The effect of product quality uncertainty on quality-screening efforts: does the purchase frequency and procurement channel choice matter?

Abstract

Product quality uncertainty is one of the major concerns for buyers in online transactions. In fact, research into the consequences and control of this uncertainty in online transactions has increased considerably in recent years. However, product quality uncertainty poses challenges not only to online buyers, but also to offline buyers. Therefore, the objectives of this empirical study were to examine the effect of product quality uncertainty on quality-screening efforts in offline transactions, and whether the frequency of purchase from the same source and the choice of procurement channel may be used as control mechanisms to reduce this effect. Empirical evidence from 239 small food-processing firms shows that product quality uncertainty has a positive effect on quality-screening efforts. Moreover, our findings demonstrate that this effect decreases significantly when food processors purchase frequently from the same source, and when they buy directly from the farm rather than through intermediaries.