Consumers' perceptiion of the internet as a product information tool - An Exploratory Study on Online Searching Behaviour and Source Evaluation
Master's Thesis 2005 137 Pages
List of Figures
List of Tables
1.1 Professional Situation – Why this study is needed
1.2 A Gap in the Research
1.3 The Decision for Italy and Germany as Research Population
1.4 Research Aim
1.5 Leading Questions
2. Conceptual Framework
2.1 Consumer Online Behaviour – How do they find information?
2.1.1 Internet Activities and Demographics
2.1.1 Consumer Choice of the Internet as Information Source
2.1.3 Online Information Searching Behaviour
2.1.4 Use of third-party online product information
2.1.5 Information Overload
2.2 Online Credibility
2.3 Importance of the Corporate Web Site
2.4 The Focus of the Project
3.1 Background for Research
3.2 The Research Process
3.3 The Research Philosophy and Rationale
3.4 The Nature of the Study
3.5 Qualitative Research Methods
3.5.1 Focus Group Interviews
3.5.2 Electronic Interviews
3.7 Target Sample
3.8 Data Analysis Process
3.10 Problems ocurred during the Research
4.1 To find out what importance the Internet has for consumers in the context of product information search.
4.1.1 Internet Experience is generally high
4.1.2 Dependence on the Internet as an Information Source
4.1.3 User show Trust into the Internet but doubt at the same time
4.1.4 Layout and Source indicate Credibility
4.1.5 Official Sources are important – Single Opinions are not credible
4.1.6 Majority Opinion counts
4.2 To identify Search Patterns consumers use when they intend to find product or Company Information on the Internet. 4.2.1 “Google” is the new gatekeeper
4.2.2 Only the first pages count
4.2.3 WOM as source for Internet Addresses
4.3.4 Corporate Pages Use depends on Education and Experience
4.2.5 Negative Information Search only in Crisis Time
4.2.6 “Favourites” are more important for experienced Users
4.3 To discover what factors influence consumer decision for certain online sources
4.3.1 Scepticism towards corporate information
4.3.2 Corporate Web Sites for technical facts
4.3.3 Contradiction: Corporate web sites are seen as visiting card, but information is not valued
4.3.4 Experiences of Fellow Customers work as Incentive
4.3.5 Price and Functionality of Products are influential Factors
4.3.6 No Internet for Services based n Trust
4.3.7 Communication counts
4.3.8 No contribution to unofficial Pages
4.3.9 Consumers are realistic about companies and third parties
4.4 Chapter Conclusion
5.1 Further Research
5.2 Marketing Communications
Appendix I Definition of Online Formats
Appendiy II Interview Guide – Focus Group
Appendix III Focus Group Interviews
Appendix IV Respondents’ Profiles
Appendix V Transcript of one Focus Group Interview
Appendix VI Focus Group Exercise
Appendix VII Introduction letter for the questionaires
Appendix VIII Example of a questionnaire
Appendix IX Questions and Objectives Relation
Appendix X Questions Rationale
Appendix XI Example of coding
Appendix XII Extract of Coding Scheme
Over the last ten years, the Internet has received growing importance all over the world. With the increasing user numbers, also companies have developed an interest in presenting themselves online and using the new medium as a tool for Marketing and PR. However, the open structure of the Internet has also enabled customers to publish their opinions on companies and product. Without being dependent on traditional media, these third-party texts are now available easily to the public. Online formats, which allow individuals to express their opinions either alone or within a group form now a considerable amount of the product- or company-related information available. This has led to the fear of companies of losing reputation and customers because of this uncontrolled information. However, very little investigation has gone into the usage of these sources by consumers when searching for product information online and therefore tried to justify this fear.
This lack of research is addressed by the present study. It explores search strategies of consumers and their decisions for certain online sources. Especially the decision for either corporate or non-corporate sources has been in the focus. The research builds on variables, which have been considered by other researcher as influential for internet behaviour. The conceptual framework outlines this background and discusses research, which has been conducted in related areas.
In the centre of attention is the European perspective. However, because of time and financial constraints primary research has been limited to two countries. Six focus group interviews have been conducted in Germany and Italy, followed by 40 qualitative e-mail interviews in both countries.
The findings of the research led to the conclusion that the internet is not used in such an active way as it could and as many researchers suggested. Consumers mostly feel limited by time or interest. Especially the high amount of information available online has been found deterrent. Furthermore, it turned out that users are sceptical towards individual information and therefore prefer official sources or sources where a high number of opinions are provided. However, it has been concluded that the corporate web site is no longer the only source for consumers and that companies are forced to an honest communication strategy since people are aware of other information sources.
1.1 Professional Situation – Why this study is needed
The Internet plays an important role in today’s daily life and business. An often-quoted Internet fact is that it took the radio 38 years to reach an audience of 50 millions, television needed 13 years, and the Internet just two-and-a half years (Bunting, Lipski, 2000). What started as a military project (Ayres and Williams, 2003) and was later an information and communication network for academics (Mowery and Simcoe, 2001) has now become an every-day medium for a growing number of people. The development of easy-to-navigate web browsers has been one important step, which enabled the Internet to become a steadily growing information source (Kaye and Medoff, 2001, Shackleford, Hölscher and Strube, 2000, Thompson and James, 1999).
Prior to the Internet, marketers generally were able to provide or influence much of the information about their product for the media (Ward and Ostrom, 2003). On the other hand, the possibilities of consumers to get information about products or companies were restricted (e.g. advertising, brochures, visits in shops or reviews in consumer magazines). This was mainly caused by an unbalanced power distribution. Due to the gatekeeper function of journalists, the voice of industry had more chance to be heard and get media coverage (McLeod, 2000). This led to corporate communication as a merely one-way activity (De Bussy, Watson, Pitt and Ewing, 2000).
The Internet has changed this situation as it enabled word-of-mouth like information in the mass media environment (Ward, Ostrom, 2003, Dellarocas, 2003). The oftencited
Internet benefits of being one-to-one platform as well as one-to-many communication at extremely low costs and independent from time or location (Pitt, Berthon, Watson and Zinkhan, 2002) has helped to empower customers. Today when a customer turns to the Internet and seeks product information, the range of information and potential sources is much wider than those of traditional media (Ward, Ostrom, 2003). Not only can official product-relevant information be found, but also millions of written information pieces by private people or activist organisations. This can even mean that employees or former customers talk about their experiences. Therefore, the Internet increases transparency of a company’s operations and leaves it more exposed to possible criticism (Anonymous, 2002). The PR people as former gatekeepers of corporate information are now bypassed (Philipps, 2000). People are communicating not only with the company if they have problems, they are communicating with each other.
Recent PR books (Haig, 2000, Philipps, 2001, Middleberg, 2000) and journal articles (e.g. Kahn and Keller, 2004, Blood, 2000) work already as a modern Cassandra, exhorting companies to be aware of the potential danger of the Internet. At the same time they tell Internet activism stories where a company is forced to change its behaviour because of online protest as happened to Shell (Brent Spar), Nestlé (a breast milk substitute), or Dunkin’ Donuts (anti-Dunkin’ Donuts site) and many others (Bunting and Lipski, 2000). Traditional media pick up this “shift of power” (e.g. Guernsey, L., 2000). This leads to the conclusion that the way companies organise their PR work has been changed dramatically by the Internet (e.g. Coombs, 2002, Hurme, 2001, Cooley, 1999, Heath, 1998). “The absolute minimum a company can do is to monitor the Internet” (Regester and Larkin, 2002, p.148) is the usual advice of recent PR strategy books, informing companies about the potential threats on the Internet and methods to react to and prevent an “online crisis” (e.g. Middleberg, 2000, Holtz, 2002, Haig, 2000).
1.2 A Gap in the Research
According to this apparently dramatic situation in the area of marketing and PR, one should expect a large number of studies dealing with these problems. Indeed, there are several academic papers dealing with the new medium. Nevertheless, the bulk of research appears to be rather outdated considering such a fast growing medium. Not only because user numbers have grown fast from the late 1990s, when the majority of research was conducted to 2005 by 146.2% (Internetworldstats, 2005), but especially when talking about Internet implications on business and marketing. The conditions for online business have changed during recent years as the average user became increasingly the average American, while the pre-dot-com crisis user tend to be part of the early-adopter group (Johnson and Kaye, 2003). Regarding Marketing Communications and the Internet, this has led to an unbalanced research situation. Since the new medium is entering the “post-euphoric phase” (Anonymous, 2004), several studies were conducted on PR practitioner’s and corporate use of the Internet as a PR and communication tool (e.g. Hurme, 2001, Newland Hill and White, 2000, Ihator, 2001, Ryan, 2003, Porter and Sallot, 2005) and about the implications of the Internet for activists and NGOs (Taylor, Kent, White, 2001, Naudé, Froneman, Atwood, 2004).
On the other hand, there are a number of studies dealing with user attitudes towards certain web site types (e.g. Bailey, 2004, Bickart and Schindler, 2001, Walker, 2001, Chatterjee, 2001) and Internet searching behaviour (e.g. Bhatnagar and Ghose, 2004, Ratchford, Talukdar and Lee, 2001), which form a basis of this study and will be discussed in the literature review. However, none of those studies has yet analysed “ordinary” consumer’s perception of the Internet as a product information tool and linked this to the consumer’s consideration of non-corporate information. In fact, research on how consumers search in the online environment and proceed to evaluate unofficial or negative information, is suggested as a pressing need (Ward and Ostrom, 2003). This is where this study intends to address a gap in the research. However, since both areas are extensive fields of research, this study shall focus on search strategies and the evaluation of unofficial sources as worth to consider or not. It is not intended to research how consumers actually react to unofficial sources regarding their shopping behaviour or their attitudes towards a company.
After analysing the potential threat and its importance, a number of interviews with consumers about their online searching behaviour provide data that reveals the extent to which non-corporate sources are considered by customers and suggest strategies for marketers and PR professionals on how to deal with this problem.
1.3 The Decision for Italy and Germany as Research Population
Even though the European user numbers are growing and make up 28.7 % of the world users (Internetworldstats, 2005) most of the research mentioned has been conducted in the USA while the European Internet landscape has been rather neglected. Since researching whole Europe would go beyond resources of this study, it has been decided to focus on two European countries instead. In order to face this limitation, the researcher tried to choose examples, which have a high number of users. Of all Internet users of the European Union 21.5 % are German followed by British people with 16.3% and Italians with 13.3% (Internetworldstats, 2005, ClickZ, 2005). Since another significant part of non-American studies available to the researcher were conducted in Britain, Germany and Italy have been chosen as exemplary countries for research. It has been assumed that British users also access American sources. Therefore, the decision for Germany and Italy allows insights, which are more likely to go beyond previous studies.
1.4 Research Aim
The overall aim of this study is to explore how consumers find information about products or companies on the Internet. In this context search strategies, source evaluation and expectations towards the source shall be identified.
1.5 Leading questions
The main question, which leads the research, is: considering the amount of non-corporate information on the Internet- how likely is it that consumers consider this information? The answer to this question depends on two basic thoughts:
a) How likely is it that consumers come across non-corporate information when searching the Internet
b) How likely is it that they access this kind of information?
2. Conceptual Framework
No piece of research exists in a vacuum. Therefore, the conceptual framework serves to outline the academic background of the study on which the research idea and the objectives have developed and in whose light the findings will be interpreted. The present study is situated between three areas of research. Firstly, it builds directly on work about consumer online behaviour. In this context the first part of the conceptual framework deals with motives for going online since they form the basis for the development of Internet usage patterns. Subsequently the second sub-part takes a closer look at research into the Internet as an information source and consumer searching behaviour. In particular, some studies are taken into consideration, which deal with non-corporate information sources. In a final sub-part, the problem of information-overload is outlined briefly since it restricts possible outcomes of information searches. The second related area of research is the idea of online credibility. The third part of the framework intends to give a general idea of work on the importance of the corporate web site for consumers and as a PR tool.
2.1 Consumer Online Behaviour - How do they find information?
2.1.1 Internet activities and demographics
In the context of this study, it appears necessary to discover factors, which might influence differences in Internet usage. The growing importance of the Internet for
marketing is mainly due to the fact that consumers are becoming more fully engaged with the Internet. However, the ways, in which people use the Internet, are different. (Molenaar, 2002). A number of studies have tried to research the relation between factors such as gender, education and Internet experience and the use of the Internet or the kind of activities performed on the web. The relationship between education and online activities has been found the most straightforward (Howard, Raine and Jones, 2001). The more educated someone is, the more he appears to engage in nearly all online activities. Also, Johnson and Kaye (2003) included in their study of politically interested Internet users the variable “education” and identified it as the strongest predictor of motivation for using the Internet. For the present study these findings lead to the question to what extend differences in education will cause differences in searching patterns and the number of sources a consumer considers.
In addition, the variable gender stands out in explaining what activities Internet users engage in. Howard et. al (2001) found that women are more likely to engage in communicative activities and search information about health, religion and travel while men are interested in financial and technical information. To include this factor, which probably influences information search behaviour, the present study used mixed focus groups. Not so clear is the relation between online experience and online activities. Researchers agree that experienced users differ in their online behaviour from inexperienced users (e.g. Hölscher and Strube, 2000, Cole, 2004). The annual Digital Future Report (Cole, 2004) suggests that the activities differ: while experienced users perform job and education-related activities as well as shopping and banking, new users spend their time mainly on e-mailing, instant messaging and playing games. It has also been found that experienced users are more able to travel the information- superhighway than newbies (Cole, 2001). This finding is supported by Hölscher and Strube (2002) who analysed searching strategies of Internet experts and newbies and found that non-experienced users are rather limited in the number of sources and search methods they considered. When searching an information it can be assumed that this can lead to a frustration among inexperienced users that might influence the future usage of the Internet. Therefore, the next part takes a look on the motivations of consumer choice of the Internet as an information source.
2.1.2 Consumer Choice of the Internet as Information Source
Information is only one thing the Internet can provide. Entertainment and fun as well as communication have also been found important. The question arises what factors cause Internet usage in general and its relevance as information source in particular. This question shall help to understand the extend of searches and why consumers prefer one source to another. Because of the relative newness of the Internet on the one hand and its rapid growth on the other hand, there has been little research published on how and why people use the Internet as an information source (Parker and Plank, 2000). One possible way that has been used by a number of studies is employing the “uses and gratifications theory” to the Internet. Developed in the 40s (Blumler and Katz, 1974) this theory provides a framework to understand how media recipients seek content or information selectively to satisfy specific needs (Johnson and Kaye, 2003, Parker and Plank, 2000). The uses and gratifications studies negate the existence of a passively receiving audience. Instead, they acknowledge active recipients, interacting with those media, which are most likely to satisfy their needs.
Convenience has been found as a major motivation for going online (Papacharissi and Rubin, 2000, Eighmey, 1997) due to the constant availability of information, interactive features of the Internet or the possibilities of customizing information (Bauer, Grether and Leach, 2002). According to some researchers (Kaye and Johnson, 2002) media with similar functions may gratify similar needs. The Internet shares many attributes with television. Accordingly, it can be assumed that people use the Internet for similar reasons. Indeed, studies have shown that information, interaction needs and entertainment are the leading reasons for going online (Cole, 2004, Parker and Plank, 2000). Parker and Plank (2000) even found in a survey among 204 students, that relaxation and escape are the most dominant key-predictors for online-usage. On the other hand, Ferguson and Perse (2000) came to the conclusion that play and information retrieval are the primary gratifications obtained from web use but that this activity cannot be considered relaxing. Finally, Papacharissi and Rubin (2000) claim that information seeking, convenience and entertainment are main factors for using the Internet.
A major limitation of these studies is that they were conducted in the early days of the Internet. This is probably also a reason for the contradictory results, which were not able to take into consideration the rapid changes that characterise the Internet and its usage patterns. Recent studies show that information retrieval is named as one of the most important Internet activities, even though it only forms one part of the total online time (Hoffman, Novak and Venkatesh, 2004, Cole, 2004) and is mentioned next to other activities such as communication, gaming or online shopping. Nevertheless, a significant number of online users agree to the idea that the Internet has become indispensable for all kinds of daily information needs (Hoffman et al, 2004). This is also due to the assumption that the Internet is most efficient at providing information about functional attributes and price (Ratchford, Talukdar, and Lee, 2001).
Ratchford et. al (2001) take a model of Internet usage as information source, which is based on a cost-benefits relation and develop a number of key propositions about the role of the Internet. They claim that a) prior information, b) skills at using each source, c) ease of accessing each source and d) income are influential factors for the benefits of search. The cost-benefit outcome of this model influences, which media is chosen. Therefore, the authors propose that the Internet cannot become the favoured source for all markets and user groups but it will depend on skill and access relative to competing sources.
A similar approach is taken by Biswas (2004) who tries to apply the theory of Economics of Information (EoI) to the Internet. Similar to the approach discussed above, it suggests that a buyer acquires information until the point where the costs of acquiring information equal or exceed the benefits (Biswas, 2004). The variables of this equation are search costs, expected benefits, perceived price dispersion and search efficiency. Both, search costs and search efficiency are related to each other and to the degree of experience a searcher has on the Internet. Biswas (2004) concludes that since search costs are very low on the Internet, the critical issue will be managing the amount of information. Therefore, search efficiency will not attempt to reduce price but to reduce the number of alternatives a search gives and therefore favours the development of search agents on the Internet and their importance for customers.
Overall, the uses and gratifications research provides a way of explaining why people use the Internet. It has its limitations in explaining why people use specific web sites for information retrieval and which concrete gratification they obtain from there, what would be important in the context of the present study. For this purpose, the cost-benefit-theory might be more helpful suggesting that the benefits of a web site must equal or exceed the costs of using it. The present study shall show if consumers also make this consideration.
2.1.3 Online Information Searching Behaviour
Knowledge about how consumers seek product information has always been important to marketers (Bhatnagar and Ghose, 2004). It is therefore surprising that little research exists on information search behaviour on the Internet related to product information. The existing studies deal for example with the relation of Internet experience and searching (Hölscher and Strube, 2000) or the impact of the Internet on information search for automobiles (Ratchford, Talukdar and Lee, 2003). On the other hand, the connection between online information and purchase is still not proven even though the Internet has already become an important marketing tool. Bhatnagar and Ghose (2004) were under of the first to include a question on whether a shopping decision is made based on online information in their survey about online information search across product categories. Their findings indicate that the more time a consumer spends on searching, the more likely it is that his purchase decision is influenced by the information retrieved online.
Likewise, it is interesting to learn about differences between searches for a specific product and general information queries about product category. Hoffmann and Novak (1996) used six dimensions for distinguishing between those two forms. Specific information search was found to be extrinsically motivated, reflecting situational involvement, instrumentally oriented, seeking utilitarian benefits, consisting of directed search, and focusing on goal-directed choices. General information searches on the other hand consisted in non-directed search, had a ritualised orientation, focused on navigational choices and were seeking hedonic benefits. These findings imply that the motivation for a search heavily influences the number and kinds of sources considered. This influence has also been found existent for time, financial, and intellectual resources of Internet users. Peterson and Merino (2003) claim that those resources still are roadblocks to overcome before majority of consumers will use the Internet habitually for information search.
A rather new area of research has been developed around the use of search engines (e.g. Fallows, 2005, Liaw and Huang, 2004). During the last decade, the Internet has turned into an immense information space with often poorly organised content (Hölscher and Strube, 2000). A search engine is able to structure this amount of information. Liaw and Huang even claim that “Web information retrieval would collapse if search engines were not available.” (2004, p.2). Therefore, the question of how important search engines are for product information of consumers is important to answer. A recent American study (Fallows, 2005) found that 84% of Internet users use search engines and of those 97% said that they were confident of their findings even though other articles report difficulties of users when searching the Internet (Liaw and Hung, 2004, ul-Haq, 2001). Fallows (2005) also reports that users turn to the Internet for both relevant and trivial information. Accordingly, the list of searches contains a wide range of subjects. For the present study, especially the area of commerce is considered interesting, which turned out as one of the most interesting areas for user searches (Fallows, 2005). What can be considered positive for companies and marketers when it is related to online shopping and visits on corporate websites, can become a threat when consumers are using the Internet to find more information about a product or service than the corporation is willing to give. This phenomenon will be discussed in the following part.
2.1.4 Use of third-party online product information
The Internet is questioning the conventional wisdom about advertising, marketing and PR. Peterson, Balasubramian and Bronnenberg (1997) even characterise it as a “market discontinuity” and claim that it changes dramatically the balance of market forces. Other authors talk about the Internet as a potential “equalizer” which is able to empower activist groups (Coombs, 1998). This development is seen as a threat to the communication of companies.
Given those early “warnings”, it appears surprising that only a few studies have tried to justify these concerns and research user opinion on the Internet. A study by Ward and Ostrom (2003) tried to analyse the Internet as a product information source by using a content analysis of hits returned by web searches. When searching for brand names in a search engine, they found that the number of hits that led to sites from unofficial sources far outweighed the hits leading to official sources. Unofficial sites spanned a long list of sources involving individuals, from opinion sites to newspapers. The authors classified the information as positive, neutral or negative and found that even though positive information was dominant, 24 % of the information was explicitly undesirable. Moreover, half of the information had a character unlikely to be found in other media (e.g. accusations of employee abuse, lack of corporate social responsibility). Fig. 1 shows kinds of non- corporate web sites, which can possibly convey product or company information
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Fig. 1: Non-Corporate Sources (A definition of all web site types can be found in Appendix I.)
A considerable amount of the information found on the Internet during Ward and Ostrom’s research (2003) has been generated by individuals. Although this word-of-mouth (WOM) information is not a new phenomenon to marketers and has always been out of their control, it has never been so easy to find. It is especially present in online feedback mechanisms, which are now part of many famous web sites such as eBay or Amazon. Dellarocas (2003) even claims that the growing popularity of these mechanisms will have implications for a wide range of management activities since “for the first time in human history, individuals can make their personal thoughts, reactions and opinion easily accessible to the global community of Internet users.” (Dellarocas, 2003, p. 1407). Even traditional media has picked up this phenomenon. An article in The New York Times talks about expert sites on which ordinary people advise on others (Guernsey, 2000). The popularity of those sites suggests that people increasingly rely on opinion posted on such systems on a variety of issues (Dellarocas, 2003).
What makes this phenomenon a threat for corporations is the amount of negative information available online. Research has shown that negative WOM information significantly reduces positive brand attitudes and purchase intentions (Chatterjee, 2001, Smith and Vogt, 1995). One reason for this is the assumption, that WOM sources have nothing to gain (Chatterjee, 2001). Research has shown that negative information in general has a greater impact if it is vividly presented and given like WOM (Bickart and Schindler, 2001). The empathy generated by WOM information seems to be a strong advantage of Internet forums as Bickart and Schindler (2001) suggest. To analyse the influence WOM can have on the Internet they used an experiment in which consumers were instructed to gather product information from either online discussions or marketer-generated web sites. The research shows that consumers who turn to online discussions for information have a greater interest in the product topic afterwards. Therefore, the authors claim that online forums are distinctively more effective in generating product interest than corporate web sites. As crucial factor for this superiority, the authors suggest a greater credibility of those sources because consumers might perceive corporate web sites as having a certain selling intention (Bickart and Schindler, 2001). Second, the fact that the “authors” of non-corporate text are often fellow-customers might give their information a higher relevance. Finally, Bickart and Schindler (2001) suggest that Internet Forums can generate empathy among readers because of their WOM character.
However, in the above stated study the participants were instructed in advance, which medium they have to use for product information. Hence, it remains unsure whether a consumer would actually consider an online review when searching for a product. These questions will be one element of the present research. Furthermore, the web contains immense volume of information, which makes it nearly impossible for a consumer to search all of it. Retailers use this opportunity to make some WOM information easily accessible by placing them close to purchase information (Chatterjee, 2001) as for example Amazon does.
Originally, WOM information was characterised by a personal information source, which had often a strong tie with the decision maker. In the online environment WOM is usually given by total strangers. The fact that some sites are successful in providing WOM recommendations and service at the same time (e.g. Amazon) enables them somehow to copy the traditional closeness between source and decision maker and positions them favourably compared to other online retailers (Chatterjee, 2001). Chatterjee (2001) examined what influence familiarity with a retailer has on the perception of negative WOM information. He asked 419 students to shop for a book online, using web-links to comparison-shopping search engines. Confronted with either a known or unknown retailer they had the chance to decide to read online reviews on this retailer or not. Chatterjee (2001) found that familiarity makes customers less receptive to negative WOM information and less interested in seeking information.
Both studies try to rate the importance third-party information has on consumer information search. They have their limitations above all in the kind of sample they employ. Both use students from American universities and it has been found that this group is particularly active online (Jones, 2002). Furthermore, both explicitly asked respondents to perform a search and to consider third-party sources. In this search one or several products were given, which makes it impossible to extend the results over different product or involvement categories. Furthermore, the searching strategy was predetermined and does not allow conclusions for ordinary searching behaviour. Last but not least, online consumer forums are not the only source of WOM information available on the Internet.
Creating a public forum online, which can be assessed by a global audience, is another effective tool for WOM information (Harrison-Walker, 2001). Some sites are even so successful that consumers trying to locate information on particular companies find the non-corporate source first. Given the importance of negative WOM information explained above, those sites can be a threat to a company’s reputation if they are used extensively. Obviously if a consumer is dissatisfied with a product or service there are several options available: they can switch the brand or supplier, boycott the product or tell friends or other consumers about their experience. The latter is, what people carry out online in user forums discussed above. If they decide to complain, they can write to the company or go to the retailer and seek help. However, only a small percentage of customers ever communicate with a store or a company directly (Day, Granbicke, Schaetzle and Staubach, 1981 cited in Harrison-Walker, 2001). The Internet is now facilitating a new type of complaining: consumer-to-consumer articulations reach other users and can at the same be read by corporations or the media (Bailey, 2004, Harrison-Walker, 2001).
A primary way of doing this is a corporate complaint web site defined as “sites where consumers can go to voice their concerns about different corporations, marketing actions and brands.”(Bailey, 2004, p.170). Interestingly a number of those sites are not only used by consumers but also by disgruntled employees giving opinions on their (former) companies (Bailey, 2004). Supporters of this type of complaining come from both, consumer and corporate sites. They argue that it helps consumers to make better-informed purchase decisions, empower them in complaint cases and on the other hand helps corporations to improve their products and services (Bailey, 2004, Harrison-Walker, 2001). The negative implications are far more obvious considering the importance of WOM: negative attitudes towards the company and its products, no repeat purchases or no purchases at all, increased consumer scepticism etc.. The extent to which a company is affected finally depends on the popularity of such web sites and on their content. Harrison-Walker (2001) conducted a content analysis of the Internet complaint forum “Untied”, which publishes user opinions about United Airlines. He found that most complaints could be avoided by the company since they dealt with employee rudeness and misinformation (Harrison-Walker, 2001). Therefore, he comes to the conclusion that such a forum is a valid source of consumer information and should be monitored and analysed by companies. However, this study does not clarify what kinds of customers use such a forum and what motivations they have. By interviewing ordinary consumers about their attitudes towards such sites, the present study will intend to approach this question.
Bailey (2004) researched consumer knowledge and responses to these kinds of web sites. Using a sample of 158 American students he asked for knowledge of corporate complaint sites, frequency of visits and their attitudes towards such sites and found that the knowledge of such sites is moderate: only half of the students have heard of corporate complaint web sites. However, once aware of these web sites, the participants were likely to visit them. The study found also that even though few people actively write in such forums, they read carefully a number of articles and tell others about the sites.
Even though both studies give interesting insights into the attitudes of consumers towards non-corporate sources, they cannot sufficiently answer the question, how important those sources are for companies and consumers. This deficit is due to the fact that both researchers used American college students as example and second, that the respondents were directly asked for their attitude towards such sites. This does not show how often consumers actually consider such sites, a question, which will be raised in the present study. However, both authors (Bailey, 2004, Harrison-Walker, 2001) mentioned information amount as a potential obstacle for the use of the Internet as an information source. The number of sites is in conflict with the time and financial resources of consumers or is just so overwhelming that it asks too much of the user. This concept of information overload is discussed in the next part.
2.1.5 Information overload
The chapters above have talked about influencing factors for Internet searching behaviour and the possible importance of third-party sources. However, when dealing with information retrieval, it appears necessary to discuss briefly its possible limitations since this will influence the number of sources a consumer considers during one search.
The development of easy-to navigate browsers led to an explosion in the number of online users and available documents online (Kaye and Medoff, 2001). Accordingly, the web as an information source is increasingly overall (Metzger, Flanagin, Zwarun, 2003). Every information query using a search engine provides thousands of web addresses, no single person can consider all. Already in the early times of the Internet, researchers have analysed the phenomenon of information overload (Edmunds and Morris, 2000), information fatigue (Oppenheim, 1997) or data smog (Shenk, 1997).
There are many definitions of this concept. In the daily language, the term “information overload” often refers to the simple notion of receiving too much information (Eppler and Mengis, 2004). A definition, which appears useful for the large amount of information a consumer is confronted with, describes information overload as being burdened with a large number of unsolicited information, some of which might be relevant (Butcher, 1998). The problem with this overload is the human inability to store and use information, which extends a certain point. While the quality of decisions or reasoning of an individual has been found positively related to the amount of information up to this point, the performance of the individual rapidly declines when further information is provided (Chewning and Harrell, 1990 cited in Eppler and Mengis, 2004) as figure 2 illustrates.
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Fig. 2 Information overload Source: Eppler and Mengis, 2004 p. 326
This can lead to refusal of information as Mcgovern (2000) describes it. In his article about information management, he claims that consumers want limited choice and simply do not have the time to trawl thousands of web links. He suggests that information not listed among the first 20 search engine hits is lost. For the present study, this means that information no matter if corporate or non-corporate will not be considered by consumers if given a later place within the search engine results. It also implies that consumers will not read all sources a search engine suggests since it is probable that they will reach their saturation point before. Indeed Biswas (2004) argues that higher information overload is symptomatically for the Internet. As important factors he names a) a high numbers of alternatives available to the consumer and b) the low searching costs for consumers, which enable them to consider a larger number of sources.
In this multi-source environment, a degree of information literacy becomes important to reduce misuse of information and the problems of information overload (Mutch, 1997). Metzger, Flanagin and Zwarun (2003) note that „Internet literacy“ began as a number of basic skills like the ability to use a Web browser, but it has moved toward the ability to critically evaluate information. This is especially important since the growth of the Internet has been accompanied by a growth of online fraud and misinformation (Flanagin and Metzger, 2000). This is critical for product information where false or defaming information can lead to reputation losses for the company. It can be assumed that the ability to evaluate information online grows with the experience a consumer has with the Internet. Nevertheless trust into certain information and the usage of an online source is also related to trust into the Internet as a source itself. Therefore, the next part discusses online credibility.
2.2 Online Credibility
Additional to the ability to discover a certain source on the Internet, the perception of credibility of this source is an important precondition for its consideration, which is in the focus of the present study. Research shows that people rely heavily on the Internet for gathering information (Hoffmann, Novak, Venkatesh, 2004). The danger is that on the Internet everybody can publish professional looking information without huge costs. Schweiger (2000) even states that it is principally possible to publish false information as long as you do not conflict with personals rights of others or break a law.
A lot of research, which has been conducted on credibility employed students as convenience sample (Flanagin and Metzger, 2003, Metzger, Flanagin and Zwarun, 2003) or asked politically interested web-users, who can be assumed to have higher information needs (Johnson and Kaye, 1998). Those studies found a trend, that online media tend to be rated credible while most information is not verified afterwards by users. Only few researches exist on Internet behaviour of average customers. In a research by Flanagin and Metzger (2000) 323 non-college-age respondents and 718 students answered a questionnaire. The study showed that users’ web site credibility ratings are influenced by perceptions of site trustworthiness and expertise as well as by attractiveness of the site whereas commercial information received the lowest credibility ratings. This has importance for product information search since the credibility rating of a website can be assumed to influence browsing behaviour: users who rate the credibility of commercial websites low will be more likely to switch to non-corporate websites. Nevertheless, the opposite is also important for corporate online PR when talking about online crises. The less credibility a website seems to have, the lower is the chance that consumers react on information published on those sites. In this context, research has shown that perceived amateurism of a web site and inconsistencies in page design or writing style can decrease information quality perceptions and overall site credibility (Metzger et.al, 2003).
As further important factor for the credibility perception of web sites, Eastin (2001) found consumer knowledge about a product or service. When asking 125 students to seek health information online he notices that message credibility was significantly higher for the topic, which the participants were knowledgeable about, in comparison with the topic they were relatively ignorant about. Generally, Eastin (2001) suggests that people use both the source and the content to assess the credibility of online information.
A survey initiated by Consumer WebWatch (2002) asked 1500 Internet users in telephone interviews for their opinion on web site credibility. 80% of the respondents stated that being able to trust information online is essential for using a web site, while more than two-third said that they also want to know the information source. A majority mentions frequent update as important for credibility. An overwhelming majority of 87% reports to use search engines frequently. It implies that search engine rankings fulfil gatekeeper role for the Internet and might prevent that users find critical information online. The importance of search engines has been confirmed in a recent study among a sample of 2,200 American adults (Fallows, 2005). While most users are aware of the difference between TV’s regular programmes and commercials, only little more than one third of search engine users distinguish between paid and unpaid content on the Internet. Only experienced users have been found to be slightly more sceptical about the nature of content they find. Fallows (2005) even reports that 68% of the interviewees consider search engines as fair and unbiased.
One of the main problems on the Internet is the fact that professional looking information is easy to create and can appear credible regardless of authorship (Flanagin and Metzger, 2000). This danger of being misled by a web offer makes information evaluation more important than ever before (Eastin, 2001). The ease of creating a credible looking web site leads to the conclusion that recipients who cannot judge whether a piece of information is true, have to trust the source (Schweiger, 2000).
2.3 Importance of the Corporate Web Site
In order to study why consumers consider certain sources the question arises what importance a corporate web site might have for a consumer. It is assumed that consumers use their knowledge about a company when they judge the quality of products. Therefore, corporate credibility is seen to influence purchase decisions (Lafferty and Goldsmith, 1999 Goldsmith et al., 2000). Brown and Dacin (1997) suggest that consumers may draw a connection between an available information piece (e.g. company reputation) and the product when they do not have enough information about a certain product attribute.
For a today’s consumer product and company are very often closely linked with each other, since the users get information about both from the same medium: the web site. This means that both concepts, product attitude and corporate reputation, are often bound to the web site quality. When a consumer turns to a company web site the basic rule for the corporation must be: you cannot not communicate (Esrock and Leichty, 2000). The information given online as well as the layout and usability count for both, product and company experience, and users expect from a company web site that it offers services which are professional and useful, and are presented in an intuitive and easy to use manner (Nysveen and Pedersen, 2004).
The success of the Internet has also changed the way companies use it for their PR and marketing activities. While during the first years, most research has been conducted on its implications for users and society, nowadays the marketing and business literature forms a large part of Internet research. This is mainly due to the movement of companies to the Internet. When Esrock and Leichty (2000) conducted their research on 100 Fortune500 companies in 1997, they found that 10 % of those companies did not have a website. However, when they repeated this search two years later, several of those non-onliners had established a company presence on the Internet. As Internet users are becoming mainstream, the attractiveness of using the Internet as Public Relations tool increases (Perry and Bodkin, 2000). Accordingly, many writers have focused on the question how company websites should be designed to facilitate positive relationships with publics. Kent, Taylor and White (2003) propose strong interactive and dialogic features for company websites to improve responsiveness to stakeholder information needs.
Nevertheless, despite the realisation that design of a website influences customer perceptions of the company (Kent et. al, 2003), research has shown that there is a difference between what is agreed to be useful and what has been actually implemented on corporate websites: most company websites contain product information, financial data and contact details but lack interactive features and responsiveness (Esrock and Leichty, 2003). This difference between idea and reality can be traced back to the findings of White and Raman (1999) when they interviewed Web site decision makers. They found that websites serve for many companies more as status symbol and necessity than as communication tool whereas many practitioners are not sure about the impact the online presence actually has on their customers.
Surprisingly this has not changed a lot over the past six years. When Hill and White (2000) interviewed Public Relations Practitioners, they found that while many PR professionals recognized the value of a website as communication tool and for corporate reputation management, most of them rated their responsibility for the organisation’s website as a “B-list task”.
This is particularly surprising given the amount of articles dealing with online issues and crisis management and threats of non-official websites for company reputation. Attention has been drawn to the activist use of the Internet. Blood (2000) calls the Internet an “ideal activist medium” mentioning that interested stakeholders can now tap into a growing number of counter information and alternative perspectives. Several researchers identify the ease of creating a website and the low costs to maintain a professional looking web presence as dangerous factors (Coombs, 1998, Turnbull, 2000, Blood, 2000). Coombs (1998) goes so far to call the Internet a “potential equalizer” He argues that it has the potential to increase activist’s power and make their interest more salient to organisations. This is supported by Hearit’s (1999) analysis of the Intel case. The company suffered a reputation loss after problems with its pentium chip were discussed in several Internet newsgroups. Hearit (1999) points out that the Internet helps likeminded persons to find each other and build publics. Those single-minded publics are more dangerous because of their lower willingness to compromise. Using Grunig’s (1982) theory of publics, Hearit (1999) argues that the Internet facilitates a rapid movement of publics to the active stage. Similarly, Coombs (2002) claims that the Internet alters the probability that an issue gains strengths and potentially develops to a crisis. He proposes that issues managers shall monitor the Internet but also take proactive steps in developing their own online strategy.
2.4 The Focus of the Project
Figure 3 shows the visualised structure of the conceptual framework given above. It summarised once more which aspects and variables have been identified as important for this study and potentially influencing Internet usage in general and the Internet as information search and searching behaviour of consumers in particular. However, it is not within the scope of the project to examine all of these possible relations. Instead, it focuses on the actual searching behaviour of consumers and their attitudes towards corporate and non-corporate sources as figure 4 visualises. The variables identified in the conceptual framework will be kept in mind for the development of interview questions and the later analysis of the findings. There has been also put a certain attention to these factors when choosing interviewees in terms of demographic data and Internet experience.
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Figure 3 Visualised Conceptual Framework; Source: Author
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Figure 4: Research Focus; Source: Author
2.5 Research Objectives
Based on the conceptual framework and the research background the following objectives have been developed:
I To find out what importance consumers attach to the Internet in the context of product information search
II To identify search patterns consumers use when they intend to find product or company information on the Internet
III To discover what factors influence consumer decisions to access certain online sources, and in this context:
III/a To explore what importance the corporate website has for consumers within their product or company search
III/b To discover factors, which make consumers consider sources other than official ones or make them contribute to unofficial sources about a product or company