Signaling theory has
been widely used in the world of marketing. A study by Wells et al. (2011) attempted to use signaling theory in
e-commerce marketing
channel. This study applies the theoretical framework of the signal
to provide a foundation for understanding how the quality of a website can reduce consumer
skepticism that sometimes
exist in evaluating products online. Signal
is a clue (cue) that allows sellers to convey
product quality information that cannot be observed buyers.
Signal is divided into extrinsic and intrinsic
cues. Intrinsic cues
are characteristics attached to a product, if
changed could affect the nature of the product as
a whole (e.g., komponen2 in a PC). Extrinsic cues are
product attributes that are not attached,
if changed will
not change the nature of the
product (e.g., brand, retailer reputation, price, warranty, store environment). Extrinsic
values are easier to observe, knowing that consumers have lack of knowledge of intrinsic attribute of a product. Therefore, optimization of extrinsic cues can
influence consumer perceptions of product quality and subsequently
affect purchase intentions.
Extrinsic cues also have
a major role in influencing consumer perceptions of the quality of products sold online because of information
asymmetries. Information asymmetries are associated with the barriers for consumers to
evaluate the product directly. Information asymmetry highly
occurs in experience-good (products
that require direct evaluation before purchase, such as clothes, bags, food, etc.).
Study by Wells et al. (2011) made the quality of
a website as an
extrinsic cues for
products sold on
a website. They
conducted 3 studies: (1) to check the validity
and feasibility of the quality of
a website to serve as a signal of product quality, (2) influence of product
asymmetries of information
when manipulating the quality of the website as a signal
of the quality of the product, and (3) effects
of signal credibility.
Based on the studies
conducted, the quality of the website met criteria to be viable to use as
signal of product quality. In particular, the quality of the website is informative
guide to be extrinsic cue of the product and the most effective when two conditions
are met: (1) high information asymmetries and (2) high signal credibility.
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