January 19, 2001, 12:00 AM

Value, not price, motivates online shoppers

It doesn't matter if consumers are shopping online for hotel rooms, groceries or other products from their favorite artists, consumers are more "value sensitive" than "price sensitive" when it comes to shopping online. That's according to research by Arvind Rangaswamy, professor of marketing in Penn State's College of Business Administration. He recently co-authored a paper, "Consumer Choice Behavior in Online and Traditional Supermarkets: The Effects of Brand Name, Price, and Other Search Attributes." It appeared in the International Journal of Research in Marketing. The increasing availability of comparative price information online does not necessarily make consumers more price-sensitive, says Rangaswamy, director of research for Penn State's eBusiness Research Center. Rangaswamy notes that convenience still dominates searches online. A majority of consumers use the Internet to simplify their choice process, that is, reduce the number of brands considered or bookmark sites selling their favorite products, rather than to make their purchase process more comprehensive.

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