Research goods have a clear value that can be assessed before purchase, making them easier to compare and negotiate prices. Retailers can use branding and bait-and-switch tactics to promote these products. In contrast, experience goods have less obvious value before purchase. Consumers can use online ratings to inform their decisions. Price competition and product substitution are also factors in the market for research goods.
An economic phenomenon, a research good refers to an item or service that carries a value that can be assessed before any sales transaction. It is a product that offers consumers a certain advantage because the value of the item can be compared and compared with the prices of other retail suppliers. Retailers can use a search to their advantage by implementing a bait-and-switch tactic, where the consumer is enticed through advertising to enter for one item but is encouraged to switch to another product upon arrival.
Perhaps the best way to understand a research good is to look at its counterpart, the experience good. Also an economic term, this product does not have such obvious value before purchase. Instead, there are multiple factors affecting its value that make the value more obscured before taking ownership. Once the item is purchased, however, the value becomes more apparent, as is the case with a new wine. There is greater risk in purchasing a positive experience because there is less assurance that the buyer will be satisfied with the purchase.
Some online outlets offer a rating system where consumers can rate the items they purchase. This can come in handy because even when buying a research product, there may be misconceptions floating around in the market. Reviewing what other buyers have to say and experiences with your item could lead to a more informed decision.
Price competition is when retailers try to outdo each other in an effort to win business by promoting the benefits of research goods to the consumer. More than one seller can advertise and stock the same item. As a result, consumers may be able to negotiate the price of a research good. This may require some research and comparisons on the part of the customer, but can lead to a favorable outcome when making a purchase.
Also search the products are replaceable. For example, if the cost of a particular product, such as lumber, is triggering price increases on items such as pencils, consumers may be enticed to substitute items, such as ink writing implements. Additionally, retailers can use the branding of research products to their advantage. By marketing a particular product at a certain price, consumers can be attracted to shopping in the store due to an attractive price. Retailers can then use the opportunity to upgrade consumers to a higher priced research product because it is clear that the customer has an interest in this type of product.
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