Article Review on

Price and Brand Name as

Indicators of Quality Dimensions
for Consumer Durables
Presented by:
Group 2
Ayush Rajbhandari
Binay Basnet
Roshan Shrestha
Shiva Raj Poudel
Consumer Behavior, Semester 3, EMBA 2020
1 May 2021
Contents
Survey
Introduction
Study 1 - Development of Dimensions for durable goods
Study 2 - Marketing Variable and Multidimensional Perspective
Research Design and Method
Discussion and Conclusion
Phone Survey
● Quality Attributes of Mobile phones
○ Screen size and type
○ RAM ROM
○ Processor
○ Camera
○ Battery
○ Charging
POLL
Phone Survey
Attribute Phone A Phone B

6.81 Inch 6.9 Inch

Display
AMOLED 120 HZ AMOLED 120 HZ

SoC Snapdragon 888 Snapdragon 888

Camera Rear 108MP+ 48MP+48MP 108MP+ 48MP+12MP

Camera Front 20MP 20MP

Battery 5000mAh 5000mAh

ANTUTU Benchmark Score 688720 514485

Brand Xiaomi Samsung

 Based only on the information available,
which one do you think is better in quality?

ⓘ Start presenting to display the poll results on this slide.

Phone Survey
Attribute Phone C Phone D

Display 6.67 inch, Amoled 6.7 inch, IPS LCD

Corning Gorilla glass 5 Corning Gorilla Glass 3+

Processor Snapdragon 732G Snapdragon 730G

Camera Rear 64 + 13 + 2+ 2 MP 64 + 12 + 5+ 5 MP
Camera Front 20 MP 32 MP

Charging 33W 25W

Battery 5160 mAH 7000 mAH

RAM/ ROM 6+ 128GB 6+128GB

Brand

Price 29,999 39,999

 Based only on the information available,
which one do you think is better in quality?

ⓘ Start presenting to display the poll results on this slide.

Phone Survey
Attribute Phone E Phone F

Display 6.43 Inches 6.5 Inch

SoC Helio G35 (22.3%) Snapdragon 450 (11.7%)

Processor Score
22.3/100 11.7/100
(tech rank up)

Ram ROM 4+64 Gb 3+32 Gb

Camera Rear 13+2+2 MP 13+2+2 MP

Camera Front 5 MP 5 MP

Fingerprint NO Yes

Battery 5000 mAH 5000 mAH

Price 14,999 14,999

 Based only on the information available,
which one do you think is better in quality?

ⓘ Start presenting to display the poll results on this slide.

Phone Survey
Model Price Brand

Phone A Mi 11 Ultra QAR 2125 Xiaomi

Phone B Galaxy S21 Ultra QAR 3125 Samsung

Phone C Poco X3 NPR 29999 Xiaomi

Phone D Galaxy M51 NPR 39999 Samsung

Phone E Poco C3 NPR 14999 Xiaomi

Phone F Galaxy M02S NPR 14999 Samsung

 Research
Background
Introduction
● Quality of a product
● Market driven Quality vs Firm driven quality
● Critical Dimensions
● General topology of quality dimensions for durable goods(Ease of Use, Versatility, Durability,
Serviceability, Performance and Prestige)
● Key Marketing Variables - Price, Brand and Product attributes
● Firm focus on quality
● Study 1 and Study 2
● Real World Implications
 Study 1:
Development of
Dimensions for
Durable goods
Research Methodology
● Focused group Interview with customers
● In-depth interview with executives
● Context analysis of data from previous interviews
● Analyzed by two Researchers
● Dimensions developed by the researchers - Ease of use, performance, versatility, durability, service
issues as distinct dimensions, prestige
Quality Dimensions in Durable Goods
■ Ease of Use
■ Versatility
■ Durability
■ Serviceability
■ Performance
■ Prestige
G-Shock Guinness World Record Test
Brand as Prestige
 Study 2:
Relationship
between
Marketing
Variables and
Quality
Dimensions
About Study 2
● Study 1 = Explains Quality Dimensions ---> in their Version
● Study 2 = Relationship between Key Marketing Variables and Consumers’ Perception of Quality Dimensions

○ Key Marketing Variables: ○ Quality Dimensions (Consumers’ Perception of these):

■ Price ■ Ease of Use
■ Brand Name ■ Versatility
■ Durability
■ Serviceability
■ Prestige
● Properties of Quality Dimensions:
■ Performance
○ Search Properties
○ Experience Properties
○ Credence Properties
Key Marketing Variables - Price
● Price-Quality Link:
○ Usually - Higher the Price, better the Quality
○ Majority of past researches simply relate Quality with Price
○ This research provides alternative explanations of the relationship
○ The absence of other information = more dependance in price
○ The presence of other information = less dependence in price
Key Marketing Variables - Price
Key Marketing Variables - Price
Key Marketing Variables - Price
● Perceived Quality is rather Multidimensional than just Unidimensional.

● Only Price is not Quality. A combination of multiple Dimensions is Quality.

Key Marketing Variables - Brand Name
● Brand-Name-Quality Link:
○ Brand name is the more important and primary indicator of quality… more than
price.
○ Brand Name serves as a shorthand for quality by giving consumers a pre-existing
notion and information about the product
Key Marketing Variables - Brand Name
Key Marketing Variables - Brand Name
Key Marketing Variables - Brand Name
Why Price and Brand Name?
● Article Findings regarding Consumer Behavior is valid for Nepal market too.

● “When attribute information is not readily available or does not lead to confident judgments, then
consumers would look for other indicators of quality, such as price and brand name.”

● Ideal Situation = Consumers’ Evaluation of Each Quality Dimension (But not possible)
 Properties of Quality Dimensions
Credence means:
Truthfulness,
believability, credibility,
authority

● Search Properties ● Experience Properties ● Credence Properties

● Versatility: ● Ease of Use: ● Serviceability:

○ Inspection of Product ○ Pre-Purchase = Theoretical
○ Packaging ○ During Consumption =
○ Labeling Practical
● Durability:
○ Pre-Purchase = Theoretical
○ Layperson vs Technicalities
○ During Consumption =
Practical
○ Own Past Experience
○ Word-of-Mouth
○ Difficult to Determine
○ Depends on Circumstance
○ Example: Bose
● Prestige:
○ Abstract Notion
○ Symbolic Value
○ Superiority
○ Social Groups
○ Self-Enhancement
● Performance:
○ Practical
○ Subjective
The Properties Continuum of QD
Hypotheses
● Unfamiliar Products ---> Quality opinions = product attributes + marketing signals

● Hypothesis 1 & 2: If Properties change from Search to Credence, rely on Price and Brand

● Hypothesis 3: Sometimes, Brand Name information makes consumers rely less on product attributes
and other concerns

● Hypothesis 4: Sometimes, Price information makes consumers rely less on product attributes and
other concerns

● Hypothesis 5: More the brand information and familiarity, less the dependence on other dimensions

● Hypothesis 6 & 7: When it is about Credence properties or Prestige, the more the consumers are
influenced by Price and Brand Name.
 Research
Hypothesis
Research Hypothesis: 1 & 2
Brand name & Price as indicator of quality

Hypothesis 1: The likelihood that price will be selected as an indicator of quality

depends on the quality dimension being judged. Price will be selected more
frequently as dimensions move from search to credence properties.

Hypothesis 2: The likelihood that brand name will be selected as an indicator of

quality depends on the quality dimension being judged. Brand name will be
selected more frequently as dimensions move from search to credence
properties.
Research Hypothesis: 3
Relative use of brand name versus price as a cue for various dimensions of
quality during search
Hypothesis 3a: Brand name will be selected more frequently than price as an
indicator of quality.
Hypothesis 3b: The relative use of brand name versus price as an indicator of
quality will vary by quality dimension.
Research Hypothesis: 4 & 5
Consumer select price or brand name information to reduce amount of product
attribute information they need to collect

Hypothesis 4: When price information is available, consumers will search for

less information on product- related attributes, as compared to when price
information is not available. This effect may depend on the quality dimension
being judged.

Hypothesis 5: When brand name is available, consumers will search for less
information on product-related attributes, as compared to when brand name is
not available. This effect may depend on the quality dimension being judged.
Research Hypothesis: 6& 7
Price Level or Brand reputation level impacts the quality dimension judgement.
Greater the difficulty in evaluating dimension the more consumer will use price
and brand name to judge quality

Hypothesis 6: Price influences quality judgments to different degrees across the

various quality dimensions. Influence will increase as dimensions move from
search to credence properties.

Hypothesis 7: Brand name influences quality judgments to different degrees

across the various quality dimensions. Influence will increase as dimensions
move from search to credence properties.
 Research
Methodology
Research Design & Methods
● Scenario Approach:: Present scenarios to respondent with different price and look for difference in
quality judgement
○ Didn’t get good response as respondent can guess the purpose of the study when price and
brand name are the only cues manipulated
● Process Tracking Approach: Seek for consumer information search behaviour
Research Design and Methodology
● Consumer were asked to make judgement on 6 dimensions of quality for three sets of cars
● Rather than providing products in scenario, customers were given opportunity to request for
information
○ By keeping track of the information requested, researchers observed the process by which
respondents made quality judgement including price and brand name information
● Respondents were consumers who had medium to high familiarity with purchasing the product
● Experiment was conducted for cars
○ purchasing an automobile is a high-involvement decision
○ cars differ markedly in quality and price
○ all six abstract dimensions of quality are relevant to cars, as indicated by focus group data
○ cars are complex, hence provide richness in potential product-related attributes
○ most consumers are familiar with cars
Research Variables
● Independent Variables
○ Price
○ Brand Name

Hypothesis 4& 5: Questionnaire were designed in a way that Price and brand name may or
may not be available for search
Hypothesis 6 & 7: price and brand name information vary independently of product attribute
● Dependent Variables
○ Search for price
○ Search for brand name
○ Search for product related attributes
Analytical Design
● Six different sets of 3 cars were used in questionnaire
● Each set of cars were paired with each quality dimensions once for each respondent
○ Respondent rated 18 different cars ( 3 cars x 6 quality dimension)
● Order win which respondents were asked to rate the dimension were also counterbalanced across
respondents
● To avoid demand artifact problem
○ 25% respondents had only price information
○ 25% respondent had only brand information
○ 25% had both brand and price information
○ 25% had no information on price and brand
Development of Stimuli
● For each of the quality dimensions list of possible attributes were developed from past research
● Each attribute were group based on the real life importance
○ MOst important 6 attributes
○ Moderately important 6 attributes
○ Least important 5 attributes
● Natural attribute covariations had been considered
○ When price was available it was ranged between $4,500~ 5,500
○ Brand name (hwn available) were chosen to be consistent with the price assigned
○ Model name of car was not disclosed
○ Three american or three foreign car but no mixture
○ In each car set there were there was one car that tended toward low quality, one car that
tended toward medium quality, and one car that tended toward high quality for each quality
dimension
 Quality Dimension Attributes
Versatility Durability Performance
Cruise control Electrical systems Miles per gallon (MPG) city/highway
Air-conditioning (A/C) Rattles and squeaks Automatic or manual
Sunroof Engine cooling system Horsepower
Audio system Exhaust system Disc brakes
Power windows Fuel system Power steering
Power locks % plastic parts Turning radius
Power steering Ignition system Hesitation
Rear window defroster Type of upholstery 60.0 braking
Retractable headlamps Type of tires Front wheel drive
Automatic or manual Service warranty length Engine size
Engine temperature gauge Parts warranty length Gas or diesel
Warning lights and indicators Structural integrity Fuel capacity
Windshield wiper speeds Type of engine Engine noise/knocking
Rear seat fold down Undercoating Gas or diesel
Steering wheel adjustment Exterior pain durability Rack and pinion steering
Seat position adjustments Incidence of brake repair Fuel injection
Trunk release Incidence of drive train repair 060 acceleration
 Quality Dimension Attributes
Ease of Use Serviceability Prestige
Control of side mirror Service warranty Type of upholstery
Right side mirror Parts warranty Seat position adjustment
Seat position adjustable Parts availability Car's shape
Automatic or manual Number of reasonable distance to Power locks
Power locks dealer service centers Power windows
Power steering Distance to service parts center-dealer Audio system
Windshield wiper speeds Distance to service parts center Vinyl/hard top
Trunk release individual Colors
Dash lights/indicator Length of wait for service appointment Retractable headlamps
Hood opener Schedule of preventive maintenance Sunroof
Cruise control Employees listen to customers Convertible
Two- or four-door Information regarding repairs Gas or diesel
Turning radius Courteous service centers Wood grain panels
Digital instrumentation Repaired correctly first time Security system
Fuel capacity Service time relative to other dealers Tinted windows
Full spare fire Warranty claims handled without Digital panel
Front wheel drive argument % plastic parts
Rear window defroster Average repair cost/year
Extended warranty
Underestimation of service cost
Provision of loan car
Question Sample
You will be judging the versatility of cars K, L, and M. What
● Respondents were in one of four conditions information would you like?
(brand name available, price and brand name 1. Price
available, price available, or neither price nor 2. Cruise control
brand name available). The following example 3. Air-conditioning
is for a respondent in the price-available 4. Sunroof
5. Audio system
condition 6. Power windows
7. Power locks
A respondent could pick price and be shown the price for 8. Power steering
cars K, L, and M. The respondent could then choose to ask 9. Rear window defroster
for more information. For example, if the respondent 10. Retractable headlamps
chose to ask about the engine temperature gauge, the 11. Automatic or manual
respondent saw what type of engine temperature gauge 12. Engine temperature gauge
was available on each of the three cars. At any time the 13. Warning lights and indicators
respondent could ask for more information or move onto a 14. Windshield wiper speeds
screen that asked for a judgement of the three cars. At the 15. Rear seat fold down
point where the respondent stopped requesting 16. Steering wheel adjustment
information, the judgment of car K's versatility (as well as 17. Seat position adjustments
the judgment of car K's versatility compared with cars L 18. Trunk release
and M) was made on the basis of the versatility
information he or she had obtained.
Sample
● 100 Male and female from middle and upper middle class
● Age: 25- 55 years
● Had purchased car in past 5 years
Results
Price & Brand Name as quality
● Hypothesis 1,2, 3a, 3b concern for search for price and brand name information
● Used CATMOD procedure in Statistical Analysis System (SAS)
● Took only those repondendents who seeked for price or brand information when other attributes
were available
Research Hypothesis: 1 & 2
Hypothesis 1: The likelihood that price will be selected as an indicator of quality
depends on the quality dimension being judged. Price will be selected more
frequently as dimensions move from search to credence properties.
Results:
Result:
Highly significant (p < 0.001)
Significant interaction with brand availability ( p < 0.05)

Hypothesis 2: The likelihood that brand name will be selected as an indicator of

quality depends on the quality dimension being judged. Brand name will be
selected more frequently as dimensions move from search to credence
properties.
Result
Significant effect on search of brand name for quality ( P < 0.0001)
No interaction with price availability
Price and Brand Name

● More than 85% looked for price when selecting prestige regardless of brand name availability
● When judging durablity and performance more respondents asked fro price (p < 0.10)
● Search for price was high for durability and performance even when the brand name was available
● Price-perceived product Quality wsa strong in presence of brand name
Research Hypothesis: 3
Relative use of brand name versus price as a cue for various dimensions of
quality during search
Hypothesis 3a: Brand name will be selected more frequently than price as an
indicator of quality.
Hypothesis 3b: The relative use of brand name versus price as an indicator of
quality will vary by quality dimension.

Results
Respondents were more likely to choose brand information than price
information (p < 0.05)
For durability and performance brand name was more likely indicator than price
(P < 0.01).
Research Hypothesis: 4 & 5
Consumer select price or brand name information to reduce amount of product
attribute information they need to collect

Hypothesis 4: When price information is available, consumers will search for

less information on product- related attributes, as compared to when price
information is not available. This effect may depend on the quality dimension
being judged.

Hypothesis 5: When brand name is available, consumers will search for less
information on product-related attributes, as compared to when brand name is
not available. This effect may depend on the quality dimension being judged.
Results: Hypothesis 4 & 5
Result:
Conditionally supported

Effect of Price and brand name availability were not

significant but their interaction was significant (p <
0.05).

Price availability decreased the amount of search only

when brand name was not available (p < 0.05)

Brand availability decreased the amount of search

only when price info was not available (p < 0.05)

When both brand and price info were not available

respondents searched for average of 12.8 intrinsic
attributes

When price alone was available the attributes

searched decreased by 2 attributes and by 2.4
attributes when brand name alone was available
Research Hypothesis: 6
Influence of price on quality judgement

Hypothesis 6: Price influences quality judgments to different degrees across the

various quality dimensions. Influence will increase as dimensions move from
search to credence properties.

Results
Effect of price was marginally significant (p<0.01)
Price affected prestige ratings ( high price > medium p < 0.10; Medium > Low
price p < 0.05)
Price affects the quality judgements to different degrees across various quality
dimension
Price is strong cue to prestige, affects judgement of durbality on medium to high
price range
Research Hypothesis: 7
Influence of brand name on quality judgement

Hypothesis 7: Brand name influences quality judgments to different degrees

across the various quality dimensions. Influence will increase as dimensions
move from search to credence properties.

Results
Price availability information was not significant i.e Brand name are not driven by
price information
Brand name is significantly affected dimension rating only for prestige (high
brand name > medium brand name p< 0.05 & medium brand name > low brand
name P < 0.05), Ease of use ( high brand name > medium brand name p<0.01)
Discussion
&
Conclusion
Discussion
● Consumer search for price and brand name information differently when making judgement on the
different dimensions of quality
● Consumer use price and brand information more often for judging quality dimension that tend
towards “credence” rather than “search” end.
● Consumer search price and brand information more frequently when evaluating Prestige
● In lab setup they provided all the information easily so the impact of price and brand might have less
significant in few quality dimensions. In real world the information is not readily available so people
tend to build more perception based on brand and price
● If prestige, or durability, is the dimension that consumers most often use to judge the quality of a
particular product, then price may be a stronger indicator of perceived overall quality for that product
than for others in which different dimensions of quality are dominant.
Limitations of the Study
● Article was published in 2000 the consumer durables scenario has changed drastically during that
time
● With chinese manufacturers overtaking the mass market especially in electronics consumer durables
this study might be slightly outdated
● We can link this study with VALS analysis
● Primary research was conducted in US so might not be applicable in country like ours where people
are price conscious
Conclusion
● Consumer evaluate quality dimension differently
● Consumer use price and brand info more frequently for prestige
● instead of overall quality, dimensions of quality form a better basis for understanding the important
relationships involved in consumer judgment and choice
Thank
You