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Retail Buying

Notes entrance of the store, so that customers are greeted with the aroma of freshly baked
cookies. Likewise, the fresh rotisserie chicken may be placed close to the store’s entrance.
Offering free samples is another technique to entice customers to purchase a product.

Self Assessment

Fill in the blanks:
6. .......................... should considers whether they wanted the product in the first place and
whether they need two of the same item.

7. Loyalty card customers receive coupons in the mail and offers for ..........................
supermarket sales.
8. Many supermarkets have a .......................... card system in which customers sign up and
receive special promotions.
9. The placement of items in a supermarket is a skillful .......................... technique.
10. Offering .......................... is another technique to entice customers to purchase a product.

14.3 Product Information Quality and Product Quality

The term “better information”, or “better quality of information” to describe improvements
along three different attributes – thoroughness, accuracy and timeliness – of the information
that consumers obtain about products. This section examines how better quality of product
information can be viewed as a substitute, albeit imperfect, for higher product quality. It is
widely accepted that better information about certain information products and services can be
part of the perceived product or service quality. This is especially true for information products
or services that are not meant to be used as “black boxes” by the consumers, but rather the
customers expect to be able to adjust and customize the products to fit their special needs. A
consumer that purchases an educational software package not only wishes to get comprehensive
help menus that make the program’s features easier to understand and use, but also expects to be
able to customize the intensity, focus, difficulty and other parameters of the learning process for
which the software is intended. More importantly for our discussion, the consumer expects that
this process will be easy to perform, based on the information that either comes with the
software package, or is available at the developer’s web site.

!
Caution For many such information products and services, product information is
indistinguishable from the product itself, and better product information simply means
better product quality.
One should be careful not to think of product information as a perfect substitute for product
quality, even for highly differentiated products that command price premiums. Indeed the
effects of increasing the quality of product information and increasing the quality of the product
are different. Whereas the latter increases every consumer’s valuation for the product, the former
only increases the valuation of those consumers who feel “emotionally close” to the product,
and who are furthermore very sensitive about their preferences in this product category. However,
we can view product information quality and product quality as substitutes, albeit imperfect,
for high profit margin, differentiated products, because their effects on the profitability of the
vendor are very similar. A vendor offering such a product, who improved the quality of her
product information, would experience an increase in market share and discover a newly
presented opportunity to raise her product price. From the vendor’s perspective it is as if the
quality of her product has improved. Thus, vendors that offer highly differentiated products at

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