The Relationship Among Perceived Value, Risk, | Structural Equation Modeling | Risk

The relationships among perceived quality, perceived risk and perceived product value

Boris Snoj Aleksandra Pisnik Korda and Damijan Mumel

An executive summary for managers and executive readers can be found at the end of this issue

1. Introduction
The logical and basic rule, which applies to each individual in the role of a customer is that his basic motive of an exchange is satisfied by a product’s reasonable or expected value. Delivering superior value to customers is considered one of the most popular concepts among business managers and academia (Ulaga and Chacour, 2001). Moreover, many authors suggested that the superior value should be considered as the most fundamental challenge for marketing strategies of organizations (e.g. Deshpande et al., 1993; Jaworski and Kohli, 1993; Day, 1994; Slater and Narver, 2000). According to the representative research projects higher levels of perceived value lead to higher levels in satisfaction of customers, greater levels of customer loyalty and retention and to a greater success of organizations (e.g. Cronin et al., 2000; Ulaga and Chacour, 2001). This challenge is gaining importance with the growing pace of environmental dynamics. Therefore it is obvious that many authors (Woodruff, 1997) forecast that in the twenty-first century the notion of value to a customer will only increase. The authors have decided to research the connection of the relations between two of the concepts of perceived value – perceived quality and perceived risk because: . according to various authors perceived quality is one of the main concepts of benefits (Klaus, 1985); . perceived risk is the least studied concept of sacrifices (Macintosh, 2002); and . there exist mixed findings concerning the research of these concepts. In Slovenia perceived value of a product is a rather neglected aspect in the research, especially considering its relationship with various impact factors. Some research was made on the impact of price on perceived value, however nobody has empirically researched the impact of other important factors on perceived value of a product. As the object of empirical study, the authors have chosen to explore the perceived value of mobile phones and its relationships with some independent variables. The researched target group was students who are known to be the fastest growing segment among the users of mobile phones in Slovenia and therefore worthy of study in this case. Moreover mobile phones are known to be indispensable products for this group of users. Authors have also selected them, because they have one of the highest degrees in selling growth in all categories of products in Slovenia.

The authors
Boris Snoj is a Professor of Marketing, Aleksandra Pisnik Korda is an Assistant of Marketing and Damijan Mumel is a Professor of Marketing, all in the Faculty of Economics and Business, University of Maribor, Slovenia.

Keywords
Quality concepts, Perception, Risk management

Abstract
Perceived value is an extremely important concept in marketing and many authors have dealt with it in recent years. In Slovenia perceived value of product is a rather neglected aspect of the research. Moreover, nobody has empirically researched the impact of individual factors on perceived value of a product. The researched target group was students – the fastest growing segment among the users of mobile phones in Slovenia. In their research the authors focused on two of the perceived value impact factors: perceived product quality and perceived risk. Based on literature and our own findings, their main researched objective was to design the model of relationships among perceived value, perceived quality and perceived risk. After the model had been tested with the method of structural equation modeling (LISREL 8.0), the authors found that statistically significant relationships (positive and negative, direct and indirect) among the concepts researched exist.

Electronic access
The Emerald Research Register for this journal is available at www.emeraldinsight.com/researchregister The current issue and full text archive of this journal is available at www.emeraldinsight.com/1061-0421.htm

Journal of Product & Brand Management Volume 13 · Number 3 · 2004 · pp. 156-167 q Emerald Group Publishing Limited · ISSN 1061-0421 DOI 10.1108/10610420410538050

156

which has more recently given way to the study of product value. Aleksandra Pisnik Korda and Damijan Mumel According to different authors. Perceived benefits are a combination of different attributes of products (tangible and intangible.. 2001). That is. Slater and Narver.. However. Moreover this perspective stems from the fact that customers buy and use products as entities consisting of a process (service) and material elements. 1998. The objective has been to develop an improved understanding of not only the concepts themselves. the others remain unresolved. This platform is also used in most discussions of customer value research (e. 1997. 2000). Cronin and Taylor. 2000). 1997. total quality management (TQM).. 2000) are both the foundation and the consequence of these waves. 1994. Snoj and Gabrijan. 1998. it was not long ago that the development of a working model of their conceptual interrelations was placed at the top of future research directions (Rust and Oliver. The Baldrige Award. perceived quality and perceived risk is developed.g. then carry through to satisfaction research. This approach stresses that very often customers do not buy products (i. Ulaga and Chacour. risk and product value Journal of Product & Brand Management Volume 13 · Number 3 · 2004 · 156-167 Boris Snoj. these waves seem to begin with the study of service quality.. but also how they relate to each other and subsequently drive the purchase behavior.e. Then the model of relationships between perceived value. Raghubir. which presents a trade-off between benefits and sacrifices perceived by customers in a supplier’s offering (e. although a consensus is beginning to emerge for some topics. 2000.g. 2000. In this article the concept of customer perceived value. Indeed. Monroe. Patterson and Spreng. Zeithaml et al.. which offer utilities to them. 1999). 2000).. in Cronin et al. Zeithaml. Cronin et al. 2. In other words. the results of these efforts have been mixed. 1997. the authors adopted the approach by Bolton and Drew (1991.). The authors adopted the marketing perspective in discussing a treatment of a product. and satisfaction have taken the center stage in those discussions. 2001). They buy bundles of attributes which derive value according to the utility (benefits) provided by the combination of attributes less the disutility represented by their sacrifices in obtaining the product. available in relation to a particular buy and use situation.. the authors found that statistically significant relationships exist among these factors. In doing so.g. the authors used a bulk of sources from the field of services marketing knowledge. Sinha and DeSarbo. 2000). perceived product risks and perceived product value. After the model has been tested with the method of structural equation modeling.. The article concludes with a discussion on relations between researched factors. 1988. perceived price. Customer perceived value The utility theory. In this article the authors focused on the relationships between perceived product quality. In addition to these issues. customer perceived value is a multidimensional concept. goods. perceived quality and perceived risk is first assessed through a literature review. provides a theoretical underpinning for the value concept (Lanchester. value. Flint and Woodruff. the developing of an understanding of conceptual relationships between parties in exchange processes has preoccupied researchers over the past two decades. Although there are many areas of pursuit.. 1990. Literature review In the article the assumption was adopted that perceived product value and perceived service value are analogous. customer value management (CVM). and ideologies such as “customer delight” (Oliver et al. Ulaga and Chacour. the value is conceptualized as a customer’s perceived net trade-off received from all relevant benefits and costs or sacrifices delivered by a product or service or supplier and its use. Popularity of these topics is due to a practical significance of the concept as each has been tied to either national awards or strategic paradigm shifts. Adapting the framework to a product context suggests that the more cognitively oriented quality and value appraisals precede satisfaction (e. Perceived sacrifices are a combination of a nominal price and all other costs of product acquisition and its use (e. 1971. 1996. Woodruff et al.g. 2000. 2001). 2000. Chenet et al. in Caruana et al. The synthesis of definitions of customer perceived value is resumed in Table I. Slater and Narver. Pisnik. Woodruff. in Caruana et al. 1993. Implications for further research as well as managerial implications are also presented. Due to a lack of sources of the physical product marketing literature. It is noted above that quality. which lies at the foundation of the modern microeconomic theory. 1992. Since then.g. A review of the marketing literature reveals several waves of conception research. which states that products are the outcomes of the results of work by human activity offered to other parties in exchange processes. numerous studies have endeavored to model these links (e. in Cronin et al.The relationships among perceived quality. services) for their own sake. dealing with concepts of perceived value and perceived quality. Therefore a common denominator of different authors’ definitions concerning customer perceived value seen in Table I is that: 157 . customer satisfaction measurement (CSM). intrinsic and extrinsic etc.

1988.. the customer perceived value is a multidimensional concept. Zeithaml et al. It is considered to be more congruent with long-term attitude (Bolton and Drew. value for a consumer is related to his expertise or knowledge. 1998) views quality as a form of an overall evaluation of a product. 1997 Slater and Narver. in Cronin et al. 1999).. According to this thinking. that some authors in the past somehow even equated the concepts of perceived quality with perceived value and that entailed that many practitioners failed to distinguish between the concepts of perceived quality and perceived value and often used the terms interchangeably (Caruana et al. Woodruff. in Caruana et al. As in the study of Ulaga and Chacour (2001). which therefore provide utility to the customer (Lancaster. 1988 Zeithaml. When speaking about interrelations among the variables forming perceived value. Ulaga and Chacour. Sweeney et al. there has been a convergence of opinion that favorable service quality perceptions lead to improved value attributions and higher levels of sacrifices lead to reduced value (Cronin et al. available in relation to a particular buy and use situation. 1990. 1988.. in Ulaga and Chacour. 1992 Woodruff and Gardial. 1990.. value for a consumer is related to the perception of a consumer and cannot be objectively defined by an organization. 2000 Hallowell. bundles of attributes together represent a certain level of quality.g.. Similarly. 1993. Zeithaml. Parasuraman et al. 2000. the available alternative of supplier’s offerings and price The customer’s assessment of the value that has been created for them by a supplier given the trade-offs between all relevant benefits and sacrifices in a specific-use situation Product value for a consumer is created when the benefits a consumer gets with a product are greater than the long-term costs a consumer is expected to have with a product Value equals a perceived quality relative to the price . 1988. in Rowley.. 1998) suggested that quality acts as a relatively global value judgment. and social benefits received by a customer’s firm in exchange for the price paid for product’s offering. 1971. in Rowley. intrinsic and extrinsic etc. 1992) quality of service could even be understood as its value to the customer. and taking it into consideration. Olshavsky (1985. 1984. 2000 . Aleksandra Pisnik Korda and Damijan Mumel Table I Definitions of customer-perceived value Definition of customer-perceived value Perceived value is composed of all factors: qualitative and quantitative. that jointly form a consumer’s buying experience The consumer’s overall assesment of the utility of a product based on perception of what is received and what is given Ratio of perceived benefits relative to perceived sacrifice Product value to a consumer is a comparison of tangible and intangible benefits from the generic as well as the supplementary levels of a product and the total costs of production and usage of a product Trade-off between desirable attributes compared with sacrifice attributes Perceived worth in monetary units of the set of economic. of buying and using of a product. there is a tendency to concentrate customer value on product quality and nominal price. 1999.). 1999). The benefits are measured through a perceived level of quality (level of working superiority). 1998 Woodruff et al. 1997. 2001 Monroe.. 2000). in Stafford et al. 2001. Dodds et al. service. objective and subjective.. 2000). risk and product value Journal of Product & Brand Management Volume 13 · Number 3 · 2004 · 156-167 Boris Snoj. 1996 Anderson et al. in Snoj.. and it presents a trade-off between benefits and sacrifices perceived by customers in a supplier’s offering. 1993. Sweeney et al. According to the “integrative approach” advocated by Klaus (1985. in Stauss. Authors Schechter. 1991. technical. Flint et al. 1991. a bundle of attributes in comparison with the consumer’s expectations..The relationships among perceived quality. 158 . in Ulaga and Chacour. Naumann and Jackson.. 2000). 1998). Perceived benefits are a combination of different attributes of products (tangible and intangible.. 1999 Nilson. 1999. in our study the variables (attributes) contributing to perceived benefits were grouped into “qualityrelated” aspects as an expression of perceived benefits. 2001).. . Anderson and Narus. in Zeithaml. From variables representing the perceived sacrifices the “risk-related” variables were examined. Perceived sacrifices are a combination of nominal price and all other costs of product acquisition and its use (e. Holbrook and Corfman (1981. It is created in relationships between customers and suppliers in which both parties are active (Eriksson et al. 1996. Sinha and DeSarbo. . Slater and Narver. 2001. 1998. Perceived quality Too often. It embodies relatively lower intensity of an effective component in the perception of a service (Oliver. This perspective went even so far.. in Ulaga and Chacour.

Regarding this issue.. in Murphy and Enis. 2001) or to replicate its conceptual structure (Kettinger et al.. Cronin et al. With this regard they are discussed in our article from the notion of relationship with or between perceived quality and perceived value of a product. Snoj in Zavrsnik and Male. . Caruana et al. in Rindfleisch and Crockett. . Swan and Bowers. because incidents of satisfaction over time lead to perceptions of good quality (Rowley. effort.. in Rindfleisch and Crockett. 1999. risk and product value Journal of Product & Brand Management Volume 13 · Number 3 · 2004 · 156-167 Boris Snoj. 1990. functional – a risk that a product will not work as expected by a consumer. Indeed. (1999) who state that risk can be defined as a subjective anticipation of loss of some degree.e. in Rindfleisch and Crockett. Bauer’s initial specification was refined by Jacoby and Kaplan (1972. which is a risk that time spent in searching for a product will 159 . 1983.. Fine (1981. 1986) say. One of the least studied elements or concepts of perceived sacrifices by the marketing literature is risks. However mixed findings in literature exist regarding the causal direction between these two concepts (Lee et al. uncertainty and negative consequences) concept. Eriksson et al. Zeithaml. . Caruana et al. It has been referred to as “elusive” (Parasuraman et al. social risk – a risk that by choosing a product. 2000). 1996. Durvasula et al. Zeithaml (1988) speaks about the costs of search.. 1995. A call for research that specifically examines the “dimensionality” of the service quality concept (Parasuraman et al. Slater and Narver. 1987. 1998). psychological – a risk of choosing a wrong product might have a negative effect on a consumer’s ego. energy costs and psychical costs. the two concepts are related. however. among the monetary costs. and social risk. authors equal the perceived sacrifices with the price of a product. theoretical findings in the area of service quality did not match the needs of practice. 2000) and “far from conclusive” (Athanassopoulos. 1999. as it is evident from the ongoing and largely failed attempts either to integrate the SERVQUAL/SERVPERF conceptualization into new industries (Kettinger et al. 2001). In the last few years. psyche and life style. Stauss. 1994. therefore not only the nominal price. opportune costs. (e.The relationships among perceived quality. 2000. 1985. performing.. 1999. 2001) and research relative to the concept is still considered “unresolved” (Parasuraman et al. Woodruff and Gardial. . 1999). 1999). Mumel (1999) added also the time risk. Ulaga and Chacour. Aleksandra Pisnik Korda and Damijan Mumel Perceived quality is defined ss the consumers’ judgment about an entity’s (service’s) overall excellence or superiority (Zeithaml.. 1995. This debate continues today. Perceived quality of service is a type of attitude. Non-monetary aspects of price are noted by a great number of authors in the marketing field. Although the most popular definition of quality relates to meeting/exceeding expectations there is neither an accepted nor the best definition of quality for every situation. This view was also adopted by Sweeney et al.g. Ulaga and Chacour. physical – a risk a consumer harms himself or others while using a product. Bauer. 1967. waiting . a possibility the product will not offer all its expected benefits (Roselius. and some of those at least are likely to be unpleasant. 1991. Nessim and Dodge.. ˇ Naumann and Jackson. Monroe. that price of a product includes. which involves an objective aspect or feature of a thing or event (Garvin. Christopher. in Rowley. 1999) defines perceived risk as a two-dimensional (i. 2001). Gale. In other words. in short. Bauer (1960. 1996. 1988. Perceived sacrifices Perceived sacrifices have a negative effect on perceived value of products. In doing so Murphy and Enis (1986) defined these types of risks as: . financial – a risk that a consumer is losing his money. 2000). 2000). there has been quite a lot of material published about the measuring of services quality and this trend is to be continued (Rowley. Consumer behavior involves risk in a sense that any action of a consumer will produce consequences which he cannot anticipate with any approximating certainty. 1998. 1999. until recently. 2000. 1971). a consumer invests more money in acquiring a product. a consumer’s status will change among his friends and/or his family and/or his colleagues. psychological. 1998). 1998). 1998. and resulting from comparison of expectations with a perception of performance (Rowley. Dodds et al. perceived service quality has proved to be a difficult concept to grasp. Grewal et al. a risk that rather than having more benefits. 1985. 1999.. Kotler and Zaltman (1971.. It differs from objective quality.. 1998. Ulaga and Chacour. 1995. 2000).g. Perceived risk was introduced to the marketing literature in the 1960s by Bauer and his associates at Harvard Business School (e. in Rowley.. it must be noted that they mean a greater aspect of a product’s price. . related to but not the same as satisfaction. about all efforts. Lee et al. risk is a subjective estimation by consumers connected with possible consequences of wrong decisions. Thus. 1998). but also the non-monetary aspects of price. Recently.. . physical. in Murphy and Enis. 1960 and Cox. who suggest that perceived risk should be considered a multidimensional concept entailing multiple types of risks. 1997. 1986) used the term social price composed of time. risks and insecurities connected to an acquisition and use of a product. because the product does not satisfy his expectations.. Consequently. Woodruff. 1994) has yet to be successfully addressed (Brady and Cronin. including financial.

Only students who suited the requirements of the sample.. and . 1999). the authors developed another two hypotheses: H3. According to those aspects the authors decided to form a model of relationships between perceived value. which suggests that a person’s appraisal of a potential threat is a function of both the severity of the threat and his or her vulnerability to it (Tanner et al. Research issues In researching the problem. 1998) suggest that the number of units in the sample and in the variables included in analysis are at a ratio of 10:1 or more. According to this. This multidimensional perspective was adopted quickly by several perceived risk researchers (who also added time risk) who merged the work of Bauer and Jacoby and Kaplan by conceptualizing and measuring the uncertainty and consequences associated with each of these various types of perceived risk (e. positive and negative). Different researchers (e. perceived risk and perceived value of mobile phones like for regular and irregular students? . in Kelloway. participated in the research. perceived prices (five indicators). Bentler and Chou (1987. H4. Aleksandra Pisnik Korda and Damijan Mumel be lost.g. perceived risks and perceived value of mobile phones relationships exist (direct and indirect. in Rindfleisch and Crockett. Researchers outside the marketing discipline also view perceived risk as a multidimensional concept (e. 246 questionnaires by the irregular students. the authors included 250 regular and 250 irregular students of the Faculty of Economics and Business at the University of Maribor. 26 variables are included in the research.g. The indicators were marked by the students using a seven-degree scale. perceived risk and perceived value of a mobile phone were selected on the basis of relevant literature and with a personal preliminary questioning of the tested group of 20 students. 160 . perceived risks (five indicators) and perceived values (five indicators) of a specific mobile phone. What are the differences between the theoretical foundations and the results of our research? In forming hypotheses the authors followed the logical structure of hypotheses tested in the research of other authors concerning the issues at stake. 1991. Rindfleisch and Crockett. Are there statistically important differences between the two target groups? .. The perceived quality of a mobile phone has a positive impact on the perceived value. such as the fear appeals literature. 1976. The surveyed students marked particular indicators of quality (11 indicators). The perceived quality of a mobile phone has a negative impact on the perceived risks. Therefore. 3. Brooker.g. Peter and Ryan. calculators). Between the perceived quality.g. and . perceived quality and perceived risks and its testing on the example of mobile phones. Sweeney et al. risk and product value Journal of Product & Brand Management Volume 13 · Number 3 · 2004 · 156-167 Boris Snoj. if a product does not perform according to a consumer’s expectations.The relationships among perceived quality. a total of 23 useless or incomplete among the regular students. 227 questionnaires by the regular students. 1984. 1999. although they operate under similar conditions as organizations worldwide. Slovic et al. small household appliances. The final number of all questionnaires included in the research was: . and the conceptualization of perceived risk as a combination of uncertainty and consequences is related conceptually to several other research streams. that is: possess a mobile phone. The research questions that the authors want to explore were: . 1999). 2000) found positive impact of perceived quality on the perceived value of different products (e. four useless or incomplete among the irregular students. Having in mind that one of the least studied elements of perceived sacrifices in the marketing literature and research is risks. What are the relations between the stated variables? . 1978. Therefore the authors assumed that also in the case of mobile phones: H2. Peter and Tarpey. Methodology Sample Structural equation modeling (SEM) is a method suitable for samples of more than 200 respondents. What are the perceived quality.. the authors took into account the following presumption – most organizations in Slovenia take little interest in a concept of perceived value for a customer. Slovenia in the sample. Bearden and Mason. 1983. 1975. 4. 1999). Specification of the the instrument (questionnaire) The questionnaire is composed of 26 questions. The perceived risks of a mobile phone have a negative impact on the perceived value. Out of all completed questionnaires there were: . Teas and Agarwal. the theoretical issues disscussed in Section 2 (Literature review) and the researched questions were used as a platform for the examination of the following a priori hypotheses: H1. The indicators of perceived quality. perceived price. in Rindfleisch and Crockett.

perceived risks and perceived value were reduced to just a few with factor analysis (see Appendix for group statistics/independent samples test). The intention of the model is to explain why the variables are correlated to each other in a specific form.63 0. in Kelloway. or the relationship between perceived quality and perceived risks will be negative. 1993. 1999). the bulk of items of perceived quality. the authors anticipated casual influences among variables researched. suggesting that the construct could be used with confidence. Therefore during the data analysis. Jo ¨reskog and Sorbom. or the relationship between perceived quality and perceived value will be positive.84 Figure 1 Conceptual model of relationships between perceived quality. 1998).84..The relationships among perceived quality. 1996. perceived risks and perceived value indicators of mobile phones after the factor analysis Coefficient Alpha (Cronbach) Perceived quality: subjective indicators of quality appearance of mobile phones flexibility of use screen size colour choice Perceived risks: financially functional risks technical aspects of risks social risks Perceived value: value regards to investment utility subjective evaluation of value 0. the authors joined 11 original indicators of perceived quality into five indicators. five original indicators of risks into three indicators and five original indicators of perceived value into another three indicators. SEM is mostly used in social sciences (Kelloway. which are observed among the analysed variables. The results of the research and discussion The results of structural path coefficients for the proposed model are seen in Table III. In their hypotheses. in Sweeney et al. As noted by many authors (e. Reliabilities range from 0. risk and product value Journal of Product & Brand Management Volume 13 · Number 3 · 2004 · 156-167 . The condition for SEM is an a priori defined model of variables among which the authors want to assess the connections or relations and the strength of those relations. The aim of SEM is to explain the patterns of covariance. perceived risks and perceived value of the mobile phone 161 . Bagozzi and Foxall. The model is actually an explanation of how are (or are not) two (or more) variables connected or in relation. where S is a matrix of covariance of the observed population. and S(T) is a covariance matrix as a consequence or result of the model. The method of structural equation modeling (SEM) is applied in further writing. Model With factor analysis. Data analysis methods In practice. Bollen (1989. Boris Snoj. especially in testing of hypotheses of causal influences. Construct reliability was assessed by using the Cronbach Alpha coefficient. the structural path b1. and the structural path b3. Ta vector of the parameter of the model. . the structural path b2. reliance on the chi-square test as a sole Table II Perceived quality. perceived price.74 0. 1998) set the basic hypothesis of SEM as: S ¼ SðT Þ. 1999).63 to 0. In Figure 1 the conceptual model of relations tested as regards the hypotheses is exposed. Aleksandra Pisnik Korda and Damijan Mumel The questionnaire itself was also tested with a written survey of 40 students. therefore they adopted SEM. or the relationship between perceived risks and perceived value will be also negative..g. 5. as shown in Table II. the items representing a construct are selected at random to form two or three combined indicators rather than using a large number of single item measures (Sweeney et al. Concerning the hypotheses the authors assume that: .

0.. According to this the authors can confirm H3 (the perceived risks of a mobile phone have a negative impact on the perceived value).The relationships among perceived quality.589 213.90 (Benter and Bonett. According to the results the authors found that the relations are: positive and negative.000 0.001. that it is not meant to be only an assurance of objective. (1999) and in research with calculators by Teas and Agarwal (2000). This means that researchers should not concentrate only on direct effects.851 2 0.628. One of the authors’ major findings is that perceived risk is a mediator between perceived quality and perceived value (Table III). in Sweeney et al. as the authors presumed. but reverse effect on perceived value of a mobile phone among the researched target group of students in Slovenia. therefore H1 (between the perceived quality. b) effects due to indirect path. 1999). c) the total effect 162 . df ¼ 71. Structural path coefficients for the proposed model are shown in Figure 2.140 Critical value 5. Only through both types of effects can the authors explain relationships between variables well enough.944 PR – PV 20. It must be stressed however. Bearing Table IV Structural path coefficients for proposed model Effect of ! on + PR PQ a) 2 0. p . RMR ¼ 0:046. (1999) came to similar results. the effect of Figure 2 Structural path coefficients for the proposed model perceived quality on perceived product value is positive with beta coefficient 0. Perhaps it is even more important to concentrate on indirect effects between perceived quality and perceived value through perceived risks. GFI ¼ 0:926.628 c) 0. 0. which the authors found to be negative (b2¼20. Comparison of structural path coefficients indicates that perceived quality.944. and further analysis of the results are shown in Table IV. Perceived risks strongly. PQ = perceived quality.391 2 5.000 b1 (pq!pv) b2 (pq!pr) b3 (pr!pv) Notes: chi-square = 250. With a relation between perceived quality and perceived risks.057 0. According to research. perceived quality. The authors’ findings highlight the close relationship between perceived risks and perceived value and how risks can be used conceptually and practically in generating perceptions of perceived value.738).116). 1980.000 0.00.316 b) 0. Path coefficient expressing direct effect of perceived quality on perceived product value is b4¼0.851). CFI ¼ 0:914. PR = perceived risks: a) effects due to direct path. Aleksandra Pisnik Korda and Damijan Mumel Table III Structural path coefficients for proposed model Connection Beta 0.097. though negatively influence perceived value of a mobile phone (b3¼2 0. Perceived quality over the perceived risks or its power to lessen them.316 (see Table IV) and according to this. the authors can confirm H2 (the perceived quality of a mobile phone has a positive impact on the perceived value). risk and product value Journal of Product & Brand Management Volume 13 · Number 3 · 2004 · 156-167 Boris Snoj. p . As expected. Further analysis reveals that approximately twothirds of total effect of perceived quality on perceived product value of a mobile phone signifies indirect effect. the authors can confirm H4 (the perceived quality of a mobile phone has a negative impact on the perceived risks).738 Standard error 0. On that basis the authors decided that the data fitted the model well. 0. the authors recommend that the suppliers and producers of mobile phones focus on assuring the highest possible quality if they want to give customers the highest possible value. influences the perceived value with the coefficient 0. perceived risks and perceived value of mobile phones different types of relationships) can be confirmed. RMSEA ¼ 0:106 (0.280 P-value 0. Positive effect was also confirmed in the research with small household appliances by Sweeney et al. between the factors in the model.851 a) 0. as they expected. All the relations in the model are also statistically significant. has a significant effect on perceived value of the mobile phone.64. but especially subjective.025 0. Also Sweeney et al. direct and indirect. Conclusions Comparison of structural path coefficients indicates that perceived quality as well as perceived risks have quite a great. 6.316 2 0. NFI ¼ 0:907 measure of fit in a structural equation model is not recommended due to its sensitivity to sample size. though their connection is a little weaker. A rule of thumb is that both indexes should be greater or equal to 0. The NFI (normed fit index) and CFI (comparative fit index) have been recommended to counteract the influence of sample size.738 Notes: PV = perceived value.

. and Cronin. Jr (2001). The recommendation from the authors is. etc.H. if the suppliers of mobile phones want to offer the highest value of products to their customers. and Mason. Implications for further research However. and Etzel. 439-41. 47. perceived value. The perceived value of a product is a multidimensional concept influenced by many variables of benefits and sacrifices. In favor of the results of this research is the fact that the more visible the use of the products the higher the social risk (Bearden and Etzel.W. Marketing Science. 34. Journal of Marketing. organizations should focus especially on those factors of perceived quality that are the most important to customers. “Understand what customers value”. According to the finding. in assessing the implications of this study. 65. A. Harvard Business Review. (1998). A. NovemberDecember. Journal of Business Research. physical evidence. Vol. pp. in practice and theory. and Narus. (1993). M. “Reference group influence on product and brand purchase decisions”. E. However. Journal of Applied Psychology. (1982). (2000). pp. (2000). J. social and psychological. In everyday life it is common sense that people are more sensitive to financial aspects of risks. J. C. (1978). In the research the authors found the perceived risk serving as a mediator between perceived quality and perceived value of mobile phones. 6. “Some new thoughts on conceptualizing perceived service quality: a hierarchical approach”.H. and Sullivan. the authors suggest that in future. Bolton. Vol. however results of this research point out that other aspects of risks must not be neglected. that more attention must be devoted to reducing the perceived risks. 34-49. its limitations must be acknowledged. “The antecedents and consequences of customer satisfaction for firms”. P.O. July. Journal of Consumer Research. and Berthon. 191-207. 63 No. than when the impact of perceived risks is also included in the measurement. 53-65. Advances in Consumer Research. 9. i. M. J. Vol. pp. Brady. When exploring the impact of perceived quality of mobile phones on their perceived value.R. Therefore. researchers should expand the model with more indicators on perceived value and perhaps study relationships between perceived value. students. 7. The authors also recommend the testing of connections between the variables in other cultural environments. and the environments where market economy was introduced only at the end of the twentieth century. generalizations of the findings beyond the immediate population observed should be taken with caution. “Service quality and satisfaction – the moderating role of value”. (1983).The relationships among perceived quality. In the authors’ opinion. mobile phones.J. A.N.J. perceived quality has a direct effect on perceived value and at the same time an indirect effect by reducing perceived risks. Hence to reduce the risks associated with use of mobile phones the producers and sellers of mobile phones should take care to look for the cues that increase customer certainty concerning social and psychological risks (image. 375-84. 1338-52. References Anderson. researchers should not concentrate only on direct effects between researched variables.J. future research should also be directed towards fine-tuning of a customer value measurement tool and in improving the questions. Vol. reliability of the mobile phone. pp. R. Vol. intention to buy. quality. Vol. perceived risks). pp. Due to the fact that our results are directly relevant only to one 163 . Only through both types of effects can the authors explain relationships between variables well enough. Journal of Consumer Research. 1982). From the research it could be suggested that they should concentrate also on the indirect effects between variables researched. that the research in the field of perceived risks has not been dealt with properly in the past. 741-9. pp. 17. warranties. Aleksandra Pisnik Korda and Damijan Mumel this in mind.M.J.O. There are two reasons for this – as we already know. 183-94. communication. especially the comparison of the environments with a long tradition of market economy. customer satisfaction and their loyalty. which measure the individual concepts (perceived quality. European Journal of Marketing. Anderson.e. Bearden. 125-43. Brooker. Therefore the researchers are advised to test the model with other products and other target groups. risk and product value Journal of Product & Brand Management Volume 13 · Number 3 · 2004 · 156-167 Boris Snoj. G. “An assesment of expanded measure of perceived risk”. In this research. target group. 2. pp. Money. and to one specific product. W. 10. along with the product’s high quality they also have to emphasize the product’s capacity which reduces risks perceived by customers in the buying process. the authors found that perceived quality has a weaker impact when measured alone. K. W. In future.). Athanassopoulos. Bearden. pp. which has a very dynamic nature. It is hoped that the findings of the study would encourage further development of the knowledge about the complex nature of the customer perceived value in general. Vol.B. pp. Vol. “Customer satisfaction cues to support market segmentation and explain switching behavior”. are a neglected field of research that needs to be examined as much in research activity as in consecutive resolution of managers. Perceived risks. 12 No. Caruana. “Consumer-perceived risk and attitudes toward generically prescribed drugs”. A. and Drew.D. (1991). researchers focus on theoretical and empirical research within the field of risks. “A multistage model of customers’ assessments of service quality and value”. mobile phone performance and overall mobile phone quality are those factors.

Dodds. K. (1998). Jaworski. May-June. S. Deshpande. pp. (1998). 132-50. “Market orientation: antecedents and consequences”. Vol. International Journal of Service Industry Management. Lee. Vol. R. 4. “Perceived risk and outcome differences in multi-level service relationships”. Mumel. “Effects of price. Tynan. H. I. Total Quality Management. Vol. August. Brady. Lexington. B. Zeithaml. Klaus. 164 . Pricing: Making Profitable Decisions. and customer satisfaction on consumer behavioral intentions in service environments”.B. pp. pp. Executive Report. K. Progressive Grocer.. “Measuring service quality: a re-examination and extension”. D. Vol. R.C. May. pp. Y.L. R. pp. V. (1994). Vol. D. Ekonomsko Poslovna Fakulteta. Cronin. 16 No. Aleksandra Pisnik Korda and Damijan Mumel Chenet. August.A. (1999). Journal of Marketing. (1998). (1994). Journal of Retailing. “Quality measurement in the public sector: some perspectives from the service quality literature”. and Sharma. Journal of the Academy of Marketing Science. L. “From brand values to customer value”.C. “SERVQUAL: a multiple item scale for measuring customer perceptions of service quality”. Vol. Vol. 13 No.B.A. pp. S.. S. 26 No. and Kohli. pp. 217-31. R. pp. “The effects of price-comparison advertising on buyers’ perceptions of acquisition value. (1999). 2. 569-89. Journal of Marketing. LISREL 8: User’s Reference ¨ Guide. Rindfleisch.A. K. “Assessing the effect of quality. pp. 12-14. Eriksson. Vol. satisfaction and repurchase intentions in a business-to-business services context: an empirical examination”. 2. Perceived Quality. 56-61.. pp.. J. D. Business Horizons. R. Journal of Business Research. Scientific Software International. (1988). (1999). 35. 13 No. and Yoo. (2000). pp. pp. and Sorbom. (1993). Raghubir. E. P. April. 2/3..J. (1981). “Customer value change in industrial marketing relationships: a call for new strategies and research”. 49. (1985). “The initiators of changes in customers’ desired value”. M.F.B. “Modeling the societal impact of fatal accidents”. V.F. and Jackson. R.M. J. Sage Publications. pp. and Fischhoff. J. (1995).K. Pricing Policies and Procedures.X. “Corporate culture. Day.R. (1996). (1993). Journal of Marketing Research. Monroe. NY. “Perceived quality in consumer decision making: an integrated theoretical perspective”. Vol. (1976). S. Olshavsky. Value-added Marketing. “Vplivni dejavniki na zaznano vrednost izdelka. and Woodruff. P. 58 No. S. (Eds).P. 23-38. Macintosh. pp. 55-66. pp. Autumn. value. Industrial Marketing Management. Parasuraman. Vol. 26 No. 13 No.. Decision Sciences. “A conceptual model of service quality and its implications for future research”.U. 1. pp. 50. Journal of Marketing. (2001). 57 No. pp. 14 No. in Czepiel. pp. S. 163-76. and behavioral intentions”.A. 56. 46-59. “Modelling the relationship between perceived value.. (1993).M. L.. and Berry. 316-24. and Krishnan. and Taylor. 4. “Service quality by relationships in the international market”. Perceived Quality. 12-40. Flint.. Managing Customer Value: Creating Quality and Services that Customers Can See. and Money. Journal of Public Policy Marketing.J. Holbrook. Peter. CA. 12-40. July. D. Satisfaction: A Behavioral Perspective on the Consumer. and Dodge. A. 64. The Service Encounter. Maribor. and Olson. P. (1997). pp. W. risk and product value Journal of Product & Brand Management Volume 13 · Number 3 · 2004 · 156-167 Boris Snoj. 2. Solomon.. Vol.B. 31-57. Joreskog. Lexington Books. and Gardial. Journal of Marketing. in Jacobi. J. Vol. Vol. M. Christopher. July. W. J. (1985). Slater. “An investigation of perceived risk at the brand level”. 1. D. Vol. and Narver. B. 1.. “Reassessment of expectations as a comparison standard in measuring service quality: implications for further research”. T. “The capabilities of market-driven organizations”. Vol. pp.T. Lexington. Maribor. G. and Surprenant.P. Woodruff.K.. Schechter. 193-218. Zeithaml. 28 No. transaction value. 2. Murphy. A. (1996).B. D. 37-52. V. Zeithaml. IL. 62. pp. and Crockett. Journal of Marketing Research. 35. 18 No. MA. 5.S. J. London. Slovic. “Intelligence generation and superior customer value”. 5. Nessim.L. “Vedenje porabnikov”. B. Vol.E. T. 28. P. magistrsko delo”. J. D. Phaldrus rides again”. Flint. 159-71. Vol.J. Industrial Marketing Management. 35. and Grewal. A. A. Vol. Monroe. (1999). “A normative conception of value”. Oliver. (1998). “An integrated approach toward the spatial modeling of perceived customer value”. 236-49.R. B. Patterson. NY. MA. Lexington Books. D. Vol. pp. A. brand and store information on buyers’ product evaluations”. Parasuraman. W. and Lee. 1.The relationships among perceived quality. 361-75. Sinha.E. 71-6. pp. 9 No. (1985). 307-19. K. G. Lysonski. (2000).. P. and Ryan. Journal of Marketing. (1984). customer orientation. “Coupon value: a signal for price?”. Kelloway. (2000). The Journal of Services Marketing. pp. 2. (1986).D. “The determinants of perceived service quality and its relation with satisfaction”. Vol. (1999). Lee. Lichtenstein. University of Maribor.J. 76 No. 30 No. Vol. NY. 58 No. Grewal. Vol. J. The Journal of Services Marketing. Rowley. and Hult. A. “One more time: how do you satisfy customers?”. M. 2.J. 46 No.L. Monroe. C. “Service performance gap: re-evaluation and redevelopment”.L. pp. Parasuraman. and Webster. “Quality and value in the consumption experience. Lexington Books.K. (1992). S. “Quality phenomenon: the conceptual understanding of quality in face-to-face service encounters”. S. “Global measures of information service quality: a cross-national study”.B. and Corfman. M.J. pp. J. 415-32. “Cigarette smoking and perceived risk: a multidimensional investigation”. (2000). and DeSarbo. Management Science. Journal of Marketing. 8 No. (1995). Lee.H. Journal of Services Marketing. pp. McGraw-Hill. (1992). C.G. (1998). Nilson. and Berry. K. London. 133-47. J. McGraw-Hill Company. Ekonomsko poslovna Fakulteta.. Vol. Vol. P. and Olson.F. Farley. 321-37. Thousand Oaks.W. Gale. C. Vol. 55-68. H. 30. (1990). and innovativeness”.A. 53-71. D. Cronin. pp. New York. Vol. Journal of Marketing Practice. “Testing the SERVQUAL scale in business-to-business sector: the case of ocean freight shipping service”.A. 3. (1971). Chicago. in Jacobi. G. L. Journal of Marketing. 2 No.J. New York. Journal of Retailing. 3. 57 No. Journal of Marketing.T. (1999). (Eds). K. (1997). 321-35.G. Journal of Marketing Research. (1991). Vol. Vol. 184-9. H. 143-57. “Consumer ranking of risk reduction methods”. L. pp.C. J. University of Maribor. McGraw-Hill. R. Using LISREL for Structural Equation Modeling: A Researcher’s Guide. (Eds). Majkgard. F. (1994). 41-50. M. 464-75.. New York.B. pp. and Berry. A. Lexington. E. 4/5. Journal of Marketing. D. Durvasula. (2002). MA. pp. Pisnik.W. 120-8. (1984). and Enis. Journal of Services Marketing. Roselius. 24-42. “Classifying products strategically”. pp. Naumann. and Spreng. Macmillan Press. Kettinger. The Free Press. A. Journal of Marketing Research. and Mehta. 2. Vol.

2. V. 29 No. and Bowers.9593 4. “Understanding value and satisfaction from the customer’s point of view”.00 2. pp.00 1.B. 1. 12 No. C. 28 No. 60-9. pp. T. NY. (1990). pp. Vol.R. Heskett. (1996).W.00 2. R.L. pp. D. R. Journal of Marketing.E. “Measuring customerperceived value in business markets”. and Gardial.2247 4. (1988). 278-90. Collier. (1994).D.00 1. Maribor. (1999). Dissertation. (1994).0854 5.00 1.L. Chicago.2115 5. Proceedings of Knowledge Development in Marketing. F. “Osnove marketinga. September-October.6260 2. Oliver.A.B. Vol. 2-22.00 2. AMA Summer Educators’ Conference. 12 No. B. 1. 105-11. pp. “Storitve v menjalnih procesih in model ˇˇ primerjalne analize njihove kakovosti na primeru zdravilisc Republike Slovenije” (Services in exchange processes and the comparative model of their quality – the case of health spas in Slovenia). V. Vol. Reichheld.E. Service Breakthroughs – Changing the Rules of the Game.00 2. (2001).5894 4.1179 4.L. Journal of Services Marketing. Stafford.K. S. J. 1 No.00 2. (1998). 31-46.. “Kundenzufriedenheit”. J. 60 No.A.7489 3.. J. Vol. 2. Greenwich.00 1. CT.00 1. Vol.00 2. and Agarwal.4097 4.1630 4. S.6870 3. Journal of Marketing. “The role of perceived risk in the quality-value relationship: a study in a retail environment”.2996 2. ¨ Swan. (2000). (1990). Woodruff. Maribor. and Wells. S. pp. Soutar.00 2. pp.00 2. pp.1463 4. D. (1999). (2000).00 1..0925 4. IL.00 2. Irwin Professional Publishing. 525-40.00 1. and Brown. and Gabrijan.F. 77-105. zbrano gradivo”.A. Snoj. T.P. Schumann. Maribor. (1997).F. Cambridge. “Customer expectations and perceptions of service quality in retail apparel stores”. JAI Press. Survey of Business.4390 4. and Johnson. and Gardial.S. ˇ Zavrsnik. L. Blackwell Publishers. and Parasuraman. Berry.00 1.5110 5. University of Maribor. R.C. pp. 25 No.. Teas.8252 5. B.4390 Further reading Brensinger.The relationships among perceived quality. S. Stauss. Vol. Harvard Business Review.00 2. B.W.3577 3.9648 4. pp.00 2.A. 55-68. Appendix Table AI Group statistics Status REALPQ1 REALPQ2 REALPQ3 REALPQ4 REALPQ5 REALPQ6 REALPQ7 REALPQ8 REALPQ9 REALPQ10 REALPQ11 REALPR1 REALPR2 REALPR3 REALPR4 1. risk and product value Journal of Product & Brand Management Volume 13 · Number 3 · 2004 · 156-167 Boris Snoj.6564 4. K.00 1. Ekonomsko Poslovna Fakulteta. Faculty of Economics and Business. The Free Press. and value”. “Management izdelkov (zbrano gradivo)”. Sasser. L.0441 3. 2. J. 426-40. Industrial Marketing Management. W.00 2.2996 5.00 1.W.00 2. pp.E. (1998).L. Woodruff. B. M. Journal of Retailing.00 2.4317 3.J.1748 4. The Free Press.1366 4. “Services quality and satisfaction: the process of people doing things together”. and Male. Gaiglano.9692 4.2276 2. “SERVPERF versus SERVQUAL: reconciling performance-based and perception-minus-expectations measurement of service quality”.N. University of Maribor. Woodruff. A. New York. “A conceptual model of service quality and service satisfaction”. Vol. July. January.B.00 2.00 2. R. Bowen.00 2. G. The Journal of Services Marketing. Cronin. (1994). Vol. (1990). (1993). 1. in Swartz.00 1. 1. and Taylor. “Zero defections: quality comes to services”. Stafford. 68. L. Journal of Services Marketing.B. (1993). Zeithaml. “Consumer perceptions of price.00 2.00 2. (1990).W. New York. and Chacour. Ekonomsko Poslovna Fakulteta.6220 4. 75 No. (1992). (1999). 58. Advances in Services Marketing and Management.. V. and Sasser.00 N 227 246 227 246 227 246 227 246 227 246 227 246 227 246 227 246 227 246 227 246 227 246 227 246 227 246 227 246 227 246 227 246 227 246 227 246 227 246 227 246 227 246 Mean 5.F. Zeithaml. 30.7764 4. 1.7805 4. “Determinants of service quality and satisfaction in the auto casualty claims process”. REALPR5 REALPV1 REALPV2 REALPV3 REALPV4 REALPV5 165 .A. Sweeney. and Hathcote. 5-24.9553 3. Aleksandra Pisnik Korda and Damijan Mumel Snoj. ASQC Quality Press.. 65-86.00 1. pp.00 1. Journal of Marketing.7841 2.00 2. “The effect of extrinsic product cues on consumers’ perception of quality. 52. Jr and Hart. 33-41. pp. E.L. Vol. 59-61. Ulaga. NY. B. Marketing-Zeitschrift fur Forschung und Praxis. The Service Quality Solution – Using Service Management to Gain Competitive Advantage. R.00 1. Journal of the Academy of Marketing Science. University of Maribor. Zeithaml. 6. 8 No. D.4493 4. Know Your Customer: New Approaches to Understanding Customer Value and Satisfaction. Vol. Journal of the Academy of Marketing Science.2398 4.00 1. V. Vol. pp.. 139-53.0569 4.2480 4. M.00 2. quality and value: a means-end model and synthesis of evidence”. “The behavioral consequences of service quality”. Berry. “Customer value: the next source for competitive advantage”.00 1. V. W.3568 4. Vol.4431 4. (1996). (Eds). Delivering Quality Service.00 1. S. F. A. Vol.6872 4. and Parasuraman.R. J.2907 4.00 1.7357 4. R.00 1. “Can the SERVQUAL scale be generalised to business to business?”. sacrifice.00 1.W.

040 0.782 471 470.943 2 0.000 0.073 0.777 471 470.902 6.025 471 470. in the case of product marketing.930 0.299 0.369 2 1.731 2.006 2 0.261 2 3.520 0.564 2 0.397 471 465.200 471 470.741 0.263 2.893 471 468.300 0. Korda and Mumel challenge marketers to think more about quality in developing strategies for brands and.667 2 0.584 0.734 1.065 2. provide some empirical support for the role of quality issues in the development of the brand.311 0.666 2 3.343 0.485 0.842 0.496 0. Partly this reflects the broader focus on brand marketing but.083 0.002 0.410 0.745 0.029 0. through a study of consumer attitudes to mobile phones.198 471 467.000 0.563 0.681 9. 166 .944 2 0. Here. risk and product value Journal of Product & Brand Management Volume 13 · Number 3 · 2004 · 156-167 Boris Snoj.010 0.956 471 461.168 471 470. Those with a particular interest in the topic covered may then read the article in toto to take advantage of the more comprehensive description of the research undertaken and its results to get the full benefit of the material present.The relationships among perceived quality.932 2 1.263 2 0.184 2 0. Aleksandra Pisnik Korda and Damijan Mumel Table AII Independent samples test Levene’s test for equality of variances F Sig REALPQ1 REALPQ2 REALPQ3 REALPQ4 REALPQ5 REALPQ6 REALPQ7 REALPQ8 REALPQ9 REALPQ10 REALPQ11 REALPR1 REALPR2 REALPR3 REALPR4 REALPR5 REALPV1 REALPV2 REALPV3 REALPV4 REALPV5 Equal variances assumed Equal variances not assumed Equal variances assumed Equal variances not assumed Equal variances assumed Equal variances not assumed Equal variances assumed Equal variances not assumed Equal variances assumed Equal variances not assumed Equal variances assumed Equal variances not assumed Equal variances assumed Equal variances not assumed Equal variances assumed Equal variances not assumed Equal variances assumed Equal variances not assumed Equal variances assumed Equal variances not assumed Equal variances assumed Equal variances not assumed Equal variances assumed Equal variances not assumed Equal variances assumed Equal variances not assumed Equal variances assumed Equal variances not assumed Equal variances assumed Equal variances not assumed Equal variances assumed Equal variances not assumed Equal variances assumed Equal variances not assumed Equal variances assumed Equal variances not assumed Equal variances assumed Equal variances not assumed Equal variances assumed Equal variances not assumed Equal variances assumed Equal variances not assumed 0.045 0.012 0.576 471 470.271 2.557 0. Quality – perception and reality must mix The consideration of quality does not always assume the prominence in brand management that perhaps it should.913 0.367 2 1.992 2 0.265 Executive summary This executive summary has been provided to allow managers and executives a rapid appreciation of the content of this article.182 0.344 2 1.008 3.718 t-test for equality of means t df 1.067 0.297 1.522 471 466. Snoj.602 3. there is a tendency to see quality in terms of objective and measurable factors rather than in terms of consumer perceptions.779 1.244 2 1.605 471 470.088 0.345 0.045 1.817 471 469.151 0.063 471 470.082 0.388 471 470.095 1.488 0.177 1.030 0.295 471 470.087 2 1.006 2 0.345 4.930 0.131 0.247 2 1.464 0.986 0.029 0.065 471 451.182 2 1.819 471 467.038 14.846 0.415 0.095 2 1.159 471 470.373 0.245 2 0.263 2 1.996 2.578 0.759 471 470.077 471 467.

In product marketing this consideration of perceived quality remains less well developed with the emphasis falling on product performance and objective assessments of quality. Since it is clear that objective quality and perceived quality are related. ´ (A precis of the article “The relationships among perceived quality. The consumer’s assessment of value is a complex construct derived from a variety of received inputs and cannot be directly associated with quality. marketers need to combine objective quality issues and improvements with a greater focus on consumer perceptions of quality. Perceived or objective quality? One of the great debates in business is whether perceived quality or actual. risk and product value Journal of Product & Brand Management Volume 13 · Number 3 · 2004 · 156-167 Boris Snoj. in markets such as that examined here for mobile phones. Aleksandra Pisnik Korda and Damijan Mumel Brand managers tend also to see quality as just one attribute that might be associated with a product or service. This is especially the case since consumers – unlike researchers – happily combine objective assessment or features and product performance with subjective considerations linked to image. assessments with limitations are better than no assessment at all especially where the limitations are recognised and taken account of. In product marketing and brand management terms. product image and perceptions of the brand. However. methods and strategies in the promotion of services. We cannot see quality in isolation from the brand and we should not simply rely on engineering to secure the right quality message. And. In truth.) 167 . however that consumer arrives at an opinion. we need to act with caution here since the link – such as it is – does not directly connect objective quality with value but demonstrates that the consumer’s assessment of value draws on perceptions of product quality (however that quality perception is arrived at). albeit one that is shared with those actually delivering the service. If our use of quality as a factor influencing marketing strategies does not cover all these three aspects then we run the risk of failing to recognise the dynamics of brand perceptions among consumers. The consumer does not see quality in isolation but derives perceptions of quality from knowledge about or experience of the product and/or brand. since services marketers have achieved success by focusing on consumer perceptions of quality. in such circumstances the assessment of and actions to promote perceptions of service quality are a core marketing function. However. Nevertheless. objective quality is more significant. between the perceived quality of the product and the consumer’s perceptions of that product’s value. consumer perceptions are critical to the success of services marketing. given the nature of services. quality should be seen as a factor that can be associated with an attribute or attributes rather than as a separate attribute. Service elements of product marketing In technology markets (and many other product markets) it is a mistake to overlook service elements of the “product”. Despite this. It is clear that. The message of quality needs to be a strong one backed up by objective support and a focus on shifting consumer perceptions in response to that objective assessment of quality. the final arbiter of sales is the consumer and. brand and peer opinion. we must be careful not to dismiss one or other approach. This use of perceived quality measures presents challenges since there remain doubts about the conclusiveness of such measures. Such service elements need to be incorporated into the development of the brand rather than left to a separate area of the business. there is a great deal for product marketers to learn from techniques. while the consumer links quality and value this link is moderated by other factors such as price. Thus marketers need to begin to draw on emerging approaches to service quality measurement in developing strategies for product brands. communicating quality to the consumer and seeking to imbue the brand with the appropriate impression of quality. for the marketers. perceived risk and perceived product value”. a focus on improving product quality benefits the brand through improved consumer perceptions. Supplied by Marketing Consultants for Emerald. Furthermore. in the case of mobile phones. However. there is a close association in the eyes of the consumer. Quality links to value The second area of debate touched on by the authors here relates to the links between quality and value. the actions indicated by Snoj et al. service quality perceptions and quality associations linked to the wider brand image and message. at least for mobile phones. perceptions tend to dominate. Finally brand managers need to draw on lessons from services marketing so as to include messages that help to improve consumer perceptions of quality. Services marketers have long recognised that.The relationships among perceived quality.’s findings centre on improving objective product quality. The adoption of such an approach suggests the concept of “brand quality” encompassing objective product quality. In some markets this message is central to successful marketing and. our authors are right to argue that.

Sign up to vote on this title
UsefulNot useful