An Investigation of External Information Search Effort: Replication in In-Home Shopping Situations

D.S. Sundaram, Black Hills State University
Ronald D. Taylor, Mississippi State University
ABSTRACT - The findings of this study indicate that perceived risk, perceived benefits of search, product knowledge, ease of access to sources of information, awareness of sources of information, and education are positively related to in-home shoppers’ search effort. Time pressure, purchasing experience, and income were found to be negatively related to search effort. Involvement and age were not directly related to search effort.
[ to cite ]:
D.S. Sundaram and Ronald D. Taylor (1998) ,"An Investigation of External Information Search Effort: Replication in In-Home Shopping Situations", in NA - Advances in Consumer Research Volume 25, eds. Joseph W. Alba & J. Wesley Hutchinson, Provo, UT : Association for Consumer Research, Pages: 440-445.

Advances in Consumer Research Volume 25, 1998      Pages 440-445

AN INVESTIGATION OF EXTERNAL INFORMATION SEARCH EFFORT: REPLICATION IN IN-HOME SHOPPING SITUATIONS

D.S. Sundaram, Black Hills State University

Ronald D. Taylor, Mississippi State University

ABSTRACT -

The findings of this study indicate that perceived risk, perceived benefits of search, product knowledge, ease of access to sources of information, awareness of sources of information, and education are positively related to in-home shoppers’ search effort. Time pressure, purchasing experience, and income were found to be negatively related to search effort. Involvement and age were not directly related to search effort.

INTRODUCTION

Replication studies, by examining the veracity of established relationships in similar or different settings, contexts, time periods, and population, help in delineating the scope and limits of the existing findings. Though many studies have replicated the findings observed in in-store buying situations within industrial buying situations and across several product purchase situations, so far no study has examined whether the relationships observed in in-store shopping situations hold good in in-home shopping setting as well. In this study, we re-examine the relations observed in in-store buying situations within the context of in-home buying situations. Specifically, the proposed framework examines the relative influence of in-home shoppers’ perceptions of risk, knowledge, purchasig experience, involvement, time pressure, perceived benefits of search, awareness of sources of information, ease of access to sources of information, education, income, and age on their information search effort.

The need to study information search process in in-home shopping situations can be attributed to the growing importance of in-home shopping methods and the recent technological changes in the communication industry that have enabled direct marketers to disseminate marketing communications using new communication media such as on-line computer networks, videodiscs, and videologs. These external changes present a new market scenario for in-home shoppers to conduct their information search. Further, the absence of an opportunity to personally inspect the operation and quality of the product may also differentiate information search in in-home shopping situation from that in in-store shopping situation.

BACKGROUND

The number of variables that affect search process and the possible interrelationships between them have made the investigation of search process cumbersome. Noticeably, only a few studies have incorporated the relationships among variables in an effort to develop comprehensive models of consumer information search effort (e.g., Punj and Staelin 1983; Srinivasan and Ratchford 1991). The approach of incorporating the interrelations among the variables in the model is preferred as it captures the real-world phenomenon better and also minimizes model specification error. Recognizing the advantage of this approach, the proposed framework of in-home shoppers’ information search effort has incorporated the interrelationship between the explanatory variables.

Determinants of External Search Effort

Amount of effort expended on search for information from external environmental sources is denoted as external search effort. Beatty and Smith (1987) defined external search effort as "the degree of attention, perception, and effort directed towards obtaining environmental data or information related to the specific purchase under consideration."

Information gathered is a function of the cost of information and perceived benefits (economic and non-economic benefits) associated with the search process (Kiel and Layton 1981; Srinivasan and Ratchford 1991). It is expected that perceived benefits of search such as obtaining the desired model and an opportunity to save money will be important in shaping in-home shoppers’ search effort. Therefore, we hypothesize

H1: Perceived benefits of search will be positively related to search effort.

Often, the fear of making a poor purchase decision such as paying a high price or buying an inferior product causes one to perceive some risk. In spite of continuous effort by the direct marketers to eliminate the risk associated with mail-order purchases, consumers perceive greater risk in buying through mail order than buying from a store (Spence, Engel, and Blackwell 1970). Information search is expected to aid consumers in making satisfactory purchase decisions, and thereby eliminate some of the risks associated with the purchase. The amount and types of information consulted varies proportionately with the level of risk perceived with the purchase. Therefore,

H2: Perceptions of risk and search effort will be positively related.

The perceptions of risk is also positively related to the perceived benefits of search. The reason is that as the uncertainty about the outcome of the purchase increases, consumers tend to engage in information search with the primary expectation that the search will help them reduce the perceptions of risk, and because of the costs associated with the search they also tend to expect certain benefits such as obtaining better deals or more satisfaction. Overall, as the level of risk associated with the purchase increases, the expected payoff from the search will also increase (Srinivasan and Ratchford 1991).

H3: Perceptions of risk and perceived benefits of search will be positively related.

Since a significant part of search involves scanning advertisements in catalogs and magazines that usually provide product attribute type information, product knowledge plays an important role in information search during in-home shopping. Knowledge reduces search effort (Beatty and Smith 1987) as knowledgeable consumers because of their enhanced ability to routinize the decision making process, search more efficiently and curtail search to relevant information. Knowledge not only affects the amount of search, but also reduces the perceptions of risk by making one feel more confident about purchase decisions.

H4: Knowledge will be negatively related to search effort.

H5: Knowledge and perceptions of risk will be negatively related.

Prior purchasing experiences in the form of interactions with salespeople, information search, evaluation of alternatives and decision making are likely to be useful in narrowing the scope of the choice task in future purchase situations as prior purchasing experiences enhance familiarity and product knowledge (Alba and Hutchinson 1987).

Purchasing experience, apart from increasing product awareness, also enhances confidence in making purchase decisions (Johnson and Russo 1984). An outcome of this increased confidence is reduced risk perceptions (Srinivasan and Ratchford 1991). Further, purchasing experience reduces search effort as shoppers with prior purchasing experiences rely more on their own experiences to make purchase decisions. Therefore,

H6: Purchasing experience and knowledge will be positively related.

H7: Purchasing experience will reduce the perceptions of risk.

H8: Purchasing experience will reduce search effort.

Involvement, apart from positively influencing information search, is also expected to have a positive impact on product knowledge. Highly involved individuals are more likely to seek information about the product on an on-going basis (Bloch, Sherrell, and Ridgway 1986) with the motive of developing an inventory of information for future use or for experiencing intrinsic satisfaction (Hirschman and Wallendorf 1982). Regardless of the motive, the outcome of on-going search is enhanced product knowledge (Capon and Burke 1980). Therefore,

H9: Involvement and knowledge will be positively related.

H10: Involvement will lead to greater search effort.

Time pressure not only affects the preference to shop in-home, but also influences the amount of information collected during prepurchase stage. Because the feeling of time pressure reduces the amount of information gathered (Beatty and Smith 1987), we hypothesize

H11: Time pressure will reduce search effort.

Bettman (1979) noted that ease of access to sources of information is an important environmental variable that deserves serious attention in the studies of the information search process. Though the role of ease of access to information on consumer information search effort is not well explored, a few organizational communication studies have documented that user perceived accessibility is positively related to use of an information source (O’Reilly 1982; Culnan 1983), suggesting that one is likely to consult information sources that are readily available. Hence,

H12: Ease of access to sources of information will increase search effort.

Another variable that has received limited attention, but which may have significant influence on consumers’ information search effort, is "consumer awareness of available information sources." Sepstrup (1980) noted that consumer choice of specific sources of information depends relatively on their awareness of the available sources of information. Awareness of information sources is relevant during in-home shopping situations, as lack of awareness of sources may prevent an individual from performing search activities to the extent he/she desires. In-home shoppers also show variations in awareness of different information sources and are likely to seek information from the sources that are known to them.

H13: Awareness of sources of information will lead to greater search effort.

Education represents an interest in and ability to seek and process information. Westbrook and Fornell (1979) also noted that educated consumers realize the value of search and try to engage in extended search.

H14: Education and search effort will be positively related.

The impact of income on search effort can be seen in the light of temporal and economical resources of the consumers. An effort to increase family income, more often than not, reduces discretionary time for shopping activities (e.g., information search) as more time is allocated to work related activities. Therefore, high income shoppers may spend less time on information search. Further, income contributes to reduced search by decreasing the perceptions of financial risk. Therefore,

H15: Income and search effort will be negatively related.

H16: Income will reduce the perceptions of risk.

With increasing age, individuals accumulate a wealth of information and also perceive less need to seek information from external sources, resulting in an inverse relationship between age and search effort (Westbrook and Fornell 1979). Following this view, we hypothesize

H17: Age and search effort will be negatively related.

Integrating the conceptual relationships discussed so far, a model to study in-home shoppers’ external information search effort, as depicted in Figure 1, has been proposed. The positive (+) and negative (-) signs indicate the direction of hypothesized relationship between the corresponding variables.

METHOD

Sample

Participants for this study ere 531 shoppers who had purchased computer, and audio equipment from a direct marketing retailer using mail, telephone, and on-line methods of shopping. The data for this study, collected through a nationwide mail survey (with 13% response rate), included 102 mail-order, 315 telephone, and 114 on-line network shoppers. Fifty-six percent of the participants had purchased a computer and forty-four percent had purchased an audio equipment. Nearly two-thirds of the respondents were male. The sample was relatively upscale in terms of education, income, and occupation.

Measures

The measures for this study were primarily drawn from the existing marketing literature (Beatty and Smith 1987; Srinivasan and Ratchford 1991), and were modified to give direct marketing context. Table 1 details the number of indicators used to measure each construct, a sample item for each of them, and construct reliability estimates. The constructs, perceived benefits of search, time pressure, product knowledge, involvement, purchasing experience, awareness of sources of information, and ease of access to sources of information were measured using a seven-point scale with anchors "1=strongly disagree," and "7=strongly agree." The items to measure ease of access to sources of information and awareness of sources of information were based on the studies by Culnan (1983) and O’Reilly (1982). Perceived risk was measured using a seven-point scale with anchors "1=very low risk," and "7=very high risk." The items that pertain to search effort were measured using open-ended questions. Search effort was measured using the following items: (1) total number of phone calls made to mail-order companies, (2) the number of advertisements referred to in catalogs, (3) the number of newspaper and magazine ads looked, (4) total number of hours spent on search, and (5) number of retail stores and computer network sites visited. The variables, age, and income were measured using categorical scale. Education was operaltionalized as the number of years of formal education completed.

FIGURE 1

PROPOSED MODEL OF IN-HOME SHOPPERS' INFORMATION SEARCH EFFORT

The Model Estimation

LISREL 8 (J÷reskog and S÷rbom 1993) was used to test the overall fit of the proposed model. Following Srinivasan and Ratchford (1991), the variances of single-indicator constructs such as age, education, and income were set to 0.20. The overall chi-square value of 853.57 (df=485, p-value=0.00) for the model was statistically significant. Since the large sample size in this study (n=531) could have reduced the likelihood of acceptance of this model, the model was evaluated using other measures. Strong evidence for the acceptance of the model is provided by the acceptable values of Goodness of fit index (GFI=0.92), adjusted goodness of fit index (AGFI=0.90), and root mean square residual (RMSR=0.054). The variance extracted estimates for the constructs ranged from 0.50 to 0.78, suggesting that all the constructs were adequately captured.

The R2 value of the structural equations were estimated to be 0.05 for risk, 0.04 for perceived benefits of search, 0.46 for knowledge, and 0.51 for information search effort. When the model parameters were re-estimated after eliminating the insignificant paths, the directions and the significance of the relations remained the same, suggesting the original findings are robust.

Empirical Tests of the Hypotheses

Given the support for the proposed model in terms of overall fit and adequacy of measurement of constructs, the structural parameters of the model were examined to test the proposed research hypotheses. The paths between the latent constructs represented the hypothesized relationships H1-H17. As shown in Table 2, all the hypotheses except, H4, H5, H7, H10, and H17 were supported at the significance level of 0.01.

DISCUSSION

Our results, paralleling the findings observed in in-store shopping (Srinivasan and Ratchford 1991), demonstrate that perceived risk increases both search effort and perceived benefits of search. This suggests that in-home shoppers engaged in greater information search because of the belief that extended search would help them obtain better deals in terms of price and quality of the product. Therefore, direct marketers should continue to incorporate risk-relievers in their marketing communication in an effort to dissuade potential buyers' perceptions of risk.

TABLE 1

DESCRIPTION OF CONSTRUCT MEASURES AND RELIABILITY ESTIMATES

Contrary to our expectation, product knowledge was found to be positively related to search effort. Information processing studies seem to offer an explanation for this finding. Consumers who differ in knowledge process information differently and adopt distinct processing heuristic (Bettman and Park 1980; Maheswaran and Sternthal 1990) because of the differences in ability to process the information. Less knowledgeable consumers because of the absence of well developed prior memory structure are less motivated to search and perceived the search to be overwhelming, especially when the task was considered very difficult (Bettman and Park 1980). In contrast, more knowledgeable consumers because of their ability to process information show greater motivation to search for information. In addition, the knowledgeable consumers are able to process product attribute type information in advertisements more extensively than do less knowledgeable consumers (Maheswaran and Sternthal 1990). Given that a significant part of information search during in-home shopping involves scanning advertisements in catalogs and magazines that primarily contain product attribute type information, level of product knowledge may play a major role in determining an individual's ability to comprehend the information and consequently determine the extent of search. The role of knowledge in information search and processing may even be greater in in-home shopping situations where opportunity to examine the product prior to purchase is limited.

The impact of prior purchasing experience on search effort was analyzed by examining both the direct and indirect effect of this variable on search effort. 'Dough the direct effect of purchasing experience on search effort was negative, the total effect of purchasing experience on search effort was positive, as it contributed to increased search by enhancing knowledge. Our attempt to explain the variations in the perceptions of risk of in-home shoppers has not been successful. Contrary to our expectation, purchasing experience and knowledge failed to reduce the perceptions of risk. Only income was found to be negatively related to risk.

As expected, time pressure was inversely related to in-home shoppers search effort. Direct marketers should understand the impact of time pressure on search process. Time pressure can affect search process in a couple of ways. First, consumers may tend to rely on existing knowledge and experience, rather than collecting information from external sources. Second, consumers may limit search to only a few sources, possibly to the ones that are easily accessible.

A surprising finding was the lack of support for the direct positive relationship between involvement and search effort. However, examination of structural modelling results indicated that indirect effect of involvement on search effort was significant and positive. Possible explanation for the indirect effect of involvement on search effort maybe that highly involved shoppers seek information on an on-going basis which enhances product knowledge and these involved shoppers coupled with product knowledge may engage in extended search when they get an opportunity to purchase the product.

This study also investigated the impact of new variables such as awareness of sources of information and access to sources of information. Both awareness of sources and access to sources were found to have a significant positive impact on search effort. Recognizing the role of information on the ultimate product choice, it is critical that direct marketers try to develop communication strategies that increase the accessibility to information. As web sites enhance access to information, it is worth the investment to set up web sites to provide commonly sought product and purchase related details.

There is a close resemblance between in-store and in-home shopping situations in terms of the effort directed towards information search. With the exception of a few variables, most of the antecedents of search effort share similar directional relationships in both the shopping situations. The above observation is made keeping in mind that this study examined only whether the nature (direction) of the relationships between a set of variables and search effort observed in in-store shopping situations hold good in in-home shopping setting. As an extension of this study, future research can examine whether the antecedents of search affect search effort to varying magnitude and possibly explore the reasons for variations. Further, future studies can examine the differences between in-home and in-store shoppers in the usage of information sources. In addition, the future studies can try to address some of the limitations of this study. For example, a future study can test for a possible inverted U-shaped relationship between knowledge and search effort (Johnson and Russo 1994) within in-home shopping situations.

TABLE 2

ESTIMATED STRUCTURAL RELATIONS COEFFICIENTS AND THE RESULTS OF THE TESTS OF HYPOTHESES

REFERENCES

Alba, J. W. and W. J. Hutchinson, (1987), "Dimensions of Consumer Expertise," Journal of Consumer Research, 13 (March), 411-454.

Beatty, S. E. and S. M. Smith (1987), "External Search Effort: An Investigation Across Several Product Categories," Journal of Consumer Research, 14 (June), 83-95.

Bettman, J. R. (1979), An Information Processing Theory of Consumer Choice, Reading, MA: Addison-Wesley Publishing Company.

Bettman, J. R. and C. W. Park (1980), Effects of Prior Knowledge and Experience on Consumer Decision Processes: A Protocol Analysis," Journal of Consumer Research, 7, 234-248.

Bloch, P. H., D. L. Sherrell, and N. M. Ridgway (1986), "Consumer Search: An Extended Framework," Journal of Consumer Research, 13 (June), 119-126.

Capon, N., and M. Burke (1980), "Individual, Product Class, and Task-Related Factors in Consumer Information Processing," Journal of Consumer Research, 7 (December), 314-326.

Culnan, M. J. (1983), "Environmental Scanning: The Effects of Task Complexity and Source Accessibility on Information Gathering Behavior," Decision Sciences, 14, 194-206.

Hirschman, E. C. and M. R. Wallendorf (1982), "Motive Underlying Information Acquisition and Transfer," Journal of Advertising, 11 (2), 25-31.

Johnson, E. J. and J. E. Russo (1984), "Product Familiarity and Learning New Information," Journal of Consumer Research, 11 (June), 542-550.

Joreskog, K., and D. Sorbom (1993), LISREL 8 User's Reference Guide, Mooresville, IN: Scientific Software.

Kiel, G. C. and R. A. Layton (1981), "Dimensions of Consumer Information Seeking," Journal of Marketing Research, 18 (May), 233-239.

Maheswaran, D., and B. Sternthal (1990), "The Effects of Knowledge, Motivation, and Type of Message on Ad Processing and Product Judgements, Journal of Consumer Research, 17 (June), 66-73.

O'Reilly, C. A. (1982), "Variations in Decision Makers' Use of Information Sources: The Impact of Quality and Accessibility of Information," Academy of Management Journal, 25 (4),756-771.

Punj, G. N. and R. Staelin (1983), "A Model of Consumer Information Search Behavior for New Automobiles," Journal of Consumer Research, 9 (March), 366-380.

Sepstrup, P. (1980), "Consumption of Mass Communication: Construction of a Model on Information Consumption Behavior," in Research in Marketing, Vol 3, ed. Jagdish N. Sheth, Greenwich, CT: Jai Press Inc., 105-142.

Spence, H. E., J. F. Engel, and R. D. Blackwell (1970), "Perceived Risk in Mail Order and Retail Store Buying," Journal of Marketing Research, 7 (August), 364-369.

Srinivasan, N. and B. T. Ratchford (1991), "An Empirical Test of a Model of External Search for Automobiles," Journal of Consumer Research, 18 (September), 233-242.

Westbrook, R. A. and C. Fornell (1979), "Patterns of Information Source Usage Among Durable Goods Buyers," Journal of Marketing Research, 16 (August), 303-312.

----------------------------------------