Consumer Informedness and Firm Information Strategy

41 Pages Posted: 20 Feb 2014

See all articles by Ting Li

Ting Li

Rotterdam School of Management, Erasmus University; Erasmus Research Institute of Management (ERIM)

Robert J. Kauffman

Singapore Management University; Singapore Management University - School of Information Systems

E. van Heck

Erasmus University Rotterdam (EUR) - Department of Technology and Operations Management

P.H.M. Vervest

Erasmus Research Institute of Management (ERIM)

Benedict G. C. Dellaert

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE); Erasmus Research Institute of Management (ERIM)

Date Written: November 21, 2013

Abstract

Consumer informedness plays a critical role in determining consumer choice in the presence of information technology (IT) deployed by competing firms in the marketplace. Using data collected through a series of stated choice experiments in two different research contexts, we examine how consumer characteristics and observed behaviors moderate the influence of price and product informedness on consumer choice. The results indicate that different types of consumer informedness amplify different consumer behaviors in specific consumer segments. In particular, we found that price informedness is more influential among consumers in the commodity segment. They exhibit greater trading down behavior, which represents stronger preferences for choosing the products that provide the best price. In contrast, product informedness is more influential among consumers in the differentiated segment. This group exhibits greater trading out behavior, involving stronger preferences for choosing products that best suit their specific needs. These results suggest that firm information strategy should take into account consumers’ characteristics, their past observed behaviors, and the impact of consumer informedness. We also discuss the theoretical contributions of this research and its broader implications for firm-level information strategy.

Keywords: Choice, information strategy, informedness, price and product information, stated choice experiment, willingness-to-pay

Suggested Citation

Li, Ting and Kauffman, Robert J. and van Heck, Eric and Vervest, P.H.M. and Dellaert, Benedict G. C., Consumer Informedness and Firm Information Strategy (November 21, 2013). Netspar Discussion Paper No. 11/2013-073, Available at SSRN: https://ssrn.com/abstract=2398282 or http://dx.doi.org/10.2139/ssrn.2398282

Ting Li

Rotterdam School of Management, Erasmus University ( email )

Burgemeester Oudlaan 50
3062PA Rotterdam
Netherlands

Erasmus Research Institute of Management (ERIM) ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

Robert J. Kauffman

Singapore Management University ( email )

Li Ka Shing Library
70 Stamford Road
Singapore 178901, 178899
Singapore
65-6828-929 (Phone)

Singapore Management University - School of Information Systems ( email )

80 Stamford Road
Singapore, 178902
Singapore

Eric Van Heck

Erasmus University Rotterdam (EUR) - Department of Technology and Operations Management ( email )

RSM Erasmus University
PO Box 1738
3000 DR Rotterdam
Netherlands
+31 10 408 2032 (Phone)
+31 10 408 9010 (Fax)

HOME PAGE: http://people.fbk.eur.nl/eheck/personal/

P.H.M. Vervest

Erasmus Research Institute of Management (ERIM) ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

Benedict G. C. Dellaert (Contact Author)

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE) ( email )

P.O. Box 1738
3000 DR Rotterdam, NL 3062 PA
Netherlands

Erasmus Research Institute of Management (ERIM) ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

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