Extrinsic Cue of Warranty by Selling through a Reputable Website

Huei-Chen Hsu
National Yunlin University of Science and Technology

Chi-Shiun Lai
National Yunlin University of Science and Technology

Cheng-Hsui Chen
National Yunlin University of Science and Technology


INTRODUCTION

Online shopping, a form of virtual operation on the internet has shown the potential to grow from a small to a major portion of the global commerce. Over 11 percent of the world's population now has access to the internet, with the number of users worldwide reaching 719 million by December 2003; this is an increase of 100.4 percent since 2000. Worldwide internet use is projected to reach 1 billion by 2005 (Nielsen, 2003). Many companies now understand the importance of building promotion strategies within the E-market. Low search costs are one of the major benefits of online shopping. In the past, when search costs were relatively high, consumers relied on extrinsic cues like brand and price. The behavior of consumers in the face of information has been the subject of numerous studies over the past 40 years. A robust review of the literature has revealed the focus more limited to the discussion of effects on perceptual factors toward the website (McMillan and Hwang, 2002). Psychological theories of attention and involvement are used to establish a framework that can accommodate the major consumer behavior (Greenwald and Leavitt, 1984). A reputable website, which provides a search service for consumers by aggregating the information provided by the various vendors, acts as a guarantor of quality by evaluating numerous products, filtering information, and reducing the number of alternatives relevant to consumer preference, thereby reducing consumer evaluation costs. The emergence of the internet has made it easier for consumers to obtain information about products and prices. A typical reputable website is an online agent that specializes in collecting and distributing product information. It provides buyers and vendors with the information they need, including price and product information (Fisherbein and Ajzen, 1980). However, one area of information economics that has gone largely untested is extrinsic clues. Furthermore, the potential value of integrating the extrinsic clues paradigm with more traditional theories of consumer behavior has gone largely untapped in empirical consumer research (Boulding and Kirmani, 1993).