The effect of product visibility upon the relationship between price and quality

Abstract

Previous studies have suggested that the relationship between price and quality for certain types of consumer goods often is not positive. Investigators have hypothesized that the experience of value, or the relationship between quality and price, may be less relevant for product categories in which a consumer's self-worth may be elevated through the act of purchase. Brands within such product categories would appear to be particularly susceptible to image building strategies involving the use of premium pricing to infer high quality.This study examined the relationship between price and objective quality from I96I through I978 for 878 brands of 54 products within three broad product categories of toilet articles, cosmetics, and clothing. Generally, the relationship for products within these categories was weak which suggests that marketing managers of some brands may well be basing prices on intangible as well as tangible values.

Price Intransparency, Consumer Decision Making and European Consumer Law

“…The consequence of all this may be that consumers may either undervalue or overrate the importance of price in their decision-making process. The latter can occur whenever consumers hold price to represent quality even when in fact price and quality of the product may be uncorrelated (Chen et al 2009;Hanf and von Wersebe 1994;Kirchler et al 2010;Sutton and Riesz 1979). The former occurs whenever context and personal attributes cause consumers to focus on more poignant features than price.…”

Competitive Price and Quality Under Asymmetric Information

“…On the empirical side, several studies examined the correlation between price and quality across a large variety of consumer markets (Dardis and Gieser 1980;Friedman 1967;Geistfeld 1982;Hjorth-Andersen 1984;Morris and Bronson 1969;Oxenfeldt 1950;Riesz 1978Riesz , 1979Sproles 1977;Sutton and Riesz 1979). The typical findings from the above studies are that there is a great variation in the price-quality correlation across markets and that several markets have negative correlations.…”

The relationship between price and quality in the marketplace

“…Other studies on the relationship between price and quality within the United States have been carried out by Friedman (1967), Morris and Bronson (1969), Sproles (1977), Riesz (1978Riesz ( , 1979, Sutton and Riesz (1979), Dardis andGieser (1980), andGerstner (1985). These studies also reported a weak overall relationship between price and quality.…”