The heterogeneous effect of WOM on product sales: why the effect of WOM valence is mixed?

Purpose – Previous literature on WOM has consistent findings on the positive and significant effect of WOM volume on product sales, but the literature on WOM valence has been mixed. In this study, the authors aim to explain the reason for the mixed effect of WOM valence on product sales by considering heterogeneous characteristics of products, especially in the movie market, by segmenting products into mainstream and non‐mainstream movies.Design/methodology/approach – This study uses empirical data from the motion picture industry, such as box office revenue, WOM volume and valence, and other variables of movie characteristics. The hypothesis is tested using OLS and panel data analysis in econometric methods.Findings – The authors find a significant effect of WOM valence on box office revenue only in the case of non‐mainstream movies, which have relatively smaller marketing budgets than mainstream movies. The findings suggest that as marketing communication channels become more diverse, with larger market...