Consumer Perception of Price Quality and Value

Consumer Perceptions of Price, Quality, and Value: A Means-End Model and Synthesis of
Evidence
Author(s): Valarie A. Zeithaml
Source: Journal of Marketing, Vol. 52, No. 3 (Jul., 1988), pp. 2-22
Published by: American Marketing Association
Stable URL: http://www.jstor.org/stable/1251446 .
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Valarie A. Zeithaml
Consumer
Perceptions
of
Price,
Quality,
and Value: A Means-End
Mod el and
Synthesis
of Evid ence
Evid ence f rom
past
research and
insights
f rom an
exploratory investigation
are combined ina
conceptual
mod el that d ef ines and relates
price, perceived quality,
and
perceived
value.
Propositions
about the con-
cepts
and their
relationships
are
presented ,
then
supported
with evid ence f rom the literature. Discussion
centers on d irections f or research and
implications
f or
managing price, quality,
and value.
THOUGH consumer
perceptions
of
price, quality,
and value are consid ered
pivotal
d eterminants of
shopping
behavior and
prod uct
choice
(Bishop 1984;
Doyle 1984; Jacoby
and Olson
1985, Sawyer
and
Dickson
1984,
Schlechter
1984),
research on these
concepts
and their
linkages
has
provid ed
f ew conclu-
sive
f ind ings.
Research ef f orts have beencriticized f or
inad equate
d ef inition and
conceptualization (Monroe
and Krishnan
1985;
Zeithaml
1983),
inconsistent
measurement
proced ures(Monroe
and Krishnan
1985),
and
method ological problems (Bowbrick 1982;
Olson
1977;
Peterson and Wilson
1985).
One f und amental
problem limiting
work inthe area involves the mean-
ing
of the
concepts: quality
and value are ind istinct
and elusive constructs that of tenare mistakenf or im-
precise ad jectives
like
"good ness,
or
luxury,
or shi-
niness,
or
weight" (Crosby 1979). Quality
and value
are not well d if f erentiated f rom each other and f rom
similar constructs such as
perceived
worth and
utility.
Valarie A. Zeithaml isAssociate Prof essor, Fuqua
School of Business,
Duke
University.
The author
gratef ully acknowled ges
the f inancial
sup-
port
and
cooperation provid ed
f or thisresearch
by
the
Marketing
Sci-
ence Institute and one of its
corporate sponsors.
The author alsothanks
Orville C. Walker, Jr.,
Richard Lutz, C. WhanPark, Diane Schmalensee,
A. Parasuraman,
and three
anonymous
JMreviewers f or
helpf ul
com-
mentsond raf tsof the
manuscript.
Because d ef inition is
d if f icult,
researchers of ten d e-
pend
onunid imensional
self -report
measures to
cap-
ture the
concepts (Jacoby, Olson,
and Had d ock
1973;
McConnell
1968; Shapiro 1973)
and thus must as-
sume shared
meanings among
consumers.
What d o consumers mean
by quality
and value?
How are
perceptions
of
quality
and value f ormed ? Are
they
similar across consumers and
prod ucts?
How d o
consumers relate
quality, price,
and value intheir d e-
liberations about
prod ucts
and services? This article
isan
attempt
to
provid e
answers tothese
questions by:
*
d ef ining
the
concepts
of
price, quality,
and value
f rom the consumer's
perspective,
*
relating
the
concepts
ina
mod el,
and
*
d eveloping propositions
about the
concepts,
ex-
amining
the available evid ence in
support
of the
propositions,
and
suggesting
areas where re-
search is need ed .
To
accomplish
these
objectives,
a review of
previous
research was
augmented by
an
exploratory
investi-
gation
of
quality
and value inthe
prod uct category
of
beverages. Company
interviews,
a f ocus
group
inter-
view,
and 30
in-d epth
consumer interviews cond ucted
by
f ree-elicitation
approachesgenerated qualitative
d ata
Journal of Marketing
Vol. 52
(July
1988), 2-22.
2
/
Journal of
Marketing, July
1988
that
supplemented previous
research and served asthe
basisf or 14
propositions.
The
Exploratory Stud y
Inthe
exploratory phase
of the
research, company,
f ocus
group,
and
in-d epth
consumer interviewswere
cond ucted to
gaininsight
intoconsumer
perceptions
of
quality
and value.
Cooperation
wasobtained f rom
a national
company
that marketsthree d istinct
prod uct
linesof
beverages:
a line of 100% f ruit-f lavored chil-
d ren's
d rinks,
a line of 100% f ruit
juices,
and a line
of tomato-based
juices. In-d epth
interviewswere held
with the
marketing
research
d irector,
the senior
prod -
uct
manager
f or
juices,
two
company strategicplan-
ners,
and the
presid ent
of the
company'sad vertising
agency. Open-end ed questionspertained
toissuessuch
as
company knowled ge
about
quality
and value
per-
ceptions
of
consumers, ways
the
company
d etermined
those
perceptions,
and how
quality
and value were
communicated toconsumers.
A f ocus
group
interview onthe
topics
of
quality
and value in
beverages
washeld ina
metropolitan
area
inthe Southeast. The f ocus
group
wasf ormed inac-
cord ance with
guid elinestrad itionally
f ollowed inthe
marketing
research f ield
(Bellenger,
Bernhard t,
and
Gold stucker
1976). Participants
were recruited tof it
the
d emographicprof ile
of
purchasers
of f ruit-and to-
mato-based
beverages.
All
participants
were women
betweenthe
ages
of 25 and 49 and all had at least one
child
younger
than10
years
of
age. Participants
were
screened toensure current or recent
usage
of f ruit-and
tomato-based
beverages.
The
id entity
of the
partici-
pating
f irm wasnot revealed inthe
interview;
d iscus-
sionabout
price, quality,
and value centered oncon-
sumer
experiences
and
perceptionsrelating
to
beverages
in
general
rather thantothe
specif ic
brand sof the
sponsoring company.
The mod erator's
questions
cov-
ered such
topics
asthe
meaning
of
quality
and
value,
the attributesused toevaluate
quality
and
value,
and
the role of
price
in
quality
and value
jud gments.
A total of 30
in-d epth
interviewswith f emale con-
sumerswere held inthree
metropolitan
areas
(one
in
the
Southwest,
one onthe East Coast,
and one inthe
Mid west).
Free-elicitation
approaches
recommend ed
by
Olsonand
Reynold s(1983)
were used toobtain
inf ormationabout the
cognitive
structuresof con-
sumers. These
techniques
includ ed triad sortsand lad -
d ering.
Inthe triad
sorts,
similar brand sinthe bev-
erage category
were d ivid ed intosets of three and
subjects
were
probed
f or d istinctions
among
them. This
initial
process
uncovered the
important
d istinctionsthat
respond ents
used tod iscriminate
among prod ucts.
The
lad d ering process,
which f ollowed the triad
sorts,
in-
volved a
sequence
of
in-d epth probesd esigned
tof orce
the consumer
up
the lad d er of abstraction. As these
proced ures
had
successf ully
elicited the more
impor-
tant
higher
levels of abstractionin
previous
stud ies
(Gutman
and Ald en
1985;
Reynold s, Gutman,
and
Fied ler
1984; Reynold s
and Jamieson
1985), they
were
used to reveal the links
among prod uct attributes,
quality,
and value. Af ter these ind irect
method s,
sub-
jectsrespond ed
to
open-end ed questionscovering
such
topics
asinf ormationneed ed tomake
jud gments
about
quality
and
value, impact
of related f actors
(e.g.,
ad -
vertising
and
packaging)
on
perceptions,
and d ef ini-
tionsof the
concepts.
Bef ore
d ebrief ing, d emographic
and
beverage usage
d ata were collected f rom
respon-
d ents.
As is
typical
in
exploratory
stud ies
using
means-
end chains
(e.g.,
Olsonand
Reynold s1983),
the d ata
generated
were not numerical.
Instead ,
the d ata were
inthe f orm of
protocols
and means-end
maps
f or in-
d ivid ual consumers. Patternsof
responses
and ob-
served similaritiesacrossind ivid ualsf orm the "re-
sults" of this
type
of
exploratory stud y.
Whencombined
with the
d escriptive
d ata f rom the executive and f ocus
group
interviews,
the observationsand
insightspro-
vid e a f ramework f or
speculating
about the
concepts
and their
relationships(Figure 1).
The Mod el
Figure 1,
an
ad aptation
of a mod el f irst
proposed by
Dod d sand Monroe
(1985),
af f ord sanoverview of the
relationshipsamong
the
concepts
of
price, perceived
quality,
and
perceived
value. Inthe
f ollowing
sec-
tions,
relevant literature and evid ence f rom the ex-
ploratory investigation
are used tod ef ine and d escribe
each
concept
inthe mod el. Tod if f erentiate between
proposed relationships
and
empirically supported
re-
lationships,
d iscussionof each
proposition
isd ivid ed
intotwo
parts.
First, propositions
are
d eveloped
on
the basisof the
qualitative
d ata f rom the
exploratory
stud y
and other
conceptual
work f rom the literature.
Second ,
f or each
proposition, empirical
evid ence that
supports
and ref utesthe
proposition
isreviewed .
The
Concept
of Perceived
Quality
Quality
canbe d ef ined
broad ly
as
superiority
or ex-
cellence.
By
extension, perceived quality
canbe d e-
f ined as the consumer's
jud gment
about a
prod uct's
overall excellence or
superiority.1
Perceived
quality
is
(1)
d if f erent f rom
objective
or actual
quality, (2)
a
higher
level abstractionrather thana
specif ic
attribute
of a
prod uct, (3)
a
global
assessment that insome cases
'Lewin's (1936)
f ield theoretic
approach
to
evaluating
the instru-
mentality
of actions and
objects
in
achieving
end s could be viewed
as a f ound ationf or thisd ef inition. Inhis view, instrumentality
is the
extent towhich an
object
or actionwill achieve anend . Inthiscase,
quality
could be viewed as
instrumentality.
Consumer
Perceptions
of Price, Quality,
and Value
/
3
FIGURE1
A Means-End Mod el
Relating Price, Quality,
and Value
I
I
Lower-level attributes
0
Perceptions
of lower-
level attributes
GO
Higher-level
attributes
resembles
attitud e,
and
(4)
a
jud gment usually
mad e
withina consumer'sevoked set.
Objective quality
versus
perceived quality.
Sev-
eral researchers
(Dod d s
and Monroe
1984;
Garvin
1983;
Holbrook and Corf man
1985; Jacoby
and Olson
1985,
Parasuraman, Zeithaml,
and
Berry 1986)
have em-
phasized
the d if f erence between
objective
and
per-
ceived
quality.
(1985),
f or ex-
ample, d istinguish
betweenmechanisticand humanistic
quality:
". .. mechanistic
[quality]
involves anob-
jective aspect
or f eature of a
thing
or
event;
human-
istic
[quality]
involvesthe
subjective response
of
peo-
ple
to
objects
and is theref ore a
highly
relativistic
phenomenon
that d if f ers between
jud ges" (p. 33).
"Objective quality"
is the term used inthe literature
(e.g., Hjorth-And erson
1984;
Monroe and Krishnan
1985)
tod escribe the actual technical
superiority
or
excellence of the
prod ucts.
Asit hasbeenused inthe
literature,
the term "ob-
jective quality"
ref erstomeasurable and verif iable su-
periority
on some
pred etermined
id eal stand ard or
stand ard s. Published
quality ratings
f rom sourcessuch
as Consumer
Reports
are used to
operationalize
the
construct of
objective quality
inresearch stud ies
(see
Curry
and Fauld s
1986).
Inrecent
years,
researchers
have d ebated the use of these measuresof
quality
on
method ological ground s (Curry
and Fauld s
1986;
Hjorth-And erson1984, 1986; Maynes1976; Sproles
1986).
Concerncentersonthe selectionof attributes
and
weights
tomeasure
objective quality;
researchers
and
experts(e.g.,
Consumer
Reports)
d onot
agree
on
what the id eal stand ard or stand ard sshould be. Others
(such
as
Maynes 1976)
claim that
objective quality
d oesnot
exist,
that all
quality
evaluationsare
subjec-
tive.
The term
"objective quality"
isrelated
closely
to-
but not the same as-other
concepts
used tod escribe
technical
superiority
of a
prod uct.
For
example,
Gar-
vin
(1983)
d iscusses
prod uct-based quality
and man-
uf acturing-based quality.
Prod uct-based
quality
ref ers
toamountsof
specif ic
attributesor
ingred ients
of a
prod uct. Manuf acturing-based quality
involves con-
f ormance to
manuf acturing specif ications
or service
stand ard s. In the
prevailing Japanese philosophy,
quality
means"zero
d ef ects-d oing
it
right
the f irst
time." Conf ormance to
requirements(Crosby 1979)
and incid ence of internal and external f ailures
(Garvin
1983)
are other d ef initionsthat illustrate manuf actur-
ing-oriented
notionsof
quality.
4
/
Journal of
Marketing, July
1988
These
concepts
are not id entical to
objective qual-
ity
because
they, too,
are based on
perceptions. Though
measuresof
specif icationsmay
be actual
(rather
than
perceptual),
the
specif ications
themselvesare set on
the basisof what
managersperceive
tobe
important.
Managers'
views
may
d if f er
consid erably
f rom con-
sumers' or users' views. Consumer
Reportsratingsmay
not
agree
with
managers'
assessmentsintermsof either
salient attributesor
weightsassigned
tothe attributes.
Ina research
stud y
f or General
Electric, Morgan(1985)
points
out
striking
d if f erences between
consumer,
d ealer,
and
manager perceptions
of
appliance quality.
Whenasked how consumers
perceive quality,
man-
agers
listed
workmanship, perf ormance,
and f orm as
critical
components.
Consumers
actually keyed
inon
d if f erent
components: appearance, cleanability,
and
d urability. Similarly, company
researchersinthe ex-
ploratory stud y
measured
beverage quality
intermsof
"f lavor round ed ness" and
"astringency"
whereascon-
sumers f ocused on
purity (100%
f ruit
juice)
and
sweetness.
To
reiterate, perceived quality
is d ef ined inthe
mod el asthe consumer's
jud gment
about the
superi-
ority
or excellence of a
prod uct.
This
perspective
is
similar tothe user-based
approach
of Garvin
(1983)
and d if f ersf rom
prod uct-based
and
manuf acturing-
based
approaches.
Perceived
quality
is alsod if f erent
f rom
objective quality,
which
arguably may
not exist
because all
quality
is
perceived by someone,
be it
consumersor
managers
or researchersat Consumer
Reports.
Higher
level abstraction rather thananattribute.
The means-end chain
approach
to
und erstand ing
the
cognitive
structure of consumershold sthat
prod uct
inf ormationisretained in
memory
at several levelsof
abstraction
(Cohen1979; Myers
and Shocker
1981;
Olsonand
Reynold s
1983; Young
and
Feigen1975).
The
simplest
level is a
prod uct
attribute;
the most
complex
level isthe value or
payof f
of the
prod uct
to
the consumer.
Young
and
Feigen(1975) d epicted
this
view inthe
"Grey
benef it
chain, "
which illustrateshow
a
prod uct
is linked
through
a chainof benef itstoa
concept
called the "emotional
payof f ."
Prod uct
-> Functional
> Practical
-> Emotional
Benef it Benef it
Payof f
Related
conceptualizations
(Table 1) pose
the same
essential id ea: consumers
organize
inf ormationat var-
ious levels of abstraction
ranging
f rom
simple prod uct
attributes
(e.g., physical
characteristics of
Myers
and
Shocker 1981, d ef ining
attributesof Cohen 1979,
concrete attributesof Olsonand
Reynold s 1983)
to
complex personal
values.
Quality
hasbeeninclud ed
inmultiattribute mod els as
though
it were a lower level
attribute
(criticisms
of this
practice
have beenleveled
by
Ahtola
1984, Myers
and Shocker 1981, and oth-
ers),
but
perceived quality
is instead a second -ord er
phenomenon:
anabstract attribute inOlsonand
Rey-
nold 's
(1983) terms,
a "B" attribute
(somewhat
ab-
stract, multid imensional but
measurable)
in
Myers
and
Shockers'
(1981)
f ormulation.
Global assessment similar toattitud e.
Olshavsky
(1985)
views
quality
as a f orm of overall evaluation
of a
prod uct,
similar insome
ways
to attitud e. Hol-
brook and Corf man
(1985) concur, suggesting
that
quality
is a
relatively global
value
jud gment.
Lutz
(1986) proposes
twof ormsof
quality,
"af f ective
qual-
ity"
and
"cognitive quality."
Af f ective
quality par-
allels
Olshavsky's
and Holbrook and Corf man's views
of
perceived quality
as overall attitud e.
Cognitive
quality
is the case of a
superord inate
inf erential as-
sessment of
quality intervening
betweenlower ord er
cuesand aneventual overall
prod uct
evaluation
(Lutz
1986).
InLutz's
view,
the
higher
the
proportion
of
attributesthat canbe assessed bef ore
purchase (search
attributes)
to those that canbe assessed
only d uring
consumption(experience attributes),
the more
likely
it isthat
quality
isa
higher
level
cognitive jud gment.
Conversely,
asthe
proportion
of
experience
attributes
increases, quality
tend s tobe anaf f ective
jud gment.
Lutz extend s this line of
reasoning
to
propose
that af -
f ective
quality
is
relatively
more
likely
f or services
and consumer nond urable
good s (where experience
attributes
d ominate)
whereas
cognitive quality
is more
likely
f or ind ustrial
prod ucts
and consumer d urable
good s (where
search attributes
d ominate).
Jud gment
mad e within consumer's evoked set.
Evaluations of
quality usually
take
place
in a com-
parison
context.
Maynes (1976)
claimed that
quality
evaluations are mad e within "the set of
good s
which
. . . would inthe consumer's
jud gement
serve the
same
general purpose
f or some maximum
outlay."
On
the basis of the
qualitative stud y,
and consistent with
Maynes' contention,
the set of
prod ucts
used incom-
paring quality appears
to be the consumer's evoked
set. A
prod uct's quality
is evaluated as
high
or low
d epend ing
on its relative excellence or
superiority
among prod ucts
or services that are viewed as sub-
stitutes
by
the consumer. It is critical tonote that the
specif ic
set of
prod ucts
used f or
comparisond epend s
onthe consumer's, not the f irm's, assessment of com-
peting prod ucts.
For
example,
consumers inthe ex-
ploratory stud y compared
the
quality
of d if f erent brand s
of
orange juice (which
would be the
comparison
con-
text of the
f irm),
the
quality
of d if f erent f orms
(re-
f rigerated
vs.
canned ),
and the
quality
of
purchased
versus homemad e
orange juice.
Figure
2
d epicts
the
perceived quality component
of the
conceptual
mod el in
Figure
1.
PQI:
Consumers use lower level attribute cues
toinf er
quality.
Consumer
Perceptions
of Price, Quality,
and Value
/
5
Selected Means-End Chain Mod els
TABLE1
and Their
Proposed Relationships
with
Quality
and Value
Personal Value
Scheme Attribute Level
Quality
Level Value Level Level
Young and Feigin
(1975)
Functional benef its Practical benef it
Emotional payof f
Rokeach (1973) Prod uct attributes Choice criteria Instrumental values Terminal values
Howard (1977)
Myers
and
Physical
characteristics
Pseud ophysical
Task or outcome User ref erent
Shocker (1981)
characteristics ref erent
Geistf eld , Sproles, Concrete,
Somewhat abstract, Abstract, multid imensional, and d if f icult
and
Bad enhop unid imensional,
and multid imensional but tomeasure attributes(A)
(1977)
measurable measurable (B)
attributes(C)
Cohen(1979) Def ining
attributes Instrumental attributes
Highly
valued
states
Gutmanand Attributes Consequences
Va
Reynold s(1979)
Olsonand Concrete attributes Abstract attributes Functional Terminal values
Reynold s(1983) consequences
Psychosocial
consequences
Instrumental values
(1985)
note that
early phi-
losophers
used the word
"quality"
toref er to
explicit
f eatures
(i.e., properties
or
characteristics)
of anob-
ject
as
perceived by
a
subject (e.g.,
Austin
1964, p.
44;
Russell
1912). Olshavsky (1985)
terms this ten-
d ency
to inf er
quality
f rom
specif ic
attributes "sur-
rogate-based pref erence f orming
behavior" and cites
examples
of
prod uct categories
inwhich a
given
sur-
rogate
is
highly
associated with
quality (e.g.,
size
sig-
nals
quality
instereo
speakers, style signals quality
in
carsand
clothes).
Inthe
exploratory stud y,
consumers
repeated ly
associated
quality
inf ruit
juices
with
purity
(e.g.,
100% f ruit
juice
with no
sugar ad d ed )
or f resh-
ness. Inthese and other
prod uct categories,
one or a
f ew attributesf rom the total set of attributes
appear
toserve as reliable
signals
of
prod uct quality.
Attributesthat
signal quality
have beend ichotom-
ized intointrinsicand extrinsiccues
(Olson 1977;
Ol-
sonand
Jacoby 1972).
Intrinsiccues involve the
phys-
ical
composition
of the
prod uct.
Ina
beverage,
intrinsic
cues would includ e such attributes as f lavor, color,
texture,
and
d egree
of sweetness. Intrinsicattributes
cannot be
changed
without
altering
the nature of the
prod uct
itself and are consumed asthe
prod uct
is con-
sumed
(Olson 1977;
Olsonand
Jacoby 1972).
Extrin-
siccues are
prod uct-related
but not
part
of the
phys-
ical
prod uct
itself .
They
are, by
d ef inition,
outsid e the
prod uct.
Price,
brand
name,
and level of
ad vertising
are
examples
of extrinsiccues to
quality.
The intrinsic-extrinsic
d ichotomy
of
quality
cues
is usef ul f or
d iscussing quality
but is not without con-
ceptual
d if f iculties.2 A small number of
cues,
most
notably
those
involving
the
prod uct's package,
are
d if f icult to
classif y
as either intrinsic or extrinsic.
Package
could be consid ered anintrinsicor anextrin-
siccue
d epend ing
onwhether the
package
is
part
of
the
physical composition
of the
prod uct (e.g.,
a
d rip-
less
spout
in
d etergent
or a
squeezable ketchup
con-
tainer),
inwhich case it would be anintrinsic
cue,
or
protection
and
promotion
f or the
prod uct (e.g.,
a card -
board container f or a
computer),
inwhich case it would
be anextrinsiccue. For
purposes
of the
mod el, pack-
age
is consid ered anintrinsiccue but the inf ormation
that
appears
onthe
package (e.g.,
brand name, price,
logo)
is consid ered anextrinsiccue.
Evid ence. Researchers have id entif ied
key
lower
level attributesused
by
consumers toinf er
quality
in
only
a f ew
prod uct categories.
These lower level cues
includ e
price (Olson 1977;
Olson and
Jacoby 1972),
sud s level f or
d etergents,
size f or stereo
speakers (01-
shavsky 1985),
od or f or bleach and
stockings (Laird
1932),
and
prod uce
f reshness f or
supermarkets(Bon-
ner and Nelson
1985).
2Other method sof classif icationcould have beenused f or these cues.
Possible alternative classif icationschemes includ e (1) tangible/intan-
gible, (2) d istal/proximal (Brunswick 1956),
and (3) d irect/inf eren-
tial. However,
each of these d ichotomies has the same
"f uzzy
set"
problems
that are inherent inthe
intrinsic/extrinsic d ichotomy.
No-
tably,
with each scheme, some cues
(particularly package)
would be
d if f icult to
classif y.
Because the
intrinsic/extrinsic d ichotomy
has a
literature
und erpinning it,
because it is
wid ely
used and
recognized ,
and because it has clear
managerial implications,
it was retained in
thisreview.
6
/
Journal of
Marketing, July
1988
FIGURE2
The Perceived
Quality Component
Perceived
Quality
I I
ExtrinsicAttributes
Intrinsic Attributes
O Perceptions of lower-
level attributes
) Higher-level
abstractions
PQ2:
The intrinsic
prod uct
attributesthat
sig-
nal
quality
are
prod uct-specif ic,
but d i-
mensionsof
quality
canbe
generalized
to
prod uct
classesor
categories.
Generalizing
about
quality
across
prod ucts
hasbeen
d if f icult f or
managers
and researchers.
Specif ic
or
concrete intrinsicattributesd if f er
wid ely
across
prod -
ucts,
asd othe attributesconsumersuse toinf er
qual-
ity. Obviously,
attributesthat
signal quality
inf ruit
juice
are not the same asthose
ind icating quality
in
washing
machines or automobiles. Even withina
prod uct category, specif ic
attributes
may provid e
d if -
f erent
signals
about
quality.
For
example,
thickness
is related to
high quality
intomato-based
juices
but
not inf ruit-f lavored child ren'sd rinks. The
presence
of
pulpsuggestshigh quality
in
orange juice
but low
quality
in
apple juice.
Though
the concrete attributesthat
signal quality
d if f er across
prod ucts, higher
level abstract d imen-
sions of
quality
canbe
generalized
to
categories
of
prod ucts.
As attributesbecome more abstract
(i.e.,
are
higher
inthe means-end
chains), they
become com-
montomore alternatives. Garvin
(1987),
f or exam-
ple, proposes
that
prod uct quality
canbe
captured
in
eight
d imensions:
perf ormance, f eatures, reliability,
conf ormance, d urability, serviceability, aesthetics,
and
perceived quality (i.e., image).
Abstract d imensions
that
capture
d iverse
specif ic
attributeshave beend is-
cussed
by
Johnson
(1983)
and
Achrol, Reve,
and Stem
(1983).
In
d escribing
the
way
consumers
compare
noncomparable
alternatives
(e.g.,
how
they
choose
betweensuch d iverse alternativesas a stereoand a
Hawaiian
vacation),
Johnson
posited
that consumers
represent
the attributesin
memory
at abstract levels
(e.g., using
entertainment value asthe d imensionon
which to
compare
stereosand Hawaiian
vacations).
Similarly, Achrol, Reve,
and Ster
proposed
that the
multitud e of
specif ic
variables
af f ecting
a f irm inthe
environment canbe
captured
inabstract d imensions.
Rather than
itemizing specif ic
variablesthat af f ect
particular
f irmsind if f erent ind ustriesund er
varying
circumstances, they proposed conceptualizing
the en-
vironment intermsof itsabstract
qualities
or d imen-
Consumer
Perceptions
of
Price, Quality,
and Value
/
7
sions
(e.g., homogeneity-heterogeneity, stability-in-
stability, concentration-d ispersion,
and
turbulence).
Olson
(1978) pointed
out that consumers
may
use
inf ormational cues to
d evelop
belief s about
prod ucts
and that task
response (i.e.,
choice or
evaluation) may
be a d irect f unction of these
med iating
belief s. Ac-
cord ing
to
Olson,
these belief s
may
be of two
types:
d escriptive,
which involve a restatement of the
orig-
inal inf ormationinmore abstract terms
(e.g.,
"accel-
eratesf rom 0 to60 in5 second s"
generates
the belief
"high perf ormance")
and
inf erential,
which involve
aninf erence to inf ormation
missing
in the environ-
ment
(e.g.,
"accelerates f rom 0 to 60 in5 second s"
generates
the belief
"probably
corers
well, too").
This
d istinction
roughly parallels
Alba and Hutchinson's
(1987)
d istinctionbetween
interpretive
and embellish-
ment inf erencesand both d ichotomiesillustrate the level
at which d imensions of
quality
canbe
conceptualized .
Interviews with
subjects
inthe
exploratory stud y
suggested
that
specif ic
intrinsicattributesused toinf er
quality
could not be
generalized
across
beverages,
but
that
higher
level abstract d imensions could
capture
the
meaning
of
perceived quality
inwhole
categories
or
classes of
beverages. Purity, f reshness, f lavor,
and
appearance
were the
higher
level abstract d imensions
subjects
d iscussed in
d ef ining quality
inthe
beverage
category.
Evid ence. Ina
stud y
of
quality
in
long
d istance
telephone, banking, repair
and
maintenance,
and bro-
kerage services, Parasuraman, Zeithaml,
and
Berry
(1985)
f ound consistent d imensions of
perceived qual-
ity
across f our consumer service ind ustries. These ab-
stract d imensions includ ed
reliability, empathy,
as-
surance, responsiveness,
and
tangibles. Similarly,
Bonner and Nelson
(1985)
f ound that
sensory signals
such as
rich/f ull f lavor,
natural
taste,
f resh
taste, good
aroma,
and
appetizing
looks-all
higher
level abstract
d imensions of
perceived quality-were
relevant across
33 f ood
prod uct categories.
Brucksand Zeithaml (1987)
contend onthe basis of
exploratory
work that six ab-
stract d imensions (ease
of
use, f unctionality, perf or-
mance, d urability, serviceability,
and
prestige)
canbe
generalized
across
categories
of d urable
good s. Though
empirical
research hasnot verif ied the
generalizability
of d imensions f or
categories
of
packaged good s
other
thanf ood
prod ucts,
f or d urable
good s,
or f or ind us-
trial
good s,
abstract d imensions
spanning
these cate-
gories
could be
conceptualized ,
verif ied ,
and thenused
to
d evelopgeneral
measures of
quality
in
prod uct
cat-
egories.
PQ3:
Extrinsiccues serve as
generalized qual-
ity
ind icatorsacrossbrand s, prod ucts,
and
categories.
Extrinsic attributes
(e.g., price,
brand
name)
are
not
prod uct-specif ic
and canserve as
general
ind ica-
torsof
quality
acrossall
types
of
prod ucts. Price,
brand
name,
and level of
ad vertising
are three extrinsiccues
f requently
associated with
quality
in
research, yet many
other extrinsiccues are usef ul toconsumers. Of
spe-
cial note are extrinsiccues such as
prod uct
warranties
and sealsof
approval (e.g.,
Good
Housekeeping). Price,
the extrinsiccue
receiving
the most research attention
(see
Olson 1977 f or a
complete
review of this liter-
ature), appears
to f unction as a
surrogate
f or
quality
whenthe consumer has
inad equate
inf ormationabout
intrinsicattributes.
Similarly,
brand name serves as a
"shorthand " f or
quality by provid ing
consumers with
a bund le of inf ormationabout the
prod uct (Jacoby
et
al.
1978; Jacoby, Szybillo,
and Busato-Schach
1977).
Level of
ad vertising
has beenrelated to
prod uct qual-
ity by
economists Nelson
(1970, 1974), Milgrom
and
Roberts
(1986),
and Schmalensee
(1978).
The basic
argument
hold s that f or
good s
whose attributesare d e-
termined
largely d uring
use
(experience good s), higher
levels of
ad vertising signal higher quality.
Schmalen-
see
argues
that level of
ad vertising,
rather thanactual
claims
mad e,
inf orms consumers that the
company
believes the
good s
are worth
ad vertising (i.e.,
of
high
quality). Supporting
this
argument
is the
f ind ing
that
many subjects
in the
exploratory stud y perceived
heavily
ad vertised brand s to be
generally higher
in
quality
thanbrand swith less
ad vertising.
The
of
beverages pro-
vid ed evid ence that f orm of the
prod uct (e.g.,
f rozen
vs. canned vs.
ref rigerated )
is anad d itional
important
extrinsiccue in
beverages.
Consumers held consistent
perceptions
of the relative
quality
of d if f erent f orms
of f ruit
juice: quality perceptions
were
highest
f or f resh
prod ucts,
next
highest
f or
ref rigerated prod ucts,
then
bottled ,
then
f rozen,
then
canned ,
and lowest f or
d ry
prod uct
f orms.
Evid ence. The literature onhed onic
quality
mea-
surement
(Court 1939;
Griliches
1971)
maintains that
price
is the best measure of
prod uct quality.
Consid -
erable
empirical
research has
investigated
the rela-
tionship
between
price
and
quality (see
Olson 1977
f or a review of this literature in
marketing)
and has
shownthat consumers use
price
toinf er
quality
when
it is the
only
available cue. When
price
is combined
with other
(usually intrinsic) cues,
the evid ence is less
convincing.
In
f orming impressions
about
quality
of merchan-
d ise,
respond ents
ina
stud y by Mazursky
and
Jacoby
(1985)
selected brand name more
f requently
than
any
other inf ormation. Gard ner
(1970, 1971)
f ound
sig-
nif icant mainef f ects on
quality perceptions
d ue tobrand
name.
Kirmani and
Wright (1987a, b)
f ound
empirical
support
f or the
relationship
between level of
spend ing
8
/
Journal of
Marketing, July
1988
on
ad vertising
and
quality
inf erences.
Manipulating
expend itures
onmed ia
bud gets
and on
prod uction
ele-
mentsin
ad vertisements, they
f ound
signif icant
ef -
f ectsof both onconsumers'
quality perceptions.
Bonner and Nelson
(1985)
conf irm that
prod uct
f orm relatesto
An
empirical stud y
revealed the same
hierarchy
of
quality
in
package
f orm
(f resh, ref rigerated ,
f rozen, bottled , canned , d ried )
as
wasf ound inthe
exploratory stud y.
Bonner and Nel-
sonconclud e: "The
sensory
maintenance
ability
of
packaging
d if f ers
by type
and those
packaging
f orms
that canbest d eliver a
rich/f ull f lavor,
natural and
f resh
taste, good
aroma,
and an
appetizing appear-
ance,
are
likely
to
gain
market share"
(p. 75).
PQ4:
Consumers
d epend
onintrinsicattributes
more thanextrinsicattributes
(a)
at the
point
of
consumption,
(b)
in
prepurchase
situationswhenin-
trinsicattributesare search attributes
(rather
than
experience attributes),
and
(c)
whenthe intrinsicattributes have
high
pred ictive
value.
Which
type
of cue-intrinsicor extrinsic-is more
important
in
signaling quality
tothe consumer? An
answer tothis
question
would
help
f irmsd ecid e whether
toinvest resourcesin
prod uct improvements(intrinsic
cues)
or in
marketing (extrinsiccues)
to
improve per-
ceptions
of
quality. Find ing
a
simple
and d ef initive
answer tothis
question
is
unlikely,
but the
exploratory
stud y suggests
the
type
of attribute that d ominatesd e-
pend s
onseveral
key contingencies.
The f irst
contingency
relatestothe
point
inthe
purchase
d ecisionand
consumptionprocess
at which
quality
evaluationoccurs. Consumers
may
evaluate
quality
at the
point
of
purchase (buying
a
beverage)
or at the
point
of
consumption(d rinking
a
beverage).
The salience of intrinsicattributesat the
point
of
pur-
chase
d epend s
onwhether
they
canbe sensed and
evaluated at that time,
that
is,
whether
they
contain
search attributes
(Nelson1970).
Where search attri-
butesare
present (e.g., sugar
content of a f ruit
juice
or color or cloud inessof a d rink ina
glassjar), they
may
be
important quality
ind icators. Intheir absence,
consumers
d epend
onextrinsiccues.
At the
point
of
consumption,
most intrinsicattri-
butescanbe evaluated and theref ore become acces-
sible as
quality
ind icators.
Many
consumersinthe ex-
ploratory stud y
on
beverages
used taste asthe
signal
of
quality
at
consumption.
If a
beverage
d id not taste
f resh or tasted
"tinny"
or too
thin,
the evaluationwas
that
quality
waslow.
Consumers
d epend
onintrinsicattributeswhenthe
cues have
high pred ictive
value
(Cox 1962). Many
respond ents
inthe
exploratory stud y, especially
those
expressing
concernf or their chid ren'shealth and
teeth,
unequivocally
stated that
purity (100% juice,
no
sugar)
wasthe criterion
they
used to
jud ge quality
acrossthe
broad f ruit
juice category.
The link between
quality
and this intrinsicattribute was clear and
strong:
all
f ruit
beverages
with 100%
juice
were
high quality
beverages
and all otherswere not.
Evid ence. Researchers
ad d ressing
this
question
(Dard en
and
Schwinghammer 1985; Etgar
and Mal-
hotra
1978;
Olsonand
Jacoby 1972; Rigaux-Bricmont
1982; Szybillo
and
Jacoby 1974)
have conclud ed that
intrinsiccueswere in
general
more
important
tocon-
sumersin
jud ging quality
because
they
had
higher
pred ictive
value thanextrinsiccues. Thisconclusion
d oesnot account f or the f act that
many
assessments
about
quality
are mad e with insuf f icient inf ormation
about intrinsiccues. Selected ind ivid ual stud ies
(e.g.,
Sawyer, Worthing,
and Send ak
1979)
have shownthat
extrinsiccuescanbe more
important
toconsumersthan
intrinsiccues.
Conf licting
evid ence about the
impor-
tance of intrinsicand extrinsiccuesbecomesclearer
if the cond itionsund er which each
type
of cue be-
comes
important
are
investigated .
PQ5:
Consumers
d epend
on extrinsicattri-
butesmore thanintrinsicattributes
(a)
ininitial
purchase
situationswhen
intrinsiccuesare not available
(e.g.,
f or
services),
(b)
whenevaluationof intrinsiccuesre-
quires
more ef f ort and time thanthe
consumer
perceives
is
worthwhile,
and
(c)
when
quality
is d if f icult toevaluate
(experience
and cred ence
good s).
Extrinsiccues are
posited
tobe used as
quality
ind icatorswhenthe consumer is
operating
without ad -
equate
inf ormationabout intrinsic
prod uct
attributes.
Thissituation
may
occur whenthe consumer
(1)
has
little or no
experience
with the
prod uct, (2)
hasin-
suf f icient time or interest toevaluate the intrinsicat-
tributes,
and
(3)
cannot
read ily
evaluate the intrinsic
attributes.
At
point
of
purchase,
consumerscannot
always
evaluate relevant intrinsicattributesof a
prod uct.
Un-
lessf ree
samples
are
being provid ed ,
consumerscan-
not taste new f ood
prod ucts
bef ore
buying
them. Con-
sumersd onot know f or certainhow
long
a
washing
machine or automobile will last until
they purchase
and consume it. Inthese and similar situations,
the
consumer reliesonextrinsicattributessuch as war-
ranty,
brand
name,
and
package
as
surrogates
f or in-
trinsic
prod uct
attributes.
At other
times,
intrinsicattributesonwhich to
evaluate
quality
are available but the consumer isun-
Consumer
Perceptions
of Price, Quality,
and Value
/
9
willing
or unable to
expend
the time and ef f ort to
evaluate them.
Working women, men,
and
single
shoppers,
f or
example,
have been
reported
touse su-
permarket prod uct
inf ormation
signif icantly
less than
other
d emographicsegments (Zeithaml 1985),
in
part
because these
segments
are more time-conscious than
other
segments (Zeithaml 1985;
Zeithaml and
Berry
1987). Working
women interviewed inthe
explora-
tory stud y reported
that
they shopped quickly
and could
not
stud y
nutritional inf ormation
caref ully
onbever-
age
containers.
They
selected
beverages
onthe basis
of the f reshness or
quality conveyed by packages
or
brand names.
Inother
situations,
intrinsic
prod uct
attributesin-
d icating quality
are
simply
too d if f icult f or the con-
sumer toevaluate. Evaluation
may
be d if f icult
prior
to
purchase,
as with
haircuts,
restaurant
meals,
and
other
experience good s. Complex
stereo
equipment,
insurance
policies,
and
major
auto
repairs
are exam-
ples
of
prod ucts
that f or
many
consumers are d if f icult
toevaluate evenaf ter
purchase
and
consumption.
For
these "cred ence
good s" (Darby
and Karni
1973),
con-
sumers
may rely
on extrinsic cues because
they
are
simpler
toaccess and evaluate.
Evid ence. Research has shown that
price
is used
as a
quality
cue toa
greater d egree
whenbrand s are
unf amiliar thanwhenbrand s are f amiliar
(Smith
and
Broome
1966;
Stokes
1985).
Research alsohasshown
that when
perceived
risk of
making
an
unsatisf actory
choice is
high,
consumers select
higher priced prod -
ucts
(Lambert 1972;
Petersonand Wilson
1985; Shap-
iro
1968, 1973).
PQ6:
The cues that
signal quality change
over
time because of
(a) competition,
(b) promotional
ef f orts of
companies,
(c) changing
consumer tastes,
and
(d )
inf ormation.
As
improved technology
and
increasing competi-
tion lead to the
d evelopment
of
technically
better
prod ucts,
the f eatures that
signal superiority change.
The
exploratory stud y suggested
that the attribute cues
signaling quality
in
beverages
are not static, but in-
stead
change
over time. The shif t f rom canned
orange
juice
tof rozen
orange juice
to
ref rigerated orange juice
is one
example
of the
evolving
stand ard sof
quality
in
beverages.
The
replacement
of saccharinwith Nutra-
sweet in
beverages
is another.
Harness
(1978, p. 17)
illustratesthe f orcesof
change
and the
responses
mad e
by
Procter & Gamble to
keep
Tid e
d etergent
the
highest quality
brand inthe
pack-
aged soapcategory:
Since Tid e wasf irst introd uced in1947,
consumers
have
changed , washing
machineshave
changed ,
f ab-
ricshave
changed , laund ry
habitshave
changed ,
and
competition
has
changed .
. . . These are
just
a f ew
of the more
signif icant changes
in the household
laund ry market,
and
every
one of these
changes
has
a
meaning
f or the
perf ormance
and the
marketing plans
f or Tid e. The
prod uct
which we are
selling tod ay
is
importantly
d if f erent f rom the Tid e
prod uct
which we
introd uced in1947. It isd if f erent inits
cleaning per-
f ormance,
in
sud sing characteristics, aesthetics,
physical properties, packaging.
In
total,
there have
been55
signif icant
mod if ications inthis one brand
d uring
its
30-year
lif etime.
The
Concept
of Perceived Price
From the consumer's
perspective, price
iswhat is
given
up
or sacrif iced toobtaina
prod uct.
This d ef inition is
congruent
with Ahtola's
(1984) argument against
in-
clud ing monetary price
as a lower level attribute in
multiattribute mod els because
price
is a
"give"
com-
ponent
of the
mod el,
rather thana "get"
component.
Def ining price
as a sacrif ice is consistent with con-
ceptualizations by
other
pricing
researchers
(Chapman
1986;
Mazumd ar
1986;
Monroe and Krishnan
1985).
Figure
1 d elineates the
components
of
price:
ob-
jective price, perceived nonmonetary price,
and sac-
rif ice.
Jacoby
and Olson
(1977) d istinguished
be-
tween
objective price (the
actual
price
of a
prod uct)
and
perceived price (the price
asencod ed
by
the con-
sumer). Figure
1
emphasizes
this d istinction:
objec-
tive
monetary price
is
f requently
not the
price
encod ed
by
consumers. Some consumers
may
notice that the
exact
price
of Hi-Cf ruit
juice
is $1.69 f or a
6-pack,
but others
may
encod e and remember the
price only
as
"expensive"
or
"cheap."
Still others
may
not en-
cod e
price
at all.
A
growing bod y
of research
supports
this d istinc-
tion between
objective
and
perceived price (Allen,
Harrell, and Hutt
1976;
Gabor and
Granger 1961;
Progressive
Grocer
1964).
Stud ies reveal that con-
sumersd onot
always
know or remember actual
prices
of
prod ucts.
Instead , they
encod e
prices
in
ways
that
are
meaningf ul
to them
(Dickson
and
Sawyer 1985;
Zeithaml 1982, 1983).
Levels of consumer attention,
awareness,
and
knowled ge
of
prices appear
tobe con-
sid erably
lower than
necessary
f or consumers tohave
accurate internal ref erence
prices
f or
many prod ucts
(Dickson
and
Sawyer
1985;
Zeithaml
1982).
Dickson
and
Sawyer reported
that the
proportions
of con-
sumers
checking prices
of f our
types
of
prod ucts
(margarine,
cold cereal, toothpaste,
and
cof f ee)
at
point
of
purchase ranged
f rom 54.2 to60.6%.
Among
the
groups
of consumers not
checking prices
in these
stud ies,
a
large proportion
(f rom
58.5 to76.7% inthe
f our
prod uct categories)
stated that
price
was
just
not
important.
Another recent
stud y
ind icates that
price
awareness d if f ers
among d emographic groups,
the
greatest
levels of awareness
being
inconsumers who
are f emale, married , old er,
and d o not work outsid e
10
/
Journal of
Marketing, July
1988
the home
(Zeithaml
and
Berry 1987).
Attentionto
prices
is
likely
tobe
greater
f or
higher priced packaged good s,
d urable
good s,
and servicesthanf or low
priced
bev-
erages,
but other f actorsinthese
categories-com-
plexity,
lack of
price inf ormation,
and
processing
time
required -may
interf ere with accurate
knowled ge
of
prices.
Anad d itional f actor
contributing
tothe
gap
betweenactual and
perceived price
is
price d isper-
sion,
the
tend ency
f or the same brand stobe
priced
d if f erently
acrossstoresor f or
prod ucts
of the same
type
and
quality
tohave wid e
price
variance
(Maynes
and Assum
1982).
Ppl: Monetary price
is not the
only
sacrif ice
perceived by
consumers.
Full
price
mod elsineconomics
(e.g.,
Becker
1965)
acknowled ge
that
monetary price
isnot the
only
sac-
rif ice consumersmake toobtain
prod ucts.
Time
costs,
search
costs,
and
psychic
costsall enter either
explic-
itly
or
implicitly
intothe consumer's
perception
of
sacrif ice. If consumerscannot f ind
prod ucts
onthe
shelf ,
or if
they
must travel d istancesto
buy them,
a
sacrif ice hasbeenmad e. If consumersmust
expend
ef f ort toassemble d urable
prod ucts
or time to
prepare
packaged good s,
and if thistime and ef f ort d oesnot
provid e
satisf actiontothe consumer inthe f orm of
recreationor a
hobby,
a sacrif ice hasbeenmad e.
Evid ence. Research in
economics,
home econom-
ics,
and
marketing supports
the
proposition
that other
costs-time, ef f ort, search, psychic-are
salient to
consumers
(Down1961;
Gronau
1973;
Leibowitz
1974;
Leuthold
1981;
Lind er
1970; Mabry 1970;
Mincer
1963;
Nichols, Smolensky,
and Tid eman
1971; Zeithaml and
Berry 1987).
The
Price-Quality Relationship
Nearly
90 research stud iesinthe
past
30
years
have
been
d esigned
totest the
general
wisd om that
price
and
quality
are
positively
related .
Despite
the
expec-
tationof a
positive relationship,
resultsof these stud -
ieshave
provid ed
mixed evid ence.
PPQI:
A
general price-perceived quality
re-
lationship
d oesnot exist.
Price reliance is a
general tend ency
insome con-
sumersto
d epend
on
price
asa cue to
quality (Lam-
bert
1972; Shapiro
1968, 1973).
The
bod y
of litera-
ture summarized
by
Olson
(1977)
is based onthe
assumption
that a
general price-perceived quality
re-
lationship
exists.
Despite
a multitud e of
experimental
stud iesonthe
topic,
however,
the
relationship
hasnot
surf aced
clearly except
insituationswhere method o-
logical
concernssuch asd emand artif acts
(Sawyer 1975)
could of f er alternative
explanations
f or the results
(Monroe
and Krishnan
1985;
Olson
1977).
Bowbrick
(1982) questioned
the
universality
of the
price-per-
ceived
quality relationship,
called the stream of stud -
ies onthe
topic"pseud oresearch, "
and claimed that
the
price-perceived quality hypothesis
is too
general
and untestable to
prod uce anything
other thantrivial
results. Petersonand Wilson
(1985) argue
that the re-
lationship
between
price
and
perceived quality
is not
universal and that the d irectionof the
relationshipmay
not
always
be
positive.
Evid ence. Monroe and Krishnan
(1985)
conclud ed
that a
positive price-perceived quality relationship
d oes
appear
toexist
d espite
the
inconsistency
of the statis-
tical
signif icance
of the research
f ind ings. They
also
noted , however,
that
multiple conceptual problems
and
method ological
limitations
compromised previous
re-
search. Monroe and Dod d s
(1988)
d escribe these lim-
itationsin
greater
d etail and d elineate a research
pro-
gram
f or
establishing
the
valid ity
of the
price-quality
relationship.
Many empirical
stud ieshave
prod uced
resultsthat
conf lict with Monroe and Krishnan'sassessment of a
positive relationship.
Inseveral stud ies
(Fried man1967;
Swan
1974),
overall associationbetween
price
and
perceived quality
is low. Other stud iesshow the re-
lationship
tobe nonlinear
(Peterson1970;
Petersonand
Jolibert
1976), highly
variable across ind ivid uals
(Shapiro1973),
and variable across
prod uctsbeing
jud ged (Gard ner 1971).
Other
research,
summarized
by
Olson
(1977),
showsthat
price
becomesless im-
portant
asa
quality
ind icator whenother
prod uct qual-
ity cues,
such asbrand name
(Gard ner 1971)
or store
image (Staf f ord
and Enis
1969),
are
present. Explor-
atory
and
survey
research
(Bonner
and Nelson
1985;
and
Berry 1985)
ind icatesthat
price
is
among
the least
important
attributesthat con-
sumersassociate with
quality.
Related stud ies
(summarized by Hjorth-And erson
1984)
have
consistently
shown
price
tobe correlated
only weakly
with
objective (rather
than
perceived )
quality. Typical
of these stud iesis work
by Sproles
(1977),
whocorrelated the
prices
of
prod ucts
with
quality ratings
obtained
through
Consumer
Reports
and
Consumers' Research
Magazine. Though
a
positive
price-objective quality relationship
wasf ound in51%
of the 135
prod uct categories,
no
relationship
wasf ound
in35% and a
negative relationship
wasf ound in14%.
Similarly,
Riesz f ound the meanrank correlationbe-
tween
price
and
objective quality
tobe .26 f or 685
prod uct categoriesreported
inConsumer
Reports
be-
tween1961 and 1975 and .09 f or 679 brand sof
pack-
aged
f ood s
(Riesz 1978).
Geistf eld
(1982)
f ound vari-
ability among
marketsand acrossstoresinthe
price-
objective quality relationship.
Most
recently,
Gerstner
(1985)
assessed the correlationbetween
quality
and
Consumer
Perceptions
of Price, Quality,
and Value
/
11
price
f or 145
prod ucts
and conclud ed that the rela-
tionshipappeared
tobe
prod uct-specif ic
and
generally
weak.
Both Petersonand Wilson
(1985)
and
Olshavsky
(1985) argue
that the
emphasis
in
price-quality
stud ies
should not be on
d ocumenting
the
general price-per-
ceived
quality relationship,
but onthe cond itionsun-
d er which
price
inf ormationis
likely
tolead toanin-
f erence about
prod uct quality.
One
possibility
isthat
some ind ivid uals
rely heavily
on
price
asa
quality sig-
nal whereasothersd onot. Petersonand Wilsonsorted
respond ents
into
groups
onthe basisof their
having
a
price-reliance
schema and conf irmed inan
experi-
ment that "schematics"
perceive
a
stronger
relation-
ship
between
price
and
quality
than"aschematics."
This
general tend ency
onthe
part
of some consumers
toassociate
price
and
quality
hasbeenexamined in
the context of covariationassessment
by Roed d er-John,
Scott,
and Bettman
(1986),
whoconf irmed that con-
sumersd if f er intheir belief sabout the associationbe-
tweenthe
price
and
quality
variables. These stud ies
provid e
evid ence that some consumershave a schema
of
price reliance,
rather than
ind icating
a
generalized
tend ency
inconsumerstoassociate
price
and
quality.
PPQ2:
The use of
price
asanind icator of
qual-
ity d epend s
on
(a) availability
of other cuesto
quality,
(b)
price variationwithina class of
prod ucts,
(c)
prod uct
quality
variationwithina
category
of
prod ucts,
(d )
level of
price
awarenessof con-
sumers,
and
(e)
consumers'
ability
tod etect
quality
variationina
group
of
prod ucts.
Monroe and Krishnan
(1985)
contend that most
past
price-perceived quality
research hasbeen
exploratory
and hasnot succeed ed in
resolving
the
question
of when
price
isused toinf er
quality. Contingenciesaf f ecting
the use of
price
as a
quality
ind icator f it intothree
groups:
inf ormational f actors,
ind ivid ual
f actors,
and
prod uct category
f actors.
The f irst
category
of f actorsbelieved toaf f ect the
price-perceived quality relationship
consistsof other
inf ormationavailable tothe consumer. Whenintrinsic
cuesto
quality
are
read ily
accessible,
whenbrand names
provid e
evid ence of a
company'sreputation,
or when
level of
ad vertising
communicatesthe
company's
be-
lief inthe
brand ,
the consumer
may pref er
touse those
cuesinstead of
price.
Several ind ivid ual d if f erence f actors
may
account
f or the variationinthe use of
price
asa
quality signal.
One
explanatory
variable is
price
awarenessof the
consumer: consumersunaware of
prod uct prices
ob-
viously
cannot use
price
toinf er
quality.
Another in-
d ivid ual d if f erence is consumers'
ability
to d etect
quality
variation
among prod ucts(Lambert 1972).
If
the consumer d oesnot have suf f icient
prod uct
knowl-
ed ge (or perhaps
even
interest)
tound erstand the vari-
ationin
quality (e.g., French, Williams,
and Chance
1973), price
and other extrinsiccues
may
be used to
a
greater d egree.
Consumers
appear
to
d epend
more on
price
asa
quality signal
insome
prod uct categories
thaninoth-
ers. One
explanation
f or thisvariation
may
be d if f er-
encesin
price-objective quality relationshipsby
cat-
egory (e.g.,
the low
price
of
Japanese
automobilesd oes
not d iminish the well-established
perception
of
quality
inthe
category).
Another
explanationmay
be
price
variationina
category.
In
packaged good scategories
(such
as
beverages)
where
prod ucts
d if f er little in
price,
the consumer
may
not attribute
higher quality
to
prod -
uctsthat cost
only
a f ew centsmore thanthose of
competitors. Respond ents
inthe
exploratory stud y,
f or
example,
d id not associate
beverage price
with
qual-
ity.
Still another
category-specif iccontingency
is
quality
variation: in
categories
where little variationis ex-
pected among
brand s
(such
assalt or
paper
sand wich
bags), price may
f unction
only
asanind icationof sac-
rif ice whereasin
categories
where
quality
variationis
expected (such
as canned seaf ood or
washing
ma-
chines), price may
f unctionalsoas anind icationof
quality.
Evid ence. Olson
(1977)
showed that
availability
of intrinsicand extrinsiccues other than
price typi-
cally
resultsin
weighting
those f actors
(e.g.,
brand
name)
as more
important
than
price.
He conclud ed
that brand name isa
stronger
cue than
price
f or eval-
uating
overall
quality (Gard ner 1971; Jacoby, Olson,
and Had d ock
1973;
Smith and Broome
1966;
Stokes
1985).
Stud ieshave ind icated that use of
price
asa
qual-
ity
ind icator d if f ers
by prod uct category. Except
f or
wine and
perf ume,
most
positive
linkshave beenf ound
ind urable rather thaninnond urable or consumable
prod ucts(Gard ner 1970;
Lambert
1972;
Petersonand
Wilson
1985).
Inan
experimental setting,
Petersonand
Wilsond ocumented the
relationship
between
price
variationand
association: the
greater
the
price variation,
the
greater
the
tend ency
f or
consumerstouse
price
asa
quality
ind icator.
Ina recent
meta-analysis
of 41 stud ies
investigat-
ing
the associationbetween
price
and
perceived qual-
ity,
Raoand Monroe
(1987)
f ound that the
type
of
experimental d esign
and the
magnitud e
of the
price
manipulationsignif icantly
inf luenced the size of the
ef f ectsobtained . The number
of cues
manipulated
and the
price
level were not f ound
tohave a
signif icant
ef f ect. Because of constraintsim-
posed by
the meta-analysis,
the reviewersinclud ed only
12 /
Journal of
Marketing, July
1988
consumer
prod ucts
and eliminated several stud ies as
outliers,
sothe f ull
range
of
prices
and
types
of
prod -
ucts was not
investigated .
Consid erable
empirical
research
supports
ind ivid -
ual d if f erences in consumer
knowled ge
of
prices.
Consumers are not
unif ormly
aware of
prices
and cer-
tainconsumer
segments (such
as
working
women and
men)
are less aware of
prices
than other
segments
(Zeithaml 1985;
Zeithaml and
Berry 1987;
Zeithaml
and Fuerst
1983).
Price awareness level has not been
stud ied asit relatesto
quality perceptions, though
Rao
(1987)
d ocumented the
impact
of
prior knowled ge
of
prod ucts
onthe use of
price
as a
quality
cue.
The
Concept
of Perceived Value
When
respond ents
inthe
exploratory stud y
d iscussed
value, they
used the term in
many
d if f erent
ways,
d e-
scribing
a wid e
variety
of attributesand
higher
level
abstractions that
provid ed
value tothem. What con-
stitutes value-even in a
single prod uct category-
appears
tobe
highly personal
and
id iosyncratic. Though
many respond ents
inthe
exploratory stud y agreed
on
cues that
signaled quality, they
d if f ered
consid erably
in
expressions
of value. Patternsof
responses
f rom the
exploratory stud y
canbe
grouped
intof our consumer
d ef initions of value:
(1)
value is low
price, (2)
value
is whatever I want ina
prod uct, (3)
value is the
qual-
ity
I
get
f or the
price
I
pay,
and
(4)
value is what I
get
f or what I
give.
Each d ef inition involves a d if -
f erent set of
linkages among
the elements inthe mod el
and each consumer d ef initionhasits
counterpart
inthe
acad emic or trad e literature on the
subject.
The d i-
versity
in
meanings
of value is illustrated inthe f ol-
lowing
f our d ef initions and
provid es
a
partial expla-
nation f or the
d if f iculty
in
conceptualizing
and
measuring
the value construct inresearch.
Value islow
price.
Some
respond entsequated
value
with low
price, ind icating
that what
they
had to
give
up
was most salient intheir
perceptions
of value. In
their ownword s:
* Value is
price-which
one is onsale.
* WhenI canuse
coupons,
I f eel that the
juice
is
a value.
* Value means low
price.
* Value is whatever is on
special
this week.
In
ind ustry stud ies,
Schechter
(1984)
and
Bishop(1984)
id entif ied subsets of consumers that
equate
value with
price.
Other
ind ustry
stud ies, includ ing
Hof f man's
(1984),
reveal the salience of
price
inthe value
equa-
tions of consumers.
Value is whatever I want ina
prod uct.
Other re-
spond ents emphasized
the benef its
they
received f rom
the
prod uct
asthe most
important components
of value:
* Value is what is
good
f or
you.
* Value is what
my
kid s will d rink.
* Little containers because thenthere is nowaste.
* Value tome is what is convenient. WhenI can
take it out of the
ref rigerator
and not have to
mix it
up,
thenit has value.
This second d ef inition is
essentially
the same as the
economist's d ef inition of
utility,
that
is,
a
subjective
measure of the usef ulness or want satisf actionthat re-
sults f rom
consumption.
This d ef initionalsohas been
expressed
inthe trad e literature. Value has been d e-
f ined as "whatever it is that the customer seeks in
making
d ecisions as towhich store to
shop
or which
prod uct
to
buy" (Chain
Store
Age 1985).
Schechter
(1984)
d ef ines value as all
f actors,
both
qualitative
and
quantitative, subjective
and
objective,
that make
up
the
complete shopping experience.
Inthese d ef i-
nitions,
value
encompasses
all relevant choice crite-
ria.
Value isthe
quality
I
get f or
the
price
I
pay.
Other
respond ents conceptualized
value as a trad eof f be-
tween one
"give" component, price,
and one
"get"
component, quality:
* Value is
price
f irst and
quality
second .
*
Value is the lowest
price
f or a
quality
brand .
* Value is the same as
quality.
No-value is af -
f ord able
quality.
This d ef inition is consistent with several others that
appear
in the literature
(Bishop 1984;
Dod d s and
Monroe
1984; Doyle 1984; Shapiro
and Associates
1985).
Value is what I
get f or
what I
give. Finally,
some
respond ents
consid ered all relevant
"get" components
as well as all relevant
"give" components
when d e-
scribing
value:
*
Value is how
many
d rinks
you
can
get
out of a
certain
package.
Frozen
juices
have more be-
cause
you
canwater them d own and
get
more
out of them.
*
How
many gallons you get
out of it f or what
the
price
is.
*
Whatever makes the most f or the least
money.
*
Which
juice
is more economical.
0
Value is what
you
are
paying
f or what
you
are
getting.
*
Value is
price
and
having single portions
sothat
there is nowaste.
This f ourth d ef inition is consistent with
Sawyer
and
Dickson's
(1984) conceptualization
of value asa ratio
of attributes
weighted by
their evaluations d ivid ed
by
Consumer
Perceptions
of
Price, Quality,
and Value
/
13
price weighted by
itsevaluation. This
meaning
isalso
similar tothe
utility per
d ollar measure of value used
by
Hauser and Urban
(1986),
Hauser and Simmie
(1981),
Hauser and
Shugan(1983),
and others.
These f our consumer
expressions
of value canbe
captured
inone overall d ef inition:
perceived
value is
the consumer'soverall assessment of the
utility
of a
prod uct
based on
perceptions
of what isreceived and
what is
given. Though
what isreceived variesacross
consumers
(i.e.,
some
may
want
volume,
others
high
quality,
still others
convenience)
and what is
given
varies
(i.e.,
some are concerned
only
with
money
ex-
pend ed ,
otherswith time and
ef f ort),
value
represents
a trad eof f of the salient
give
and
get components.
Value and
quality.
Inthe means-end
chains,
value
(like quality)
is
proposed
tobe a
higher
level abstrac-
tion. It d if f ersf rom
quality
intwo
ways. First,
value
is more ind ivid ualisticand
personal
than
quality
and
is theref ore a
higher
level
concept
than
quality.
As
showninTable
1,
value
may
be similar tothe "emo-
tional
payof f "
of
Young
and
Feigen(1975),
to"ab-
stract, multi-d imensional,
d if f icult-to-measure attri-
butes" of
Geistf eld , Sproles,
and
Bad enhop(1977),
and to"instrumental values" of Olsonand
Reynold s
(1983). Second ,
value
(unlike quality)
involves a
trad eof f of
give
and
get components. Though many
conceptualizations
of value have
specif ied quality
as
the
only "get" component
inthe value
equation,
the
consumer
may implicitly
includ e other
f actors,
sev-
eral that are inthemselves
higher
level
abstractions,
such as
prestige
and convenience
(see
Holbrook and
Corf man1985 f or a d iscussionof the
d if f iculty
in-
volved in
separating
these abstractionsinthe value
construct).
Pv1:
The benef it
components
of value includ e
salient intrinsic
attributes,
extrinsicat-
tributes, perceived quality,
and other rel-
evant
high
level abstractions.
Dif f erences
among
the benef it or
get components
showninthe mod el and listed in
Pvl
canbe illustrated
by f ind ings
f rom the
exploratory stud y
of f ruit
juices.
As d iscussed
bef ore, perceived quality
inf ruit
juices
was
signaled by
the attribute "100% f ruit
juice" plus
sensory
attributessuch astaste and texture.
Some intrinsicattributesof f ruit
juices-other
than
those
signaling quality-were
cited as
provid ing
value
to
respond ents.
Color wasone
important
intrinsicat-
tribute. Most mothersknew which colorsor f lavors
of
juice
their child renwould
d rink; only
those f lavors
were consid ered to be
acceptable
to the child and
theref ore tohave value f or the mother. Other intrinsic
attributes
(e.g.,
absence of
pulp
and visible consis-
tency
of the
d rinks)
alsoaf f ected value
perceptions.
Inad d itionto
perceived quality
and these intrinsic
attributes,
other
higher
level abstractionscontributed
to
perceptions
of value. A
f requently
mentioned
higher
level abstractionf or f ruit
juice
wasconvenience. Some
consumersd id not want toreconstitute the
juice.
Oth-
erswanted self -serve containerssothat child rencould
get juice
f rom the
ref rigerator by
themselves. For this
reason,
small canswith
d if f icult-to-opentops
were not
as convenient as little boxes with insertable straws.
Fully reconsituted , read y-to-serve,
and
easy-to-open
containerswere
keys
to
ad d ing
value inthe
category.
These intrinsicand extrinsiclower level attributesad d ed
value
through
the
higher
level abstractionof conve-
nience.
Another
higher
level abstraction
important
in
pro-
vid ing
value inchild ren'sf ruit
juices
was
apprecia-
tion. Whenchild rend rank
beverages
the mothersse-
lected ,
when
they
mentioned them to mother or
evid enced
thanks,
the mothersobtained value. This
particular psychological
benef it was not evoked d i-
rectly
in
any
of the consumer
interviews,
but came
through strongly
inthe
lad d ering process.
The value
perceptions
f iltered
through
the
higher
level abstrac-
tionof
appreciation
and d id not come
d irectly through
intrinsicor extrinsicattributes. Thisind irect inf erenc-
ing process
illustratesa
major d if f iculty
in
using
tra-
d itional multiattribute or
utility
mod elsin
measuring
perceived
value. The intrinsicattributesthemselves
are not
alwaysd irectly
linked to
value,
but instead
f ilter
through
other
personal
benef itsthat are them-
selvesabstract.
Evid ence.
Though
no
empirical
research hasbeen
reported
onthe
pivotal higher
level abstractionsre-
lated to
value,
several d imensionshave been
proposed
inselected
categories. Bishop(1984),
f or
example,
claimed that value in
supermarket shopping
isa com-
posite
of the
higher
level abstractionsof
variety,
ser-
vice,
and f acilitiesinad d itionto
quality
and
price.
Doyle (1984)
id entif ied convenience, f reshness,
and
time as
major higher
level abstractionsthat combine
with
price
and
quality
to
prod uce
value
perceptions
in
supermarket
consumers.
Pv2:
The sacrif ice
components
of
perceived
value includ e
monetary prices
and non-
monetary prices.
Consumerssacrif ice both
money
and other re-
sources
(e.g., time, energy, ef f ort)
toobtain
prod ucts
and services. Tosome
consumers,
the
monetary
sac-
rif ice is
pivotal:
some
supermarket shoppers
will in-
vest hours
clipping coupons, read ing
f ood
ad vertising
inthe
newspaper,
and
traveling
tod if f erent storesto
obtainthe best
bargains.
Tothese
consumers, any-
thing
that red ucesthe
monetary
sacrif ice will increase
the
perceived
value of the
prod uct.
Less
price-con-
sciousconsumerswill f ind value instore
proximity,
14
/
Journal of
Marketing, July
1988
read y-to-serve
f ood
prod ucts,
and home
d elivery-even
at the
expense
of
higher
costs-because time and ef -
f ort are
perceived
asmore
costly.
Evid ence. Recent research revealsthat
saving
time
hasbecome a
pivotal
concernof consumersin
super-
market
shopping
and
cooking. Supermarket shoppers
have cited f ast checkout asmore
important
thanlow
prices
in
selecting grocery
stores
(Food Marketing
In-
stitute
1985, 1986).
Stud iesalsoshow that consumers
are
willing
to
spend money
to
get
more convenient
packaging
inf ood
prod ucts(Morris1985).
Pv3: Extrinsicattributesserve as "value
sig-
nals" and can substitute f or active
weighing
of benef itsand costs.
How
caref ully
d oconsumersevaluate these com-
ponents
of
prod ucts
in
making
assessmentsof value?
To
jud ge
f rom the
prod uct category
of
beverages,
cognitive
assessment islimited . Rather than
caref ully
consid ering prices
and
benef its,
most
respond ents
d e-
pend ed
oncues-of ten extrinsiccues-in
f orming
impressions
of value. A f ew
respond entscaref ully
calculated the
cheapest
brand intheir set ona
regular
basis, but most seemed tof ollow
Langer's(1978)
no-
tionof mind lessness: most
respond entsbought
bev-
erages
with
only
minimal
processing
of available in-
f ormation.
They repeated ly bought
a brand
they
trusted
or used extrinsicvalue cuesto
simplif y
their choice
process.
These value
triggers
were
present regard less
of the
way
consumersd ef ined value.
Many
consumerswho
d ef ined value aslow
price reported using
a
coupon
as
a
signal
tolow
price
without
actually comparing
the
red uced
price
of the
couponed
brand with the
prices
of other
brand s,
or
they reported
that "cents-of f " or
"everyd ay
low
price" signs
or a
private
label brand
triggered
the value
perception. Respond ents
whod e-
f ined value intermsof what
they
wanted in
prod ucts
cited small
containers, single-serving portions,
and
read y-to-serve
containers. Consumerswho d ef ined
value as the
quality they get
f or the
price they pay
used
signals
such as 100% f ruit
juice
on
special
or
brand name on
special. Finally,
consumerswhod e-
f ined value as what
they get
f or what
they pay
d e-
pend ed
onf orm
(f rozen
vs. canned
juice)
and econ-
omy-sized packages
as
signals.
Not all consumers
respond ed
inthismind less
way
-many
saw their role aseconomical
shopper
tobe
important enough
to
spend
time and ef f ort to
weigh
caref ully
the
give
and
get components
intheir own
equations
of value.
Moreover,
not all
prod ucts
are as
simple
or
inexpensive
as
beverages.
One would ex-
pect
tof ind more rational evaluationinsituationsof
high
inf ormation
availability, processing ability,
time
availability,
and involvement in
purchase.
Evid ence. To
d ate,
no
reported empirical
stud ies
have
investigated
the
potential
of
triggers
that lead to
perceptions
of value.
Pv4: The
perception
of value
d epend s
onthe
f rame of ref erence inwhich the con-
sumer is
making
anevaluation.
(1985)
maintainthat value
perceptions
are situational and
hinge
onthe context
withinwhich anevaluative
jud gment
occurs. Thisview
may helpexplain
the
d iversity
of
meanings
of value.
Inthe
beverage category,
f or
example,
the f rame of
ref erence used
by
the consumer in
provid ing
mean-
ings
includ ed
point
of
purchase, preparation,
and con-
sumption.
Value meant d if f erent
things
at each of these
points.
At the
point
of
purchase,
value of tenmeant
low
price, sale,
or
coupons.
At the
point
of
prepa-
ration,
value of teninvolved some calculationabout
whether the
prod uct
was
easy
to
prepare
and how much
the consumer could obtainf or what she
paid .
At con-
sumption,
value was
jud ged
intermsof whether the
child renwould d rink the
beverage,
whether some of
the
beverage
was
wasted ,
or whether the child ren
ap-
preciated
the mother f or
buying
the d rinks.
Evid ence. No
empirical
stud ieshave beencon-
d ucted to
investigate
the variationinvalue
perceptions
acrossevaluationcontexts.
Pv5:
Perceived value af f ectsthe
relationship
between
quality
and
purchase.
As
Olshavsky (1985) suggested ,
not all consumers
want to
buy
the
highest quality
item in
every
cate-
gory. Instead , quality appears
tobe f actored intothe
implicit
or
explicit
valuationof a
prod uct by many
consumers
(Dod d s
and Monroe
1985; Sawyer
and
Dickson
1984).
A
givenprod uct may
be
high quality,
but if the consumer d oesnot have
enough money
to
buy
it
(or
d oes not want to
spend
the amount re-
quired ),
its value will not be
perceived
as
being
as
high
asthat of a
prod uct
with lower
quality
but a more
af f ord able
price.
Inother
word s,
when
geta
-
givea
>
getb
-
giveb
but the
shopper
has a
bud get
con-
straint,
then
givea
>
bud get
constraints>
giveb
and
hence b ischosen. The same
logicmay apply
to
prod -
uctsthat need more
preparation
time thanthe consum-
er'stime constraint allows.
The
respond ents
inthe
beverage stud y
illustrated
this
point
as
they
d iscussed their
typical purchasing
behavior. For
respond ents
with several
child ren,
bev-
erages
accounted f or a
large portion
of their
weekly
f ood bill.
Though
most believed that
pure
f ruit
juice
wasof
higher quality
thanf ruit
d rinks, many
of these
respond ents
d id not
buy only pure
f ruit
juice
because
it wastoo
expensive. They
tend ed to
buy
some
pro-
portion
of
pure
f ruit
juice,
thenround out these more
Consumer
Perceptions
of
Price, Quality,
and Value /
15
expensive purchases
with f ruit d rinks. Intheir eval-
uation, high quality
wasnot worth its
expense,
solower
levels of
quality
were tolerated ina
portion
of the
weekly beverages.
These consumersobtained more
value f rom the lower
quality juices
because the low
costs
compensated
f or the red uctionin
quality.
Evid ence. Several
empirical
stud ieshave inves-
tigated
the
relationship
between
quality
and
purchase,
but no
empirical
stud ieshave
investigated explicitly
the role of value asan
intervening
f actor between
quality
and
purchase.
However,
stud iesonthe use of unit
price
inf ormation
(e.g.,
Aaker and Ford
1983;
Dicksonand
Sawyer 1985;
Zeithaml
1982) suggest
that
many
con-
sumersuse unit
price
inf ormation
(i.e.,
a measure of
value)
in
making prod uct
choicesin
supermarkets.
Research
Implications
The
preced ing propositions
raise
questions
about
ways
inwhich
quality
and value have beenstud ied inthe
past
and
suggest
avenuesf or f uture research.
Current Practices in
Measuring Quality
Acad emic research
measuring quality
has
d epend ed
heavily
on unid imensional
rating scales, allowing
quality
tobe
interpreted
in
any way
the
respond ent
chooses. This
practice
d oes not ensure that
respon-
d entsare
interpreting quality similarly
or inthe
way
the researcher intend s.
Hjorth-And erson(1984)
claims
that unid imensional scales are
method ologically
in-
valid
by showing
that the
concept
of overall
quality
has
many
d imensions. Holbrook and Corf man
(1985)
call f or
ambiguousquality
measurestobe
replaced
with scalesbased on
conceptual
d ef initionsof
quality.
An
example
of the
approach they
recommend is il-
lustrated
by
and
Berry (1985),
who
investigated
service
quality
inanextensive ex-
ploratory stud y, conceptualized
it ind imensionsbased
onthat
investigation,
and
operationalized
it
using
the
conceptual
d omain
specif ied
inthe f irst
phase (Para-
suraman, Zeithaml,
and
Berry 1986).
Inthat stream
of
research, quality
wasd ef ined asa
comparison
be-
tweenconsumer
expectations
and
perceptions
of
per-
f ormance based onthose d imensions,
an
approach
that
allowsf or ind ivid ual d if f erencesacross
subjects
inthe
attributesthat
signal quality.
The research
approach
used
by
Parasuraman,
Zei-
thaml,
and
Berry (1985)
could be used ind if f erent
categories
of
prod ucts(e.g., packaged good s,
ind us-
trial
prod ucts,
d urable
good s)
tof ind the abstract d i-
mensionsthat
capture quality
inthose
categories.
Such
an
attempt
is
currently und erway by
Brucksand Zeith-
mal
(1987)
f or d urable
good s.
Stud iesalsoare need ed
tod etermine which attributes
signal
these d imensions,
whenand
why they
are selected instead of other cues,
and how
they
are
perceived
and combined
(see
also
Gutmanand Ald en
1985,
Olson
1977,
and Olsonand
Jacoby
1972 f or similar
expressions
of need ed re-
search). Finally,
the
relationship
betweenthe con-
structsof attitud e and
quality
should be examined . The
instrumentality
of a
prod uct
f eature
(Lewin1936)
and
the
quality rating
of such a f eature in
separately
d e-
termining
choice
may
be an
interesting
research issue.
The
convergent
and d iscriminant
valid ity
of the con-
structsof attitud e and
quality
alsowarrant
investiga-
tion.
Quality
measurement scalesremaintobe d evel-
oped
and valid ated .
Current Practices in
Mod eling
Consumer
Decision
Making
Three
aspects
of
mod eling
consumer d ecision
making
canbe
questioned
if the
propositionsprove
tobe ac-
curate
representations:
the
tend ency
touse actual at-
tributesof
prod ucts
rather thanconsumer
perceptions
of those
attributes,
the
practice
of
d uplicating
and
comingling physical
attributeswith
higher
ord er at-
tributes
(Myers
and Shocker
1981),
and the f ailure to
d istinguish
betweenthe
give
and
get (Ahtola 1984)
components
of the mod el.
Howard
(1977, p. 28) clearly
statesthe f irst
prob-
lem.
It isessential to
d istinguish
betweenthe attributes
per
se and consumers'
perceptions
of these
attributes,
be-
cause consumersd if f er intheir
perceptions.
It isthe
perception
that af f ects
behavior,
not the attribute it-
self . "Attribute" isof tenused tomeanchoice crite-
ria,
but thislead stoconf usion. Touse "attribute"
when
you
meannot the attribute itself but the con-
sumer'smental
image
of
it,
isto
reif y
what isinthe
consumer'smind .
Jacoby
and Olson
(1985) concur, claiming
that the f o-
cus of marketersshould not be
objective reality
but
instead consumer
perceptions,
which
may
be altered
either
by changing objective reality
or
by reinterpret-
ing objective reality
f or consumers.
Myers
and Shocker
(1981) point
out that comin-
gling quality,
a
higher
level
abstraction,
with lower
level
physical
attributesinmod els limits the
valid ity
and conf ound s the
interpretation
of
many stud ies,
es-
pecially
whenthis
practice d uplicates
lower level at-
tributes.
Theref ore,
it is
necessary
touse attributesf rom
the same
general
classif ication or level in the hier-
archy
in
mod eling
consumer d ecision
making.
Ahtola
(1984)
conf irms that when the hierarchical nature of
attributes is not
recognized
in consumer d ecision
mod els,
d ouble and
triple counting
of the
impact
of
some attributes results.
Techniques
to elicit and or-
ganize
attributes,
inhis
opinion,
should
preced e
mod -
eling
of the attributes.
Myers
and Shocker
(1981)
d is-
cussd if f erent consumer d ecisionmod els
appropriate
f or the levelsand
ways
attributesshould be
presented
inresearch instrumentsand analyzed later. Huber and
16
/
Journal of
Marketing, July
1988
McCann
(1982)
reveal the
impact
of inf erential belief s
on
prod uct
evaluationsand
acknowled ge
that und er-
stand ing
consumer inf erencesisessential both in
get-
ting
inf ormationf rom consumersand in
giving
inf or-
mationtoconsumers.
Finally,
Ahtola
(1984)
callsf or
expand ing
and
revising
mod elsto
incorporate
the sac-
rif ice
aspects
of
price.
Sacrif ice should not be limited
to
monetary price alone, especially
insituationswhere
time
costs,
search
costs,
and convenience costs are
salient tothe consumer.
Method s
Appropriate
f or
Stud ying Quality
and Value
The
approach
used inthe
is
appropriate
f or
investigating quality
inother
prod uct
categories.
Olson and
Reynold s (1983) d eveloped
method sto
aggregate
the
qualitative
d ata f rom ind i-
vid ual consumers.
Aggregate cognitive mapping,
structural
analysis, cognitive
d if f erentiation
analysis,
and value structure
mapping
are all
techniques
d e-
signed especially
to
analyze
and
represent higher
or-
d er abstractionssuch as
quality.
These
techniques
are
more
appropriate
than
pref erence mapping
or mul-
tiattribute
mod eling
f or
investigating concepts
like
quality
and value
(f or
a
complete
d iscussionand ex-
plication
of these
techniques,
see Gutmanand Ald en
1985 or
Reynold s
and Jamieson
1985).
Several researchershave
d eveloped approaches
to
link
prod uct
attributesto
perceptions
of
higher
level
abstractions. Mehrotra and Palmer
(1985) suggest
a
method ological approach
to
relating prod uct
f eatures
to
perceptions
of
quality
based onthe work of Olson
and
Reynold s(1983).
Intheir
proced ure,
listsof cues
and benef itsare
d eveloped
f rom f ocus
groups
or in-
d epth
interviewswith
consumers,
semanticd if f eren-
tial scales are constructed to
capture
the
benef its,
a
trad eof f
proced ure
is used tod etermine the
impor-
tance of the
cues,
and
respond ents
match cues to
prod uct concepts. Through
this
type
of
analysis,
d e-
gree
of
linkage (between
cuesand
benef its),
value of
a
cue,
and
competitive
brand inf ormationare
pro-
vid ed .
Mazursky
and
Jacoby (1985)
also
recognized
the
need f or
proced ures
totrack the inf erence
process
f rom
consid erationof
objective
cuestothe
higher
level im-
age
of
quality.
Instead of f ree-elicitation
proced ures,
they
used a behavioral
processing
simulation
whereby
they presented
attribute inf ormationto
respond ents
and
asked them tof orm an
impression
of
quality by
choos-
ing any
inf ormation
they
wished .
Though
thismethod
canbe criticized as
unrealistic,
it
provid esinsights
into
the
types
of inf ormationthat consumersbelieve
signal
quality.
Mod if icationsof the method tomake the en-
vironment more realistic
(such
as
by
Brucks
1985)
are
also
possible.
Other researchershave d escribed
analyticproce-
d uresto link attributeswith
perceptions.
Holbrook
(1981) provid es
a theoretical f ramework and
analytic
proced ure
f or
representing
the
intervening
role of
per-
ceptions
inevaluative
jud gments.
Neslin
(1981)
d e-
scribesthe
superiority
of
statistically
revealed
impor-
tance
weights
over self -stated
importance weights
in
linking prod uct
f eaturesto
perceptions.
Researching
Value
A
major d if f iculty
in
researching
value isthe
variety
of
meanings
of value held
by
consumers.
Build ing
a
mod el of value
requires
that the researcher und erstand
which of
many (at
least of
f our) meanings
are
implicit
inconsumers'
expressions
of value.
Utility
mod elsare
rich in terms of
method ological
ref inements
(see
Schmalensee and Thisse 1985 f or a d iscussionof d if -
f erent
utility
measuresand
equations),
but d onot ad -
d ressthe d istinctionbetweenattributesand
higher
level
abstractions.
They
also
presume
that consumerscare-
f ully
calculate the
give
and
get components
of
value,
an
assumption
that d id not hold true f or most con-
sumersinthe
exploratory stud y.
Price as a
Quality
Ind icator
Most
experimental
stud iesrelated to
quality
have f o-
cused on
price
asthe
key
extrinsic
quality signal.
As
suggested
inthe
propositions, price
isbut one of sev-
eral
potentially
usef ul extrinsic
cues;
brand name or
package may
be
equally
or more
important, especially
in
packaged good s. Further,
evid ence of a
generalized
price-perceived quality relationship
is inconclusive.
Quality
research
may
benef it f rom a
d e-emphasis
on
price
asthe mainextrinsic
quality
ind icator. Inclusion
of other
important ind icators,
aswell asid entif ication
of situationsinwhich each of those ind icatorsis im-
portant, may provid e
more
interesting
and usef ul an-
swersabout the extrinsic
signals
consumersuse.
Management Implications
An
und erstand ing
of what
quality
and value meanto
consumersof f ersthe
promise
of
improving
brand
po-
sitions
through
more
precise
market
analysis
and
seg-
mentation, prod uct planning, promotion,
and
pricing
strategy.
The mod el
presented
here
suggests
the f ol-
lowing strategies
that canbe
implemented
tound er-
stand and
capitalize
onbrand
quality
and value.
Close the
Quality PerceptionGap
Though managersincreasingly acknowled ge
the im-
portance
of
quality, many
continue tod ef ine and mea-
sure it f rom the
company'sperspective. Closing
the
gap
between
objective
and
perceived quality requires
that the
company
view
quality
the
way
the consumer
d oes. Research that
investigates
which cues are im-
portant
and how consumersf orm
impressions
of
qual-
Consumer
Perceptions
of
Price, Quality,
and Value
/
17
ity
based on those
technical, objective
cues is nec-
essary. Companies
also
may
benef it f rom research that
id entif ies the abstract d imensions of
quality
d esired
by
consumers ina
prod uct
class.
Id entif y Key
Intrinsic and Extrinsic Attribute
Signals
A
toppriority
f or marketers is
f ind ing
which of the
many
extrinsic and intrinsic cues consumers use to
signal quality.
This
process
involves a caref ul look at
situational f actors
surround ing
the
purchase
and use
of the
prod uct.
Does
quality vary greatly among prod -
ucts inthe
category?
Is
quality
d if f icult toevaluate?
Do consumers have
enough
inf ormationabout intrin-
sic attributesbef ore
purchase,
or d o
they d epend
on
simpler
extrinsiccues until af ter their f irst
purchase?
What cues are
provid ed by competitors? Id entif ying
the
important quality signals
f rom the consumer's
viewpoint,
then
communicating
those
signals
rather
than
generalities,
is
likely
tolead tomore vivid
per-
ceptions
of
quality. Linking
lower level attributeswith
their
higher
level abstractionslocatesthe
"d riving
f orce"
and
"leverage point"
f or
ad vertising strategy (Olson
and
Reynold s 1983).
Acknowled ge
the
Dynamic
Nature of
Quality
Perceptions
Consumers'
perceptions
of
quality change
over time
as a result of ad d ed inf ormation,
increased
competi-
tionina
prod uct category,
and
changing expectations.
The
d ynamic
nature of
quality suggests
that marketers
must track
perceptions
over time and
align prod uct
and
promotion strategies
with these
changing
views.
Because
prod ucts
and
perceptions change,
marketers
may
be able toed ucate consumers on
ways
toevaluate
quality. Ad vertising,
the inf ormation
provid ed
in
packaging,
and visible cues associated with
prod ucts
canbe
managed
toevoke d esired
Und erstand How Consumers Encod e
Monetary
and
Nonmonetary
Prices
The mod el
proposes
a
gap
between actual and
per-
ceived
price, making
it
important
tound erstand how
consumers encod e
prices
of
prod ucts. Nonmonetary
costs-such as time and ef f ort-must be acknowl-
ed ged . Many consumers, especially
the 50 million
working
women inthe U.S.
tod ay,
consid er time an
important commod ity. Anything
that canbe built into
prod ucts
tored uce
time, ef f ort,
and search costs can
red uce
perceived
sacrif ice and
thereby
increase
per-
ceptions
of value.
Recognize Multiple Ways
to Ad d Value
Finally,
the mod el d elineates several
strategies
f or
ad d ing
value in
prod ucts
and services. Each of the
boxes
f eed ing
into
perceived
value
provid es
anave-
nue f or
increasing
value
perceptions. Red ucing
mon-
etary
and
nonmonetary costs, d ecreasing perceptions
of
sacrif ice, ad d ing
salient intrinsic
attributes,
evok-
ing perceptions
of relevant
high
level
abstractions,
and
using
extrinsic cues to
signal
value are all
possible
strategies
that
companies
canuse toaf f ect value
per-
ceptions.
The selection of a
strategy
f or a
particular
prod uct
or market
segment d epend s
onits customers'
d ef initionof value.
Strategies
based oncustomer value
stand ard sand
perceptions
will channel resources more
ef f ectively
and will meet customer
expectations
better
thanthose based
only
on
company
stand ard s.
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