RESEARCH METHODS & SKILLS

SUBMITTED BY:

 Syed Ali Kawish Chishty – 48914

 M. Yasir Ikram – 40195

 S.A.Danish Chishty – 48913

 Arpun Kammal - 52650

COURSE: Research Methods & Skills

SUBMITTED TO:

 Kamran Mohy-ud-din

PROGRAM: BBA

DATED: 19th December 2021

 LITERATURE REVIEW:

2.1 Perceived Product Value:

A customer’s perceived value represents an overall mental evaluation of a particular good or

service (Peterson and Yang, 2004). This construct is often defined in terms of the equity theory
which describes perceived value as that which is deemed fair, right, or deserved concerning the
perceived cost of the offering, while taking into consideration suitable competitor alternatives
(Khalifa, 2004; Zeithaml, 1988).

Research by Monroe (2002) reveals one of the prime definitions for this construct to be the ratio
or trade-off between quality and price, hence representing a value-for-money conceptualization.
Customer perceived value is arguably one of the most critical determinants of purchase intent
and, consequently, one’s willingness to buy. Although research has shown that this construct is
difficult to both conceptualize and measure, it seems universally accepted that if a customer
perceives the value of a good or service to be relatively high, the probability (s)he will make a
purchase is likely to increase (Monroe, 2002; Zeithaml, 1988). Therefore, this study
hypothesizes that:

H1. Perceived value influences a customer’s willingness to buy private label household cleaning
products.

Evidence has been produced to reveal that customer perceived product value is a
multidimensional and highly subjective evaluation of factors, thus gaining an understanding of
the various dimensions of customer perceived value becomes crucial for developing effective
positioning strategies.

This is because customer-perceived product value not only dictates how the organization is seen
in the mind of its customers but also provides insight into the types of communication channels
that a company might use to maximize the probability that messages are interpreted as intended.
The role of customer-perceived product value as a mediator in the processes linking the above
constructs should also be taken into account. As per research by Agarwal and Teas (2001),
Sweeney et al. (1999), and Zeithaml (1988), we advocate that customer perceived product
value be investigated for its effect on the indirect relationships involving perceived relative price,
perceived product quality, perceived risk and willingness to buy. The following hypotheses are
therefore set out for empirical testing:

H2a. Perceived value mediates the influence of perceived quality on a customer’s willingness to buy
private label household cleaning products.

H2b. Perceived value mediates the influence of perceived relative price on a customer’s willingness
to buy private label household cleaning products.

H2c. Perceived value mediates the influence of perceived risk on a customer’s willingness to buy
private label household cleaning products.

2.2 Perceived Relative Price:

The literature provides varying perspectives on the role that price plays in influencing the
perceived customer value of a product. Jacoby et al. (1971) describe perceived relative price as
being the price encoded by the customer by referencing the price of the product relative to the
price of other substitutable products. By applying the principles contained in the works of
Sweeney et al. (1999) and Kwon et al. (2008), the perceived relative price of a private label
brand may be deemed to be the perception of the product’s price compared to that of other non-
private label brands in the same merchandise category.

Accordingly, it has been found that a significant negative relationship exists between perceived
price and perceived value (Boksberger and Melsen, 2011; DeSarbo et al., 2001; Kashyap and
Bojanic, 2000) in that a high price erodes purchasing power.

Authors such as Huber et al. (2007), Petrick (2002), and Lapierre (1997) emphasize that price
is but one variable in the value equation. Other such aspects may include the time or effort in
making the purchase as well as service quality, thus not all consumers are fixated on the price-
value relationship. Dickson and Sawyer (1986) add that customers do not always recall the exact
prices of all products. For such reasons, the pricing of merchandise is seldom the deciding factor.
As well as Jacoby et al. (1971), support the notion that there is a distinction between actual
(absolute) price and perceived relative price. To this end, information may be recalled based on
other product knowledge or it could be directly recollected from a stored representation. Thus,
pricing is seen holistically as being relative within the particular merchandise context. As a result
of Sweeney et al.’s (1999) conceptualization, the price construct of this study is measured
comparatively as the perceived relative price. Thus, we hypothesize that:

H3. Perceived relative price influences the perceived value of private label household
cleaning products.

2.3 Perceived Product Quality:

Perceived product quality may be defined as how a customer views a product’s brand equity and
overall superiority compared to the available alternatives (Aaker, 1991; de Chernatony, 2009;
Richardson, 1997). It relates to a customer’s attitude towards the overall brand experience as
opposed to just a product’s particular characteristics. Quality perceptions are thus created when
active relationships between suppliers and customers exist (Eriksson et al., 1999). According to
some researchers, customers will use product performance, as well as the degree to which the
product conforms to manufacturing standards and product-specific attributes, to judge the
product quality.

Multiple studies have found a correlation between perceived product quality and perceived value
(Dodds et al., 1991; Khalifa, 2004; Rangaswamy et al., 1993;). The inclusion of perceived
product quality in the modeling of perceived product value, and ultimately willingness-to-buy,
can be justified by sources who claim that product quality is a significant determinant of private
label brand purchases and their success (Garretson et al., 2002; Grewal et al., 1998). Literature
suggests that there is a positive relationship between the perceived quality and perceived value of
a product, thus when comparing private label brands to manufacturer brands, higher perceived
product quality may increase the perceived value and, consequently, a customer’s willingness-to-
buy (Cronin et al., 2000; Snoj et al., 2004). Therefore, this study hypothesizes that:

H4. Perceived quality influences the perceived value of private label household cleaning
products.
Numerous studies by authors such as Varki and Colgate (2001), Etgar and Malhotra (1981)
and Gerstner (1985) share the view that perceived relative price is also a determinant of
perceived product quality, whereby a positive correlation exists between the variables. Hence,
this study hypothesis that:

H5. Perceived relative price influences the perceived quality of private label household
cleaning products.

Pioneering research by Monroe and Krishnan (1985) profiled the positive relationship that
price has with perceived product value, through its influence on perceived quality. This
highlights the possible mediating nature of perceived product quality with regards to perceived
relative price among customers purchasing private label products. To allow compliance with this,
and test the effect, we hypothesize the following:

H6. Perceived quality mediates the influence of perceived relative price on the perceived
value of private label household cleaning products.

2.4 Perceived Risk:

Dowling (1986) defines perceived risk as the uncertainty of the desired performance that all
customers experience when making purchasing decisions. Mitchell (1998) contends that
perceived risk is a “multidimensional phenomenon” that can be segmented into different risk
components. The more common components of perceived risk include functional/performance,
physical, financial, social, and psychological risk (Jacoby and Kaplan, 1972; Laforet, 2007;
Murphy and Enis, 1986; Peter and Tarpey, 1975; Schiffman and Kanuk, 2009; Shimp and
Bearden, 1982). Customers are certainly conscious of the losses that may arise due to product
failure (Sweeney et al., 1999), hence a product with a relatively high perceived likelihood of
malfunction will have a lower perceived value (Livesey and Lennon, 1993; Narasimhan and
Wilcox, 1998; Tam, 2012). Richardson et al. (1996) advocate that the level of perceived risk in
a specific product category is a vital factor in private label brand purchases. Thus, certain
categories of merchandise are more suitable for private labels than others. We, therefore,
hypothesize that:

H7. Perceived risk influences the perceived value of private label household cleaning
products.

There is strong support from the literature that customers depend on perceptions of quality to
form perceptions about risks (Batra and Sinha, 2000; Sweeney et al., 1999; Settle and Alreck,
1989). Prior research has emphasized that the higher the level of perceived quality, the lower the
risk in a particular product category (Batra and Sinha, 2000; Hoch and Banerji, 1993;
Narasimhan and Wilcox, 1998; Sabiote et al., 2012). Therefore, this study hypothesizes that:

H8. Perceived quality influences the perceived risk of private label household cleaning
products.

It has also been put forward that perceived risk is a mediator between perceived product value
and perceived product quality (Agarwal and Teas, 2001; Snoj et al., 2004; Sweeney et al.,
1999). In this light, we too suggest that:

H9. Perceived risk mediates the influence of perceived quality on the perceived value of
private label household cleaning products.