Consumer Search For Information in the Digital Age: an Empirical Study of Pre-Purchase Search For Automobiles

Citation:

Lisa R. Klein and Gary T. Ford (2002) ,"Consumer Search For Information in the Digital Age: an Empirical Study of Pre-Purchase Search For Automobiles", in NA - Advances in Consumer Research Volume 29, eds. Susan M. Broniarczyk and Kent Nakamoto, Valdosta, GA : Association for Consumer Research, Pages: 100-101.

Advances in Consumer Research Volume 29, 2002     Pages 100-101

CONSUMER SEARCH FOR INFORMATION IN THE DIGITAL AGE: AN EMPIRICAL STUDY OF PRE-PURCHASE SEARCH FOR AUTOMOBILES

Lisa R. Klein, Rice University

Gary T. Ford, American University

Consumer information search has been the focus of numerous articles in the consumer behavior, economics and marketing literature over the past three decades (Beatty and Smith 1987; Furse, Punj and Stewart 1984; Moorthy, Ratchford and Talukdar 1997; Newman 1977; Punj and Staelin 1983; Srinivasan and Ratchford 1991; Wilkie and Dickson 1985). Based on Stigler (1961), the dominant paradigm in this research has assumed that consumers use an implicit cost/benefit analysis to choose a search strategyCwhat, when, where, and how much to search. One very important conclusion from this research is that consumers do not search much which in turn leads to the inference that consumers perceive search costs to be quite high or alternatively that the value of search is quite low.

The research presented here adds to the long stream of CIS research in three distinct ways. First, we attempt to replicate and validate earlier findings on the economics of the search process in consumer information search for automobiles. Do basic economics continue to drive information search amount, breadth, and patterns? What is the precise relationship between the different measures of knowledge and the different dimensions of search? Second, we build upon previous classifications of sources (Kiel and Layton 1981; Schmidt and Spreng 1996) by exploring how sources accessed via the Internet differ from those accessed via traditional sources, in terms of consumer’s perceived costs and benefits and relative credibility. Specifically, we investigate whether consumers evaluate Internet sources as a separate category or continue to segment all sources into categories based on the controller of the information. Third, we explore a segmentation of individuals based on the search indicators described above, with the goal of identifying segments of consumers who exhibit distinct patterns of search across both traditional and Internet sources. In addition, we provide some comparisons to past research, where possible, given the differences in samples and techniques.

According to information search economics, individuals search until the perceived marginal costs of search equal the perceived marginal benefits (Stigler 1961). In prior research on information search, both the costs and benefits have been measured with individual demographic data. Income has consistently been used as the primary proxy for information search costs as it represents the opportunity cost of time. With respect to perceived benefits of search, the ability to gather and assimilate new information is the primary proxy for perceived benefits. In this vein, edcation, experience, and subjective and objective measures of knowledge have all been used as measures (Brucks 1985; Srinivasan and Ratchford 1991). Early research showed a positive linear relationship between ability and search, while later research has identified an inverted u-shaped relationship with product category expertise. Presumably, those with very high levels of ability need to search less because (1) they have a greater store of knowledge, and (2) are much more efficient processors of information gathered. We would thus expect to find such a u-shaped relationship between all available measures of processing ability. Our study includes measures of automobile experience, education levels, and self-rated (subjective) expertise.

In the context of the Internet, it is necessary to investigate a different type of ability, namely, the ability to navigate on the Internet. Given that the Internet has only been a commercial medium for less than ten years, the ability to use the Internet with proficiency is an acquired skill whose level varies throughout the population. However, we do not expect this type of ability to result in an inverted u-relationship because it does not assist with category knowledge formation or information assimilation. It only helps with information gathering and source evaluation so the efficiency savings that lead to decreased search with greater ability should not be found here.

Surveys were distributed from a Web site over a 3-week period in early 2000. Two separate surveys were posted for those who had already purchased a car in the past 18 months ("buyers") and for those planning to purchase a car within the next 6 months ("shoppers"). In total, 171 buyers and 168 shoppers submitted complete responses to the survey. The survey instrument asked a broad range of questions, including number of hours spent, the number of sources used, the order accessed and the perceived value for each of nine source types. Questions were also asked about current and past car ownership, automobile and Internet experience, weekly Internet usage and demographic information.

Survey results show that the basic economics of search continue to drive information search in general, measured in terms of amount (time) and breadth (number of sources). The same economic drivers, with the exception of income, drive the use of the Internet as a component of search. We find an inverted-u relationship between automobile knowledge and total time spent and a positive relationship between both subjective expertise and education and the breadth of search, suggesting that we need to distinguish further between different types of ability and different measures of "total search." Interestingly, factor analyses do not yield factors based on sourceCmedia, retail, neutral and interpersonalCas has been found in previous research (Beatty and Smith 1987). Instead, we find aggregations of sources based on both medium (internet versus traditional) and source control (marketer versus third party), suggesting that while the Internet is not viewed as one source, distinctions are still made between media. Cluster analyses reveal segments of shoppers based not only on amount of search, but also on search strategies across media. Individuals differ in the use of the Internet for searching for different types of product attributes and in the patterns of substitution and complementarity they exhibit across sources. In terms of search outcomes, we find that process satisfaction is not driven by the amount of search. However, individuals appear to be aware of their own inefficiencies, as these inefficiencies do affect process satisfaction. We also find key differences between shoppers and buyers that may be attributable to the rapid evolution of auto buying information on the Internet.

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