The Effect of Electronic Word Of Mouth on Purchase Decision of Msme Consumers: The Mediating Role of Brand Image and Brand Trust

Abstract

Most Indonesian MSMEs cannot afford advertising, so what other customers say online often does the selling for them. This study asks whether that electronic word of mouth (e-WOM) actually moves MSME consumers to buy, and whether it does so directly or by first shaping how they see and trust the brand. We surveyed consumers who had read or shared online reviews before buying an MSME product and tested a stimulus-organism-response model with partial least squares structural equation modelling and bootstrapping. After a few weak items were dropped, the measurement model met the usual reliability and validity requirements. e-WOM turned out to be a strong driver of both brand image and brand trust, and each of these in turn pushed consumers toward a purchase decision. The direct link between e-WOM and purchase decision, however, was not significant, while the indirect links through brand image and brand trust were. In other words, the effect of e-WOM on buying is fully mediated. Reviews do not sell MSME products on their own; they work by making the brand look credible and trustworthy first, and that is where MSMEs should aim their e-WOM effort.