Web Systems Design and Online Consumer Behavior [Electronic resources] نسخه متنی

Literature Review

In the consumer behavior literature, the purchase decision
process encompasses several steps. The process starts with a recognition of needs, which generates
an information search. Through an information search, consumers are able to make purchasing
decisions after evaluating alternatives. Although this flow of buying decision making may seem to
be habitual and predictable, it is actually quite dynamic and implications for the process of
information search cannot be ignored. A thorough understanding of how consumers search is critical
for effective marketing communication strategies because information search represents a primary
stage at which marketing can provide information and influence consumers’ decisions. Consequently,
it is not surprising that marketing has a long tradition of research on consumer information search
behavior and that there has been a considerable number of empirical studies in this area (Beatty
& Smith, 1987; Carlson and Gieseke, 1983; Moorthy et al., 1997; Newman, 1977; Punj and Staelin,
1983; Srinivasan and Ratchford, 1991; Urbany et al., 1996).

Several perspectives have been adopted to investigate consumers’ information search
processes. This chapter draws on multiple streams of literature, each of which will be reviewed.
The first part will provide the background on the information search process. Extant research on
information search will be then discussed from the economics of information literature. The last
part of this section will focus on the properties of information processing from the psychology
literature and “way-finding” paradigm.

Information Search Process

Information search is a stage of the decision making process in which consumers actively
collect and utilize information from internal and/or external sources to make better purchase
decisions. Internal search occurs when consumers access information previously stored in memory. It
is the primary source used for habitual and limited decision making. On the other hand, external
search, which is the focus of this study, involves seeking information from sources outside of
memory because the required information was not previously acquired or cannot be recalled from
memory (Schmidt and Spreng, 1996). Sources such as friends, packaging or other in-store displays,
advertisements, and magazines such as Consumer Reports are often
utilized by consumers to facilitate their decision making. Lately, the Internet has joined other
traditional media and has become a major source of information about many products and
services.

Past studies also distinguish between two types of information search — pre-purchase and
ongoing search (Schmidt and Spreng, 1996). Information acquired but not specifically related to an
imminent purchase is regarded as ongoing search (Bloch, Sherrell, and Ridgway, 1986). In contrast,
pre-purchase search is initiated when a purchase problem is recognized and ends with an actual
purchase (Punj and Staelin, 1983; Srinivasan and Ratchford, 1991). Others have ignored such
distinctions. For example, Schmidt and Spreng (1996) believe that ongoing and pre-purchase search
are difficult to separate in practice. In this chapter, we maintain the distinction between ongoing
and pre-purchase search.

In the online environment, the distinction between browsing and goal-directed behavior is
necessary because browsing behavior, like window shopping (Bloch et al., 1986) may be a form of
entertainment or time-filling activity. This distinction is particularly important because the
attractiveness of links may be a factor for browsing, often referred to as Web surfing (Duchastel,
1998), rather than the information itself.

Consumers seeking external information face tasks such as destination selection (i.e.,
information source selection) and movement to the desired destination (i.e., the information
source) before the analysis of the information can be undertaken (Hodkison et al., 2000).
Destination selection and movement to the desired location are tasks inherent to active information
search by a task-oriented consumer in any environment. Hoffman and Novak (1996) characterized this
goal-directed behavior as intentional and selective search for contents.

The present chapter on consumer search for information on the Internet is guided by the
following definition:

Information search is the effort expended by a consumer to acquire
information in a Web-based marketspace that is directed by a specific purchase under
consideration.

The online environment is characterized as a non-broadcast electronic medium requiring an
active consumer (Hodkison, Kiel and McColl-Kennedy, 2000) to efficiently locate and process
information. Consumers need to develop this ability and nurture it because it directly affects
online information search (Hodkison et al., 2000; Spence, 1999). Two main tasks that consumers face
in an online environment include: (1) location of Web sites of interest and the movement to and
between those sites (inter-site search), and (2) the acquisition of information within sites of
interest (intra-site search) (Hodkison et al., 2000). A typical search process incorporates both
types of tasks. Consumers often alternate between inter-site and intra-site search.

Figure
1-1 delineates the process of goal-directed information search and the scope of this
chapter. When consumers recognize a purchase problem, internal search is the primary source for
habitual decision-making. When information stored in memory is insufficient, consumers are likely
to engage in external information search. The emergence of the Internet has provided consumers an
additional option for their information search activities. These activities could either take place
exclusively in an online, off-line or combined environment. This chapter only deals with online
information search that includes intra- and inter-sites as well as pure-play and brick-and-click
sites.

Figure 1-1: Process of goal
directed information search

Economics of Information

Traditionally, information search literature has been built on the theory of economics of
information (also called cost-benefit model) (Stigler, 1961). The theory hypothesizes that in
searching for information, a consumer would search only up to the point where the perceived
marginal gain from the search equals the perceived marginal cost of that search. In other words,
when searching for information such as price, a particular buyer may not be willing to search for a
small amount of savings in price, but may find greater search worthwhile if the amount of money
saved is large.

How is consumers’ information search conceptualized and measured? In a survey by Newman
(1977), the most common measure is the number of retail stores visited before purchase. Other
measures of information search include number of information sources visited, number of types of
information sought, number of product/brand alternatives considered, purchase decision time, and
various indices of information-seeking activities.

The literature has also attempted to identify variables categorized by search costs and
benefits that affect the amount of information search and their interrelationships. These variables
include market (e.g., number of alternatives, price range), product (e.g., price, differentiation),
consumer (e.g., perceived risk, education, income), and situational (e.g., time availability)
characteristics. Approximately sixty variables have been studied empirically as determinants of
information search (Srinivasan and Ratchford, 1991).

Despite the wide set of determinants affecting consumers’ information search, past studies
have consistently shown that most consumers only engage in modest pre-purchase search for durable
goods and do even less price-comparison shopping (Beatty and Smith, 1987). This could be attributed
to the higher search cost in the physical environment because of factors such as limited time and
mobility constraints (Putrevu and Ratchford, 1997; Urbany et al., 1996). As Stigler has proposed,
higher search costs do lead to less searching. Is the same likely to be true for the online market
where the search costs have been reduced? Do consumers search for more information online? Recent
empirical studies seem to suggest that instead of searching more online, search activity is
relatively low (Jansen et al., 2000; Johnson et al., 2000). Therefore, although the Internet
reduces external search costs, the amount of information searching does not seem to increase.
Certainly, this argument is contrary to Stigler’s proposition
that lower search cost will lead to more information searching.

The economics of information identifies two types of search costs that influence information
search — external and cognitive. The costs of resources consumers invest in search, such as
monetary costs to acquire information, or opportunity costs of time during acquisitions, are
external search costs. Such costs are influenced by factors beyond consumers’ direct control. They
are exogenous and depend on situational influences. On the other hand, cognitive search costs are
internal to the consumer and reflect the cognitive effort consumers must engage in to direct search
inquiries, sort incoming information and integrate it with stored information to form decision
evaluations (Goldman and Johansson, 1978; Hauser, Urban and Weinberg, 1993). They are influenced by
consumers’ ability to cognitively process incoming information.

Psychology Paradigm

An alternative and complementary perspective to the economics of information is the
information-processing paradigm drawn from psychology literature (Bettman, 1979; Bettman and Park,
1980; Darke et al., 1995). In this approach, consumers are viewed as information processors,
interacting with a choice environment, acquiring and processing information and making a decision
from alternatives (Bettman, 1979). This process is often guided by goals and developed
constructively (Bettman, Luce and Payne, 1998). Bettman et al. (1998) outlined four of the most
important goals in the decision making process which capture many motivational aspects of
information search — the accuracy of decision, minimizing the cognitive effort required for the
decision, minimizing the experience of negative emotion while making the decision, and maximizing
the ease with which a decision can be justified — all influencing the amount of information
acquired.

Bettman and Park (1980) theorized that information search depends on both one’s ability and
one’s motivation. Either determinant without the other inhibits information search. The notion that
both ability and motivation are required to process information is consistent with Bettman’s (1979)
model and with Cacioppo and Petty’s (1982) Elaboration Likelihood Model (ELM) that suggests that
both the ability and motivation to process information are necessary before someone engages in
effortful cognitive processing. Similarly, it is logical to posit that both motivation and ability
are required to acquire information via effortful search. In dealing with the question how
consumers search for information, Darke et al. (1995) proposed the heuristic-systematic approach to
information search behavior and argued that consumers use various heuristic cues often encountered
in the process of searching.

Way-Finding Paradigm

Since the online environment possesses several spatial
characteristics, researchers have applied the way-finding paradigm to analyze online navigation
(Hodkison et al. 2000; Spence, 1999). Downs and Stea (1977) define way-finding as “the process of
solving one class of spatial problems, the movement of a person from one location on the earth’s
surface to another” (p. 55). Passini (1984) equated way-finding with the concept of spatial
orientation, which he defined as the ability of a person to determine where they are within a
physical setting. Concepts such as landmarks and routes associated with physical navigation were
evaluated and applied in these new spaces (Darken and Sibert, 1996).

When users engage in goal-directed navigation, they usually use three methods: landmark,
route and survey knowledge (Hodkison et al., 2000; Wickens, 1992). Each method is used under
different conditions and depends on the navigator’s familiarity with the environment. First,
landmark (Dillion, McKnight and Richardson, 1993) or place knowledge (Garling and Golledge, 1989;
Gopal, Klatzky and Smith, 1989) refers to the salient familiar sights at intermittent points along
the route of travel. When a person navigates by landmarks, it is critical that distinctive markers
be used in the display to aid both in finding the route to the goal site as well as in determining
where the navigator is currently located along the path to the site.

Second, route knowledge is the ability to navigate that guides a user from one point to
another by using landmark knowledge (Dillion et al., 1993). This allows users to string together a
series of landmarks that determines the route to be followed. It only works when the user is on a
familiar route through extensive experience with a particular environment. Finally, survey
knowledge requires sufficient knowledge by the user to form a cognitive map of the navigational
space (Tolman 1948) and represents a “world frame of reference rather than an egocentric one”
(Dillion et al., 1993, p. 74). It is the most sophisticated form of spatial knowledge.

Hodkison et al. (2000) elaborate these concepts in the online environment. Landmarks are
stable and conspicuous in an environment (Dillion et al., 1993) and could include search engines
and a user’s frequently visited sites from bookmarks or manual entry of a URL. Route knowledge
consists of instructions that must be followed to arrive at the desired destination. These
instructions enable navigation although the user does not really know much about the
environment.

Online navigation follows a series of routes. For example, a consumer using Yahoo with route
knowledge may follow these steps to reach the destination for travel-related shopping activities –
upon arrival at Yahoo, click on Yahoo! Shopping, click on “Travel,” and so on. Route knowledge only
works when the user is on a known route and does not preclude the user from getting lost if a wrong
turn is taken (Wickens, 1992). In an online environment, users can retrace their steps to a
familiar landmark by hitting the “back” button on the browser. Survey knowledge consists of a
cognitive map of cyberspace. An online user may be aware of a large number of search engines and
their strengths and weaknesses, including their method of data acquisition. Similarly, users with
survey knowledge may have imaginary representations of the Web sites that enable a seamless
navigation.

In summary, the economics of information focuses on external factors such as market
characteristics influencing consumer information search at the macro level. The psychological
approach focuses on internal factors such as motivation and ability at the micro level. Way-finding
paradigm focuses on users’ spatial knowledge which could facilitate information search in an online
environment. Although conceptually distinct, these theoretical perspectives are complementary and
can be integrated to examine consumers’ information search behavior in the online
environment.