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Marketspace or Marketplace? Online Information Search and Channel Outcomes in Auto Retailing

The Lally School of Management and Technology, Rensselaer Polytechnic Institute, Troy, New York 12180
Decision and Information Technologies, Robert H. Smith School of Business, University of Maryland, College Park, Maryland 20742
Decision and Information Technologies, Robert H. Smith School of Business, University of Maryland, College Park, Maryland 20742
Capital Group Companies, Inc., Irvine, California 92710
iSky, Inc., Laurel, Maryland 20707
kuruzj{at}rpi.edu
sviswana{at}rhsmith.umd.edu
ragarwal{at}rhsmith.umd.edu
sgosain{at}uci.edu
sweitzman{at}isky.com

The growth of the Internet has spawned an increasing number of online information sources (OISs). The effect of OISs on consumer information search processes has been particularly striking in sectors such as auto retailing, where the typical consumer has conventionally been confronted with an unpleasant and inefficient purchase process. However, the relationships between the information found in the online "marketspace," consumer search in the offline "marketplace," and other aspects of the multichannel shopping process are not well understood. This study examines the differential impact of price and product information found in the marketspace, relating consumers' information needs and information retrieval from OISs to three shopping-related outcomes—purchase based on online infomediary referral (i.e., referred purchase), intensity of search in the marketplace, and online search satisfaction. We draw on a large data set of more than 16,000 new vehicle purchasers who reported using the Web for search related to their new vehicle purchase. We find that OISs offer different levels of price and product information and consumers are differentiated in their ability to retrieve this information. Further, the retrieval of price versus product information online has important implications for whether consumers consummate their online search through referred purchase or extend their search into the physical marketplace. Our results suggest different business models for infomediaries providing price and product information and underscore the need for designing information provisioning systems of OISs to facilitate transition between the marketspace and the marketplace.

Key Words: online infomediaries; information needs fulfillment; auto retailing; value chain
History: This paper was received on July 18, 2005.