Information quality and market share in electronic commerce

Abstract

Purpose

For electronic commerce applications, the importance of quality information is self‐evident, especially for firms offering information products where information either significantly augments a physical product or constitutes the product itself. Aims to use a probabilistic simulation model is used to explore the relationship between information quality and market share for firms offering an information product.

Design/methodology/approach

In the Excel‐based Monte Carlo model information quality is represented as a function of four general quality attributes. For these attributes, quality gaps relative to best practices are calculated and these gaps are used to drive a volume model whose output includes market share. The model is used to examine various scenarios including cases dealing with differences in a firm's initial information quality levels, differences in innovation rates and their variability, and differences in a firm's proclivity to copy advances of competitors.

Findings

The results indicate that firms starting with information quality leads tend to maintain that lead and accrue market share. However, they may lose their lead if innovation rates lag behind the competition. Generally, variation and the ability for firms to copy advances are good for markets.

Practical implications

Some practical implications from the findings include: the criticality of innovation and its importance in fostering quality; the ineffectiveness of insular strategies; and evidence that specialization, while benefiting markets, does not necessarily benefit individual firms.

Originality/value

The model presents a mechanism for scholars and practitioners to – expeditiously and inexpensively – test the impact of various information‐quality strategies.

Citation

Miller, H. (2005), "Information quality and market share in electronic commerce", Journal of Services Marketing, Vol. 19 No. 2, pp. 93-102. https://doi.org/10.1108/08876040510591402