Tupi National High School

Tupi, South Cotabato

Senior High School Department
Accountancy Business and Management

Product Knowledge

Consumers often rely on prior knowledge during search and evaluation due to

information processing limita-tions (Bettman, Luce, & Payne, 1998; Lynch &

Srull,1982). The stimulus-rich nature of online settings will cause memory-based

influences on search and evalua-tion to diminish while enhancing the role of externally

available information (Alba et al., 1997). Consumers use prior knowledge to initiate

search (John, Scott, & Bettman, 1986) with information on uncertain beliefs being

acquired earlier (Simonson, Huber, & Payne,1998). The iterative nature of online search

and evaluation may result in information on previously preferred alternatives being

disconfirmed (Oorni, 2003). Preference reconstruction can then be expected to be based

on exposure to new alternatives and selection criteria(Haubl & Murray, 2003).

Consumers who are skillful at using the Internet to research products rely on it as an

important source of information (Ratchford, Lee,& Talukdar, 2003; Ratchford, Talukdar,

& Lee, 2001). However, some consumers have a difficult time learning the search

terminology (i.e., keywords) necessary for seeking out the product that best matches

needs in an electronic environment (Belkin, 2000). Thus, consumers need both “web

expertise” (i.e., device knowledge) and product knowledge (i.e., domain knowledge) to

make better decisions in an online setting. It is pos-

sible for web expertise to compensate for the lack of product knowledge, provided

consumers use the former to develop the latter (Spiekermann & Paraschiv, 2002). If
 Tupi National High School
Tupi, South Cotabato
Senior High School Department
Accountancy Business and Management

consumers do not have the necessary level of product knowledge, they may focus on easy

to use, but unimportant product attributes, which will adversely affect decision quality.

An increase in product knowledge will have a greater positive effect on decision

quality in the electronic environment in comparison to a traditional retail environment.

The above proposition can be empirically tested using measures of product knowledge

reported in Brucks (1985), Srinivasan and Ratchford (1991), Simonson, Huber, and

Payne (1998), Ariely (2000), and Jepsen (2007) and measures of decision quality

reported earlier

Due to the rapid growth of e-commerce, consumer purchase decisions are

increasingly being made in online stores. In the 12 years that the U.S. Cen-sus Bureau has

kept track, e-commerce sales havegrown at a double-digit rate from $5 billion in 1998to

an estimated $194 billion in 2011 (http://www.census.gov/retail/mrts/www/data/pdf/ec-

̇current.pdf).Web-based stores offer immense choice and provide avirtual shopping

experience that is more real-world than ever before, through the use interactive video,

animation, flash, zoom, three-dimensional rotating images, and live online assistance.

The conventional wisdom is that online shopping has been a boon to consumers.

The Internet has certainly made it easier for consumers to search for the best price when

that is most important due to the profusion of merchants on the web. Likewise, the large

product as-sortments offered by these merchants has also made it easier to find the best

product fit (i.e., the matchbetween consumer needs and product attributes) when that is

most important. Recommendation agents offered by sellers and third-party shopbots

 Tupi National High School
Tupi, South Cotabato
Senior High School Department
Accountancy Business and Management

enable consumers to quickly navigate through huge product assortments to find that

elusive bargain or “dream” product (i.e.,one they were not sure even existed). The ability

to electronically screen (and rescreen) product choices en-ables consumers to focus on

the primary benefit they seek while shopping online, be it paying a lower price or finding a

product that best matches needs.

 Tupi National High School
Tupi, South Cotabato
Senior High School Department
Accountancy Business and Management

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