A comparison of purchase decision calculus between potential and repeat customers of an online store

Authors:
Hee-Woong Kim;Sumeet Gupta
Affiliations:
Yonsei University, Graduate School of Information, New Millenium Hall, 134 Shinchon-Dong, Seodaemoon, Seoul, 120-746, Republic of Korea;Department of Business Administration, Shri Shankaracharya Institute of Management and Technology, Junwani, Bhilai, 490020, India
Venue:
Decision Support Systems
Year:
2009

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Abstract

Potential and repeat customers of an online store possess different amount of information and use different criteria for making purchase decisions. Internet vendors should therefore adopt different sales strategies for creating initial sales and generating repeat sales. Yet little is known about the differences in online purchase decision making between the two customer groups. This study examines the differences between potential and repeat customers based on mental accounting theory and information processing theory. We found that value perception (of transactions made with the online vendor) as an overall judgment for decision making is more strongly influenced by the non-monetary (perceived risk) factor than by the monetary factor (perceived price) for potential customers, whereas it is more strongly influenced by the monetary factor than by the non-monetary factor for repeat customers. The findings of our study would help Internet vendors develop customized strategies for creating initial sales and repeat sales.