European Journal of Marketing
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Angeline Gautami Fernando, Bharadhwaj Sivakumaran, L. Suganthi,
Article information:
To cite this document:Angeline Gautami Fernando, Bharadhwaj Sivakumaran, L. Suganthi, (2018) "Comparison ofperceived acquisition value sought by online second-hand and new goods shoppers", EuropeanJournal of Marketing, Vol. 52 Issue: 7/8, pp.1412-1438, https://doi.org/10.1108/EJM-01-2017-0048
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(2018),"Building brand authenticity in fast-moving consumer goods via consumer perceptions ofbrand marketing communications", European Journal of Marketing, Vol. 52 Iss 7/8 pp. 1387-1411 <ahref="https://doi.org/10.1108/EJM-11-2016-0665">https://doi.org/10.1108/EJM-11-2016-0665</a>(2018),"CSR types and the moderating role of corporate competence", European Journal ofMarketing, Vol. 52 Iss 7/8 pp. 1358-1386 <a href="https://doi.org/10.1108/EJM-12-2016-0702">https:// doi.org/10.1108/EJM-12-2016-0702</a>
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   D  o  w  n   l  o  a   d  e   d   b  y   G  r  e  a   t   L  a   k  e  s   I  n  s   t   i   t  u   t  e  o   f   M  a  n  a  g  e  m  e  n   t   A   t   2   0  :   5   0   1   0   J  u   l  y   2   0   1   8   (   P   T   )
 
Comparison of perceivedacquisition value sought by onlinesecond-hand and newgoods shoppers
Angeline Gautami Fernando
VIT Business School, VelloreInstituteof Technology, Chennai, India
Bharadhwaj Sivakumaran
Department of Marketing, Great Lakes Instituteof Management,Chennai, India, and
L.Suganthi
Department of Management Studies, Anna University, Chennai, India
Abstract
Purpose
 – 
 Second-hand/used goods channels compete with existing traditional channels to satisfyconsumers
 needs that are unmet by traditional retail networks. However, most studies on online shoppinghave largely ignored online second-hand/used good purchases. This study aims to use Thaler
s mentalaccounting model, principal
 – 
agent perspective and contamination theory to highlight the differences in thevaluesought by onlinenewgoods and second-hand shoppers.
Design/methodology/approach
 – 
 A conceptual framework linking perceived uncertainty,perceived acquisition value and e-loyalty was developed and tested using structural equationmodelling. The moderating effects of product type (new vs second-hand) and frugality were alsoincluded.
Findings
 – 
 The paper found strong support for the model. Results showed that online second-handshoppers were more uncertain and perceived lesser levels of acquisition value when compared to new goodsshoppers. They were also less frugal. Online shoppers are also more likely to buy products with sensoryattributes (experience goods)in new goods websites and products with non-sensory attributes (search goods)fromsecond-hand websites.Theauthors recommend various ways in which managers can increaseperceivedvaluefor theonlineshopper.
Research limitations/implications
 – 
 Future studies can extend this investigation by includingtransaction value or other hedonic values to verify their impact on acquisition value and e-loyalty. While theauthors found support for thenotion that consumers whobuy used goods onlineareless frugal,thereis someresearch that could point totheopposite.Hence,research can investigatethis topicin depth in morecountriestothrowmorelight on this.
Practical implications
 – 
 To sustain themselves in a competitive online market, retailers need tounderstand the value sought by consumers. This study provides empirical evidence of the importance of acquisitionvaluefor newgoods andsecond-hand shoppers.
Originality/value
 – 
 No recent research has compared the value sought by online second-hand and newgoods shoppers.This study contributes totheunderstanding oftheacquisition valueperceived by consumersin onlinenewgoods and second-hand shopping channels.
Keywords e-loyalty,Frugality,Onlinenew/second-hand shopping,Perceived acquisition value,Product category (search vs experience)Paper type Research paper
EJM52,7/81412
Received 12January 2017Revised 16September 201729December 20176February 2018Accepted 19February 2018
European JournalofMarketing
Vol.52No.7/8,2018
pp. 1412-1438© EmeraldPublishingLimited0309-0566DOI 10.1108/EJM-01-2017-0048
Thecurrent issueand full text archiveof this journal is availableon Emerald Insight at:www.emeraldinsight.com/0309-0566.htm
   D  o  w  n   l  o  a   d  e   d   b  y   G  r  e  a   t   L  a   k  e  s   I  n  s   t   i   t  u   t  e  o   f   M  a  n  a  g  e  m  e  n   t   A   t   2   0  :   5   0   1   0   J  u   l  y   2   0   1   8   (   P   T   )
 
IntroductionIn recent years, the number of online shoppers has increased exponentially across mostglobal markets. Research on perceived value sought by the online shopper is on the rise, asmost consumer purchases are driven by this construct (Cronin et al., 2000; Grewal et al., 2003;Zeithaml,1988).Whileextant research in this area tries toidentify variables that drive perceived value in thepurchase ofnew goods online (Kim and Gupta,2009;Gupta and Kim, 2010; Audrain-Pontevia et al., 2013), the Internet also serves as a signi
cant channel thatfacilitates theexchangeofused or second-hand goods.Online auctions, second-hand goods retail websites and online classi
eds websites alsoserve as important intermediaries for redistributing used goods (Cameron and Galloway,2005). Such intermediaries enable the reduction of excessive waste caused by over-consumption in society (Brosius et al., 2013). Online second-hand markets are also animportant part of the growing
sharing economy
 that is fuelled by the growth ininformation technology (Hamari et al.,2016).The second-hand market is experiencing rapidgrowth worldwide (Lee and Stewart, 2016; Lockett, 2016; Durif et al., 2017). Hence, it is important toinvestigateperceived valuein thecontext ofonlinesecond-hand markets too.This study draws from Thaler
s mental accounting model (Thaler, 1985)to address thisgap by examining thevariations in perceived valuein both new and second-hand purchaseson the Internet. Zeithaml (1988) de
nes perceived value as
the difference between thebene
ts obtained and the sacri
ces made to acquire a product
; we follow this de
nition.Thaler
s mentalaccounting modeldescribes this trade-offaspect ofperceived valueby usingthe components of 
acquisition value
 and
transaction value
. Online transactions sufferfrom a number of uncertainties. Perceived uncertainty is an important characteristic of online transactions and refers to the
dif 
culty in predicting the outcome of an onlinetransaction duetoseller-related and product related information asymmetry
 (Dimoka et al.,2012).As acquisition valueis an important determinant ofconsumer choicewhen comparedto transaction value when quality is uncertain (Urbany et al., 1997), this study examinesacquisition valuerather than transaction value.E-tailers arealsointerested in theeffect ofperceived valueon loyalty as repeat purchasesimprove the margin (Sirdeshmukh et al., 2002) and area source of competitive advantage(Reichheld and Schefter, 2000; Anderson and Srinivasan, 2003; Yang and Peterson, 2004; Sabiote et al., 2012; Valvi and Fragkos, 2012). Online second-hand e-tailers also need to encourage repurchases to improve their revenue. Therefore, in this study,we scrutinise theeffect of perceived value on online loyalty to understand if acquisition value drives repeatpurchases ofboth newand second-hand products on theInternet.We believe that the product type (new vs second-hand) will in
uence perceiveduncertainty and acquisition value.Unlikewebsites that retailnew goods,second-hand goodsneed other cues for quality evaluation (Gabbot, 1991). Hence, we scrutinise these issues byinvestigating thein
uenceofproduct type(new vs second-hand)in our study.Among various personal characteristics, frugality is a lifestyle trait that is consistentlyassociated with second-hand purchases (Cervellon et al., 2012; Guiot and Roux, 2010; Lastovicka et al.,1999;Roux and Guiot,2008).We examine its effect in thecontext of online purchases. We believe that consumer contamination might affect second-hand purchases.Consumers view previously touched products as
contaminated
 products and evaluatethem less favourably (Argo et al., 2006). Second-hand purchases have a high probability of being affected by thecontamination effect as they havebeen previously owned.Speci
cally,we believe that experience goods (e.g. apparel) will suffer greater contamination effects asconsumers typically prefer to examine the sensory attributes of such goods. Not many
Perceivedacquisitionvalue1413
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studies have investigated this association. We do so in this study by investigating if thenatureoftheproducts
attributes ampli
es contamination effects whileshopping online.Tosummarise,themajor objectives ofour research aretoinvestigatetheeffect of:perceived uncertainty on perceived acquisition value;perceived acquisition valueon e-loyalty;effect of product type (new vs second-hand) on perceived uncertainty, acquisitionvalue and frugality;roleoffrugality in online new goods and second-hand purchases;andeffect of product (search vs experience) category on online product choice (new vssecond-hand).To address these objectives, we develop a research model based on mental accountingtheory, principal
 – 
agent perspective and contamination theory. Structured equationmodelling is used to test the model and the proposed relationships. From a practicalperspective, different strategies might be needed to promote traf 
c to online retail andsecond-hand retail websites. Hence, this study would contribute the understanding of thevaluethat buyers seek fromthesechannels.Literature reviewOnlinesecond-hand/used goods shoppingSecond-hand/used goods shopping refers to the purchase of previously owned products. Inthe of 
ine market,consumers acquire second-hand goods through a number of outlets suchas
 
ea markets, swaps and garage sales. The Internet has greatly facilitated marketplaceexchanges of used goods among consumers, e.g. online consumer-to-consumer (C2C). Insuch situations, the sellers usually remain anonymous and the buyer may not be able toinspect the product before purchase (Yen and Lu, 2008). Hence, the bidder evaluates theseller based on the reputation mechanism (e.g. reputation signals like seals) provided bythe Internet intermediary (e.g.eBay).Therefore, most studies on online auctions investigatetheeffect oftrust mechanisms on bidder behaviour in onlineauction and retail (Ghose,2009;Liet al.,2009;Yeh et al.,2012). Apart from auction and retail websites, the online classi
eds ad space (e.g.Craigslist)is a widely used business model that supports the transaction of used goodsover the Internet (Belk, 2014). The website that provides the platform for thesetransactions is mostly involved in facilitating the meeting between the buyer and sellerand usually does not provide any other value-added services (Kapitan and Bhargave,2013). For instance, eBay provides eBay Classi
eds (Kijiji) as an alternative toincreasing competition from the online classi
eds space. In this model, the users cantransact among themselves at a reduced cost and can
 fi
nd local goods quickly (Combergand Velamuri,2015).Existing research examines the effect of trust mechanisms on the potential buyer(Ghose,2009)or cluster buyers based on psychographic variables (Lee et al., 2013).While some researchers demonstrate economic motivation for online second-hand shoppers,Parguel et al. (2017) show that in online second-hand websites, they are driven by
indulgent consumption
. We contribute to this stream of research by adding ourinvestigations on the perceived value sought by the consumer when using the onlinesecond-hand channel.
EJM52,7/81414
   D  o  w  n   l  o  a   d  e   d   b  y   G  r  e  a   t   L  a   k  e  s   I  n  s   t   i   t  u   t  e  o   f   M  a  n  a  g  e  m  e  n   t   A   t   2   0  :   5   0   1   0   J  u   l  y   2   0   1   8   (   P   T   )
 
Principal
 – 
agent perspectiveand perceived uncertaintyin onlinetransactionsThe principal
 – 
agent perspective, based on agency theory, aids in examining the issue of information asymmetry between twoself-interested parties (i.e.buyers and sellers)in onlineexchanges (Pavlou et al., 2007). This states that principals (buyers) assign the deliveryresponsibility totheseller (agent)whohas moreinformation in onlinemarkets.This leads toadverse selection (hidden information)and moral hazard (hidden action)issues (Biswas andBiswas, 2004; Dimoka et al., 2012). Hidden information refers to pre-purchase uncertainties regarding the product and seller quality.Hidden action refers to the uncertainties related totheseller
s post-purchasebehaviour.The principal
 – 
agent perspective recommends that agents (sellers) can
signal
 theirquality to overcome uncertainties. Signals foster trust between the principal and agent andreduce uncertainty in online transactions (Li et al., 2009; Fang et al., 2011). For example, buyers rely on the seller
s reputation, product condition and the quality of the sellers
argument toovercometheinformation asymmetry problem (Shen et al.,2011).Hence,sellersshould focus on reducingtheperceived uncertainties ofthebuyer (Scott et al.,2012).While the effect of perceived uncertainty has been explored in the context of onlineshopping and auction websites, extant research does not offer much information regardingits effect on acquisition value and purchase of second-hand goods online. We intend
 fi
llingthis gap.Mentalaccountingmodeland perceived valuePerceived value is the consumer
s evaluation of the bene
ts received vs the sacri
ces (e.g.cost, time) made. Based on Thaler
s mental accounting model, perceived value comprises
acquisition value
 (perceived bene
ts intrinsic to the product) and
transaction value
(psychologicalpleasurein getting a good deal).Perceived acquisition valuecan betreated as
the perception of affordable quality in the merchandise purchased
 while shopping online(Mathwick et al.,2001).Acquisition valueis thedifferencebetween theperceived bene
ts intrinsictotheproductwhen compared to the expenses, whereas transaction value refers to the
merit of the deal
(Monroe and Chapman, 1987; Thaler, 1985). The merit of the deal is usually the pleasure/  displeasure associated with receiving a difference between the price and the internalreference price of the product (Lichtenstein et al., 1990). Acquisition value is
consumersurplus
, and transaction value is the incremental utility for the purchase (Urbany et al.,1997). For example, if the consumer is considering the purchase of a car, the quality of theproduct features that he is interested in contributes to the acquisition value. If he believesthat the mileage and safety features of the car match the price he pays for the car, then hehas a favourable evaluation of the acquisition value of the car. The price need not be
nancial at all times. For instance, increased search costs can constitute an increase in thepricing component and bring down the acquisition value of the product.On the other hand,ifhehad bought thecar for a bargain (less than thestandard selling price)during thefestiveseason,the pleasure ofgetting a lower pricewould contribute tothetransaction value oftheproduct. Some researchers favour the study of transaction value in online shopping as theypresume that the roles of transaction and acquisition value overlap. They hypothesise thatas the quality of products in online stores do not differ, consumers evaluate only pricedifferences among onlinestores toassess value.This pricedifferencecould causean overlapbetween acquisition and transaction value(Gupta and Kim,2010).However, this assumption ignores the effect of perceived uncertainty in onlinetransactions.Perceived uncertainty will have a signi
cant negativeeffect on theconsumer
sperceived quality. Perceived quality is known to have a positive effect on acquisition value
Perceivedacquisitionvalue1415
   D  o  w  n   l  o  a   d  e   d   b  y   G  r  e  a   t   L  a   k  e  s   I  n  s   t   i   t  u   t  e  o   f   M  a  n  a  g  e  m  e  n   t   A   t   2   0  :   5   0   1   0   J  u   l  y   2   0   1   8   (   P   T   )
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