Playing cat and mouse: consumer empowerment and marketing interactions on the internet

Since the internet was first used in the business world, researchers have been asking whether consumers have more power when they make their purchases using this channel and whether this makes electronic markets more efficient. No definitive answers for these questions have yet been found. The current work analyses the power game between consumers and companies online. The work considers the sources of consumer empowerment on the internet and the marketing initiatives that firms develop, which sometimes reduce consumers' power. The work also analyses the impact of these two factors on electronic markets in light of evidence from the literature examining their supposed greater efficiency. The article identifies various sources of power for the online consumer and stresses that different groups of consumers exercise this power at different levels of intensity.

[1]  Zoonky Lee,et al.  A Longitudinal Price Comparison For Music CD's In Electronic and Brick-and-Mortar Markets: Pricing Strategies In Emergent Electronic Commerce , 2002, Journal of Business Strategies.

[2]  John Morgan,et al.  Temporal price dispersion: Evidence from an online consumer electronics market , 2004 .

[3]  Xiaolin Xing,et al.  Pricing dynamics in the online consumer electronics market , 2004 .

[4]  Florian Zettelmeyer,et al.  Expanding to the Internet: Pricing and Communications Strategies When Firms Compete on Multiple Channels , 2000 .

[5]  B. Ratchford,et al.  Can price dispersion in online markets be explained by differences in e-tailer service quality? , 2002 .

[6]  Florian Zettelmeyer,et al.  How the Internet Lowers Prices: Evidence from Matched Survey and Automobile Transaction Data , 2006 .

[7]  Suzanne Loker,et al.  Mass Customization: On-line Consumer Involvement in Product Design , 2006, J. Comput. Mediat. Commun..

[8]  Brian T. Ratchford,et al.  Price dispersion on the internet: A review and directions for future research , 2004 .

[9]  C. Sims Implications of rational inattention , 2003 .

[10]  Donna L. Hoffman,et al.  The Revolution Will Not Be Televised: Introduction to the Special Issue on Marketing Science and the Internet , 2000 .

[11]  Walter J. Carl,et al.  What's All The Buzz about? , 2006 .

[12]  J. M. C. Hernandez Brand Trust and Online Consumer Behavior , 2002 .

[13]  Don Peppers,et al.  The One to One Future: Building Relationships One Customer at a Time (Будущее персонализации: построение взаимоотношений с одним клиентом) , 1993 .

[14]  Valerie J. Trifts,et al.  Consumer Decision Making in Online Shopping Environments: The Effects of Interactive Decision Aids , 2000 .

[15]  A. Rangaswamy,et al.  Consumer Choice Behavior in Online and Traditional Supermarkets: The Effects of Brand Name, Price, , 2000 .

[16]  Alok Gupta,et al.  The Sources of On-Line Price Dispersion Across Product Types: An Integrative View of On-Line Search Costs and Price Premiums , 2006, Int. J. Electron. Commer..

[17]  R. Nelson,et al.  An Analysis of Pricing Strategy and Price Dispersion on the Internet , 2007 .

[18]  R. Dholakia,et al.  Factors Driving Consumer Intention to Shop Online: An Empirical Investigation , 2003 .

[19]  Dhruv Grewal,et al.  Imperfect information: The persistence of price dispersion on the web , 2006 .

[20]  M. Etzel,et al.  National Aggregate Consumer Sentiment toward Marketing: A Thirty-Year Retrospective and Analysis , 2005 .

[21]  Micael Dahlén,et al.  Real consumers in the virtual store , 2002 .

[22]  Francisco J. Martínez-López,et al.  Online shopping, the standard learning hierarchy, and consumers' internet expertise: An American-Spanish comparison , 2005, Internet Res..

[23]  Kathryn Waite,et al.  The internet, information and empowerment , 2006 .

[24]  Francisco J. Martínez-López,et al.  Motivations for consumption behaviours on the web: a conceptual model based on a holistic approach , 2006 .

[25]  Jonathan E. Schroeder,et al.  Mapping Consumer Power: An Integrative Framework for Marketing and Consumer Research , 2006 .

[26]  Varun Grover,et al.  The Dark Side of Information and Market Efficiency in E-Markets , 2006, Decis. Sci..

[27]  Richard T. Watson,et al.  The Internet and the birth of real consumer power , 2002 .

[28]  M Niblock Mass customization: The new frontier in business competition ? II, Harvard Business School Press (1993), 332 pp., £25.95 , 1993 .

[29]  Antonis C. Stylianou,et al.  Pricing on the Internet and in Conventional Retail Channels: A Study of Over-the-Counter Pharmaceutical Products , 2005, Int. J. Electron. Commer..

[30]  Cary A. Deck,et al.  Tracking Customer Search to Price Discriminate , 2006 .

[31]  D. Chaffey,et al.  Internet Marketing: Strategy, Implementation and Practice , 2000 .

[32]  F. Sotgiu,et al.  The Drivers of E-tailers' Price Levels , 2005 .

[33]  Myung-Soo Lee,et al.  A Model of Consumer Choice of the Internet as an Information Source , 2001, Int. J. Electron. Commer..

[34]  R. MacAvoy,et al.  Frictionless Commerce? A Comparison of Internet and Conventional Retailers , 1999 .

[35]  Kent B. Monroe,et al.  Pricing on the Internet , 2002 .

[36]  Wonseok Oh,et al.  Information Technology and Pricing Decisions: Price Adjustments in Online Computer Markets , 2006, MIS Q..

[37]  John G. Lynch,et al.  Interactive Home Shopping: Consumer, Retailer, and Manufacturer Incentives to Participate in Electronic Marketplaces , 1997 .

[38]  Michael R. Baye,et al.  Price Dispersion in the Small and in the Large: Evidence from an Internet Price Comparison Site , 2004 .

[39]  Lawrence Feick,et al.  A Penny for Your Thoughts: Referral Reward Programs and Referral Likelihood: , 2007 .

[40]  Kent B. Monroe,et al.  The impact of the Internet and consumer motivation on evaluation of prices , 2003 .

[41]  Erik Brynjolfsson,et al.  Consumer Decision-Making at an Internet Shopbot , 2001 .

[42]  D. Gilbert,et al.  How e‐CRM can enhance customer loyalty , 2003 .

[43]  Dennis L. Hoffman,et al.  Marketing in Hypermedia Computer-Mediated Environments : Conceptual Foundations 1 ) , 1998 .

[44]  G. Stigler The Economics of Information , 1961, Journal of Political Economy.

[45]  J. Bakos Reducing buyer search costs: implications for electronic marketplaces , 1997 .

[46]  Lisa Harris,et al.  Marketing in the Internet age: what can we learn from the past? , 2003 .

[47]  Folke Ölander,et al.  Consumer power: Enabling and limiting factors , 1991 .

[48]  Brian T. Ratchford,et al.  On the Efficiency of Internet Markets for Consumer Goods , 2003 .

[49]  Jeffrey M. Perloff,et al.  Price Dispersion on the Internet: Good Firms and Bad Firms , 2001 .

[50]  Michael J. Shaw,et al.  Buyers' Choice of Online Search Strategy and Its Managerial Implications , 2006, J. Manag. Inf. Syst..

[51]  Ramayya Krishnan,et al.  Retail Strategies on the Web: Price and Non-Price Competition in the Online Book Industry , 2003 .

[52]  H. Varian,et al.  Conditioning Prices on Purchase History , 2005 .

[53]  Michael J. Shaw,et al.  Consumer cost differences for traditional and Internet markets , 1999, Internet Res..

[54]  Charles Dennis,et al.  Enhancing consumer empowerment , 2006 .

[55]  Linda L. Price,et al.  The market maven: A diffuser of marketplace information. , 1987 .

[56]  Michael D. Smith The impact of shopbots on electronic markets , 2002 .

[57]  Robert C. Blattberg,et al.  Interactive Marketing: Exploiting the Age of Addressability , 1991 .

[58]  Jihui Chen Differences in Average Prices on the Internet: Evidence from the Online Market for Air Travel , 2007 .

[59]  Fang-Fang Tang,et al.  Forthcoming , 2001, Central European History.

[60]  Antoni Meseguer-Artola,et al.  An Integrated Model of the Adoption and Extent of E-Commerce in Firms , 2007 .

[61]  R. Staelin,et al.  A Customer Relationship Management Roadmap: What is Known, Potential Pitfalls, and Where to Go , 2005 .

[62]  R. Lal,et al.  When and How is the Internet Likely to Decrease Price Competition , 1999 .

[63]  Behrang Rezabakhsh,et al.  Consumer Power: A Comparison of the Old Economy and the Internet Economy , 2006 .

[64]  Guilherme D Pires,et al.  The internet, consumer empowerment and marketing strategies , 2006 .

[65]  John G. Lynch,et al.  Wine Online: Search Costs Affect Competition on Price, Quality, and Distribution , 2000 .

[66]  Austan Goolsbee,et al.  Does the Internet Make Markets More Competitive? Evidence from the Life Insurance Industry , 2000, Journal of Political Economy.

[67]  R. Krishnan,et al.  Prices and Price Dispersion on the Web: Evidence from the Online Book Industry , 2001 .

[68]  Eric K. Clemons,et al.  Price Dispersion and Differentiation in Online Travel: An Empirical Investigation , 2002, Manag. Sci..

[69]  Scot Burton,et al.  Advertised reference prices in an Internet environment: Effects on consumer price perceptions and channel search intentions , 2003 .

[70]  Venkatesh Shankar,et al.  Price levels and price dispersion within and across multiple retailer types: Further evidence and extension , 2004 .

[71]  Zhenlin Yang,et al.  A comparison of time-varying online price and price dispersion between multichannel and dotcom DVD retailers , 2006 .