How do we decide what to buy? According to Itamar Simonson and Emanuel Rosen, the authors of Absolute Value: What Really Influences Customers in the Age of (Nearly) Perfect Information, we used to make buying choices based on brand. It was guesswork, they say. And often we were duped by sexy advertising campaigns that presented bad products in a good way.
And then the Internet came along. Simonson and Rosen say that the Internet age is one of (nearly) perfect information in which we can research the quality of anything – from hotels to cameras to cars to apps – online. Quality wins, in our Internet age, they say. Rather than basing our purchasing decisions on brand, we can read 50 reviews online and then make a much more educated decision on what we should buy.
This is great news for entrepreneurs, Simonson and Rosen say. There are much lower barriers to entry, particularly for start-ups without large marketing budgets. So a company like Asus, they say, can successful get into the notebook and tablet business without a massive marketing budget.
But what about Apple, I asked. What happens to a company with both really great products and great advertising in an age of (nearly) perfect information?