The &Quot;Value For Price&Quot; Concept: Relationships to Consumer Satisfaction

ABSTRACT - A national telephone survey of 604 consumers was conducted to assess satisfaction with the "value for price" of apparel brand types, store types, and brand types in association with store types. Utilizing a congruity theory approach, results revealed that consumer satisfaction with the value for price of name brands is significantly lowered when associated with certain store types, satisfaction with the value for price of store types is significantly lowered by association with designer brands, and that satisfaction with the value for price of store brands is significantly lowered when associated with certain store types. Implications for manufacturers, retailers, and consumer behavior researchers are discussed.

Citation:

Michelle A. Morganosky (1988) ,"The &Quot;Value For Price&Quot; Concept: Relationships to Consumer Satisfaction", in NA - Advances in Consumer Research Volume 15, eds. Micheal J. Houston, Provo, UT : Association for Consumer Research, Pages: 311-315.

Advances in Consumer Research Volume 15, 1988      Pages 311-315

THE "VALUE FOR PRICE" CONCEPT: RELATIONSHIPS TO CONSUMER SATISFACTION

Michelle A. Morganosky, University of Illinois at Urbana-Champaign

ABSTRACT -

A national telephone survey of 604 consumers was conducted to assess satisfaction with the "value for price" of apparel brand types, store types, and brand types in association with store types. Utilizing a congruity theory approach, results revealed that consumer satisfaction with the value for price of name brands is significantly lowered when associated with certain store types, satisfaction with the value for price of store types is significantly lowered by association with designer brands, and that satisfaction with the value for price of store brands is significantly lowered when associated with certain store types. Implications for manufacturers, retailers, and consumer behavior researchers are discussed.

INTRODUCTION

Consumers today are confronted with a variety of store types from which they can purchase similar or identical products. Some of these stores place an emphasis on price, while others tend to emphasize service. Brand types are proliferating as well. Department stores which at one time carried mainly name brand and designer goods are now increasing their commitment to private and store brands. Off-price stores carry name and designer brand goods, and in fact advertise their ability to offer such goods at "below department store prices." How satisfied are consumers with the value for price which these products offer? More importantly, does the consumer's perception of a product's "value for price" change depending upon in which store it is placed? This study attempts to understand the interactive effect of placing various brands in various store types. Engel and Blackwell (1982) have defined physical product attributes and subjective factors that consumers consider to be important in the purchase decision as "evaluative criteria." The evaluative criterion, price, has been studied frequently in relationship to quality (Monroe 1973, 1976; Shapiro 1973). The evaluative criterion "value for price" has been studied less often, although Rodgers and Sweeney (1979) did find a relationship between the perception of "value for your money" and store type.

Satisfaction, according to Andrews and Withey (1976), is an enduring global attitude. Consumer satisfaction can be defined as a feeling of parity between what is expected in products and services and how products and services perform. Czepiel and Rosenberg (1976) conceptualize satisfaction as a singular response representing a summary of subjective responses to many different facets. Prior to 1970, relatively few research studies were done on consumer satisfaction. In response to the consumer movement, the 1970s saw more research on the topic. Much of this research was focused on repeat purchase behavior (Jacoby and Chestnut 1978; Newman and Werbel 1973) and complaint behavior (Kraft 1977; Swan and Longman 1973; Zaichkowsky and Liefeld 1977). Consumer satisfaction theories (Day 1977; Day and Landon 1977; Miller 1976; Oliver 1980) and measures (Handy 1977; Lingoes and Pfaff 1973; Swan and Combs 1976) were developed.

A congruity theory approach (Osgood, Suci, and Tannenbaum 1957) is utilized in the present study which attempts to measure how satisfied consumers are with brand types in association with store types. Congruity theory is a form of consistency theory which states that when individuals experience inconsistency, tensions arise which force restoration to consistency. The basic premise of congruity theory is that humans abhor inconsistency. Jacoby and Mazursky (1984, 1985) utilized congruity theory to link brand and retailer images to perception of quality. The present study extends the work of Jacoby and Mazursky by linking store types (rather than individual stores) with brand types (rather than individual brands) in relationship to consumer satisfaction with the value for price concept. The hypothesis for the study was that consumer satisfaction with the value for price of brand types independent from store type would differ significantly from satisfaction with brand types in association with store types.

METHOD

Subjects

A national sample of 952 individuals who met the criterion of being the person who did most of the household shopping for apparel was drawn on the basis of a systematic probability sample of households in the United States. Random digit dialing was used to eliminate selection bias of listed over unlisted numbers. Statistically this sample provided data at the 95% level of confidence within a maximum sampling error of 3.5%. There were 604 interviews (64% response rate) obtained. All fifty states plus the District of Columbia were -- represented in the sample. Eighteen percent of the sample was drawn from the Northeast (compared to a population of 21%), 32% from the Midwest (compared to a population of 25%), 34% from the South (compared to a population of 34%), and 16% from the West (compared to a population of 20%). Approximately 18.4% of the sample resided in rural areas.

Respondents in the sample had a median age of 40 years (compared to a national median of 32 years based on the Statistical Abstracts of the US.), with a median of 12.5 years of schooling. About 5290 of the subjects had a high school education and 39% had some college education. Males made up 24% of the sample. Sixty-three percent of the respondents were employed (compared to a national norm of 6096). Fourteen percent of the sample was retired. Married respondents made up 63% of the sample (compared to 63% nationally), whites 83%, blacks 10%, and median household income averaged $27,260 (compared to a national median of $26,433).

Measures

Variables in the study consisted of satisfaction with the value for price of apparel store types and brand types. Satisfaction with the value for price of apparel was measured on a four-point Likert scale (very satisfied, somewhat satisfied, somewhat dissatisfied, and very dissatisfied). Consumers were asked to describe how satisfied they were with the value for price of apparel sold in four different store types. The store types consisted of department stores "like Macy's or Marshall Field s," discount stores "like K-mart or Zayre," national chain stores "like J. C. Penney's," and off-price stores "like Loehmann's, Marshall's, or T. J. Maxx." Satisfaction was assessed with store types individually and also in association with each of three brand types (name, designer, and store brands). For example, respondents were asked how satisfied they were with the value for price of apparel sold in department stores like Macy's or Marshall Field's. They were also asked to assess the value for price of name brand apparel sold in department stores.

This method of measurement whereby consumers rated store types separately and then in association with different brand types allowed for an assessment of the adjustments that consumers were willing to make when their satisfaction with the value for price of a store type varied considerably from that of the brand type. Thus, a measurement of how congruity was established between store types and brand types was possible. Brand types consisted of name brands, designer brands, and store brands. Name brands were defined to the respondents as "well-known recognized brands that many stores carry,' designer brands as "brands named after a well-known designer," and store brands as "brands that have a label with the store's name on it." Similar to the measurement of store types, all brand types were measured separately and in association with the four different store types. The inclusion of off-price stores in this study was seen as particularly important, since off-price apparel stores are rapidly expanding and are a fairly new form of retail institutional type. The inclusion of store brands was also seen as significant because many apparel retailers (especially department stores) are expanding the percentage of store brands that they carry.

Data Collection and Analysis

A pretest consisting of 24 telephone interviews was conducted by professional telephone interviewers. Questionnaire revisions and an estimate of the average time required to administer the interview schedule resulted. Following the pretest, 604 telephone interviews were obtained by trained professional interviewers. The questionnaire consisted of approximately 118 questions. All interviews were conducted in the evening during the week and during the day on the weekend in order to facilitate contact with persons holding jobs. Up to ten attempts were made to conduct an interview at a given telephone number before it was considered a noncontact. At least 10% of the completed interviews of every interviewer were verified by telephone, either by the supervisors or by interviewers specifically trained for this purpose. Bonferroni t-tests were used to compare mean differences between brand types and brand types in association with different store types. Bonferroni t-tests were also used to compare store types in association with different brand types.

RESULTS

Based on the mean scores as presented in Table 1, consumers were most satisfied with the value for price of name brands and least satisfied With designer brands. Among store types, consumers were most satisfied with the value for price presented at department stores and least satisfied with off-price stores. In relationship to different types of brands found in stores, consumers were most satisfied with store brands within department stores, name brands within discount stores, name brands within national chain stores, and name brands within off-price stores. Across store types, consumers were least satisfied with the value for price of designer brands. Consumers were significantly (p = .000) less satisfied with designer brands than either store or name brands. They were also significantly (p 5 .000) less satisfied with discount rather than department stores, off-price rather than department stores, discount rather than national chain stores, and off-price rather than national chain stores.

Results of the paired t-tests between name brands and store types (Table 2) indicated that satisfaction with the value for price of name brands was significantly [Similar to the method used by Jacob and Mazursky (1984), a more stringent test, the Bonferroni tCtest (Alt 1982), was applied to correct for the possibility of spuriously biased results due to the use of multiple tCtest runs applied to the same population. The Bonferroni test requires the tCvalue to be significant at the alpha level divided by the number of comparisons (which in the present study is .05/2) rather than the conventional .05 level to satisfy statistical confidence.] lowered when name brands were sold in discount stores, national chain stores, and off-price stores. Satisfaction with name brands was not significantly lowered when associated with department stores.

In relationship to designer brands, a clear pattern of consumer dissatisfaction emerged (Table 3). Across the four store types of department store, discount store, chain store, and off-price store, consumers' satisfaction with value for price was significantly lowered by a store's association with designer brands. Chain stores were most hurt by the association with designer brands while off-price and discount stores were least hurt by the association with designer brands.

TABLE 1

MEANS AND RANKINGS FOR ALL VARIABLES ON SATISFACTION WITH VALUE FOR PRICE

TABLE 2

PAIRED T-TESTS BETWEEN NAME BRANDS AND STORE TYPES

TABLE 3

PAIRED T-TESTS BETWEEN DESIGNER BRANDS AND STORE TYPES

Results of the paired t-tests between store brands and store types (Table 4) revealed a pattern similar to that for name brands. Satisfaction with the value for price of store brands was significantly lowered when associated with discount stores, national chain stores, and off-price stores. Satisfaction with store brands was not significantly lowered when associated with department stores.

DISCUSSION

According to the findings in the present study, name brand apparel represents good value for the price to the American consumer. However, when name brand apparel is associated with discount stores, national chain stores, or off-price stores, feelings of satisfaction with the value for price are significantly lowered. Consumers obviously are allowing their satisfaction with the store type to dominate their feelings of satisfaction when name brands are in association with store types. The only exception is that of name brands in department stores. Manufacturers of name brands should recognize that the placement of their brands in discount stores, national chain stores, and off-price stores does significantly lower the feeling of satisfaction that consumers have about the value for price that these products represent. Manufacturers should also recognize that the image of the name brand is not significantly hurt by its association with the department store.

TABLE 4

PAIRED T-TESTS BETWEEN STORE BRANDS AND STORE TYPES

Findings from this study would suggest that name brand manufacturers should try to increase their offerings in department stores. This may be particularly difficult because many department stores are shifting a higher percentage of their stocks into private brands and store brands rather than name brands. Reasons why this is occurring focus on the apparel retailers' ability to obtain higher gross margins on private label and store label merchandise and opportunities for exclusiveness Future studies should attempt to assess why consumers are less satisfied with the value for price of name brands in discount, national chain, and off-price stores. Since these stores usually offer merchandise at lower prices than the department store, one could have expected the consumer to be more satisfied with the value for price at these stores. Perhaps consumers do not perceive the name brand prices to be significantly lower at discount, national chain, or off-price stores and, therefore, the value for the price is simply not there.

Another dilemma to be faced by domestic name brand apparel manufacturers is in relationship to the current apparel import situation. Many department and specialty stores have shifted their assortments into private and store brands which are frequently manufactured outside the United States. This has left the domestic name brand apparel manufacturer without a retailer to sell to, or at least fewer retailers to sell to. The option which many U.S. apparel manufacturers have chosen is to sell to discount, national chain, and off-price stores to make up for the business previously provided by the department store. Thus, the U.S. name brand manufacturer must decide to what extent it is beneficial in the long run to continue to sell to discount stores, national chain stores, and off-price stores. The findings from this study certainly pose a word of caution to domestic name brand manufacturers in terms of consumer satisfaction.

In relationship to the findings concerning designer brands, a clear pattern of consumer dissatisfaction with the value for price of designer brands emerged. Thus, in this instance, retail stores need to be particularly careful about the inclusion of designer brands ii their assortments. This is especially true for national chain stores and department stores. Although stores may choose to carry designer brands for reasons other than the perception of good value, the fact that designer brands consistently lowered consumers' satisfaction across store types cannot be ignored. National chain stores like J. C. Penney, which have added such designer brands as Halston III, need to be cognizant of the fact that these brands might represent poor value to their customers. Balancing a retailer's image between "fashion" and "value" is certainly not an easy task. However, retailers such as J. C. Penney should recognize that what may be gained in terms of a "fashion" image may be lost in terms of a "value" image.

The findings in relationship to store brands revealed that consumers are most satisfied with the value for price of store brands when placed in department stores. Thus, similar to the relationship between store types and name brands, store brands are heavily influenced by the association with a store type. Future studies should attempt to assess consumer satisfaction with other evaluative criteria such as fashionableness in relationship to store brands.

This study revealed that consumers are satisfied or dissatisfied with the value for price of "categories" or "types" of stores and brands. Jacoby and Mazursky (1984, 1985) demonstrated the usefulness of applying congruity theory to the study of specific store and brand images. The present study further demonstrates the usefulness of using congruity theory in relationship to consumer response to categories of retail stores and brands. Consumer behavior research would be furthered by the extension of this study to include other product categories, those both more or less durable than apparel. This might include products such as food, automobiles, or stereos. Low involvement products such as toothpaste might also be studied.

The "value for price" concept warrants further research as well. Apparently "value for price" in the consumer's mind extends beyond the specific attributes of the product and the product price. Subjects in the present study were less satisfied with the value for price of name brands in discount, national chains, and off-price stores even though name brands in these stores are frequently offered for less than the department store's price. Value in the consumer's mind may include additional factors such as liberal return policies and store services. National chains, off-pricers, and discounters should communicate these "value symbols" to the consumer whenever and wherever possible.

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