Consumer Informedness and Firm Information Strategy

Author List: Li, Ting; Kauffman, Robert; Heck, Eric van;
Information Systems Research, 2014, Volume 25, Issue 2, Page 345-363.
Consumer informedness plays a critical role in determining consumer choice in the presence of information technology deployed by competing firms in the marketplace. This paper develops a new <i>theory of consumer informedness</i>. 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 <i>commodity segment</i>. They exhibit greater <i>trading down</i> 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 <i>differentiated segment</i>. This group exhibits greater <i>trading out</i> 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: consumer choice;information strategy;marketing and IS;price and product information;randomized experiment;stated choice experiment;theory of consumer informedness
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#5 0.238 consumer consumers model optimal welfare price market pricing equilibrium surplus different higher results strategy quality cost lower competition firm paper
#20 0.166 procurement firms strategy marketing unified customers needs products strategies availability informedness proprietary purchase resonance policies open-source compatible competitors differentiation involve
#89 0.116 product products quality used characteristics examines role provide goods customization provides offer core sell key potential stronger insights design initial
#51 0.111 results study research experiment experiments influence implications conducted laboratory field different indicate impact effectiveness future participants evidence test controlled involving
#0 0.100 information types different type sources analysis develop used behavior specific conditions consider improve using alternative understanding data available main target
#102 0.100 choice type functions nature paper literature particular implications function examine specific choices extent theoretical design discussion value widely finally adopted
#75 0.067 behavior behaviors behavioral study individuals affect model outcomes psychological individual responses negative influence explain hypotheses expected theories consequences impact theory