Consumer Perceptions: a Discussion

Eric N. Berkowitz, University of Minnesota
ABSTRACT - The title for this session indicates the extent of commonality between these three papers. Beyond this broad framework, little overlap exists. As a result, a discussion of macro-perceptual issues is difficult. Although the presentation may be a little more tedious, I will discuss each paper in sequence.
[ to cite ]:
Eric N. Berkowitz (1981) ,"Consumer Perceptions: a Discussion", in NA - Advances in Consumer Research Volume 08, eds. Kent B. Monroe, Ann Abor, MI : Association for Consumer Research, Pages: 176-177.

Advances in Consumer Research Volume 8, 1981      Pages 176-177

CONSUMER PERCEPTIONS: A DISCUSSION

Eric N. Berkowitz, University of Minnesota

ABSTRACT -

The title for this session indicates the extent of commonality between these three papers. Beyond this broad framework, little overlap exists. As a result, a discussion of macro-perceptual issues is difficult. Although the presentation may be a little more tedious, I will discuss each paper in sequence.

For each paper, three questions will be addressed. First, how adequate is the design and methodology employed? Secondly, what additional information is presented in these studies which hitherto has been unknown. And, finally, I will take some liberty to suggest areas of additional research which are suggested by these papers.

DELLA BITTA AND MONROE'S "PERCEPTION OF VALUE FROM RETAIL PRICE ADVERTISEMENTS"

The study conducted by Della Bitta and Monroe focuses upon the presentation of price information to consumers, and the effects of these presentations on consumers' price evaluations. The authors' motivation for this study is derived some extent from the inconsistencies of prior research. Findings indicate that semantic and comparison cues do affect price perceptions, but the inconsistencies of prior research are not resolved.

Methodologically, this study has a distinct strength in its multivariate treatment of consumer response variables. Advancement in pricing research necessitates this recognition of a multiple response ["R" in the Jacoby and Olson conceptualization] variable framework. There are, however, a few aspects of this design which deserve some comment and re-examination.

Of some concern in this study is the product. The use of a single product in price perception studies must be questioned. As Della Bitta and Monroe note, this research stream while still developing has resulted in several inconsistent findings. Berkowitz and Walton have shown in a multiproduct price response study that consumer perceptions may vary by product class. As a result, findings of single product pricing studies present some difficulty in interpreting their generalizability. A second aspect of the product concern is the product itself. Calculators, as a class of products, are probably highly familiar to the subject population, students. Now does this familiarity affect perceptions of discount levels? Does this possible familiarity negate the effect of more descriptive comparison cue presentations? Using the S-O-R framework, the (R)esponses may be moderated by the (O)rganismic variables. Price responses may have to be analyzed in light of "O" variables such as familiarity, reference standards, ownership, etc.

The Della Bitta and Monroe study adds several interesting aspects to the knowledge of price perceptions. Foremost, this study underscores the complexity of consumer price responses and the multidimensional nature of these judgments. Results are particularly interesting in showing the consistently poor response generated by an advertisement with only the actual price cue. And, this study finds the "percent off" semantic cue to be one version which does not favorably affect price perceptions. This finding is consistent with results observed by Berkowitz and Walton (1980). Of greatest interest may be the lack of response differences across the three highest level discount treatments (30%, 40%, 50%). This finding should imply some reconsideration of retail mark-down policies as well as of discount operations' initial price offerings.

Finally, this study raises several interesting areas of further study. No price study has provided so many possible comparison price cues. While the most descriptive alternative (RP, SP, PO, AO) did not result in the highest positive price perceptions, this more descriptive presentation should be investigated among non-student subjects. Wheatley and Chiu (1977) and Berkowitz and Walton (1980) have observed demographic differences in price perceptions. It is possible that the amount of comparison price cue information necessary to be related to positive price perceptions is dependent upon the education level or age of the respondent.

A second important area for future investigation pertains to the discount levels. Since credibility of the price offering was not found by the authors to be an issue, other explanations for this observation should be explored. Pricing strategies for practitioners might be very dependent upon this area of research.

Finally, the "O" variables of the S-O-R model deserve greater attention. What is the effect of familiarity, usage, expected price level on consumer price responses?

As usual with pricing research, while several important and interesting findings have been added to the base of knowledge, it also has the beneficial effect of suggesting several areas worthy of further exploration.

WHEATLEY'S "GENERIC PRODUCTS ON CONSUMER PERCEPTIONS AND BRAND CHOICE"

The second paper in this session examines the impact of generic brands on consumer perceptions and brand selection. The objective of the study is to assess the effect of generic brands on the share of national and private brands. Wheatley reports that generic brand market share is obtained from both the national and private label, and consumer perceptions of these existing offerings also shift with this new form of competition.

The methodology of this study is unique from the other two papers in this session by its use of non-student subjects. Yet several aspects of this study raise questions with regard to the interpretation of the results. Of primary concern is the selection and meaning of "national" brands. One group of shoppers were presented with two choices (national vs. private label) in six product categories. A second group also was presented with the same six product categories, however, a generic brand was included among the stimuli. How dependent are the observed product selections on the "national" brand being presented to subjects? The national brand was described as the "leading" offering. Is this "lead" with regard to sales at the experimental store/or in terms of national market share? If the latter definition is accurate, non-national brand selection may not be surprising.

A second concern is the demand characteristics of this experiment. Wheatley hypothesizes that the selection of the generic and private label offerings in the three-choice condition may be understated. In the Limitation section of the paper, Wheatley states "the tendency to choose the national brand was probably enhanced due to the fact that the subjects did not have to make an actual choice". A competing explanation, however, might account for an overly high frequency of generic and private label selection. A consumer confronted with three products at three different price levels and asked which one s/he would choose, might feel compelled to give the impression of rationality. This demand artifact would result in the lowest cost alternative being selected.

A third concern with regard to this study is the previously identified strength, the subjects. Some criticism might be voiced regarding the small number of subjects, yet Wheatley should be complimented for convincing a retailer to allow an in-store study. However, the subjects who did participate do not appear to have been qualified in any way. Did the subjects use any of the existing brands? For example, what percentage of the 75 subjects presented with the three choice criteria use the national brand of catsup? Does this possibility account for the little slippage of the national brand brand choice figures (in the 2 vs. 3 condition)? Results should have been analyzed with regards to existing brand usage. Had any of the subjects in the generic group had prior experience with generic products?

A final concern with this study is the in-depth presentation of only one product category. In light of the variations observed in product selection, the choice reasons should have been gathered (or reported) for all six product categories.

Results of this study are interesting in terms of the observed brand choice shifting in the three choice condition. To some extent, these results must be disconcerting to companies in going against the trade belief that generic gains will be at the expense of score brands (Coyle 1978). Moreover, the selection reasons analysis in the shortening case reveals an interesting perceptual restructuring of brand offerings. With the existence of the generic brand, the differential advantage of private labels noticeably diminishes, but a new position on the quality dimension is revealed.

Wheatley's study suggests a couple of areas worthy of further investigation. First, some attention to the problems discussed with this study might clarify the impact of generic brands. Secondly, large variations across product classes with regard to generic brand selection are observed. What are the reasons for this occurrence? Are these variations due to perceived quality differences across product offerings? What of price differentials between alternative choices? In this study edible products were investigated. The potential for generic brand inroad may be in non-edible commodities such as paper goods. Future investigations should consider different classes of products. Several of these issues may be resolved in the near future. The author's final statements indicate more information will soon be coming.

BELK'S "DETERMINATION OF CONSUMPTION CUE UTILIZATION"

The third paper of this session is the continuation of a research stream in impression formation presented at ACR. Belk's objective in this study is to identify consumption cue determinants that result in impressions of personality and social class. The extensive literature review provides eight possible determinants. A two-stage study is conducted to assess which attributes are significant in forming impressions.

To a great extent, the design of this study appears highly appropriate. Two separate subject groups were used, one to develop the possible predictions and a second to validate the cue determinants. Following the style of this study, I'd like to raise some questions by study.

Study 1 required 68 students at the University of Illinois to assess 39 products on eight dimensions as to whether the products were related to personality and social class. Similar to the first paper in this session, the student subjects may be deserving of some criticism. These subjects, students at a State University, are quite likely to be similar in terms of social class. This homogeneity in social class might affect their own evaluations on this criterion.

A second concern with Study 1 pertains to the meaningfulness of the task. How meaningful is it to rate Pets, or Flowers (e.g., cut, potted) in terms of complexity? A table showing the 39 x 8 means and standard deviations of the student ratings could help eliminate this concern.

Study 2 investigated the significance of the predictors (variety, cost, decision involvement) identified in the first portion of this research. Again, a student subject pool was used, but the product was restricted to briefcases. Several other products such as bicycles, winter recreation, televisions, in Table 1 appear more relevant to student subject 1. Why was this particular product selected for study 2? What effect might familiarity with the product have in impression formation?

Variety is not observed in study 2 to be a significant determinant. Again, the experience/familiarity of students with this product may contribute to this lack of significance. A second possible reason, as Belk also notes, may be in the operationalization of variety. The variety manipulation was done in terms of dozen [three dozen] models. The "models" term is not explained or further defined.

How does this research extend existing knowledge? Belk has provided a good first step in identifying the determinants of cue utilization. Since products have been found to affect impression formation, the identification of significant determinants is critical. Future research in this area has an important area in which to expand. The relevancy of this research in marketplace behavior has been proposed. The need to demonstrate the results of impression formation to marketplace behavior, however, could afford further demonstration.

REFERENCES

Berkowitz, Eric N. and Walton, John R. (1980), "Contextual Influences on Consumer Price Responses: An Experimental Analysis," Journal of Marketing Research, XVII (August), 349-359.

Coyle, Joseph S. (1978), "Generics," Progressive Grocer (February), 74-78.

Wheatley, John J. and Chiu, J. (1977), "The Effects of Price, Store Image and Product and Respondent Characteristics on Perceptions of Quality," Journal of Marketing Research, XIV (May), 181-86.

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