Chapter 11: Shopping on the Internet

Comparing Attributes

Comparisons can be made brand by brand, by price, or by other attributes. As they evaluate products, consumers generally use one of two types of decision making strategies: compensatory or noncompensatory. Marketers need to be aware of the different decision rules and design web sites and content that address consumers' likely thought processes.

If a good score on one attribute can make up for a bad score on another, the consumer is said to be using a compensatory evaluation.

Noncompensatory evaluation strategies can take many forms. Their common characteristic is that a weakness or absense of one attribute cannot be compensated for by the presence or strength of another (or other) attribute. If "low price" is the most important attribute, the consumer will not purchase a more expensive product, even if it has many desirable features. Alternatively, if a brand does not meet some minimum requirement for an attribute, such as a snack being at least minimally nutritious, the consumer might simply eliminate that brand. Sometimes consumers simply purchase what they bought last time.

Activities

  1. What attributes might come into play when the consumer compares


  2. What would happen to competition in a certain product category when the consumer can easily search for products and sort them by price from lowest to highest?


  3. What do you think might be the impact of perceived risk on a consumer's decision of which product to purchase? As you formulate your answer, consider the following analysis. Early in the history of the World Wide Web, some people suggested that the consumer's ability to seek out product information and pricing would result in dramatically lower prices. In economic terms, the Net economy was predicted to result in perfectly competitive markets because there would be many sellers, undifferentiated products, ease of entry into the marketplace, and consumers would have relatively equal access to information. Three economists put this hypothesis to the test. They reviewed several research studies which investigated pricing on the net. What they found was that even though prices were higher at sites such as Amazon.com and CDNOW, people still ordered from these companies-even when they knew that the same products were available at lower prices from other sites. What might explain this behavior? Compare your answers with the conclusions of the study's authors.
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