Question

In: Operations Management

whats the extent of search quality, experience quality, and credence quality for each of the following...

whats the extent of search quality, experience quality, and credence quality for each of the following situations:

a. Buying a personal computer

b. Applying to graduate school

c. Setting up a retirement program

d. Dining at a local restaurant e. Visiting a theme park

Solutions

Expert Solution

Answer:

  1. Buying the personal computer: In this situation the search quality is high as products are expensive and there are number of brands with different configuration and prices that are available. Hence the customers make a deep research before buying. The experience quality is also high as customers actually understand the quality and value of a product after using it. Credence quality is also very high as the purchases are often made based on the brand image of the company at the marketplace.
  2. Applying to a graduate school: Search quality is high as there are many options with different fees and facilities available. The students make a proper research before deciding a graduate school. The experience quality is also high as the quality of education and related facility the students get decide their perception about the school. The reputation of the graduate school is a major factor in decision making by the students and hence the credence quality is high.
  3. Setting up retirement program: The search quality is high as there are many options that have different types of offerings. The experience quality is moderate as customers know beforehand that what they are going to get on a routine basis. Only factors like delays in payments can spoil the experience. Reputation of the retirement program provider matters as it is a financial product, hence credence matters.
  4. Dining in a restaurant: Search quality is moderate as the taste of the food can only be established after consuming but things like prices can be known beforehand. The experience quality is high as the taste of the food and service quality is only experienced. The credence quality is high as most people select restaurants based on the experience of others.
  5. Visiting a theme park: Search quality is moderate as except for price other attributes can only be known after experience. Experience quality is high as the product/service offered by theme park can only be evaluated by experience. The credence quality is high as most people select theme parks based on the recommendations of others.

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