Search at different price levels: the impact of knowledge and search cost

Studies the impact of search cost and prior knowledge on consumer search at different price points in a market price distribution for telecommunications products. In an experiment it is found that buyers search differently on premium price products than they do on moderate and low price products, and that this behavior depends on the search costs of the purchase situation and the knowledge of the buyer involved. The results suggest a number of implications for marketers on the role of premium priced brands, ranging from product line pricing strategy to information communication strategy.