Chapter 2

REVIEW OF RELATED LITERATURE

This part discusses varied studies and readings of different criterions in

evaluating products which were gathered from different sources.

More than half of a typical acquisition effort is spent evaluating the product

that is being obtained. The purpose of these evaluations is to determine

whether the product is being built properly and whether it provides the

capabilities that a customer needs (Boehm 2001, Bennett 2005).

Changing a product that failed to satisfy its acceptance criteria requires

making corresponding revisions in that criteria so that it matches. The

evaluation of requirements during product development should have

discovered any discrepancies with acceptance criteria; any failure to accept at

this point would be the result of not having properly expressed the

customers needs or by an unanticipated change in the customers needs

(Campbell et al, 2011).

While testing requires an operable product as its subject, reviews can

occur anytime during development as various work products are produced.

The most cost-effective technique for product evaluation is reviews by a mix

of mentors, peers, and subject matter experts (Pomeroy-Huff , 2009).

Testing is a means to evaluate a product based on specific scenarios and

test cases that represent each testers understanding of how the product will

be used. Testing is an important means of product evaluation because it

builds directly upon knowledge of how an enterprise operates (Perry, 2000;

Bhor, 2001; McGregor, 2001; Spillner, 2007).

In addition to reviews and testing, options are emerging for greater use of

formal methods that can reduce the amount of time spent on evaluations or to

expose defects that are otherwise difficult to discover. Formal methods

include techniques such as static analysis, static or symbolic testing,

assurance cases and model-based dynamic analyses for verifying quality

factors, and domain specific, correct-by-construction engineering methods

(Weinstock, 2004; Feiler, 2010).

Self-concept can be viewed as the sum total of an individuals ideas,

thoughts and feelings about themselves in relation to other objects in a

socially determined frame of reference; it is an individuals perception of

ones own abilities, limitations, appearance and characteristics, including

ones own personality (Onkvisit and Shaw, 1987; 1994).

Marketers try to create images for their brands so that they are

positioned to fit a distinct market segment occupied by no other brand. They

strive to create a brand image that is similar to (congruent with) the self-image

of the target consumers (Aaker and Biehl, 1993; Kapferer, 1992).

Researchers have suggested that evaluations of publicly consumed

products are more affected by ideal congruence, whereas evaluations of

privately consumed products are more affected by actual congruence (Hong

and Zinkhan, 1995; Sirgy, 1982).

Any product cue, extrinsic or intrinsic, is useful in assessing the worth

of a product, and consumer knowledge is a known determinant in evaluating

the quality of a product (Blair & Innis, 1996).

 Familiarity as the number of product related experiences that have

been accumulated by the consumer. The task competence indicated by

expertise is reflected in the consumers cognitive structures, analysis,

elaboration, and memory of products (Alba and Hutchinson, 1987).

Product knowledge is measured either objectively or subjectively.

Objective knowledge is measured by an impartial third party, usually by some

testing procedure, whereas subjective knowledge reflects self-evaluation.

Both objective and subjective measures have validity. Whereas objective

measures can detect true knowledge, subjective measures may better define

consumer strategies and heuristics, because subjective measures are based

on what the consumer thinks he or she knows (Park and Lessig, 1981).

The relationship of knowledge measures on attribute search when

using a product in a complex use situation, and found that objective expertise

is positively correlated to the number of product attributes examined.

Conversely, subjective knowledge is negatively related to amount of search

(Brucks, 1985).

The influence of a products place of origin on product evaluation has

mainly been studied from a country-of-origin perspective. The influence of a

products region of origin on the product attribute perception and preference

is shown in Brunswiks lens model which distinguishes three elements

cues (e.g., regional label), the true state of an attribute, and the perceived

or inferred state of an attribute. Consumers, when confronted with a regional

cue, start making inferences about the true state of product attributes. As

respondents are not able to observe the true state of the attributes, they must

make inferences based on cues present (Steenkamp, 1990).

 When a consumer is knowledgeable about a countrys products, the

origin may act as a summary construct for the consumer, whereby origin

influences beliefs about attributes and directly affects attitude toward the

product. When a consumer is unknowledgeable about a countrys products,

origin may act as a halo, whereby the consumer infers a products attributes,

and indirectly affects attitude toward the product through product attribute

ratings (Han, 1989).

To infer the true state of a regional products attributes, consumers

use the image they have of the products region of origin. The role of

(country) image factors in the evaluation process has received little attention

in the marketing literature (Verlegh and Steenkamp, 1999).

The product-specific regional image is defined as the beliefs consumers

have with respect to the suitability of a region for the production of a specific

product. The attitude towards the region of origin is defined as a learned

predisposition to respond to the region of origin wins a consistently favorable

or unfavorable way (Sheth et al., 1999, p. 388).

As the attitude towards a region is based on a broad range of beliefs

and experiences, the attitude towards the region of origin is assumed to

influence product preference both directly and indirectly, through product

attribute perception (Hong and Wyer, 1989, 1990).

Since the human and natural environment factors in a region may

cohere strongly with the evaluation of products from that region, a regional

indication may offer better opportunities for differentiating a product than a

country-of-origin label. By using a place-of-origin indication, marketers are

able to exploit the associations consumers have with a particular area and
provide their product with an image. One important determinant for this

strategy to be successful is that the image is internally consistent (Kapferer,

1992).

Another stream of extrinsic-cue research concerns the effect of product

country of origin on consumer evaluation and choice. Consumers perceive the

quality of products to vary from country to country. Typically, products from

industrialized countries are regarded to be superior to those of less developed

countries (Cordell, 1992).

A meta-analysis of 36 studies in which some or all of these three cues

were found. Both brand name and price were widely correlated to product

quality evaluations, whereas store name showed a positive but not statistically

significant relationship to perceived quality (Rao and Monroe, 1989).

The price a consumer is willing to pay for a product should relate to the

consumers perception of the products quality. The consumers belief

that products possess a positive price/quality relationship is associated with a

preference for higher-priced products (Peterson & Wilson, 1985).

Consumers with positive price/quality beliefs have a willingness to

accept higher price levels for a product than those who have lower belief in

price and quality correlation (Lichtenstein, Bloch, & Black, 1988).

The relationship of prior knowledge and price effects has also been

examined. Irrespective of price/quality relationship, low-knowledge consumers

perceive price as a quality indicator more than moderate knowledge

consumers. For a product class with a high price/quality relationship,

consumers with low and high familiarity are more likely to use price as an

indicator of quality than are subjects with moderate familiarity (Rao & Monroe,
1988).

High quality products require superior inputs which may be purchased

at higher cost only. This cost is embedded by the marketer in final price of the

product. Considering this logic consumers believe that highly priced products

offer superior quality in a competitive environment (Rao and Monroe, 1989).

Over the years, efforts has been made to understand the intricate

relationships that exist between market cues such as price, store and brand

names, and to further define consumers' cognitive evaluations of these cues

in terms of monetary sacrifice, perceived risk, product quality, value, and

buying intentions. Marketers use these market cues as perceptual indicators

to influence consumer behavior, and consumers need to be better informed so

that they can handle those influences. (Dodds & Grewal, 1991).

Marketer supports and promotes the cues believing that it would

consciously or unconsciously be perceived and stimulate consumer to

respond by entering their cognitive processes. Several researches have

suggested that consumers often respond to cues such as the brand name, the

price, or the country of origin of the product being evaluated (Dodds & Grewal,

1991; Wheatley, Chiu, & Goldman, 1981; Chao, 1993; Darling & Arnold.,

1988; Hann & Terpstra, 1988).

Cues are dichotomized as intrinsic or extrinsic. Intrinsic cues are

internal physical attributes or operational features of a product such as

memory, processing speed of a computer, whereas extrinsic cues are product

related but not a part of the physical product. They are, by definition, outside

the product such as price, brand name, country of origin. Both are suggestive
in nature, when diagnosed, and generally provides certain product associative

information (Olson & Jacoby, 1972; Olson J. C., 1977).

It is believed that consumers are more familiar with extrinsic cues than

intrinsic cues and tend to rely more heavily on extrinsic cues. The belief is

substantiated by past studies too (Dodds & Grewal, 1991; Hann & Terpstra,

1988).

Existing literature indicates that extrinsic cues may affect consumer

product evaluations and their search beahviour. Consumer may infer product

quality and products ability to deliver benefits from cues such as brand name

and price levels perceived (Brown & Carpenter, 2000; Meyvis & Janiszewski,

2002).

When making a purchase decision, consumers are always faced with

some concern over the performance of the product since perfect information

regarding future performance is never known (Sweeney et al., 1999; p. 81).

Perceptions of value for product evaluations are often conceptualized

as involving a trade-off between quality and sacrifice, which results in quality

having a positive association with value and sacrifice having a negative

association with value (Zeithaml, 1988; Dodds & Grewal, 1991; Teas &

Agarwal, 2000).

The use of price as an indicator of product quality is not irrational, but

represents a belief that price in the marketplace is determined by the interplay

of the forces of competitive supply and demand. Such forces would lead to a

"natural" ordering of competing products on a price scale, resulting in a strong

actual positive relationship between price and product quality. Thus, given the

belief that price and quality are positively related, it is naturai that consumers
would use price as an indicator of quality. Subsequently, other economic and

marketing theorists expanded the argument to include other signals of product

quality such as brand and store names and advertising expenditures

(Scitovszky, 1945).

Actual price is an objective external characteristic of a product that

consumers perceive as a stimulus. Therefore, price has both objective

external properties and subjective internal representations that are derived

from the perceptions of price, thus resulting in some meaning to consumers

(Jacoby and Olson 1977).

A paradoxical situation in which a commodity offered at a lower price than

competing commodities would be both more attractive to the consumer

because it is cheaper and less attractive because of its suspected inferior

quality (Scitovszky, 1945).

The link between perceived quality, evaluation, and choice can be

explained in part by the acceptable price range concept. Therefore, people

not only may refrain from purchasing a product when they consider the price

too high, but also may be suspicious of the quality of a product if its price is

too much below what they consider acceptable (Cooper 1969a).

If price, as an external cue, is perceived differently than its "objective"

characteristic, buyers are likely to use similar perceptual processes for both

brand and store names. Therefore, we suggest that the external cues of price,

brand name, and store name are three cues that influence perceptions of

product quality and value, and hence willingness to buy (Zeithaml 1988).

Meta-analysis found a more positive effect for price when brand

information is present than when it is absent. The implication of their finding is

not that brand name dominates the influence of price, but rather that brand

name enhances the influence of price on quality perceptions (Monroe and

Krishnan's, 1983).

In a choice setting, higher-knowledge subjects gain more accurate

knowledge than lower-knowledge subjects; yet the former is no more adept at

learning goal-appropriate information. High-knowledge consumers are

capable of more extensive processing of information, and thus are better able

to articulate evaluations of products (de Bont & Shoormans, 1995; Huffman

and Houston, 1993).

In experiential marketing, consumers are viewed as rational as well as

emotional human beings who are interested to achieve pleasurable

experiences. It explains that by having customers sense, feel, think, act, and

relate to a company and its brands, companies are now creating experiential

marketing (Schmitt, 1999).

Event marketing has the purpose to gain emotional bonds with individuals

through shared experiences by providing experiences, entertainment, and

education in relation to the brand. Event marketing is a construct that first

emerged in Germany in the late 1980s as an experiential marketing

communication strategy (Wohlfeil and Whelan, 2005).

Results from this study support the idea of event marketing indeed being

a pull strategy within marketing communication. In terms of relevant

marketing-related outcomes, event marketing aims at positively influencing

image, customer familiarity, attitude, and emotional attachment to the brand

(Wohlfeil, 2005).
 Literature argues that what consumers purchase is potentially influenced

by the congruity between the brands image and their own self-image. It is a

well-known fact that consumers not only seek for the functional aspects of a

product when they are making their purchase decisions (Zinkhan and Hong,

1991; Ericksen, 1996).

A brand could have both functional as well as symbolic meaning to

consumers confirms this notion and concludes that both the brands

functional as well as symbolic aspects are relevant for consumers. In other

words, as buying a product or a brand is a good tool for consumers to express

who they are, consumers often buy product which show the most similarity to

their own self-image (Graeff, 1996; Bhat and Reddy, 1998)

Self-image congruity theory suggests that a mental comparison of the

similarities between the self-image en the brands images is made by the

consumers. This results in what is often described as self-image

congruity. (Sirgy, 1986; Graeff, 1996; Sutherland, 2004; Parker, 2009).

The foundation of self-image congruity theory is defined by the image

congruence hypothesis by Sirgy in 1982. He describes it as the similarity,

that is the congruence, between ones self-image and a brands image

increases, so should the favourability of brand attitudes and hence the

likelihood of positive action (e.g. purchase) in regards to that brand (Sirgy,

1982, 1991 and 1997).

The literature moreover argues that as the congruity between the self and

the brand increases so as the favourability toward the brand. The congruence

between self-image and product image also positively relates to the

customers brand evaluation (Graeff, 1996; Sutherland, 2004; Parker, 2009)