The point is very vastly mentioned in the marketing literature. However, Study 2's results indicate a reversal of the negative effects of lower prices on perceived brand quality in an evaluation task to generally positive effects when the lower price is offered in the form of a discount in a choice task. In all cases, however, higher prices correspond to higher levels of the quality. In addition to providing evidence that fears of the detrimental effects of lower prices may be overblown, the results also provide insight to managers of brands of different levels of quality on how to manage discounts to build, or at least to insulate, perceptions of the brand's quality. For example, Safeway claims “You will find high quality brands at low prices” and H&M claims “fashion and quality at the best price”. One explanation for this variation may be differences in price–objective quality relationships by category (e.g., the low price of Japanese automobiles does not diminish the well-established perception of quality in the category). But that perception is not true because as was found from their list of preferred values, many did not choose to have a bigger house or have their own land instead they chose to have happiness, health and safety. You can join in the discussion by joining the community or logging in here.You can also find out more about Emerald Engage. A lower price is associated with lower perceived brand quality in Study 1's evaluation task environment. Its not any individual factor, but the combined perception of all of them together which establishes a baseline expectation on the quality of your company’s product. Avoiding the "low-price, low-quality" perception Of course, the price of a product doesn't always reflect its quality. However, when subtly reminded of value, they rated the cheap wine more favorably. Depending on which naive theory consumers use, a low price can indicate either good value or low quality, whereas a high price may imply either poor value or high quality, according to a new study. If you think you should have access to this content, click the button to contact our support team. DelVecchio, D. and Puligadda, S. (2012), "The effects of lower prices on perceptions of brand quality: a choice task perspective", Journal of Product & Brand Management, Vol. Thus the quality and the pricing positions the car to the topmost segment. Does Low Cost Mean Low Quality? When you’re new in the industry and struggling to find clients, pricing your services low might seem like the best option to bring you more bookings. Past research has shown that, to varying degrees, consumers tend to believe price is an indicator of quality, even though there is in fact often very little correlation between objective measures of price and quality (PQ). They maintain their quality such that their customers are ready to give the highest pricing for the cars. Visit emeraldpublishing.com/platformupdate to discover the latest news and updates, Answers to the most commonly asked questions here, (Farmer School of Business, Miami University, Oxford, Ohio, USA). The low price condition generated lower perceptions of quality, more favorable perceptions of price, and higher purchase intentions than the high price condition. They seem quite contented with their life, their home … In a sample of 484 low-cost airline passengers, we found service quality to be related to increased price perception of service as a result of increasing passengers' WOM, which also creates success in this regard by increasing their revisit intention. https://doi.org/10.1108/10610421211264946. By Shula Neuman June 8, 2006 November 29, 2020. The stance of this article is that there exists a relationship between the price and product quality. Narayanan Janakiraman, UTA assistant professor of marketing in the College of Business, said these same consumers equate lower prices with lower quality. Residents of a low cost flat would have their quality of life increased if they have a bigger and more beautiful house than their own flat. Discussion Study 1 demonstrated that the contextual appeal influenced quality perceptions more strongly than price perceptions and purchase intentions; the effect of the contextual appeal on quality perceptions was even stronger than … If prices are marked lower … Since its customers are less sensitive to product quality and breadth, the discounter can offer a narrower assortment, which allows it to present a lower-price and lower-end image in stores. Read more…, A Step by Step Guide to Charging for your Event Planning Service (Updated for 2020), 100+ Websites to Advertise your Event Planning Business (Updated for 2020), How to Start An Event Planning Business in 2020, 4 Tips for Booking your First Paying Client without a Portfolio, 3 effective emails to book more event planning clients, 10 Books Every Event Planner Should Be Reading, Aisle Planner: 5 Ways to Wow Your Clients & Book More Weddings. 21 No. But before you go slashing your prices and packages, let me explain exactly why low pricing doesn’t work for event planners and wedding planners. From the University of Chicago Press Journals press release via EurekAlert! Introduction Retailers often simultaneously announce both high quality and low price in their advertisements. At higher prices, small changes in price correspond to smaller changes in quality. This “high quality, low price” (HQLP) appeal indicates that the two semantic cues, “high … "Why are … The purpose of this paper is to investigate whether the negative effect of lower prices on perceived brand quality that has been demonstrated in evaluation tasks arises in a brand choice context. You may be able to access this content by logging in via Shibboleth, Open Athens or with your Emerald account. image 2) price perception 3) service quality. The effects of lower prices on perceptions of brand quality: a choice task perspective Devon DelVecchio; Sanjay Puligadda 2012-09-14 00:00:00 Given their ability to swing the value equation in favor of a product, and their ease of implementation, lower prices are attractive to consumers and tempting to brand managers. Consumers perceive price as the prime indicator to presume the quality of the product. In one experiment, consumers were shown an ad for a bottle of wine with either a high or low price. This study is generally embarked to determine the age income and educational level of consumers, if it has or no effect on their perception on product quality specifically and their decision to buy the product. The two multi-line products both showed main effects of brand name and price but no price X brand name interaction (Tuna: F(1,109)=12.85, p<.001 for price; F(1,196)=25.96, pc.001 for brand name. That’s often the initial response when people hear of the $30 cell phone that Motorola is building for emerging markets. Lower prices; Increase actual value (improve the quality or functionality of the product) Option one decreases revenue, while option two increases costs, and therefore both options can negatively affect our bottom line (unless we were at a suboptimal place to begin with). The interactions suggest that for single line products, consumers use both brand name and price information, with a low value of either sufficient to lower perceptions of quality. It’s the Numbers That Matter, Not the Dollars. The effects of lower prices on perceived quality are assessed via two laboratory experiments in which college students participated. When you’re new in the industry and struggling to find clients, pricing your services low might seem like the best option to bring you more bookings. However, Study 2's results indicate a reversal of the negative effects of lower prices on perceived brand quality in an evaluation task to generally positive effects when the lower price is offered in the form of a discount in a choice task. This example shows how powerful pricing can be on perception. When product marketing backfires … low price low quality perception. Generic product experience does not apparently guarantee a degree of expertness about product quality sufficient to rule out price or brand as useful cues. 465-474. https://doi.org/10.1108/10610421211264946, Copyright © 2012, Emerald Group Publishing Limited. 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