. School of Business Administration, Huaqiao University, Quanzhou 362021
  • Received:2014-10-22 Online:2017-01-28 Published:2017-03-16

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Abstract:

With the development of online reviews system, WOM has become an important reference for consumers' purchasing decision and affects product sales trend. Taking skin care products for example——in which WOM effect is most obvious, this paper makes use of fine-gained sentiment analysis technology to extract objective sentiment and subjective sentiment in the WOM. According to the "Term Frequency", the paper designs and tests the weight index of each dimension of fine-gained sentiments, and eventually constructs the fine-gained sentiment index. Then, fine-gained sentiment index and consumer rating are taken as input emotion variable in the ARMA model respectively for sales forecast empirical analysis. The comparative results show that the model which adds an emotion variable could improve the data fitting ability. The sentiment index has stronger predictive power and higher prediction precision. The model in which the consumer rating as an emotion variable has higher prediction ability on some point, but the overall predictive power isn't ideal. The results also show that sentiment index that is one period behind provides the best prediction effect. Sentiment index that is one to four periods behind could produce some effects on sales forecast.

Key words: electronic word-of-mouth, sales forecast, sentiment index, fine-gained sentiment analysis