Journal of Promotion Management

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Impact of “High Quality, Low Price” Appeal on

Consumer Evaluations

Miyuri Shirai

To cite this article: Miyuri Shirai (2015) Impact of “High Quality, Low Price” Appeal
on Consumer Evaluations, Journal of Promotion Management, 21:6, 776-797, DOI:
10.1080/10496491.2015.1088922

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Journal of Promotion Management, 21:776–797, 2015
Published with license by Taylor & Francis Group, LLC
ISSN: 1049-6491 print / 1540-7594 online
DOI: 10.1080/10496491.2015.1088922

Impact of “High Quality, Low Price” Appeal on

Consumer Evaluations

MIYURI SHIRAI
Keio University, Tokyo, Japan

Marketers frequently adopt a “high quality, low price” appeal in

advertisements. However, the price–quality inference theory implies
that this contextual appeal may not be well-accepted by consumers
because it contains two contradictory cues: high quality and low
price. This article investigates how consumers evaluate this appeal
through two laboratory experiments. Study 1 shows that the appeal
leads to favorable price perceptions and purchase intentions when
the product price is high; it leads to high quality perceptions when
the price is low. Study 2 shows that these effects are salient when
consumers have a weak price–quality schema or a low need-for-
cognition.

KEYWORDS advertising appeal, consumer evaluations, need for

cognition, price—quality inference

INTRODUCTION

Marketers employ various kinds of appeals to make products appear more

attractive for consumers. Consumers also pay attention to and rely on these
appeals to decide whether to purchase the products, to look for other prod-
ucts, or to visit other stores for comparisons (Anderson & Simester, 2003).
One of the appeals frequently utilized in retail advertisement is a wording ap-
peal, “high quality, low price” (HQLP appeal). For example, Safeway claims
“Check out our brands! You will find high quality brands at low prices” and

© Miyuri Shirai
Address correspondence to Miyuri Shirai, 79-4 Tokiwadai, Hodogaya-ku, Yokohama,
Kanagawa 240-8501 Japan. E-mail: shirai@ynu.ac.jp
This is an Open Access article. Non-commercial re-use, distribution, and reproduction
in any medium, provided the original work is properly attributed, cited, and is not altered,
transformed, or built upon in any way, is permitted. The moral rights of the named author(s)
have been asserted.

776
 “High Quality, Low Price” Appeal 777

H&M claims their business concept such as “fashion and quality at the best
price.” This type of appeal is used over a wide range of product and service
categories such as clothing, cosmetics, furniture, housing, rent-a-car, and so
on. The prevalence of this appeal indicates that marketers must consider it
a success; however, it has been largely neglected by marketing researchers
although a considerable amount of studies focused on effectiveness of avail-
able information regarding products for consumers.
Thus far, numerous studies analyzed effects of product-related attributes
on consumers’ quality perceptions (e.g., Monroe & Dodds, 1988; Olson,
1977). The effect of third-party rating on quality perceptions was exam-
ined by Akdeniz, Calantone, and Voorhees (2013). Van Herpen, Pieters,
and Zeelenberg (2009) found that for scarce products, information about
excess demand influenced consumers’ inferences of popularity and informa-
tion about limited production quantities influenced consumers’ inferences of
exclusiveness. Aguirre-Rodriguez (2013) also examined these scarce appeals
for coupon scarcity. Furthermore, a stream of research focused on contex-
tual appeals that were indicated in retail advertisements. Various types have
been examined, but they were mostly for price promotions. The research has
examined restriction on purchase quantity or time (e.g., Howard & Kerin,
2006; Inman, Peter, & Raghubir, 1997; Manning & Sprott, 2007; Raghubir,
1992; Suri, Kohli, & Monroe, 2007; Wansink, Kent, & Hock, 1998), price
comparison (e.g., Burton, Lichtenstein, & Herr, 1993; Darke & Chung, 2005),
multiple-unit price (e.g., Manning & Sprott, 2007; Wansink et al., 1998), and
tensile price claim (e.g., Biswas & Burton, 1993; Mobley, Bearden, & Teel,
1988), sale sign (Anderson & Simester, 2003), and rationales for providing
price discounts (Bobinski, Cox, & Cox, 1996).
This study investigates consumers’ responses to the contextual HQLP ap-
peal. As described above, little research has focused on it, and consequently,
no empirical studies have so far been reported. This appeal is intriguing be-
cause it contains two cues: high quality and low price. As consumers usually
prefer to obtain high quality products at lower costs, this appeal seems to
meet consumers’ needs and resonate with them. However, following the
price–quality inference theory (e.g., Monroe & Dodds, 1988; Olson, 1977),
we considered the possibility that these cues contradict each other because
the theory essentially implies that high quality equals to high price. It is,
therefore, interested in how consumers psychologically evaluate this appeal.
If consumers accept such an appeal, then questions arise regarding their
responses. Do consumers really perceive that the advertised products have
the high quality advertised? Do consumers really perceive that the prices are
low? Do consumers really believe high quality equals low price? The purpose
of this research, therefore, is to try to answer the above research questions.
We next discuss the concept of consumers’ price–quality inferences and
monetary sacrifice, and explore how these concepts help explain the ef-
fect of the HQLP appeal on consumers’ evaluations. Then, we present our
778 M. Shirai

hypotheses and describe our two studies and results. Study 1 investigates
whether consumers’ quality perceptions, price perceptions, and purchase
intentions are influenced by this appeal. Study 2 further investigates what
type of consumer accepts this appeal more easily. The individual differences
focused are price–quality schema, price consciousness, and need for cog-
nition. Previous studies found that these characteristics play an important
role in consumers’ evaluations (e.g., Inman, McAlister, & Hoyer, 1990; Licht-
enstein, Block, & Black, 1988; Lichtenstein, Ridgway, & Netemeyer, 1993).
Finally, we conclude with a discussion of the findings and implications from
our studies.

CONCEPTUAL BACKGROUND
Price–Quality Inferences
Consumers frequently use retail price as an indicator of product quality.
Higher-priced products are believed to possess higher quality than lower-
priced products. This notion is referred to as price–quality inferences and
primarily introduced by Scitovszky (1944–1945). Ever since Leavitt (1954) em-
pirically tested this consumers’ tendency, it has long attracted researchers’
attention, and a considerable number of studies have been reported. This
inference was found to be used more for low-similarity products than high-
similarity products (Tull, Boring, & Gonsior, 1964) and more for durables
than nondurables (Lichtenstein & Burton, 1989). Z. V. Lambert (1972) showed
that participants who chose high-priced items tended to have more confi-
dence in the price–quality inference and perceive large quality variations
within the product category.
Multiple cues studies extended earlier studies by including not only
price, but also other cues in their analyses. These cues have been di-
chotomized into intrinsic and extrinsic cues (e.g., Miyazaki, Grewal, & Good-
stein, 2005;Zeithaml, 1988). Intrinsic cues are an integral part of and are in-
separable from the physical product (e.g., flavor, color, or texture for foods),
whereas extrinsic cues are not physical components of the product, and
changes have no material effects on the actual product (e.g., price or brand
name). Wheatley and Chiu (1977) compared three extrinsic cues (price, store
prestige, and carpet color) and found that price had the strongest effect, fol-
lowed by store prestige, then color. Olson (1977) reviewed 24 studies and
concluded that price cue effects were inconsistent. D. R. Lambert (1980) also
reviewed 14 studies and concluded that price was not the most important
quality cue, but other extrinsic cues (store image, brand name, and coun-
try of manufacturer) were also associated with quality perceptions. Then,
Wheatley, Chiu, and Goldman (1981) found that physical cues (product sam-
ples) exerted a more pronounced effect than price. Rao and Monroe (1988)
showed that low- and high-familiarity participants tended to use price while
 “High Quality, Low Price” Appeal 779

moderately-familiar participants tended to employ intrinsic cues (quality re-

lated information) to assess product quality. A meta-analysis of 36 studies
reporting 85 effects of three extrinsic cues (price, brand name, store name)
was conducted by Rao and Monroe (1989). Their results showed that the
effect of price was slightly smaller than the effect of brand name; mean-
while, the store name did not affect quality perceptions. A similar result was
also demonstrated by Dodds, Monroe, and Grewal (1991). More recently,
Walters and Long (2012) found that experts who have nutrition knowledge
generated higher quality perceptions and purchase intentions when the ex-
trinsic cue (“all natural”) was consistent with the intrinsic cue (ingredient).
However, the extrinsic cue positively influenced novices’ evaluations despite
the intrinsic cue. Finally, Akdeniz et al. (2013) showed that brand reputation
exerted the strongest effect, with product warranty of a car coming second,
and price the weakest.
Taken together, the findings of these studies suggest that consumers
tend to use price as an indicator of quality, especially when they feel un-
certain on quality judgments or purchase decisions, although its influence
varies depending on the presence of other cues.

Monetary Sacrifice and Purchase Intentions

The issue of monetary sacrifice should not be neglected when considering
purchase intentions. Price is known to have a dual role, first as an indicator of
quality, as discussed above, and second, as an indicator of monetary sacrifice.
Monetary sacrifice is a consumer’s perception of what must be given up in
order to purchase a product or a perception of making a sacrifice by paying
a specific price. Monroe (2003) developed a conceptual model incorporating
this dual role in which higher prices lead customers first to perceive higher
quality, then perceive a higher value, and finally to be more willing to
pay. At the same time, higher prices lead to a higher monetary sacrifice,
which in turn leads to perceptions of lower value, and finally, to a lower
willingness to pay. Clearly, perceived value represents a tradeoff between
perceived quality and monetary sacrifice. Teas and Agarwal (2000) verified
this model and demonstrated that the effects of extrinsic cues (price, brand
name, store name, and country of origin) on perceived value can be mediated
by perceived quality and sacrifice. Suri et al. (2007) confirmed that perceived
quality and monetary sacrifice exist in opposition; that is, perceived quality
is high, monetary sacrifice is low and vice versa. Zeithaml (1988) posited
that the monetary sacrifice is pivotal for price conscious consumers because
they would perceive an increase in value as their sacrifice declined. Finally,
by using the construal level theory (e.g., Kardes, Cronley, & Kim, 2006),
Bornemann and Homburg (2011) found consumers used price as an indicator
of quality in a distant perspective and used price as an indicator of sacrifice in
780 M. Shirai

a near perspective. Taken together, perceived quality and monetary sacrifice

are the key factors determining perceived value and purchase intentions.

Hypotheses Development
The hypotheses presented in this article are based on a comparison of three
types of appeals: the HQLP appeal, an appeal with the wording “high qual-
ity” (HQ-only appeal), and an appeal with the wording “low price” (LP-only
appeal). Both the HQ-only appeal and LP-only appeal are often adopted in
retail advertisements. Their effects on quality perceptions, price perceptions,
and purchase intentions are discussed here. Following the price–quality infer-
ence theory, the HQLP appeal apparently contains two contradicting cues,
high quality and low price, essentially indicating high quality equals low
price. It is postulated that these two cues elicit confusion in consumers
and they are not accepted as they are. Although the “high quality” cue might
tempt consumers’ belief, the alternate cue of “low price” may evoke cognitive
dissonance that hinders acceptance of this second cue. Similarly, consumers
first attracted by the “low price” cue, the “high quality” cue may likewise
evoke cognitive dissonance that hinders acceptance.
In such a situation, consumers are likely to use heuristics in order to
reduce this cognitive dissonance, and such heuristics would take the form of
discounting both cues. That is, consumers would be likely to conclude that
the quality is not as high as promised and/or the price of products is not
as low. For example, with respect to quality, consumers may infer that raw
materials or construction quality may not be as good as in truly high-quality
products. With respect to price, consumers may conclude that the price
may be not as low as true low-priced products due to costs incurred from
providing better quality. However, we presume that occurrences of these
discounting depend on the level of price. The discounting of the two cues
is expected to occur for high priced products since consumers are usually
more involved with their decision makings and price–quality inferences are
likely to be utilized to judge given information. For low priced products, the
two cues are expected to be accepted since consumers are more concerned
with risks of obtaining low quality from low priced products and likely
to have preferences for high quality low price products. Thus, the HQLP
appeal would not be accepted in the case of high priced products whereas
the appeal would be accepted in the case of low prices.
Subsequently, when firms individually implement the HQ-only appeal,
the quality claims are likely to be accepted more easily as no other in-
formation hinders their acceptance. This generates an increase of quality
perceptions; however, the appeal does not influence perceptions of price.
In the same way, when firms adopt the LP-only appeal, claims of low price
are likely to be accepted and generate favorable price perceptions, but this
 “High Quality, Low Price” Appeal 781

appeal does not influence perceptions of quality. Accordingly, we conjecture

that, in the context of high price, the HQLP appeal will generate perceptions
of lower quality than the HQ-only appeal and perceptions of higher price
than the LP-only appeal. In the context of low price, the HQLP appeal will
generate the same level of quality perceptions with the HQ-only appeal and
the same level of price perceptions with the LP-only appeal.
With respect to purchase intentions, we hypothesize that the HQLP
appeal will generate higher scores than either the HQ-only appeal or LP-
only appeal when prices are high. The two appeal points, “high quality”
and “low price,” contained in the HQLP appeal are likely to bring about
two benefits to consumers; they are an increase of perceived quality due
to the high quality appeal and a decrease of monetary sacrifice due to
the low price appeal. We expect that these two simultaneous benefits will
lead to higher purchase intentions, although the HQLP appeal discounts the
perceptions of high quality and low price, as discussed. On the other hand,
the HQ-only appeal and LP-only appeal each evoke only one benefit so that
purchase intentions would not be as high as with the HQLP appeal. When
prices are low, an increase of perceived quality becomes more important
since monetary sacrifice should be reduced. Hence, the HQLP appeal will
generate scores similar to the HQ-only appeal and higher than the LP-only
appeal.

On the basis of this reasoning, the following three hypotheses are

offered:

H1. Perceptions of quality generated from the HQLP appeal will be

less favorable than the HQ-only appeal when the price is high. The per-
ceptions will be as favorable as the HQ-only appeal when the price is
low.
H2. Perceptions of price generated from the HQLP appeal will be less
favorable than the LP-only appeal when the price is high. The perceptions
will be as favorable as the LP-only appeal when the price is low.
H3. Purchase intentions generated from the HQLP appeal will be more
favorable than the HQ-only appeal or LP-only appeal when the price is
high. The perceptions will be as favorable as the HQ-only appeal and more
favorable than the LP-only appeal when the price is low.

STUDY 1

Study 1 is designed to test H1 through H3 using a controlled experimental

method. We manipulated contextual appeal and price in a print advertise-
ment for a particular product.
782 M. Shirai

Design and Stimulus

A laptop computer was selected as the experimental stimulus. This product
category was selected based on the following criteria. First, it is usually of
particular interest to the target participants. Second, most participants possess
some knowledge about product features and prices. Third, prices and quality
vary among brands.
The experiment employed a 3 (contextual appeal) × 2 (price) between-
subjects design. The three levels of contextual appeal conditions were HQLP
appeal, HQ-only appeal, and LP-only appeal; the two levels of price were
high and low. These two factors were manipulated in a print advertisement so
that crossing contextual appeal and price resulted in six print advertisements.
In an advertisement, each contextual appeal was displayed in a prominent
headline. A fictitious brand name, Brand X, was used. In the HQLP appeal
condition, the headline read “A high quality and low price laptop computer”
and the tagline was “Brand X, a brand-new laptop computer with high
quality and low price launched.” For the HQ-only appeal condition, the
headline and tagline read “A high quality laptop computer” and “Brand X,
a brand-new laptop computer with high quality launched”; for the LP-only
appeal condition, the headline and tagline respectively read “A low price
laptop computer” and “Brand X, a brand-new laptop computer with low
price launched.” All conditions provided a product description below the
tagline.
To determine price levels, we ran a pretest (n = 26) and measured
prices that participants thought expensive, reasonable, and inexpensive.
The mean price was JPY149,423 (SD = JPY48,956) for an expensive price,
JPY93,192 (SD = 23,667) for a reasonable price, and JPY47,115 (SD = 15,202)
for an inexpensive price. The Japanese yen (JPY) approximately converts
to $1 = JPY100. These three prices significantly differed (all t(25)s > 4.0,
p < .0001). We also checked an internet shopping site (Kakaku.com) that al-
lows consumers to make price and brand comparisons of laptops of various
online stores; we then found that laptops made by large Japanese manufac-
turers varied in price between JPY35,100 and JPY372,964. Based on these
data, JPY145,000 was selected as the high price level and JPY45,000 was se-
lected as the low price level. To avoid an effect of price ending, both prices
ended with 5,000.

Participants and Procedures

In all, 152 undergraduate students enrolled in a business course at a major
university participated in this study in exchange for extra credit. We created
six versions of questionnaire including one of the six print advertisements
and questions regarding the advertisement. Participants were randomly as-
signed to one of the six questionnaires. The number of participants in each
questionnaire ranged from 24 to 27.
 “High Quality, Low Price” Appeal 783

TABLE 1 Means for Dependent Variables: Study 1

Quality perception Price perception Purchase intention

Appeal High price Low price High price Low price High price Low price

HQLP 4.92 4.64 4.20 6.06 4.94 5.22

HQ-only 5.87 4.92 2.65 5.90 4.35 5.33
LP-only 3.94 2.98 3.80 5.88 3.44 4.92

A scenario approach was adopted and participants were asked to imag-

ine that they were planning to purchase a new laptop computer and had
happened that day to see a printed advertisement for a new laptop computer
made by a Japanese manufacturer. After reading the scenario, participants
were presented with an advertisement containing a headline, tagline, a brief
description of a product’s features and price. After reviewing the ad, partici-
pants were asked to assess several measures regarding the featured product.

Measures
All items were measured on a seven-point scale from one to seven. Par-
ticipants answered questions regarding the advertised product in terms of
quality perceptions, price perceptions, and purchase intentions. For quality
perceptions, participants rated the advertised laptop on the scale of “very
bad” to “very good” and “very unreliable” to “very reliable.” Responses were
averaged to form a quality perception index (r = 0.68, p < .0001). Next,
participants rated their perceptions of price on the scale of “very expen-
sive” to “very inexpensive” and “not at all attractive” to “extremely attrac-
tive.” Responses were averaged to form a price perception index (r = 0.89,
p < .0001). Respondents then indicated their purchase intentions by answer-
ing the questions: “Would you like to purchase this laptop computer?” and
“Would you like to use this laptop computer yourself?” Answers to both
questions were assessed on a scale of “not at all” to “very much.” Responses
were averaged to create a purchase intention index (r = 0.61, p < .0001).

Results
Table 1 shows the means by condition. Hypotheses were tested using
ANOVA including main effects of contextual appeal and price as well as
the two-way interaction between them. For the effects on quality percep-
tions, the results revealed the main effects stemmed from contextual appeal
(F(2, 146) = 61.13, p < .0001) and price (F(1, 146) = 24.96, p < .0001), and
an interaction between them (F(2, 146) = 1.26, p < .1). We then conducted
one-way ANOVA for each price level. The main effect of contextual appeal
784 M. Shirai

was observed at both prices (F(2, 75) = 28.97, p < .0001 for the high price;
F(2, 71) = 34.84, p < .0001 for the low price). Follow-up Tukey tests in-
dicated that for the high price condition, the HQ-only appeal was highest,
with the HQLP the second strongest, the LP-only appeal the least; for the
low price condition, the HQ-only and HQLP appeals had similar levels of
quality perceptions and they were higher than the LP-only appeal. Hence,
H1 is supported for both prices.
For price perceptions, the results revealed the main effects of contex-
tual appeal (F(2, 146) = 8.6, p < .001) and price (F(1, 146) = 198.29,
p < .0001), and an interaction between them (F(2, 146) = 6.28, p < .01).
ANOVA conducted at each price level determined that the main effect from
contextual appeal was observed only for high price (F(2, 75) = 13.26, p
< .0001). Inconsistent with H2, Tukey tests indicated that the HQLP and
LP-only appeals had similar levels of price perceptions and they were more
favorable than the HQ-only appeal. This implies that the “low price” cue
of the HQLP appeal was not discounted and the HQLP appeal and LP-only
appeal were viewed similarly in terms of price perceptions. With respect to
low price, price perceptions did not differ among the three appeals and were
influenced by price more than contextual appeal.
An analysis on purchase intentions revealed the main effects of contex-
tual appeal (F(2, 146) = 7.16, p < .01) and price (F(1, 146) = 20.54, p <
.0001), and a marginal interaction between them (F(2, 146) = 2.97, p < .06).
ANOVA conducted for each price level again revealed the main effect of
contextual appeal only for high price (F(2, 75) = 11.08, p < .0001). Incon-
sistent with H3, follow-up Tukey tests indicated that the HQLP and HQ-only
appeals had similar levels of purchase intentions and the HQLP appeal had
higher purchase intentions than the LP-only appeal. With respect to low
price, purchase intentions did not differ among the three appeals and were
influenced by price more than contextual appeal.
We note that the main effects of price on these three dependent variables
all manifested in expected directions. The low price condition generated
lower perceptions of quality, more favorable perceptions of price, and higher
purchase intentions than the high price condition.

Discussion
Study 1 demonstrated that the contextual appeal influenced quality per-
ceptions more strongly than price perceptions and purchase intentions; the
effect of the contextual appeal on quality perceptions was even stronger
than the effect of price. As expected, the effect differs depending on the
price level. When the price was high, perceptions of quality generated by
the HQLP appeal was lower than with the HQ-only appeal. This implies
that the price–quality inferences were used and the “high quality” cue of the
HQLP appeal was discounted because of the mismatch between the “high
 “High Quality, Low Price” Appeal 785

quality” and “low price” cues. On the other hand, when the price was low,
the HQLP appeal generated quality perceptions at levels similar to those from
the HQ-only appeals. This implies that the price–quality inferences were not
adopted here and instead, the HQLP appeal helped to reduce perceived risks
of having low quality. Apparently, the HQLP appeal has an ability to raise
consumers’ quality perceptions more in the context of low price than high
price.
In the case of price perceptions, the HQLP and the LP-only appeals
generated the same level of perceptions when the price was high. Contrary
to our expectation, the discounting of “low price” cue of the HQLP appeal
was not observed here. The “low price” cue of the HQLP appeal and the
LP-only appeal were viewed similarly. This indicates that low price appeals
are taken in the same way regardless of how they are framed. This may have
occurred because low price appeals are uncommon in the context of high
price.
Purchase intentions generated by the HQLP appeal were similar to those
generated by the HQ-only appeal and it was more favorable than those gen-
erated from the LP-only appeal when the price was high. Although the HQLP
excels the HQ-only appeal in monetary sacrifice perception, the HQ-only
appeal excels the HQLP appeal in quality perception. As a result, purchase
intentions of the HQLP appeal did not exceed purchase intentions of the
HQ-only appeal.
In sum, the HQLP appeal has two attractive cues, “high quality” and
“low price,” but consumers seem to place value on one cue more than the
other. Consumers are likely to value more on the “high quality” cue in the
case of low price while they are likely to value more on the “low price” cue
in the case of high price. Accordingly, the HQLP appeal generated higher
quality perceptions in the case of low price and generated more favorable
price perceptions and purchase intentions in the case of high price. The
only effect found to be negative was that the HQLP appeal lowered quality
perception of high priced products. This is a critical problem because this
negative effect is much larger than the positive effects. Consumers gener-
ally require high quality for high priced products and the high prices are
not well-justified if quality perceptions are reduced. The use of the HQLP
appeal for high priced products; therefore, needs to be careful. Overall,
the HQLP appears to be an effective appeal for low prices more than high
prices.

STUDY 2

Study 2 tests the moderating role of important individual difference variables:

price–quality schema, price consciousness, and need for cognition. It adopts
a similar experimental design to Study 1 to see if the results of Study 1 will
be replicated.
786 M. Shirai

Price–Quality Schema (PQ-schema)

As mentioned earlier, price—quality inference theory predicts that con-
sumers often perceive prices as an indicator of quality. Peterson and Wilson
(1985) showed that consumers who made such an inference possessed a
price–quality schema (PQ-schema). Following Lichtenstein et al. (1993), we
define this schema as the generalized belief across product categories that
the level of price is positively related to product quality. Prior research has
demonstrated that consumers who have a strong PQ-schema had tendency
to prefer higher-priced products (Lichtenstein et al., 1988; Peterson & Wilson,
1985; Tellis & Gaeth, 1990), have a lower accuracy of price recall (Lichten-
stein et al., 1993), and lower attitudes toward private label brands (Burton,
Lichtenstein, Netemeyer, & Garretson, 1998). It was also found that PQ-
schema adherence varied among consumers and product categories (Licht-
estein & Burton, 1989). Considering the extent of consumers’ PQ-schema,
we expect that consumers with a strong PQ-schema would be more aware
of the contradiction inherent in the HQLP appeal and feel more negative
about the appeal than consumers who have a weak schema. Additionally,
consumers possessing a strong schema are likely to prefer the HQ-only ap-
peal because they consider the purchase of high priced products as a way
to acquire high quality products. We therefore expect that consumers hav-
ing a strong PQ-schema evaluate the HQ-only appeal more highly than the
consumers with a weak price–quality inference. Thus, we hypothesize:
H4a. Quality perceptions, price perceptions, and purchase intentions
generated by the HQLP appeal would be more favorable for consumers
having a weak PQ-schema than for consumers having a strong PQ-schema.
H4b. Quality perceptions, price perceptions, and purchase intentions
generated by the HQ-only appeal would be more favorable for consumers
having a strong PQ-schema than for consumers having a weak PQ-schema.

Price Consciousness
Price consciousness refers to the degree to which consumers exclusively
focus on paying low prices (Lichtenstein et al., 1993). Prior research has
found that highly price-conscious consumers have a tendency to purchase
increased quantities of sale products, and spend more money on sale prod-
ucts (Burton et al., 1998; Lichtenstein et al., 1993). These consumers also
have lower price acceptability levels and narrower latitudes of acceptable
prices (Lichtenstein et al., 1988), and have a higher attitude on private label
brands (Burton et al., 1998). Based on these findings, we predict that highly
price conscious consumers evaluate the LP-only appeal more favorably be-
cause they are considered looking for indications of low or discount prices
in general and the LP-only appeal meets their needs. However, they may
also evaluate the HQLP appeal highly because of interest in obtaining higher
quality possibly at a lower price. Hence, we hypothesize:
 “High Quality, Low Price” Appeal 787

H5: Quality perceptions, price perceptions, and purchase intentions gen-

erated by the HQLP and the LP-only appeals would be more favorable for
consumers having a high price consciousness than for consumers having a
low price consciousness.

Need for Cognition (NFC)

NFC refers to an individual’s tendency to engage in and enjoy effortful cog-
nitive endeavors (Cacioppo & Petty, 1982). High NFC consumers intrinsically
enjoy thinking, whereas low NFC consumers tend to avoid cognitive work
requiring effort (Haugtvedt, Petty, & Cacioppo, 1992). High NFC consumers
are more likely to form attitudes based on evaluations of product attributes
whereas low NFC consumers are more likely to form judgments based on
simple peripheral cues inherent in the advertisements (Haugtvedt et al.,
1992). Low NFC consumers tend to react to firms’ promotional message
more readily than high NFC consumers. For example, Inman et al. (1990)
showed that low NFC consumers showed increased likelihood to purchase
a product based on only a signal (e.g., “Crest $__”) with no accompanying
price cut while high NFC consumers were unaffected by this signal. Inman
et al. (1997) demonstrated that low NFC consumers were also influenced by
purchase–limit restrictions on deals (e.g., limit one per customer) whereas
high NFC consumers were unaffected. Ailawadi, Neslin, and Gedenk (2001)
showed that low NFC consumers used out-of-store promotions (flyers and
newspaper coupons) more frequently than high NFC consumers. Finally,
Suri and Monroe (2001) showed that the acceptable price range was wider
for high NFC consumers than for low NFC consumers because high NFC
consumers use price–quality inference and low NFC consumers consider
monetary sacrifice more than product quality. Based on these finding, we
predict that high NFC consumers focus more on the two contradicting cues
in the HQLP appeal than low NFC consumers. Accordingly, we set the fol-
lowing hypothesis:
H6. Quality perceptions, price perceptions, and purchase intentions gen-
erated by the HQLP appeal would be more favorable for low NFC consumers
than for high NFC consumers.

Design and Procedures

As in Study 1, a laptop computer was selected as the experimental stimulus.
The experiment utilized a 3 (contextual appeal) × 2 (price) between-subjects
design. The contextual appeals are the same as Study 1; the two prices were
moderately high and low. Based on the pretest run in Study 1, JPY115,000
was selected as the moderately high price and JPY45,000 was selected as
the low price. An additional pretest (n = 12) by using a four-point scale
788 M. Shirai

with anchors “very inexpensive” and “very expensive” indicated they were
appropriate levels (M moderate = 3.25, M low = 1.38, t(11) = 7.64, p < .0001).
In all, 159 undergraduate students who were enrolled in a business
course at a major university participated in this study in exchange for extra
credit. The number of participants in each group ranged from 25 to 28.
Questionnaire administration was conducted the same as in Study 1.

Independent Variables
All items were measured on a seven-point scale. The PQ-schema was as-
sessed by a 4-item scale (Burton et al., 1998; Lichtenstein et al., 1993). These
items were averaged to form a PQ-schema index (α = 0.92). To create a
clear difference between the strong and weak PQ-schema groups, subjects
whose scores fell in the middle third of the distribution of PQ-schema scores
were not included in the analyses. After the exclusion, the mean score of
PQ-schema became 6.04 in the strong group and 3.65 in the weak group.
Price consciousness was assessed on a 3-item scale (e.g., Lichtenstein et al.,
1988). These items were averaged to form a price consciousness index (α =
0.89). Excluding the middle third of the distribution of price consciousness
scores, the mean score in the high group was 6.34 and the mean score in the
low group was 3.03. NFC was assessed by an 18-item NFC scale (Cacioppo,
Petty, & Kao, 1984). These items were averaged to form a NFC index (α =
0.87). Excluding the middle third of the distribution of NFC scores, the mean
score in the high group was 5.37 and the mean score in the low group was
3.54.

Dependent Variables
The same dependent variables used in Study 1 were measured: quality per-
ceptions, price perceptions, and purchase intentions. All items were mea-
sured on a seven-point rating scale from one to seven. The same two items
were averaged to form a quality perception index (r = 0.83, p < .0001),
price perception index (r = 0.86, π < .0001), and purchase intention index
(r = 0.74, π < .0001).

Results and Discussion

Two-way ANOVA using contextual appeal and price as factors was con-
ducted for each dependent variable and the results were analogous to those
found in Study 1. We next conducted three-way ANOVAs including the PQ-
schema as a moderator. A three-way interaction was obtained on quality
perception (F(2, 109) = 2.95, p < .05). Figure 1A and 1B shows two-way
 “High Quality, Low Price” Appeal 789

FIGURE 1A Interactive effect on quality perception for high PQ-inf group: Study 2.

interactions on quality perception for each group. The interaction was signif-
icant for strong PQ-schema group (F(2, 50) = 11.77, p < .0001), but not for
weak PQ-schema group (F(2, 59) = 1.07, n.s.). Strong PQ-schema group had
the highest quality perception when the HQ-only appeal was used and the
price was moderately high whereas they had the lowest quality perception
when the LP-only appeal was used and the price was low. The HQ-only ap-
peal was favored more by strong PQ-schema group than weak PQ-schema
group only when price was moderately high (t(21) = 5.02, p < .0001). On the
other hand, weak PQ-schema group generated quality perception from the
HQLP appeal similar to the HQ-only appeal. The HQLP appeal was favored
more by weak PQ-schema group than strong PQ-schema group regardless
of price level (t(19) = 2.5, p < .05 for moderately high price; t(20) = 4.18,
p < .005 for low price).
Another three-way interaction was obtained on purchase intention (F(2,
109) = 3.43, p < .05). Figure 2A and 2B shows two-way interactions on

FIGURE 1B Interactive effect on quality perception for low PQ-inf group: Study 2.
790 M. Shirai

FIGURE 2A Interactive effect on purchase intention for high PQ-inf group: Study 2.

purchase intention for each group. The two-way interaction was significant
for strong PQ-schema group (F(2, 50) = 6.82, p < .01), but not for weak PQ-
schema group (F(2, 59) = 0.16, n.s.). The HQ-only appeal was favored more
by strong PQ-schema group than weak PQ-schema group only when price
was moderately high (t(21) = 4.72, p < .0001). The HQLP appeal was favored
more by weak PQ-schema group than strong PQ-schema group regardless
of price level (t(19) = 3.19, p < .005 for moderately high price; t(20) =
9.4, p < .0001 for low price). Price perception was not influenced by PQ-
schema. There results indicate that H4a was supported for quality perception
and purchase intention. H4b was also supported for quality perception and
purchase intention, but in the case of moderately high price.
Next, H5 was tested. We conducted three-way ANOVAs including price
consciousness as a moderator for each dependent variable. The results re-
vealed no three-way interaction on all dependent variables. Price conscious-
ness only interacted with price on purchase intention (F(1, 108) = 6.51,
p < .05); high price-conscious group lowered purchase intention more than

FIGURE 2B Interactive effect on purchase intention for low PQ-inf group: Study 2.
 “High Quality, Low Price” Appeal 791

FIGURE 3A Interactive effect on quality perception for high NFC group: Study 2.

low price-conscious group when the price was moderately high. Hence, H5
is not supported.
Finally, we tested H6. Three-way ANOVAs including NFC as a moderator
were conducted. A marginal interaction was confirmed on quality perception
(F(2, 90) = 2.93, p < .06). Figure 3A and 3B shows two-way interactions on
quality perception for each group. The interaction was significant for high
NFC group (F(2, 41) = 5.55, p < .01), but not for low NFC group (F(2,
49) = 0.27, n.s.). High NFC group generated lower quality perception from
the HQLP appeal when the price was moderately high, whereas low NFC
group generated quality perception from the HQLP appeal similar to the
HQ-only appeal for both moderately high and low prices. The HQLP appeal
was favored more by low NFC group than high NFC group when price was
moderately high (t(15) = 3.46, p < .01).
Purchase intention also obtained a marginal three-way interaction (F(2,
90) = 2.53, p < .06). Figure 4A and 4B shows two-way interactions on
purchase intention for each group. A two-way interaction was significant for

FIGURE 3B Interactive effect on quality perception for low NFC group: Study 2.
792 M. Shirai

FIGURE 4A Interactive effect on purchase intention for high NFC group: Study 2.

high NFC group (F(2, 41) = 8.17, p < .001), but not for low NFC group
(F(2, 49) = 1.16, n.s.). The HQLP appeal was favored more by low NFC
group than high NFC group regardless of price level (t(15) = 3.46, p < .01
for moderately high price; t(20) = 1.69, p < .1 for low price). High NFC
group seems to prefer the HQ-only appeal more than the HQLP and LP-only
appeals. Price perception was not influence by NFC. There results indicate
that H6 was supported for quality perception and purchase intention.
The results of Study 2 extend those of Study 1. The HQLP appeal in-
fluences consumer evaluations; however, this relationship has at least two
moderators: PQ-schema and NFC. Most of the moderating effects of both
the PQ-schema and NFC were observed in quality perceptions and purchase
intentions. The HQLP appeal was less effective when the PQ-schema was
stronger and when NFC was higher. Thus, PQ-schema and NFC hinder ac-
ceptance of the HQLP appeal. Also, the HQ-only appeal was effective for
consumers with a strong PQ-schema. Price consciousness was not a modera-

FIGURE 4B Interactive effect on purchase intention for low NFC group: Study 2.
 “High Quality, Low Price” Appeal 793

tor; price conscious consumers paid attention to the actual level much more
than the contextual appeal.

GENERAL DISCUSSION

Owing to tremendous interest retailers and manufacturers have in the role

of contextual appeals, a substantial body of empirical evidence has been
accumulated. However, little scholarly research has examined wording ap-
peals particularly used for non-discounted prices. This research has sought
to address this void and specifically focused on the commonly-used HQLP
appeal. We intended to understand the psychological impact of this appeal
on consumer evaluations and shed light on how this relationship is moder-
ated by the consumers’ characteristics. The results of Study 1 show that the
effects of the HQLP appeal vary depending on the level of product prices.
In the case of high prices, the appeal leads to perceptions of lower quality
than the HQ-only appeal, but higher quality than with the LP-only appeal, as
expected. Since price–quality inferences are evoked when evaluating high
priced products, the appeal is not capable of leading consumers to perceive
high quality. However, it still has some abilities to raise favorable price per-
ceptions and purchase intentions. In the case of low prices, the HQLP appeal
does not influence price perceptions and purchase intentions, but can still
raise quality perceptions. Study 2 provides evidence that the HQLP appeal’s
effectiveness appears on quality perceptions and purchase intentions when
consumers have a weak price–quality schema and low need for cognition.
Overall, the present research suggests that the HQLP appeal works differently
depending on product prices and consumer characteristics.
The primary contribution of this research is to provide additional under-
standing of contextual appeals that may influence consumers’ evaluations. In
particular, it confirms the usefulness of appeals expressed only with words,
a subject that has been the focus of relatively few scholarly studies. To the
best of our knowledge, this research is the first to reveal the specific role of
the HQLP appeal by showing its ability to attract consumers in the absence
of price discounts. Moreover, this research shows that when consumers ob-
serve attractive, but inconsistent cues simultaneously, they are likely to focus
on one cue more. When observing the HQLP appeal, they seem to value
more on the “high quality” cue in the case of low price while they seem to
value more on the “low price” cue in the case of high price. The former leads
to higher quality perceptions and the latter leads to better price perceptions.
Thus, the HQLP appeal may strengthen weak points of high priced and low
priced products respectively. Furthermore, we also theorized that consumers’
belief of a positive relationship between price and quality moderates the im-
pact of this appeal. The effect of this belief on contextual appeals has not
previously been examined so that this study extends prior studies by show-
794 M. Shirai

ing the existence of a new moderator. The present work also contributes
to an understanding of the mechanism by which need-for-cognition mod-
erates the impact of this appeal. This finding was consistent with research
that suggests high NFC individuals do conduct cognitive work and evalu-
ate information more cautiously than low NFC individuals (Haugtvedt et al.,
1992; Inman et al., 1990). The effect of this concept and a similar concept
on contextual appeals was analyzed by Inman et al. (1997) and Suri et al.
(2007), but with a focus on restriction cues. This research provides addi-
tional information about the relationship between consumer characteristics
and contextual appeals. In sum, this research offers theoretical contributions
while adding to the growing literature documenting the impacts of various
contextual appeals on consumers’ evaluations.
This research has some implications for marketers. This research sug-
gests that consumers pay attention to the HQLP appeal even though price
discounts are not provided. This appeal has two attractive cues—high quality
and low price—that many consumers seek to simultaneously obtain. Thus,
despite the seeming contradiction inherent in this claim, consumers seem to
favor it. Although its effect may be moderated by some consumers’ charac-
teristics, it remains worthwhile to consider as an effective appeal in order
to increase consumers’ attention or improve their attitude toward products,
services, and stores. However, the use of the HQLP for high priced products
should be adopted with caution as it can generate consumer perceptions of
lower quality, although it may generate better price perceptions or purchase
intentions. Perhaps, providing reasons for appealing low price with high
quality or detailed information explaining how the low price was achieved
while maintaining high quality. If retailers plan to emphasize mainly on high
quality and wish to attract consumers who seek for high quality, then the
use of HQ-only appeal might be more suitable.
The current research also has several limitations that should be the
focus of future research. First, joint effects of the HQLP appeal with dis-
counted prices or other contextual appeals need to be examined. Discounts
have been found to lead to lower quality perceptions (Raghubir & Corfman,
1999); however, providing a message assuring product quality helps counter
this negative perception (Darke & Chung, 2005). Therefore, the HQLP ap-
peal may also help to counter such negative quality perceptions. Moreover,
as joint use of different contextual cues was found to be effective (e.g.,
Howard & Kerin, 2006), the effect of the HQLP appeal might be magnified
when presented with other cues. Second, our subject pool consisted of a
homogeneous student sample. Although we selected a product category af-
ter carefully considering the participants of our studies, the fact remains that
shopping experiences, income levels, and interests differ. Analyses including
adult, fully employed members of society are needed to confirm the general
applicability of our findings. Finally, other product classes should be targeted
and field experiments are necessary to confirm the results.
 “High Quality, Low Price” Appeal 795

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