The Value of Quality

Tellis, Gerard J.; Johnson, Joseph

doi:10.1287/mksc.1070.0286

Cited by 146 publications

(105 citation statements)

References 71 publications

(60 reference statements)

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“…Endowment Effect: What is owned is preferred to what can be obtained (Thaler 1980) Inappropriate pricing setting (considered safe) may be chosen in pricing. For example, instead of a product leadership strategy for quality products, managers may undervalue quality and choose a safer objective (Tellis & Johnson 2007). Managers may be more focused on current markets rather than pursue strategies of gaining customers from competitors through pricing.…”

Section: Resultsmentioning

confidence: 99%

Behavioral issues in price setting in business-to-business marketing: A framework for analysis

Iyer

Xiao

Sharma

et al. 2015

Industrial Marketing Management

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Highlights Managerial price setting processes are examined through insights obtained from behavioral decision making. Behavioral models of pricing provide realistic understanding of managerial price setting in business-to-business contexts. Issue understanding, cognitive biases and heuristics are offered as major managerial factors that impact price setting. An agenda for future research is offered along with managerial suggestions for price setting.3 Behavioral Issues in Price Setting in Business-to-Business Marketing: A Framework for Analysis AbstractBusiness-to-business pricing research has often focused on developing rational and normative frameworks and models for pricing issues, strategies and tactics. However, there has been less attention given to behavioral models that help us understand the realities of pricing and how managers actually set prices. Specifically, there has been less attention given to the various individual and group influences on the price setting process. We apply insights from a steadily increasing body of literature on behavioral decision making to identify some relevant behavioral issues that may affect managerial price setting processes in business-to-business contexts. We conclude with some implications for theory building and practice and an agenda for future research. Approaching the field of business-to-business pricing from the perspective of behavioral decision making, which contends that managerial cognitive biases are key sources for deviations 5 from optimal decisions, we attempt to understand the impacts of managerial factors on the price setting process. Our primary objective is to build a case for the study of managerial cognitions that could affect the use and application of normative frameworks of price setting. With this objective in mind, we attempt to make three distinct contributions to the current sparse research in the area of managerial influences on business-to-business pricing. First, we extend insights from behavioral research from various disciplines, including behavioral economics, management and behavioral finance, to understand how behavioral issues may contribute to the price setting process. While most existing research on business-to-business marketing focuses on the customer or the purchasing manager (e.g., Anderson et al. 2000), we place our attention on the manager in the selling or marketing firm. Second, we offer a preliminary framework that contends that managerial issue identification, cognitive biases and heuristics intervene in the Keywords

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Section: Resultsmentioning

confidence: 99%

Behavioral issues in price setting in business-to-business marketing: A framework for analysis

Iyer

Xiao

Sharma

et al. 2015

Industrial Marketing Management

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show abstract

“…In the second set of experiments, we present a case study on applying our proposed approach on fifty reviews written by Walter Mossberg on the Thursday issues of the Wall Street Journal from 1991 to 2001 [5]. Two annotators were asked to independently annotate product features, opinion expressions, and relations between them.…”

Section: Resultsmentioning

confidence: 99%

Mining product reviews based on shallow dependency parsing

Zhang

et al. 2009

Proceedings of the 32nd International ACM SIGIR Conference on Research and Development in Information Retrieval

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This paper presents a novel method for mining product reviews, where it mines reviews by identifying product features, expressions of opinions and relations between them. By taking advantage of the fact that most of product features are phrases, a concept of shallow dependency parsing is introduced, which extends traditional dependency parsing to phrase level. This concept is then implemented for extracting relation between product features and expressions of opinions. Experimental evaluations show that the mining task can benefit from shallow dependency parsing.

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“…Prior studies show that a measure of quality obtained from third-party reviews affects firm value and can serve as a reliable indicator of quality (Chen et al 2012;Tellis and Johnson 2007). In addition, experts are less subject to behavioral tendencies and advertising influences than the general public (List 2003;Maheswaran 1994).…”

Section: Datamentioning

confidence: 99%

Does advertising indicate product quality? Evidence from prelaunch and postlaunch advertising in the movie industry

Song

Jang

2015

Mark Lett

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Literature on the informative role of advertising indicates that advertising quantity can serve as an indicator of product quality. As product life cycles grow shorter, firms in many industries spend significant amounts on advertising during the prelaunch period to create large initial demand. Thus, the role of prelaunch advertising may differ from that of postlaunch advertising, and a proper understanding of these differences is important. This study provides an empirical investigation of whether advertising is a reliable indicator of quality before and after product launches, using the data from the movie industry. Analyses of 1078 movies released during 2003-2011 show that postlaunch advertising is a reliable quality indicator and increases revenues, whereas prelaunch advertising is not a reliable quality indicator, even if it leads to higher revenues.

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The Value of Quality

Cited by 146 publications

References 71 publications

Behavioral issues in price setting in business-to-business marketing: A framework for analysis

Behavioral issues in price setting in business-to-business marketing: A framework for analysis

Mining product reviews based on shallow dependency parsing

Does advertising indicate product quality? Evidence from prelaunch and postlaunch advertising in the movie industry

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