The Influence of Prior Product Experience, Price and Brand on Quality Perception

John J. Wheatley, University of Washington (student), University of Washington
Richard G. Walton, University of Washington
John S. Y. Chiu,
ABSTRACT - For both skiers and non skiers, high prices and a well known brand name were found to enhance the perceived quality of skis. An unknown or little known brand name and low prices resulted in lower quality perceptions. Generic product experience does not apparently guarantee a degree of expertness about product quality sufficient to rule out price or brand as useful cues.
[ to cite ]:
John J. Wheatley, Richard G. Walton, and John S. Y. Chiu (1977) ,"The Influence of Prior Product Experience, Price and Brand on Quality Perception", in NA - Advances in Consumer Research Volume 04, eds. William D. Perreault, Jr., Atlanta, GA : Association for Consumer Research, Pages: 72-77.

Advances in Consumer Research Volume 4, 1977   Pages 72-77

THE INFLUENCE OF PRIOR PRODUCT EXPERIENCE, PRICE AND BRAND ON QUALITY PERCEPTION

John J. Wheatley, University of Washington

Richard G. Walton (student), University of Washington

John S. Y. Chiu, University of Washington

ABSTRACT -

For both skiers and non skiers, high prices and a well known brand name were found to enhance the perceived quality of skis. An unknown or little known brand name and low prices resulted in lower quality perceptions. Generic product experience does not apparently guarantee a degree of expertness about product quality sufficient to rule out price or brand as useful cues.

INTRODUCTION

This paper examines the influence of prior (generic) product experience, price and brand name on perceptions of product quality and the extent to which the latter two elements of the marketing mix interact.

Some of the research that has been carried out on the topic of quality perception has utilized "experts" as subjects (Jacoby, et al., 1971). This work has indicated, not surprisingly, that buyer characteristics may affect the importance of price and other cues as indicators of product quality. Scitovsky, for example, has suggested that consumers lacking experience with a product would be more inclined than users to utilize price in assessing product quality (Scitovsky, 1944). Notwithstanding the general expectation that prior experience with a product would have such an effect, the authors are unaware of any evidence in the published literature indicating acceptance of the hypothesis.

Unlike the experience issue there is, on the other hand, a growing body of evidence pointing to the conclusion that price affects a potential buyer's perception of the quality of at least some products (McConnell, 1968; Stafford and Enis, 1969). Other studies that have concerned themselves with indicated purchase behavior have also implied that price is sometimes utilized as an implied quality cue (Leavitt, 1954; Tull, et al., 1964). The only controversy concerning the effect of price as a quality cue is whether or not it retains its salience when other cues are also present and what the influence might be of as yet experimentally untested factors such as prior product experience.

Perhaps even less in dispute is the proposition that brand names are influential in terms of affecting buyer's perceptions of quality (Gardner, 1970, 1971).

Interaction effects between price and other marketing variables are generally believed to exist (Shapiro, 1972). The empirical evidence supporting this position is limited but tends to confirm the suggestion of at least some interactions among variables (Stafford and Enis, 1969).

Prior experience with a product, price and brand information are not the only influences affecting quality perception. It has been suggested that many other factors such as the name of the store in which a product is purchased, the effort involved in making a purchase and the amount of money spent may also influence perceptions of quality. In all likelihood, still other aspects of the exchange process are selectively perceived by individual buyers as being indicative of product quality. No attempt has been made, however, in this study to assess the impact of these other forces.

On the basis then, of prior research findings with respect to price and brand as cues to quality and speculation on the importance of prior experience with a product it was hypothesized that:

1. Subjects who were non-users of the product chosen for the study would utilize the price and brand cues to a greater extent than product users.

2. Price would have a significant effect on the experimental subjects' perception of quality.

3. Brand would also have a significant effect on quality perception.

4. There would be a significant interaction effect between price and brand.

PROCEDURE

The subjects in this experiment were 100 students enrolled at the University of Utah and an additional 106 students from Brigham Young University. One-half of the subjects were skiers while the remainder were non-skiers.

All of the respondents were asked to rate the quality of each of four pairs of skis identified only by brand and price. An effort was made to isolate the effects of these Two variables and to avoid the introduction of extraneous variables which might affect the quality judgments of the respondents. The students were told that each of the four pairs of skis were of basically identical structural design and the common elements of that design were shown on each questionnaire. (A cross-sectional drawing of a ski of the same design referred to in the questionnaire was included with coded arrows pointing to each feature, i.e., hard plastic top, one-piece steel edges top and bottom, fiber reinforced plastic "fiberglass" wrapped around an inner core of laminated wood, and a high density plastic base.) This information was included to reduce any ambiguity that might have resulted from respondents' awareness of the many different structural designs then available in skis, i.e., all wood, wood and metal sandwich, fiberglass and wood sandwich, fiberglass and metal sandwich, hollow-chamber fiberglass, etc. Respondents were also told that the skis in question were all made for skiers at the same level of proficiency. They were asked to judge only the quality of the skis in question and not whether or not they would purchase either of the two brands.

The product description was included on an information sheet which was handed out to the subjects to read. The researcher also read the material aloud to the subjects. They were asked to turn to a second "answer sheet" and circle the appropriate number on a "quality scale" below each brand name and price. For a rating of "highest" quality, they were to circle the number 5. For a rating of "low" quality, they were to circle the number 1. The values 4, 3, and 2 were intended to signify intermediate responses between "highest" and "low." Next to each brand name, price, and quality scale was a simple line illustration of a pair of skis. One view of the top and one view of the side. All four illustrations were exactly the same.

The choice of brand names to represent high and low brand recognition levels was governed by the observation that the brand name HEAD had dominated the metal ski market from about 1960 until very recently. Even if a subject did not ski, the probability of his or her being aware of the brand name was felt to be very high. This also holds true, of course, for skiers. The brand name DAVOS was chosen because it is the private brand name of an inexpensive wood ski produced for a Seattle outdoor equipment firm and sold only in their retail stores and through their mail order catalog. The likelihood of the respondents having had any contact or experience with this brand name was judged to be very small.

The construction design of the ski shown to the subjects was not made by either of the two companies that manufactured the brands included in the survey. Identification of a particular ski by price line was also minimized by use of prices that were not consistent with either brand's regular price levels. The high and low prices used were $165 and $75 respectively. HEAD priced their skis at levels above and below $165 and above $75 while DAVOS was priced below both at the time of the experiment.

In short then, respondents should not have been able to accurately identify, on the basis of any previous information that they may have possessed any of the four pairs of skis, thereby increasing their dependence on the price and brand information furnished them as the sole basis for judging the quality of the skis shown to them.

ANALYSIS OF RESULTS

The results of the experiment indicate that the subjects' perception of product quality is influenced by both brand and price information. Table 1 presents the mean quality ratings for each pair of skis and the means for each of the price and brand treatments for the whole sample. The difference in perceived quality attributable to price level was greater than the difference attributable to brand recognition. Not surprisingly, a higher price and a well known brand name were associated with higher quality and conversely a low price and an unknown, or little known, brand name was perceived as meaning lower quality.

While non-users of the product had a slightly stronger tendency to utilize the price cue to assess product quality than did users, the difference between the two groups was very small. The manner in which both groups utilized the brand cue was almost identical.

Analysis of the price and brand effects on the perception of quality and the interaction of these two treatments as well as the influence of product use is shown in Table 2. The experimental design is a randomized block factorial; the statistical model used here is hierarchal:

yi(j)k = u + gi + di(j) = tk + ei(j)k

where

i = 1, 2, (groups)

(j) = 1, 2,..., 206 (individuals tested in the groups)

k = 1, 2, 3, 4 (treatments)

The structure of the treatments is factorial:

bl + rm + (br)lm

where

l = 1, 2, (brands

m = 1, 2, (prices)

and

t1 = b2r2

t2 = b2r1

t3 = b1r2

t4 = b1r1

TABLE 1

MEAN PRODUCT QUALITY RATING - TOTAL SAMPLE

TABLE 2

FACTORIAL ANALYSIS

It is very clear that the price effect on the subjects:' perception of the quality of the skis is statistically significant and accounts for the bulk of the variation observed. The brand effect is also significant but not nearly as strong as the price effect. The two treatment effects also interact but this interaction effect is small and barely significant. Table 2 also reveals that while the variance attributable to the individuals participating in the experiment was statistically significant, this particular source of variation was small compared to the variation associated with the combined treatment effects of price and brand.-

There is no basis for rejecting the hypothesis that both skiers and non-skiers utilize the price and brand cues in a similar manner.

SOME LIMITATIONS

Care should be taken in extrapolating the results of experiments involving student subjects although in this instance the respondents constitute an important segment of the total market for the product.

The particular range and number of prices used in this experiment may also have affected the subjects perceptions of product quality. It is a matter of judgment as to the "appropriateness" of the prices used but that this is something which is important to buyers is intuitively appealing and seems to be reasonably well established. As Gabor and Granger put it:

The consumer intent on a purchase has two price limits in mind: an upper limit above which the article would be judged too expensive, and a lower limit below which the quality of the item would be suspect (Gabor and Granger, 1966, p. 45).

In a real world situation the significance of price or, for that matter, any other cue such as brand may also be enhanced or diminished because of the tendency on the part of purchasers to perceive the dimensions of the buying problem in a selective manner, disregarding or emphasizing other potentially useful bits of information.

It must also be acknowledged that although there is a general tendency on the part of marketers to assume that price and brand are independent variables the effect of a particular "brand name" as a perceived stimulus is very hard to isolate because it is, in part at least, linked to the other elements of a usually consistent marketing mix which, of course, includes price.

Finally, the implications of this and other similar research investigations from a business management standpoint are thus far still quite limited. It should be recognized that associating price with quality does not mean that the probability of a buyer purchasing a particular product will necessarily increase if prices are set at a high rather than a low level. For one thing buyers almost invariably have limited resources, therefore high prices will tend to inhibit or deter purchases. Also, buyers will not always place emphasis on high product quality as an important objective when engaged in purchasing behavior. A minimum level of quality may be sought or assumed to be present in the product to be bought.

DISCUSSION

Theoretical Considerations

At the present time we do not have a comprehensive and tested theoretical framework within which these empirical results can be analyzed.

Economic demand theory is, unfortunately, not very helpful in explaining or predicting consumer perceptions of quality or purchase behavior in the short run. It is really more of an explanation of how consumers should behave given certain assumptions about their knowledge-ability as buyers on the one hand and their goals as consumers on the other.

Its virtual silence on the issue of price as an indicator of product quality may be because:

it is of considerable analytical convenience to ignore price as a quality indicator, because if this is not done, the utility function of the individual must be formulated so as to incorporate an additional set of independent variables, namely the prices of all the commodities in the market (Gabor and Granger, 1966, p. 43).

Lancaster has attempted to integrate information about products into traditional demand theory but the difficulty with his approach is that he does not recognize that products are viewed by consumers as more than physical entities with easily identified objective properties or characteristics (Lancaster, 1971).

The significance of "brand" in demand theory is treated as of importance only in exceptional or unusual circumstances and is also dismissed as theoretically unimportant.

Finally, the consequence of being a product user is submerged under the assumption that all buyers are "knowledgeable."

The most serious problem with traditional economic demand theory that seems to have been generally overlooked is that it assumes inter alia that "product" is always a constant. To the extent that buyers perceive quality differences in physically identical goods because of, for example, the price at which such merchandise is offered for sale, "product" is apparently a variable. Instead of the usual negatively sloped continuous demand function describing a price-quantity relationship or a backward sloping demand curve, what we have, if a "product" changes when its price changes, is a series of points in two dimensional space each of which describes a unique price-quantity relationship. As Tull, et al., have pointed out, buying at a higher price or indicating an intention to purchase at a higher price implies that product quality differences have apparently been imputed by the purchaser and, as they say, "in the framework of conventional demand theory, therefore, these curves cannot be considered to be demand curves" (Tull, et. al., 1964, p. 191).

The most promising theoretical approach thus far advanced that can be used to explain a buyer's use of price or brand information or experience with a product as cues to product quality is the hypothesis suggested initially by Bauer that such behavior could be viewed as a form of perceived economic or social risk taking.

Consumer behavior involves risk in the sense that any action of a consumer will produce consequences which he cannot anticipate with anything approximating certainty, and some of which at least are likely to be unpleasant (Bauer, 1960, p. 390).

Picking up on Bauer's observation that confidence is the reciprocal of risk taking, Cox developed the notion that a product or service is seen by potential buyers as an array of cues and consumers use these cues to make judgments about products. Buyers evaluate cues in terms of their predictive value and the confidence the buyer has in his or her ability to evaluate the cues, with the latter taking precedence over the former. This means that consumers are, of course, capable of making mistakes in their assessments of products because:

unless a consumer feels sufficiently confident about evaluating a cue she is not as likely to use it--no matter how high its predictive value (Cox, 1962, p. 419).

Shapiro, using Cox's concept and some additional work of Bauer's on source credibility has developed the idea a bit further and suggested that reliance on price as an indicator of quality is also influenced by the consumer's trust in the price setter, as well as such other factors as susceptibility to snob appeal (Shapiro, 1973).

Most recently, Taylor has proposed a still more complete formulation of buyer behavior as risk taking in a choice situation (Taylor, 1974). Briefly, self-esteem or generalized self-confidence is said to interact with buyer anxiety or tension to evoke risk reducing strategies which suffer from uncertainty about both their outcomes and their consequences. Reduction of the seriousness of the outcome and the acquisition of information are suggested as the ways in which a decision to buy is reached. Unfortunately, his model is more descriptive or explanatory in nature than it is predictive. It is also incomplete. For example, the manner in which information, intended to reduce uncertainty, is acquired and processed in Taylor's model is not spelled out in an operational manner.

While the results of the exploratory investigation reported here cannot be regarded as a test of Taylor's model they are compatible with it. They are also consistent with the hypotheses of Bauer, Cox and Shapiro and the cognitive or problem solving models of buyer behavior that have been proposed by marketers in the last decade, notwithstanding the finding that prior product experience did not alter the manner in which the price and brand information was utilized by the experimental subjects. The problem solving models of buyer behavior usually allow for the possibility of experience influencing attitudes, perceptions and behavior but whether it does so or not depends on the nature of the experience. A satisfactory experience or an unsatisfactory experience could both be presumed to affect buyer behavior but it seems reasonable to suppose that many experiences must be essentially neutral in their effect on the individual and therefore would not influence buying, attitudes or perceptions.

Compatibility with Other Empirical Research

Theoretical considerations aside, the results of this experiment are also consistent with much, though not all, of the other empirical research studies on this topic. In those instances where consumers believe that quality differences exist among brands in a product category, price, when it is the only cue available, is generally agreed to serve as an indicator of quality, notwithstanding a feeling on the part of some that this effect, when demonstrated, is something of an experimental artifact (Rao, 1971).

Price has also been previously demonstrated to be the dominant quality cue in a multi-cue setting (Andrews and Valenzi, 1971; Stafford and Enis, 1969). The salience of the price cue has not, however, been demonstrated in all multi-cue studies (Jacoby, et. al., 1971). Confusion about price effects seem almost inevitable, if for no other reason than there has been no systematic effort to find out which product categories have significant perceived quality differences that are not readily apparent to typical buyers. Thus, when a particular experiment reveals no price effect on quality perception it is possible that the result is due to the choice of product used. Inasmuch as the subjects in this experiment utilized price as a cue to product quality, skis may be presumed to be another product class for which quality differences exist between brands.

It has also been suggested that in addition to perceived but not obviously apparent quality differences between brands the "real world" prices of the tested product must vary across a wide range if price is to be utilized as a quality cue in a multi-cue setting (Jacoby, et. al., 1971). Skis obviously meet this criterion.

It seems plausible to conclude, for the present at least, that while price is not as absolutely significant in a multi-cue setting as it is when it is the only cue, when real prices vary over a wide range, unless buyers are technical experts or product quality can be assessed readily by non-experts, it is still a very important cue and quite possibly the most important one typically utilized by consumers. It is a cue with a very high confidence value and a predictive value more useful, for example, than experience with skis.

The importance of the brand variable, in terms of its influence on quality perception, was confirmed, as it has been in other studies, but with some differences. First, the results of this experiment differ, for example, from those reported by Gardner; the price-quality relationship was not "replaced by a brand-quality relationship" (Gardner, 1971, p. 243). Once again, this could be a reflection of the product used in the experiment. It is plausible that among the young adult subjects involved in this experiment there may have been a separate and distinct element of brand inspired snob appeal for skis.

Second, Monroe has suggested that the brand-quality relationship may be restricted to "relatively inexpensive grocery products and beverages" (Monroe, 1973, p. 73). Andrews and Valenzi also found that "the lower the price the greater the influence of brand names" (Andrews and Valenzi, 1970, p. 395). Skis, it may be noted, are relatively high-priced consumer goods. It seems reasonable to conclude at least tentatively then that brand, as an indicator of product quality, like price, is very likely product specific. It is quite probably also inter-related with price and, in the case of some low priced consumer products increases in importance, relative to price, as a quality cue. Conversely, it decreases in relative importance for some, but not all, higher-priced consumer products.

While brand name and some of the physical characteristics of a product have been the most frequently mentioned alternative candidates for the role of dominant cue, Jacoby, et al., have suggested that "the variables that effect quality perception seem to manifest themselves primarily through interaction with other variables'' (Jacoby, et al., 1971, p. 577). As a practical matter it may be noted that if this is indeed the case it is discouraging news for experimentalists because of the problems associated with the interpretation of higher order interaction effects.

In this experiment there was only the hint of a small interaction effect between price and brand. As mentioned earlier, other research studies on quality perception have also generally found some interactions among cues but Jacoby has suggested that these results and the results of the research reported here may understate the existence of interaction effects (Stafford and Enis, 1969).

Since past experimental investigations of quality perception have manipulated other cues while holding actual differences between the samples (products) constant (i.e., nonexistent), they may well be using an oversimplified representation of reality and, therefore, missing important and complex relationships between the cues (Jacoby, et. al., 1971, p. 577).

At the present time there is not enough evidence to either confirm or refute Jacoby's interaction hypothesis, although Andrews and Valenzi have found that combined cue ratings were predicted quite accurately by a simple weighted average of single cue ratings (Andrews and Valenzi, 1970).

The intuitively appealing suggestion that experience with a product would make a respondent less inclined to use price or brand cues as indicators of product quality was not supported by the evidence in this study. The most plausible interpretation of this result is that product use alone does not apparently mean a degree of expertness about product quality sufficient to rule out price or brand as useful cues. The oft heard expression "you get what you pay for" is apparently both a more powerful influence, and a widely held point of view, at least with respect to skis.

Andrews and Valenzi have offered evidence to support, in at least a limited way, the observation that you do indeed "get what you pay for:"

Previous research on alcoholic beverages has suggested that where products used for the same purpose are substantially different in purchase price, there is a slight positive relationship between purchase price and blind-rated quality. The results of this small scale investigation using margarines and butter tended to confirm that conclusion (Andrews and Valenzi, 1970, p. 395).

In a simulated purchase situation, Lambert also found that experience in buying was positively related to choosing high-priced brands (Lambert, 1972).

The choice of subjects in an experiment is likely to be important in determining the significance of such cues as price or brand as product quality indicators. At some level of expertise it seems possible that price and/or brand would not be utilized as cues to quality. Had salesmen from ski manufacturing firms been used as subjects in the experiment reported here, it is possible that the results would have been different. That is to say, price and brand would not have been utilized as cues to quality, at least to the same extent. The use of experimental subjects having a degree of expertise in excess of that possessed by most purchasers or users of a product has led some researchers to suggest that price is not an important quality cue under such circumstances (Jacoby, et al., 1971).

The widely held belief that experience with a product will influence perceptions of it has not been disproved in this experiment; the research has highlighted the point that it is the nature of the experience with the product that appears to be important.

FUTURE RESEARCH

There are a great many gaps in our knowledge and understanding of both the process of quality perception, purchase behavior and the link between the two. The phenomenon of brand loyalty might, for example, be better understood if some of these voids were eliminated.

Leavitt's discovery reported in the literature more than 20 years ago that price is used as a guide to the quality of some products should be followed up. Specifically, we need to discover exactly what it is about a product or a buyer that encourages the assessment of quality on the basis of cues such as price and/or brand. Preliminary efforts by one of the authors along these lines suggest that it is not an easy task and that may be why relatively little has been published to date on this subject. Still, some hypotheses have been suggested.

Tull, et al., have indicated that," consumers rely heavily upon prices as a predictor of quality when there is a substantial degree of uncertainty involved in the purchase decision" (Tull, et al., 1964, p. 191). While this statement seems plausible the results of this study at least indicate that experience with a product such as skis may not be enough to serve to reduce uncertainty. Or it may be, as Gardner suggests, that price will be used as a guide to product quality in any situation where "comparisons of product characteristics are difficult from the consumer's point of view" (Gardner, 1970, p. 39). Lambert, however, did not find any evidence to support this hypothesis (Lambert, 1970). On the other hand, Lambert did conclude that the social importance of a brand choice and the consequences associated with an unsatisfactory choice were influential factors in a simulated purchase situation.

Further development of a theoretical foundation for work on the subject of quality perception is also needed especially with respect to the acquisition and processing of information by consumers.

A greater variety of research techniques and approaches, i.e., multidimensional scaling and field experiments should also be employed if quality perception research is to be placed on a firmer foundation.

Finally, it seems desirable to systematically investigate the possible influence of other cues under the control of sellers such as store image, personal selling and advertising on consumer perceptions of product quality and subsequent buying behavior.

REFERENCES

I. R. Andrews and E. R. Valenzi, "Combining Price, Brand and Store Cues to Form an Impression of Product Quality," Proceedings, 79th Annual Convention, APA (1971), 649-650.

I. R. Andrews, "The Relationship Between Price and Blind-Rated Quality for Margarines and Butters," Journal of Marketing Research, VII (August 1970), 393-395.

Raymond Bauer, "Consumer Behavior as Risk Taking," Dynamic Marketing for a Changing World, American Marketing Association, June 1960, 389-398.

Donald F. Cox, "The Measurement of Information Value: A Study in Consumer Decision Making," Emerging Concepts in Marketing, American Marketing Association, December 1962, 413-421.

Andre Gabor and C. W. Granger, "Price as an Indicator of Quality: Report on an Enquiry," Economica (1966), 43-70.

David M. Gardner, "An Experimental Investigation of the Price Quality Relationship," Journal of Retailing, 46 (Fall 1970), 25-41.

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Tibor Scitovsky, "Some Consequences of the Habit of Judging Quality by Price," Review of Economic Studies, 12 (1944-45), 100-105.

Benson P. Shapiro, "The Pricing of Consumer Goods: Theory and Practice, Working Paper," Marketing Science Institute (February 1972), 146 pp.

Benson P. Shapiro,"Price Reliance: Existence and Sources," Journal of Marketing Research, 10 (August 1973), 286-294.

James E. Stafford and Ben M. Enis, "The Price Quality Relationship: An Extension," Journal of Marketing Research, 6 (November 1969), 456-458.

James W. Taylor, "The Role of Risk in Consumer Behavior," Journal of Marketing, 38 (April 1974), 54-60.

D. S. Tull, R. A. Boring and M. H. Gonsoir, "A Note on the Relationship of Price and Imputed Quality," Journal of Business, 37 (April 1964), 186-191.

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