Effect of Brand Name and Price On Consumer Product Evaluations

IRJMST Volume 5 Issue 1 Online ISSN 2250 - 1959
EFFECT OF BRAND NAME AND PRICE ON CONSUMER PRODUCT

EVALUATIONS
AUTHORED BY: SHIVANI GARG

Assistant professor, Ramjas college, Delhi University
shivanigarg01@gmail.com
+91-9999352421
C0-AUTHORED BY: SHWETA GARG

Research aspirant, Department of Commerce, Delhi School of economics, DU
shwetagarg18@gmail.com
+91-9711967507
Introduction
Many marketers are looking for better ways to manage the informational cues of price and brand
name to create more effective and efficient behavior in the marketplace by both consumers and
marketers (Dodds 1991). Over the years, efforts has been made to understand the intricate
relationships that exist between market cues such as price, store and brand names, and to further
define consumers' cognitive evaluations of these cues in terms of monetary sacrifice, perceived
risk, product quality, value, and buying intentions. Marketers use these market cues as perceptual
indicators to influence consumer behavior, and consumers need to be better informed so that they
can handle those influences. (Dodds & Grewal, Effects of Price, Brand, and Store Information on
Buyers' Product Evaluation, 1991)
The purpose of present study is to test effect of brand name and price on consumers‟ judgment of
quality, sacrifice, risk which act as mediating variables between consumers‟ perception of
marketing cues and their perceptions of value. Several researches have shown that perceived
value directly affects consumers‟ willingness to buy and their purchase intentions. Management
of cues assumes importance in affecting consumers‟ purchase intentions. In the end, the paper
discusses the findings and proposes implications for managers assisting them in formulation
and management of cues in marketing mix strategies.
International Research Journal of Management Science & Technology

http:www.irjmst.com Page 73
Cues and Marketing Cues
In the discipline of psychology, cues are referred to as “a stimulus either consciously

or unconsciously perceived that elicits or signals a type of behaviour”. It is anything
that excites one to action. Marketing discipline construct cues as any characteristics
or attribute supported and promoted by a marketer, with a view to elicit a response
from the consumer. The response can be in the form of a) attention b) consideration
c) prioritization and d) purchase. Marketer supports and promotes the cues believing
that it would consciously or unconsciously be perceived and stimulate consumer to
respond by entering their cognitive processes. Several researches have suggested that
consumers often respond to cues such as the brand name (Dodds & Grewal, 1991),
the price (Dodds & Grewal, 1991; Wheatley, Chiu, & Goldman, 1981), or the
country of origin (Chao, 1993; Darling & Arnold., 1988; Hann & Terpstra, 1988) of
the product being evaluated. Hence, overtime different cues have been posed as
stimuli to consumer behavior. The effect of specific cues on valuation of a product
has been laid out over several years of exploratory study. Herein the attempt is made
to study the effects of brand name and price levels perceptions on product
evaluations and consumer search behavior. Before attempting to review the effect of
brand name and price on consumer‟s valuation classification of cues merits attention.
INTRINSIC and EXTRINSIC CUES
On the basis of meta-physical analysis (Olson & Jacoby, 1972; Olson J. C., 1977)
cues are dichotomized as intrinsic or extrinsic. Intrinsic cues are internal physical
attributes or operational features of a product such as memory, processing speed of a
computer, whereas extrinsic cues are product related but not a part of the physical
product. They are, by definition, outside the product such as price, brand name,
country of origin. Both are suggestive in nature, when diagnosed, and generall y
provides certain product associative information. For instance, TATA sells many
automobiles with brand name TATA and product specific attributes such as engine
capacity, airbags. These trigger some information about the product. Hence, these
may be regarded as informative cues.
Intrinsic cues are utilitarian, tangible, and specific to a particular product and are
inbuilt into the product itself. However, extrinsic cues are non-utilitarian, intangible,
more general, applicable to a wider range of products, and are outside the product.
For example the attributes such as engine capacity for a specific TATA automobile is
an intrinsic cue, and brand name TATA is an extrinsic cue. Hence it is believed that
consumers are more familiar with extrinsic cues than intrinsic cues and tend to rely
more heavily on extrinsic cues. The belief is substantiated by past studies too (Dodds

& Grewal, 1991; Hann & Terpstra, 1988). This paper herein focuses on exploration
of extrinsic cues‟, that is, brand name and price effects.
Marketing scholars and practitioners increasingly have recognized that price is an

important extrinsic cue affecting perceptions for both quality and sacrifice (Bearden
& Shimp, 1982; Dodds & Monroe, 1985; Dodds & Grewal, 1991; Zeithaml, 1988).
Research indicates that brand names (Dodds & Monroe, 1985; Stokes, 1985) store
names (Wheatley & Chiu, 1977), country of origin (Bilkey & Edk, 1982; Han, 1989),
(Hann & Terpstra, 1988) are also classified as extrinsic quality cues. Warranties as
extrinsic cue have been recently suggested by several scholars. These are posited to
influence perceptions for value by affecting risk perceived (Bearden & Shimp,
1982).
Existing literature indicates that extrinsic cues may affect consumer product
evaluations and their search beahviour. Consumer may infer product quality and
product‟s ability to deliver benefits (Brown & Carpenter, 2000; Meyvis &
Janiszewski, 2002) from cues such as brand name and price levels perceived.
CONSUMERS‟ INTEREST IN MARKET CUES
Marketing cues act as an input to consumers‟ perceptual process. Exposure to

cues stimulates sensory receptors and begins the process of decision making by
selectively attending and processing the stimuli. During this process consumers
infer value from the cues presented. Their judgments of value get integrated in
their choice decision process which shall ultimately affect willingness of
consumers to buy. People respond on the basis of their perception of reality and
not on basis of objective reality. It has been argued that consumer behaviour is,
at root, driven by perceptions of a product and not the objective reality.
Advancing the argument further, it has often been stated that there exists no
concept as “objective reality” as every task situation is a perception of the
decision maker. Perceptions provide grounds for purchasing decisions. Stimulus
affecting consumer perceptions and evaluations is hence of interest both to
marketer and to the consumer.
Over the years there has been a shift in consumer behavior in product
evaluations. The market environment has certainly become more complex for

the consumer. Maynes (1985) suggest that three key factors underlie the
present-day shopping environment.
The overabundance of brands in the marketplace leads to information

overload.
The technical complexity of many goods makes quality assessment
virtually impossible for the average consumer.
The urbanization of our society creates an environment where there are
too many stores offering similar goods.
These factors rendered the consumers unable or unwilling to conduct an

exhaustive search. The market chaos often lead consumers to rely on simple
rules as” brand as an indicator for quality”, hence depicting consumers‟ higher
biasness towards extrinsic rather than intrinsic cues. Consumers have thus
shifted from evaluating intrinsic to extrinsic attributes such as price, store
name, and brand name. The focus of present paper is to study perception for
brand name and price levels affecting consumers‟ search and product
evaluations.
Consumers‟ search behavior involves the search characteristics consumers pay

attention to while searching for the product, the search time undertaken to form
perceptions and the search source consumers resort to during pre-evaluation
stage. Each of the dimensions is proposed to affect consumers‟ evaluation.
MARKETERS’ INTEREST IN MARKET CUES
A highly competitive environment demands formulation of strategies by a

typical firm. A firm decides product specification, price, production location,
targeted distribution areas and the nature of information disseminated in
promotions. Consumers‟ demand for products depends on their perceptions of
the attended parameters, which in turn, lead to construction of their preferences
for arriving at choice decision through a cognitive or intuitive decision making
process. Firms continually choose product specifications by 'locating' on the

attribute space relevant to the consumers. Incorporation and delivery of

attributes crucial to consumers is critical for marketer to adopt in its overall
strategy. It is one of the main challenges facing a marketer. A marketer is
required to present consumers with characteristics to base their decisions.
Presenting such characteristics is not simple as marketers usually have a vast
amount of product associated information. Limited information processing
capacity of consumers requires marketer to present information appropriate and
favorable to consumers‟ value perceptions. Superfluous information would
impede consumers‟ ability to make good decisions (Bettman, Johnson, &
Payne, 1991). Marketers must focus on exposing consumers to cues which are
favourably evaluated and attempt to decrease the saliency of negative attributes.
A larger market segment of the target market may be hence reached
successfully.
Positioning a product with respect to different cues is all the more important in
today‟s competitive business scenario. Even in many instances, cues act as a
quick tool in adjusting marketing strategies. For instance, marketers‟
understanding of how price as a cue works on consumers‟ perceptions of value,
enable it to formulate a pricing strategy for the target consumers. In view of
competition marketer can choose to adjust price accordingly. Also, marketers
use cues for varied situational promotions. For instance, existing literature
suggests that extrinsic cues are often effective in promoting products to
consumers highly knowledgeable about a product category, and having
enduring involvement with the product (Hawkins 2001).
Consumers today form the core for business and market-orientation stresses
consumer advocacy. Consequently, reliance by consumers on extrinsic and
trivial cues makes it vital for marketers to focus on the role cues play in
influencing consumers‟ behaviour. Marketers need to direct focus on cues

impact to reach the markets they are targeting. But, consumers‟ perceptions of
product attributes keep on evolving. This mandates dynamism in strategy
formulation and implementation by the firm. A competitive firm must
understand consumers‟ perceptual and decision making process, respond by
strategizing influence casted by cues on consumers perceptions for value and
keep on adapting itself to the evolving consumer perceptions. Perceptions for a
product are not static but are highly dynamic. They are highly dependent on
consumers‟ behavioral characteristics which are by nature “evolving” with time
and situation.
Impact of Cues On Perceived Value
The conceptual model presented in Figure A examines the linkages between consumers‟
perceptions of value and their utilisation of cues- brand name and price levels. The
relationship is mediated by the variables discussed- perceived quality, sacrifice and risk.
Different marketing cues can impact the mediating variables positively or negatively.
The impact of brand name and price levels on consumer perceptions of value as
discussed so far in literature is concisely reviewed here.
Perceived Risk
Consumers‟ perceptions of risk are considered to be central to their evaluations, choices,

and behaviours (Dowling, 1999). Consumer researchers define perceived risk in terms
of uncertainty and consequences; perceived risk increases with higher levels of
uncertainty and/or the chance of greater associated negative consequences (Oglethorpe
& Monroe, 1987). Study by Agarwal and Teas (2001) purport that perceived risk is
multi dimensional in nature and includes performance risk and financial risk.
Performance risk is posited as “the uncertainty about whether the product will perform
its intended function” and financial risk as “the uncertainty about how much loss may
have to be incurred for repair/maintenance of the product” (Agarwal & Teas, 2001).

Perceived risk is the feeling of discrepancy between product value and consumers‟
expectations for the type of product. Role of perceived risk as a mediator between cues
and perceived value has been posited by Sweeney, Soutar and Johnson (1999).
According to Sweeney et al. (1999; p. 81), "When making a purchase decision,
consumers are always faced with some concern over the performance of the product
since perfect information regarding future performance is never known." Hence,
whenever exposed to extrinsic product cues consumers make judgements of not only
product quality, sacrifice but also about uncertainties that may pose potential long-term
losses. Risk may be thus postulated as an indicator for future costs. Accordingly, the
model conceptualises risk as the feeling of discrepancy between product value and
consumers‟ expectations for the type of product. Building on the works of Baur (1960),
study by Bearden and Shimp (1982) suggests that consumers use extrinsic cues (such as
price, manufacturer reputation, and warranty) to form perceptions of value through
formation of perceptions for risk. Teas and Agarwal (2000) included country of origin
as an additional extrinsic cue and further validated the mediating role of perceived risk
in influencing perceptions for value. Moreover, empirical work by Wood and Scheer
(1996) has suggested and hypothesized perceived risk to be related negatively to
product evaluations. Perceptions of value for product evaluations are often
conceptualized as involving a trade-off between quality and sacrifice (Zeithaml, 1988;
Dodds & Grewal, 1991; Teas & Agarwal, 2000), which results in quality having a
positive association with value and sacrifice having a negative association with value.
Sweeney, Soutar, and Johnson, 1999 offer arguments justifying the role of risk as a
mediator between extrinsic cues and value. They suggest a negative linkage between
quality and risk and since a positive linkage is established between quality and value,
the following hypothesis is constructed. Empirical evidences suggest a strong support
for less favourable product evaluations when risk perceptions are high.

H1 : Perceived risk is negatively associated to Perceived value
H 1a: Perceptions for financial risk is positively associated to price levels
H 1b: Perceptions for performance risk is negatively associated to perceived quality.
Perceived Quality
Perceived Quality is construed as the belief in the overall "goodness" of what all is
received i.e. product or service. It represents the “get” component in consumer shopping
models. It is the judgement about a product‟s excellence or superiority. Perceptions of
product quality play a pivotal role in determining consumer shopping and choice
decision (Zeithaml, 1988). Perceived quality is:
(1) different from objective or actual quality,
(2) a higher level abstraction rather than a specific attribute of a product,
(3) a global assessment that in some cases resembles attitude, and
(4) a judgment usually made within a consumer's evoked set. (Zeithaml, 1988)
Academic research initially measured quality by using uni-dimensional rating scales.

The fact that quality is multi-dimensional was considered by Dodds and Grewal (1991)
and they formally operationalised quality by forwarding a conceptual definition. Quality
scales were then developed and validated to be used for different categories of products
(e.g., packaged goods, industrial products, durable goods) to capture quality in those
categories. Dodds has specifically laid down a multi attribute scale for assessing quality
involving constructs as such reliability, workmanship, dependability. This may be
formalized as total quality in the proposed model.
Perceived quality has shown to involve a positive relationship with perceptions for
value. In certain categories of product, surrogates (Olshavsky, 1985) such as style in
cars and clothes, vacuum packaging for fruit juices signals quality serving as reliable
agents for formation of perceptions for value. Greater the presence of surrogates higher
is value perceived. Perceptions of value are constructed around the perceptions for
quality.
H2: Perceived quality is positively associated with perceived value
Perceived Sacrifice
Perceived Sacrifice refers to the feeling towards giving up something important, i.e.
money, time, energy, efforts. It represents the “give” component in buying models

focussing consumers. In economics objective price is regarded as the only sacrifice

consumers make to obtain product. In multi-attribute models consumer perceive price as
sacrifice. Perceptions of price are different from objective price. Objective price is the
actual price of the product and perceived price is price as encoded by consumers.
Consumers do not consider the numerical price while deciding, however they consider
price as cheap or expensive depending upon their financial situation. Other variables
such as time, energy and efforts are included either explicitly or implicitly in
consumers‟ judgments of sacrifice. If consumers do not find the product in store and
expend time and efforts in searching the product for acquisition then it increases the
perceptions of „give‟ component in perceived value component for consumers.
However, in the present study perception sfor sacrifice are measured on financial lines
only. Higher sacrifice perceptions have been shown by researches to impact value
perceptions negatively (Dodds & Grewal, 1991). The following is hypothesized,
H3: Perceived sacrifice is negatively related to perceived value
Perceived Value and Willingness to Buy
Perceived value
Perceived value refers to an evaluation of the "fairness" of the transaction, i.e. the belief
that the product/service quality is equivalent to the sacrifice and risk, formalized as total
cost for consumers. Empirically, product is evaluated on perceived value basis and a
consumer depicts willingness to buy the product when,
Perceived value = Total Quality Perceived > 1
Total Cost Perceived
Existing studies have delimited perceived value concept to perceived quality and
sacrifice, ignoring perceived risk as a contributing variable to consumers‟ total value
perception. This study expands the potential mediators, expanding consumers‟
perceived value concept. Value perceived by consumers has been shown over several
years of exploratory research to affect willingness to buy for consumers ultimately
influencing purchase intentions.
The Impact of Brand on Consumers' Perceptions of Quality
Research indicates that brand names (Dodds & Monroe, 1985; Stokes 1985) and store
names (Wheatley & Chiu, 1977) are extrinsic quality cues. Researchers have viewed
brand name as a "summary" construct (Johansson, 1989; Han, 1989); or a "shorthand"

cue (Zeithaml, 1988) for quality. Wright (1975) suggests that consumers do not examine
brand attributes every time they make brand choice decision, and base their judgments
on brand attitudes (summary information) rather than on product attribute information.
Rao and Monroe (1989) has tested impact of brand name on consumers‟ perceptions for
quality and have found a positive association between the two. The degree of
association was even higher for consumers with higher levels of product familiarity.
Accordingly the following hypothesis is proposed,
H4: Product evaluation differs for differences in perceptions for brand name which serve as a
generalized Quality indicator.
Impact of Price on Consumers Perceptions of Quality and Sacrifice
Marketing scholars and practitioners increasingly have recognized in recent decades that
price provides an important marketplace extrinsic cue (Bearden & Shimp, 1982; Dodds
& Monroe, 1985; Dodds & Grewal, 1991; Zeithaml, 1988) by indicating the amount of
money consumers must sacrifice to satisfy their consumption needs. In this respect,
price represents a financial burden, and posited as an indicator of sacrifice. Erickson and
Johansson (1985) have highlighted a negative role of price in sense that higher price
negatively affects purchase probabilities.
H5 : Product evaluation differs for differences in perceptions for price levels which serve as a
generalized Sacrifice indicator.
However in a study Zeithaml (1988) posited that consumers perceive price in a broader
sense. Apart from consideration of price as a cue affecting sacrifice perceptions price is
also used as a quality cue. Several exploratory studies have studied the relationship
reflecting effect of price, as a marketing cue, on consumers‟ perceptions for quality
(Miyazaki 2005). Rao and Monroe (1989) have substantiated a positive price- quality
linkage. High quality products require superior inputs which may be purchased at higher
cost only. This cost is embedded by the marketer in final price of the product.
Considering this logic consumers believe that highly priced products offer superior
quality in a competitive environment. Intense competition limits marketer‟s ability to
offer low quality products at high prices lest he should endanger his survival in the
marketplace (Erickson & Johansson, 1985; Liechtenstein, Ridgway & Netemeyer,
1993). So consumers tend to take price as a cue for quality.
H6: Product evaluation differs for differences in perceptions for price levels which serve as a
generalized quality indicator.
Research Design and Sample

The participants for this research were people with the age between 18 and 35 years. The reason
for the choosing this particular age-group is that people in this group are aware of the selected
product categories of mobile phones and athletic shoes. The selection of the product categories is
guided by the principle that it must be of use to both male and female population. Both males
and females must be prospective buyers of the products under study. Also, it renders replication
of previous price-brand –value studies where athletic shoes have been used a product category
under study.
For testing the effect of brand name and price on consumers‟ search and product evaluations in
Indian context an explanatory experimental study is undertaken with a structured questionnaire
survey. The questionnaire contained measures for different constructs under study. Perceived
quality, perceived value was assessed via scales developed by (Dodds & Grewal, Effects of
Price, Brand, and Store Information on Buyers' Product Evaluation, 1991). Scale for perceived
sacrifice was taken from the published researches (Teas & Agarwal, 2000). Sacrifice was
assessed via a two-item summated scale developed by Teas and Agarwal (2000). Scale for
perceived risk is taken from published researches Dowling (1999). Risk is considered a multi-
dimensional concept, involving five types of risks - performance, psychological, social, financial,
convenience, and physical (Kaplan, Szybillo, and Jacoby 1974). However, the two most
commonly studied risks are performance risk and financial risk (Bearden & Shimp, 1982;
Sweeney et al. 1999; Wood and Scheer 1996). Performance risk (a two-item summated scale)
and financial risk (a three-item summated scale) were measured by scales proposed by Grewal et
al. (1994). The scales are listed in Appendix.
The participants were obtained by making use of own network of people. They were specifically
asked about their demographic information and then their levels of familiarity and
knowledgeability for each of the product categories. They were asked to provide a brand name
each for the respective product categories for which they feel they are comfortable forming
opinions regarding quality, sacrifice, risk and value. Each respondent was exposed to questions
pertaining to both the product categories. This was done to check the generalisability of the
outcomes to the research. The questionnaire is appended in the paper.
Results and Analysis
Reliability and Correlation
Reliability tests are administered to check the internal consistency of a summated scale where
several items or sub-constructs are used to assess the major construct. Each item measures

certain aspect of the construct and the items must be consistent in what they indicate about the
major construct. Coefficient alpha or cronbach‟s alpha is computed for a construct comprising of
more than two items measured on similar Likert scale.
Perceived quality is a mutli-dimensional construct measured through the questionnaire using four
items positioned on Likert scale. Internal consistency of perceived quality is assessed via
Cronbach‟s alpha computation. Coefficients cronbach‟s alpha for perceived quality is greater
than 0.7 and is hence acceptable.
RELIBILITY STATISTICS and ITEM STATISTICS
Cronbach's Alpha Cronbach's Alpha Based on Standardized N of Items

Items
.723 4
.718
Items(Perceived Quality) Mean Standard Deviation
Reliability 4.38 .612
workmanship 3.66 .690
dependability 3.76 .691
Durability 4.31 .595
Since the other multi-dimensional constructs were positioned as two-item with likert scale,
reliability test is not conducted. Rather, conducting simple correlation tests between each pair of

variables (sub-constructs) in this multi-variate data analysis study would help signify the
internal consistency. The results of the simple correlation tests indicate that there is
significant correlation between each item taken to measure a construct. The specific
results are shown in the table following.
Constructs Pearson correlation Sig. (1-tailed)
 Sub-constructs(items)
Perceived Sacrifice .528 .000
 Inability to spend
 Reduction in spending
Correlation significant at 0.01 level
Perceived Value .234 .013
 Brand is a good buy

 Brand is a bargain
Correlation significant at 0.05 level
Perceived Financial Risk .132 .108
 Financial risk quotient

 Overall financial risk
Perceived Performance Risk .561 .000
 Confidence in performance
 Perceived working
Correlation is significant at 0.01 level
Perceived Quality, Sacrifice, Risk and Value effects
H1 : Perceived risk is negatively associated to Perceived value
H 1a: Perceptions for financial risk is positively associated to price levels

H 1b: Perceptions for performance risk is negatively associated to perceived quality.
For testing the relationship between perceived financial risk and price level perceptions
of respondents‟ simple correlation test is employed and it is envisaged that financial risk
and price levels perceived for a product category are not unrelated. Coefficient of
correlation between the two constructs is found to be .205 which signifies a positive
association. ANNOVA shows the variance observed in the dependent variable (perceived
financial risk) through the sum of squares corrected for the mean (SS). SSbetween is 4.899
showing the portion of the sum of squares in perceived financial risk related to the
independent variable or factor ,that is, price levels. SSwithin signifies variation in perceived
financial risk related to the variation within each category of price levels. SS perecieved
financial risk =SSbetween + SS within ,i.e SS perceived financial risk is 4.899+ 31.803= 36.702.
So the strength of effects of price levels on perceived financial risk is measured as:
=4.899/36.702= .13348,
stating that 13.34% of the variation in perceived financial risk is accounted for by price levels.
Calculated value of F-statistic is larger than the critical value for 3 and 85 df, hence null hypothesis
stating no association between perceived financial risk and perceived price levels is rejected. With low
price consumers depict lower perceived financial risk and with medium, high and too high levels of
price perceptions consumers depict comparatively higher financial risky perceptions for the product
categories under evaluation.
Table: 3.1 DESCRIPTIVES

Perceived Financial Risk
N Mean Std. Std. Error 95% Confidence Interval
Deviation for Mean
Lower Bound Upper
Bound
Low 4 1.3750 .25000 .12500 .9772 1.7728
Medium 38 2.3289 .49697 .08062 2.1656 2.4923

High 44 2.4773 .72300 .10900 2.2575 2.6971

too high 3 2.0000 .00000 .00000 2.0000 2.0000
Total 89 2.3483 .64581 .06846 2.2123 2.4844
Table 3.2 :Correlations

Price(ind) AvgFinRisk1
3
Pearson
1 .205
Correlation
Price(ind)
Sig. (2-tailed) .054
N 91 89
Pearson
.205 1
Perceived Correlation
financia risk Sig. (2-tailed) .054
N 89 90
Table 3.3: ANOVA
Perceived financial risk
Sum of df Mean Square F Sig.
Squares
Between Groups 4.899 3 1.633 4.365 .007
Within Groups 31.803 85 .374
Total 36.702 88
H2: Perceptions for performance risk is negatively related to perceived quality.

For testing the relationship between perceived performance risk and quality level
perceptions of respondents , simple correlation test is employed and it is seen that
performance risk and quality levels perceived for a product category are not unrelated.
Coefficient of correlation between the two constructs is found to be .385 significant at
.001 level of significance.
It is showing a positive association. ANOVA shows the variance observed in the dependent variable
(perceived perfromance risk) through the sum of squares corrected for the mean (SS). SSbetween is
showing the portion of the sum of squares in perceived perfromance risk related to the independent
variable or factor ,that is, perceived quality levels. SSwithin signifies variation in perceived perfromance
risk related to the variation within each category of perceived quality levels. SS perecieved performance risk
=SSbetween + SS within ,i.e SS perceived performance risk is 4.586+25.774= 30.36. So the strength of
effects of perceived quality levels on perceived performance risk is measured
as: =4.586/30.36= 0.15105,
stating that 15.15% of the variation in perceived performance risk is accounted for by perceived
quality levels. Calculated value of F-statistic is larger than the critical value for 2 and 86 df, hence
null hypothesis, signifying no association between perceived performance risk and perceived quality
levels is rejected. With satisfactory quality levels perceived consumers depict somewhat confident
outlook that the brand would perform satisfactory , however with good and very good levels of quality
perceptions consumers depict very high confidence in performance of the brand under evaluation. This
is evident in table showing descriptive.
Table 3.5: ANOVA

Perceived performance Risk13
Sum of df Mean Square F Sig.
Squares
Between Groups 4.586 2 2.293 7.650 .001
Within Groups 25.774 86 .300

Total 30.360 88
Table 3.6: Correlationsb

sumPerRis Quality
k
Pearson
1 .385**
sumPerRis Correlation
k Sig. (2-
.000
tailed)
Pearson
.385** 1
Correlation
Quality
Sig. (2-
.000
tailed)
**. Correlation is significant at the 0.01 level (2-tailed).

H3: Perceived Risk is negatively related to perceived value
For assessing the association between perceived risk and perceived value, correlation coefficient
calculated is found to be -0.135. This indicates a negative association between perceived risk and
perceived value.
Table 3.7: Correlationsa
Descriptives : Performance risk perceived

Perceived N Mean Std. Std. Error 95% Confidence Interval for Mean Minimum Maximum
Quality levels Deviation Lower Bound Upper Bound
Satisfactory 6 3.7500 .61237 .25000 3.1074 4.3926 3.00 4.50
Good 32 3.9844 .54602 .09652 3.7875 4.1812 2.50 5.00

very good 51 4.3922 .54142 .07581 4.2399 4.5444 3.50 5.00
Total 89 4.2022 .58736 .06226 4.0785 4.3260 2.50 5.00
Per Risk Per

Value
Percei Pearson Correlation 1 -.135
ved
Risk
Percei Pearson Correlation -.135 1
ved
Value

Summated Perceived risk values are categorized into 3 levels where 1 indicates low risk(
combining values 1 and 2 where 1 was very low risk and 2 was low risk), 2 indicates
medium risk and 3 indicates high risk(combination of itemized 3 and 4 denoting high
and very high risk previously). One-way ANOVA is used to analyze the effect of
perceived risk on perceived value levels. Summated perceived value construct,
Individual perceived value asked by respondents and perceived value in relation to the
money expected to be expended is each tested using ANOVA and results are
summarized in table 3.8 and 3.9 The p-value (i.e. sig.) for each item under perceived
value construct is greater than the significance level α=0.05 and hence the hypothesis is
not rejected. Although the association between perceived risk and perceived value is
negative as depicted by correlation coefficient, the population means for low, medium
and high risk levels are not significantly different. This is evident from the descriptive
table where perceived risk levels are tested for each item under perceived value construct
and no significant difference is observed. .
Table 3.8: Descriptives

Perceived Risks N Mean Std. Std.
levels Deviatio Error
n
1.00 31 3.77 .669 .120
2.00 51 3.90 .700 .098
Perceived value 3.00 4 4.25 .500 .250
Tot
86 3.87 .682 .074
al
3.580
1.00 31 .68431 .12291
Summated 6
perceived value 3.519
2.00 51 .46862 .06562
6

3.125
3.00 4 .25000 .12500
0
Tot 3.523
86 .55257 .05959
al 3
1.00 31 3.29 .938 .168
2.00 51 3.02 .761 .107
Brand Value with
3.00 4 3.00 .000 .000
respect to price
Tot
86 3.12 .818 .088
al
Table 3.9 :ANOVA

Sum of df Mean F Sig.
Squares Square
Between
.914 2 .457 .981 .379
Groups
Perceived value Within
38.679 83 .466
Groups
Total 39.593 85
Between
.737 2 .369 1.213 .302
Groups
Summated
Within
perceived value 25.216 83 .304
Groups
Total 25.953 85
Brand Value Between
1.470 2 .735 1.102 .337
with respect to Groups

price Within
55.367 83 .667
Groups
Total 56.837 85
H4: Perceived quality is positively associated with perceived value
Correlation analysis is done for determination of association between perceived quality

and perceived value. Summated perceived value and specific item indicating
respondent‟s perception of value are analyzed. .134 and .066 indicates positive
correlation between the two constructs. Also, both the constructs, summated perceived
value and specific value asked for, is showing a positive association of 0.436 and is
further validating the construct.
Table 3.10: Correlationsb

Perceived Summated Percceived
Quality perceived value value(specific)
1 .134 .066
Perceived Quality
.215 .542
Summated perceived .134 1 .436
value .215 .000
Percceived .066 .436 1
value(Specific) .542 .000
b. Listwise N=87
ANOVA indicates a p-value<α,0.05, hence rejecting the null hypothesis that population
means of different levels of quality do not differ with perceptions of value. It can be
observed from the descriptives that for a low level (1=low) of quality perceived
respondents perceive the value as less than satisfactory and for medium and high levels of
perceived quality value perceptions are good for the brand under evaluation, where

(perceived value less than or equal to 3 is considered as below satisfaction and ranging
between 3 to 4 is considered as good value). So the table depicts significant differences in
the means of perceived quality levels with perceived value as a dependent variable.
Table 3.11: Descriptives

Per qlty levels N Mean Std. Std. 95% Confidence Min. Max.
Deviation Error Interval for Mean
Lower Upper
Bound Bound
1.00 3 3.00 .000 .000 3.00 3.00 3 3
2.00 29 4.00 .598 .111 3.77 4.23 3 5
Percceived 3.00 54 3.85 .711 .097 3.66 4.05 3 5
value Total 86 3.87 .682 .074 3.73 4.02 3 5
2.833
1.00 3 .28868 .16667 2.1162 3.5504 2.50 3.00
3
3.655
Summated 2.00 29 .42476 .07888 3.4936 3.8167 3.00 5.00
2
perceived
3.481
value 3.00 54 .60628 .08250 3.3160 3.6470 2.00 5.00
5
3.517
Total 86 .56071 .06046 3.3972 3.6377 2.00 5.00
4
Table 3.12 ANOVA

Squares Square

Between
Percceived value 2.778 2 1.389 3.132 .049
Groups
Within
36.815 83 .444
Groups
Total 39.593 85
Between
2.024 2 1.012 3.401 .038
Groups
Summated value Within
24.700 83 .298
Groups
Total 26.724 85
H5: Perceived sacrifice is negatively related to perceived value
The association between perceived sacrifice and perceived value is analyzed through
correlation coefficients computation. A negative coefficient of .096 indicates that there is
a negative association between perceived sacrifice and perceived value. Since,
respondents have been asked specifically about their perceptions of value for a brand
with respect to the price, correlation is tested for with the specific sub-construct and it is
not undertaken for other items in the construct perceived value.

Table 3.13:Correlationsa
Perceived Brand Value
Sacrifice with respect
to price
Pearson
1 -.096
Perceived Sacrifice Correlation
Pearson
Brand Value with -.096 1
Correlation
respect to price
a. Listwise N=89
However, ANNOVA descripitives and analysis reveal that there is no significant

difference between the population means for different levels of perceived sacrifice. The
difference in means for different levels of perceived sacrificetested with perceived value
as dependent variable is not significant. p-value > α of .05 and hence the null hypothesis
of no difference in population means is not rejected.
Table 3.14 : Descriptives

Per Sacrifice levels N Mean Std. Deviation Std. Error 95% Confidence Interval for Minimum Maximum
Mean
Lower Bound Upper Bound
1.00 36 3.72 .615 .102 3.51 3.93 3 5
Percceived 2.00 13 4.00 .577 .160 3.65 4.35 3 5
value(single) 3.00 39 3.92 .739 .118 3.68 4.16 3 5
Total 88 3.85 .670 .071 3.71 3.99 3 5
1.00 36 3.14 .798 .133 2.87 3.41 2 5

Brand Value with
2.00 13 3.15 .801 .222 2.67 3.64 2 5
respect to price
3.00 39 3.08 .870 .139 2.79 3.36 1 5

Total 88 3.11 .823 .088 2.94 3.29 1 5
1.00 36 3.3889 .52251 .08708 3.2121 3.5657 2.50 4.50
2.00 13 3.5385 .43116 .11958 3.2779 3.7990 3.00 4.00

Summated value
3.00 39 3.6282 .61471 .09843 3.4289 3.8275 2.00 5.00
Total 88 3.5170 .55940 .05963 3.3985 3.6356 2.00 5.00
Table 3.15: ANOVA

Squares Square
Between
1.088 2 .544 1.217 .301
Groups
Percceived
Within
value(single) 37.991 85 .447
Groups
Total 39.080 87
Between
.097 2 .048 .070 .933
Brand Value Groups
with respect to Within
58.767 85 .691
price Groups
Total 58.864 87
Between
1.079 2 .540 1.754 .179
Groups
Summated
Within
value 26.145 85 .308
Groups
Total 27.224 87
4. Brand name and price effect on product evaluations

H6a: Product evaluation differs for differences in perceptions for brand name which serve
as a generalized Quality indicator.
H6b: Product evaluation differs for differences in perceptions for brand name which
serve as a generalized Quality indicator.
H7a : Product evaluation differs for differences in perceptions for price levels which
serve as a generalized Sacrifice indicator.
H7b : Product evaluation differs for differences in perceptions for price levels which
serve as a generalized Quality indicator.
The hypotheses were tested using one-way ANOVA with brand names and price levels
perceived treated as factors and perceived quality, sacrifice, risk and value were one by
one treated as dependent variables. The results of the ANOVA are presented in Table 4.
Table 4 indicates that perceptions for Brand name have significant effect on perceived
quality with f=0.000 indicating significance even at 0.001 α levels. However, no
significant effects were observed for brand name on sacrifice and risk. Perceived value is
also significantly affected by perceptions for the brand name with f reported as
0.000<0.001α. However, no significant effects were observed for brand name on sacrifice
and risk. Perceived value is also significantly affected by perceptions for the brand name
with f reported as 0.000<0.001α. The effect size is computed indicating that brand name
effect perceived quality levels to the extent of 36.09% and affects perceived value to the
extent of 21.66%. Hence, it may be conclude that perceptions for brand name
significantly affect perceived quality and perceived value during product evaluations.
Hypothesis 5 is also tested using the same procedure and it is found that price levels
significantly affect perceived sacrifice levels and perceived value. Reported f values are
found to be significant at appropriate α levels. The effect size is then computed and it is
indicating that perceived price is affecting perceptions for sacrifice to the extent of 7.25%
and perceptions of value to the extent of 24.78 %.
Table 4: Analysis of Variance for Brand and Price perceptions .

Treatmnt Df Quality Sacrifice Risk Value Effect size
F-value P F- P F- P value F value P η2 SSx/SSy

value value value value value
Brand 9,8 1.024 .428 .748 .664 9.337* .000* Brand name is having significant
0 effect on perceived quality
5.008* .000* which is=0 .3609
And on perceived value=0.2166
Price 3, .968 .412 2.244* .089** 1.247 .298 9.337 .000* Price perceptions is having
84 * significant effect on perceived
sacrifice=0.0725 And on
perceived value=0.2478
Brand X
Price
*significant at .001 levels

** significant at .05 levels
*** significant at .10 levels
Discussion and Implications
The study deciphers significant managerial implications for formulation

and modification of segmentation, positioning, pricing, and
communicating strategies. Marketers might segment their markets on
basis of variables such as individual differences. Results have shown that
consumers can be segmented on the basis of their levels of familiarity
and knowledegeability, influencing consumers search time. Levels of
familiarity and knowledgeability are highly co-related with levels of
qualification. So consumers can be segmented on basis of their
qualification levels. Moreover, analysis indicated that males and females
evaluate products differently, so marketers must manipulate cues
accordingly. Gender differences give rise to differences in cue reliance.

By managing and manipulating marketing cues marketers may position

their products favourably in a competitive scenario. Brand name is
shown to influence search time taken and the search characteristics
consumers look for. Perceptions for brand name are seen to influence
perceived quality. Perceptions for quality get positively integrated into
perceived value framework. Marketers can position their products so that
they occupy meaningful and distinct competitive positions in the mind of
the consumer. This can be accomplished, in part, by differentiating the
product on attributes deemed important by the consumer. For instance,
marketers can segment consumers on the basis of their price perceptions.
Consumers with high price perceptions tend to resort to advertising and
in-store promotion during search. However, if lower price involvement is
perceived for a product category then consumers would rely more on
word-of mouth during search. Accordingly marketer can decide upon the
promotion strategies. Price can be manipulated for a product and
projected as a major positioning tool. Perceptions for price serve as
indicators of sacrifice for consumers. Consumers‟ perceptions for
sacrifice then get embedded in their perceptions for value which
ultimately affects their evaluations of a product. Also, the impact of
brand name on perceptions for risk consumers oversee was hypothesized,
but no significant association between brand name and level of risk
perceived is observed. However, the study contributes by validating the
negative role of perceived risk to perceived value. It is found that price
levels perceptions impact the financial risk perceived and hence, by
implication marketers must manage perceptions for price of a product if
the aim of projecting a product as “low-risky” needs to be achieved. By
improving the perceptions for quality, one way for which is to enhance
brand name projections, markets can achieve degradation in consumers‟
perceptions of performance risk associated with a product. Consumers‟
perceptions can be better managed and hence allowed to enter product

evaluations favorably. Product evaluations directly influence willingness

to buy. Cues might be posited as communication tools communicating
quality, sacrifice and risk associated with product. The study suggests
real life implications for managers enabling them to manage cues
communication ultimately resulting in a positive product image. This
might translate into a purchase action on consumers‟ part.
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IRJMST Volume 5 Issue 1 Online ISSN 2250 - 1959

EFFECT OF BRAND NAME AND PRICE ON CONSUMER PRODUCT

AUTHORED BY: SHIVANI GARG

C0-AUTHORED BY: SHWETA GARG

International Research Journal of Management Science & Technology

Cues and Marketing Cues

In the discipline of psychology, cues are referred to as “a stimulus either consciously

INTRINSIC and EXTRINSIC CUES

International Research Journal of Management Science & Technology

Marketing scholars and practitioners increasingly have recognized that price is an

CONSUMERS‟ INTEREST IN MARKET CUES

Marketing cues act as an input to consumers‟ perceptual process. Exposure to

International Research Journal of Management Science & Technology

The overabundance of brands in the marketplace leads to information

These factors rendered the consumers unable or unwilling to conduct an

Consumers‟ search behavior involves the search characteristics consumers pay

MARKETERS’ INTEREST IN MARKET CUES

A highly competitive environment demands formulation of strategies by a

International Research Journal of Management Science & Technology

attribute space relevant to the consumers. Incorporation and delivery of

International Research Journal of Management Science & Technology

Impact of Cues On Perceived Value

Consumers‟ perceptions of risk are considered to be central to their evaluations, choices,

International Research Journal of Management Science & Technology

International Research Journal of Management Science & Technology

H1 : Perceived risk is negatively associated to Perceived value

H 1a: Perceptions for financial risk is positively associated to price levels

H 1b: Perceptions for performance risk is negatively associated to perceived quality.

(1) different from objective or actual quality,

(2) a higher level abstraction rather than a specific attribute of a product,

(3) a global assessment that in some cases resembles attitude, and

Academic research initially measured quality by using uni-dimensional rating scales.

H2: Perceived quality is positively associated with perceived value

International Research Journal of Management Science & Technology

focussing consumers. In economics objective price is regarded as the only sacrifice

H3: Perceived sacrifice is negatively related to perceived value

Perceived Value and Willingness to Buy

Perceived value = Total Quality Perceived > 1

Total Cost Perceived

The Impact of Brand on Consumers' Perceptions of Quality

International Research Journal of Management Science & Technology

Impact of Price on Consumers Perceptions of Quality and Sacrifice

Research Design and Sample

International Research Journal of Management Science & Technology

Results and Analysis

Reliability and Correlation

International Research Journal of Management Science & Technology

RELIBILITY STATISTICS and ITEM STATISTICS

Cronbach's Alpha Cronbach's Alpha Based on Standardized N of Items

Items(Perceived Quality) Mean Standard Deviation

Reliability 4.38 .612

workmanship 3.66 .690

dependability 3.76 .691

Durability 4.31 .595

International Research Journal of Management Science & Technology

Constructs Pearson correlation Sig. (1-tailed)

Perceived Value .234 .013

 Brand is a good buy

Perceived Financial Risk .132 .108

 Financial risk quotient

Perceived Quality, Sacrifice, Risk and Value effects

H1 : Perceived risk is negatively associated to Perceived value

H 1a: Perceptions for financial risk is positively associated to price levels