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Zeithaml
Schoolof Business,
To these a review of
ValarieA. Zeit ha mlis AssociateProfessor,F uqua
accomplish objectives,
Duke Theauthor thefinancial
Uni versity.
Theauthoralsothanks
enceInstituteandoneof itscorporatesponsors.
Journal of Marketing
2 / Journalof Marketing,July 1988 Vol. 52 (July 1988), 2-22.
that supplementedprevious researchand had elicited the more
procedures successfully impor-tant higher
basis for 14 levels of abstractionin previous studies
served as the propositions. Fiedler
(Gutman and Alden 1985; Reynolds, Gutman, and 1984;
The Reynolds and Jamieson1985), they were
used to reveal the links
Exploratory Study
among product attributes, quality, and value. After these
In the exploratory phase of the research, company, focus group, and indirectmethods, sub-
in-depth consumer interviews were conducted to gain insight into to such
jects responded open-endedquestionscovering topics
consumer perceptions of quality and value. Cooperationwas
as informationneeded to makejudgmentsabout quality and
obtained from a nationalcompany that marketsthree distinct value, impact of related factors (e.g., ad-
product and on and defini-
vertising packaging) perceptions,
lines of beverages: a line of 100% fruit-flavoredchil-dren's tions of the Before
concepts. debriefing, demographic and
drinks, a line of 100% fruit juices, and a line
of tomato-based interviews were held juices. In- beverage usage data were collected from respon-dents.
As is in studies means-end
depth typical exploratory using
with the marketingresearchdirector, the senior prod-
uct
manager
for chains Olson and the data
(e.g., Reynolds 1983),
two of the generatedwere not numerical. Instead, the data were in the
juices, company strategic plan-ners, and the president
company's advertising to issues such
form of protocols and means-end maps for in-dividual
agency. Open-endedquestionspertained consumers. Patterns of responses and ob-served similarities
as about and value across individuals form the "re-
company knowledge quality per-ceptions of
the determined sults"of this
type of exploratorystudy. Whencombined
consumers, ways company those perceptions,
and how quality and value were communicatedto consumers. with the descriptivedata from the executive and focus
group interviews, the observations and insights pro-vide a
A focus group interview on the topics of quality and
and value in was held in a area frameworkfor speculating about the concepts
beverages metropolitan their
in the Southeast. The focus group was formed in ac-cordance
relationships(Figure 1).
with guidelines traditionallyfollowed in the
The Model
marketing research field (Bellenger, Bernhardt, and Goldstucker first
1976). Participantswere recruited to fit Figure 1, an adaptationof a model proposed by Dodds and
the of of fruit- and to- Monroe (1985), affords an overview of the
demographicprofile purchasers mato-based
the of and
beverages. All participantswere women between the ages of 25 relationshipsamong concepts price, perceived quality,
value. In the sec-
and 49 and all had at least one perceived following tions, relevant literature
child than 10 of were
younger years age. Participants screenedto and evidence from the ex-ploratoryinvestigationare used to
ensure currentor recent usage of fruit- and define and describe each
The of the concept in the model. To
tomato-based beverages. identity partici-pating differentiatebetween
firm was not revealed in the interview; discus-sion about and re-
proposed relationships empirically supported lationships,
price, quality, and value centered on con- discussion of each propositionis divided into two parts. First,
and to on
sumerexperiences perceptionsrelating beverages in general propositions are developed the basis of the qualitative data
The
rather than to the specific brands of the sponsoringcompany. from the exploratory study and other conceptual work from
moderator's cov- evidence
questions ered such topics as the meaning of the literature. Second, for each proposition, empirical
quality and value, the attributesused to evaluate quality and that
supportsand refutes the proposition is reviewed.
value, and the role of price in quality and value judgments.
A total of 30 in-depthinterviews with female con-sumers
were held in three metropolitanareas (one in the Southwest, one on
The Concept of Perceived Quality
can be defined as or ex-
the East Coast, and one in the Midwest). Free-elicitation Quality broadly superiority cellence. By
can be de-
extension, perceived quality fined as the consumer's
approaches recommended by Olson and Reynolds (1983) were
judgment about a product's
used to obtain information about the cognitive structures of con-
overall excellence or Perceivedquality is
sumers. These techniquesincluded triad sorts and lad-dering. In superiority.1
a
the triad sorts, similar brands in the bev-erage category were (1) different from objective or actual quality, (2) higher level
divided into sets of three and subjectswere probedfor abstractionratherthan a specific attribute
distinctionsamong them. This of a product,(3) a global assessmentthat in some cases
initial process uncoveredthe important
distinctionsthat
used to discriminate The instru-
respondents among products.
'Lewin's (1936) field theoretic approach to evaluating the mentality
of actions and objects in achieving ends could be viewed as a foundation for
ladderingprocess, which followed the triad sorts, in-volved a this definition. In his view, instrumentality is
the
extent to which an object or
of to force action will achieve an end. In this case,
sequence in-depthprobesdesigned the consumer up
the ladder of abstraction. As these be viewed as
quality could instrumentality.
and Value 3
ConsumerPerceptionsof Price,Quality, /
FIGURE1
A Means-End Model Relating Price, Quality, and Value
I Lower-level attributes
Perceptions of lower-
0 level attributes
GO Higher-level attributes
resembles attitude, and (4) a judgment usually Curry and Faulds 1986). In recent years, researchers
made within a consumer's evoked set. have debated the use of these measures of quality on
methodological grounds (Curry and Faulds 1986;
Objective quality versus perceived quality. Sev- Hjorth-Anderson1984, 1986; Maynes 1976; Sproles
eral researchers(Dodds and Monroe 1984; Garvin1983; 1986). Concern centers on the selection of attributes
and to measure researchers and
Holbrookand Corfman 1985; Jacoby and Olson 1985, weights objective quality;
Parasuraman,Zeithaml, and Berry 1986) have em- Consumer do not on
experts (e.g., Reports) agree what the
phasized the difference between objective and per-ceived quality. ideal standardor standardsshould be. Others
Holbrookand Corfman(1985), for ex-ample, distinguishbetween
as claim
(such Maynes 1976) that objective quality
mechanisticand humanistic
does not exist, that all quality evaluations are subjec-
quality: ". .. mechanistic [quality] involves an ob- tive.
istic The term is related to-
jective aspect or feature of a thing or event; human- "objectivequality" closely but not
involves the of technical
[quality] subjective response peo-ple to the same as-other concepts used to describe
objects and is therefore a highly relativistic phenomenon that of a For Gar-
superiority product. example, vin (1983)
differs between judges" (p. 33). discusses product-basedquality and man-
ufacturing-based Product-based refers
Holbrook and Corfman (1985) note that early phi-losophers ceptual difficulties.2 A small number of cues, most
used the word to refer to notably those involving the
product's package, are
"quality" explicit features (i.e.,
or of an ob- as a to
properties characteristics) ject perceived by difficult classify as either intrinsic or extrinsic.
Austin Package could be considered an intrinsic or an extrin-sic cue
subject (e.g., 1964, p. 44; Russell 1912). Olshavsky (1985)
terms this ten- depending on whether the package is part of the physical
dency to infer quality from specific attributes of the a
behavior" and cites composition product (e.g., drip-
"sur-rogate-based preference forming in or a con-
of in which a sur- less spout detergent squeezable ketchup tainer), in
examples product categories given rogate is highly
with size in stereo which case it would be an intrinsic cue, or
associated quality (e.g., sig-nals quality speakers, and for the a card-
in protection promotion product (e.g., board
style signals quality cars and clothes). In the exploratory study,
in fruit with container for a computer), in which case it would
consumers repeatedly associated quality juices purity
(e.g., 100% fruit juice with no sugar added) or fresh- be an extrinsic cue. For purposes of the model, pack-age is
ness. In these and other product categories, one or a considered an intrinsic cue but the information
on the brand
few attributes from the total set of attributes appear
reliable of
that appears package (e.g., name,
to serve as signals product quality. Attributes that price, logo) is considered an extrinsic cue.
signal quality have been dichotom- Evidence. Researchers have identified key lower level
ized into intrinsic and extrinsic cues (Olson 1977; Ol-
son and Jacoby 1972). Intrinsic cues involve the phys-ical by consumers to infer quality in only a few
attributes used
of the In a intrinsic product categories. These lower level cues include price
composition product. beverage, cues
would include such attributes as flavor, color, Olson and
(Olson 1977; Jacoby 1972), suds level for
texture, and degree of sweetness. Intrinsic attributes
detergents, size for stereo speakers (01-shavsky 1985),
of the
cannot be changed without altering the nature odor for bleach and stockings (Laird 1932), and produce
product itself and are consumed as the product is con-sumed (Olson freshness for
Extrin- supermarkets (Bon-ner and Nelson 1985).
1977; Olson and Jacoby 1972).
but not of the
sic cues are product-related part phys-ical product 2Othermethods of classification could have been used for these cues.
outside the
itself. They are, by definition, Possible alternative classification schemes include (1) tangible/intan-
and level of and (3) direct/inferen-tial.
However,
product. Price, brand name, advertising are examples gible, (2) distal/proximal (Brunswick 1956),
each of these dichotomies has the same "fuzzy set"
of extrinsic cues to quality. No-tably, with each scheme,
cues problems that are inherent in the intrinsic/extrinsic dichotomy.
would be difficult to classify. Because the
The intrinsic-extrinsic dichotomy of quality is some cues (particularly package)
has a
con- intrinsic/extrinsic dichotomy
useful for discussing quality but is not without literature underpinning it, because it is widely
used and
recognized, and because it
it was retained in
has clear managerial implications,
this review.
6 / Journalof Marketing,July1988
FIGURE2
The Perceived
Quality Component
Perceived Quality
I I Extrinsic Attributes
Intrinsic Attributes
O Perceptions of lower-
level attributes
) Higher-level abstractions
PQ2: The intrinsic product attributes that sig- higher in the means-end chains), they become com-
nal are but di- mon to more alternatives. Garvin (1987), for exam-
quality product-specific,
mensions of can be to that can be in
quality generalized ple, proposes product quality captured
classes or dimensions:
product categories. eight performance, features, reliability,
aboutquality across products has been conformance,durability,serviceability,aesthetics, and
Generalizing perceived quality (i.e., image). Abstract dimensions that
difficult for managers and researchers. Specific or concrete intrinsic
capture diverse specific attributeshave been dis-cussed
attributesdiffer widely across prod-ucts, as do the by Johnson(1983) and Achrol, Reve, and Stem
attributesconsumers use to infer qual-
In
(1983). describing the way consumers compare
attributesthat in fruit are not alternatives how
ity. Obviously, signal quality juice noncomparable (e.g., they choose between such
the same as those in diverse alternatives as a stereo and a
indicating quality washing machines or
automobiles. Even within a productcategory, specific Hawaiian vacation), Johnson posited that consumers represent
attributes dif-
may provide ferent signals about quality. For
the attributesin memory at abstractlevels (e.g., using
example, thickness is related to high quality in tomato- entertainmentvalue as the dimension on
basedjuices but not in fruit-flavoredchildren's drinks. The which to compare stereos and Hawaiian vacations).
presence Similarly, Achrol, Reve, and Ster proposed that the
of in but low in multitudeof specific variables affecting a firm in the
pulp suggests high quality orange juice quality
apple juice. environmentcan be capturedin abstractdimensions.
Though the concrete attributesthat signal quality differ across Rather than itemizing specific variables that affect
products, higher level abstract dimen- particularfirms in different industries under varying
sions of can be to of the en-
quality generalized categories products.As circumstances, they proposed conceptualizing vironmentin
attributesbecome more abstract(i.e., are terms of its abstractqualities or dimen-
Consumer of andValue 7
Perceptions Price,Quality, /
sions not product-specific and can serve as general indica-tors of
(e.g.,
quality across all types of products. Price, brand name, and
homogeneity-heterogeneity, stability-in-
stability, concentration-dispersion, and turbulence). level of advertising are three extrinsic cues frequently
associated with in
Olson (1978) pointed out that consumers may use quality research, yet many other extrinsic
and cues are useful to consumers. Of spe-cial note are extrinsic cues
informational cues to develop beliefs about products
that task choice or such as product warranties
response (i.e., evaluation) may be a direct and seals of Good
to approval (e.g., Housekeeping). Price,
function of these mediating beliefs. Ac-cording Olson, these
the extrinsic cue receiving the most research attention
beliefs may be of two types: descriptive, which involve a
(see Olson 1977 for a complete review of this liter-ature), appears
restatement of the orig-inal information in more abstract terms
to function as a surrogate for quality when the consumer has
(e.g., "accel-erates from 0 to 60 in 5 seconds" generates the inadequate information about intrinsic attributes. Similarly,
belief "high performance") and inferential, which involve an
inference to information missing in the environ- brand name serves as a "shorthand" for quality by providing
ment (e.g., "accelerates from 0 to 60 in 5 seconds" generates the consumers with a bundle of information about the product
corers al.
belief "probably well, too"). This distinction roughly (Jacoby et 1978; Jacoby, Szybillo, and Busato-Schach 1977).
parallels Alba and Hutchinson's (1987) distinction between Level of advertising has been related to product qual-ity by
economists Nelson
interpretive and embellish-ment inferences and both dichotomies (1970, 1974), Milgrom and Roberts (1986),
illustrate the level
and Schmalensee (1978). The basic argument holds that for
at which dimensions of quality can be conceptualized. termined use
Interviews with in the goods whose attributes are de- largely during
subjects exploratory study suggested levels of
(experience goods), higher advertising signal higher
that specific intrinsic attributes used to infer Schmalen-
could not be across but quality. see argues that level of advertising, rather
quality generalized beverages, that higher
level abstract dimensions could capture the than actual claims made, informs consumers that the company
of in whole or believes the are worth of
meaning perceived quality categories classes of goods advertising (i.e., high
and this is the that
beverages. Purity, freshness, flavor, appearance were the quality). Supporting argument finding
discussed in in the advertised
higher level abstract dimensions subjects defining many subjects exploratory study perceived heavily
in the brands to be in than brands with less
quality beverage generally higher quality
advertising.
category. The of
exploratory investigation beverages pro-vided evidence
Evidence. In a study of quality in long distance telephone,
bro- that form of the product (e.g., frozen vs. canned vs. refrigerated)
banking, repair and maintenance, and kerage services,
and is an additional important extrinsic cue in beverages. Consumers
Parasuraman, Zeithaml, Berry (1985) found consistent
held consistent perceptions of the relative quality of different
dimensions of perceived qual-ity across four consumer service of fruit were for fresh
forms juice: quality perceptions highest
industries. These ab-stract dimensions included reliability, next for then
products, highest refrigerated products,
empathy, as- and lowest for
and bottled, then frozen, then canned, dry
surance, responsiveness, tangibles. Similarly, Bonner and Nelson
forms.
(1985) found that sensory signals such as rich/full flavor, natural product
taste, fresh taste, good aroma, and appetizing looks-all higher Evidence. The literature on hedonic quality mea-surement
level abstract dimensions of perceived quality-were relevant (Court 1971)
1939; Griliches price is the best
maintains that
across
measure of product quality. Consid-erable empirical
33 food product categories. Brucks and Zeithaml (1987) and
research has investigated the rela-tionship between price
contend on the basis of exploratory work that six ab-stract Olson 1977
dimensions (ease of use, functionality, perfor- quality (see for a review of this literature in
and
mance, durability, serviceability, prestige) can marketing) and has shown that consumers use price to infer
be across of durable
generalized categories goods. Though quality when it is the only available cue. When price is
research has not verified the of is less
empirical generalizability combined with other (usually intrinsic) cues, the evidence
dimensions for of other convincing.
categories packaged goods than food In about of merchan-
forming impressions quality dise,
products, for durable goods, or for indus-trial goods, abstract in a and
respondents study by Mazursky Jacoby (1985) selected
dimensions spanning these cate-gories could be conceptualized,
and then used measures of brand name more frequently than any other information.
verified, to develop general
in cat- Gardner (1970, 1971) found sig-nificant main effects on quality
quality product
egories. perceptions due to brand name.
cues serve as Kirmani and found
Wright (1987a,b) empirical
PQ3: Extrinsic generalized qual-ity
and for the between level of
indicators across brands, products, support relationship spending
categories.
8 / Journalof Marketing,July1988
on and inferences.
advertising quality Manipulating expressingconcernfor their chidren'shealthand teeth,
on media and on ele- stated that no
expenditures budgets production ments unequivocally purity (100% juice, sugar)
in advertisements, they found significant ef-fects of both on was the criterionthey used to judge quality across the broad fruit
consumers' quality perceptions. juice category. The link between quality and this intrinsic
Bonner and Nelson (1985) confirm that product attributewas clear and strong: all
form relates to An fruit with 100% were
qualityperceptions. empiricalstudy beverages juice high quality
revealedthe same of in form hierarchy quality beverages and all others were not.
package
as Evidence. Researchers addressing this question
(fresh, refrigerated,frozen, bottled, canned, dried) was found in and
(Darden Schwinghammer 1985; Etgar and Mal-hotra
the exploratorystudy. Bonner and Nel-son conclude: "The 1978; Olson and Jacoby 1972; Rigaux-Bricmont 1982; Szybillo
differs and and Jacoby 1974) have concluded that intrinsic cues were in
sensory maintenance ability of packaging by type sumers in
those forms general more importantto con- judging quality
packaging that can best deliver a rich/full flavor,
natural and because had
they higher predictive value than extrinsic
and an
fresh taste, good aroma, appetizing appear- cues. This conclusion does not account for the fact that many
ance, are likely to gain market share" (p. 75).
assessments about quality are made with insufficient
PQ4:Consumersdepend on intrinsicattributes information about intrinsiccues. Selected individual studies
and Sendak have shown
more than extrinsic attributes (e.g., Sawyer, Worthing, 1979)
at the of that
(a) point consumption,
extrinsiccues can be more to consumersthan
(b) in prepurchase situations when important
in-trinsic attributesare search
attributes (rather than experience intrinsic cues. Conflicting evidence about the impor-tance
attributes), and of intrinsic and extrinsic cues becomes clearer
(c) when the intrinsicattributeshave high if the conditions under which each type of cue be-
value. comes are
predictive important investigated.
Which type of cue-intrinsic or extrinsic-is more PQ5:Consumers depend on extrinsic attri-
in to the consumer? An
important signaling quality answerto this butes more than intrinsic attributes
questionwould help firmsdecide whether (a) in initial purchase situations when
to invest resources in productimprovements(intrinsic for
to of intrinsiccues are not available (e.g.,
cues) or in marketing(extrinsic cues) improve per-ceptions services),
a and definitive this is
quality. Finding simple answerto question
but the (b) when evaluationof intrinsiccues re-
unlikely, exploratory study suggests the type of
on several quires more effort and time than the
attributethat dominatesde-pends key contingencies. consumer perceives is worthwhile, and
The first contingency relates to the point in the purchase
decision and at which (c) when quality is difficult to evaluate
consumptionprocess quality and credence
evaluation occurs. Consumers may evaluate quality at the (experience goods).
of a
point purchase (buying beverage) Extrinsic cues are posited to be used as quality
a indicatorswhen the consumeris operatingwithout ad-equate
or at the point of consumption(drinking beverage). The
salience of intrinsic attributesat the point of informationabout intrinsic product attributes.
pur- This situation may occur when the consumer (1) has
chase depends on whether they can be sensed and has in-
little or no experience with the product, (2) sufficient
time or interest to evaluate the intrinsic at-
evaluated at that time, whether they contain
tributes, and (3) cannot readily evaluate the intrinsic
search attributes(Nelson 1970). Where search attri-butes are attributes.
consumers cannot
present (e.g., sugar content of a fruit juice or color or At point of purchase, always
evaluate relevant intrinsic attributesof a product. Un-
cloudiness of a drink in a glass jar), they may be
less free samples are being provided, consumers can-not
importantquality indicators.In their absence,
consumers depend on extrinsic cues. taste new food productsbefore buying them. Con-sumers do
not know for certain how long a washing
At the point of consumption, most intrinsic attri- machine or automobile will last until they purchase
butes can be evaluated and therefore become acces-
and consume it. In these and similar situations, the
sible as quality indicators.Many consumersin the ex-
taste as the consumer relies on extrinsic attributessuch as war-
ploratorystudy on beverages used signal as for in-
If a did not taste ranty, brand name, and package surrogates trinsic
of quality at consumption. beverage fresh or
product attributes.
tasted "tinny"or too thin, the evaluation was
At other times, intrinsic attributes on which to evaluate
that quality was low.
quality are available but the consumer is un-
Consumersdepend on intrinsicattributeswhen
the cues have high predictive value (Cox 1962). Many
those
respondentsin the exploratorystudy, especially
1988
10 / Journalof Marketing,July
the home (Zeithamland Berry 1987). Attentionto prices (Monroe and Krishnan 1985; Olson 1977). Bowbrick
is likely to be greater for
higherpricedpackagedgoods, (1982) questioned universality
the of the
price-per-ceived quality
durablegoods, and services than for low priced bev-erages, but relationship, called the stream of stud-ies on the topic
other factors in these categories-com- "pseudoresearch,"and claimed that
plexity, lack of price information,and processingtime the is too
interfere with accurate of price-perceived quality hypothesis general and
required-may knowledge
untestable to produce anything other than trivial results.
prices. An additional factor contributing to the gap
between actual and is Peterson and Wilson (1985) argue that the re-lationship
perceived price price disper-sion, the between is not and
price universaland perceived quality
tendency for the same brands to be priced differently not be
and to that the directionof the relationshipmay always
across stores or for products of the same type quality positive.
have wide variance
price (Maynes and Assum 1982). that a
Evidence. Monroe and Krishnan(1985) concluded does
positive price-perceivedquality
sumers to depend on price as a cue to quality (Lam-bert 1972; in 35% and a negative relationshipwas found in 14%. Similarly,
Riesz found the mean rank correlationbe-
Shapiro 1968, 1973). The body of litera-ture summarized by
Olson (1977) is based on the tween price and objective quality to be .26 for 685 product
that a re- in Consumer be-
assumption general price-perceived quality categories reported Reports tween 1961 and
a multitudeof
lationshipexists. Despite experimental 1975 and .09 for 679 brandsof pack-
not aged foods (Riesz 1978). Geistfeld (1982) found vari-ability
studies on the topic, however, the relationshiphas surfaced
among marketsand across stores in the price-
clearly except in situations where methodo-logical Most Gerstner
concernssuch as demandartifacts(Sawyer 1975) could offer objective quality relationship. recently,
alternative explanations for the results (1985) assessed the correlation between quality and
Consumer of andValue 11
Perceptions Price,Quality, /
price for 145 products and concluded that the rela- dividual difference is consumers' ability to detect
variation
to be and quality among products (Lambert 1972). If
tionship appeared product-specific generally weak.
the consumer does not have sufficient productknowl-
Both Peterson and Wilson (1985) and Olshavsky (1985) edge (or perhapseven interest)to understandthe vari-
that the in should not be on ation in
argue emphasis price-qualitystudies quality (e.g., French, Williams, and Chance 1973), price and
the
documenting general price-per-ceived quality relationship, other extrinsic cues may be used to
a
but on the conditions un-der which price informationis likely to greaterdegree.
ference about One is Consumers appear to depend more on price as a
lead to an in- product quality. possibility
that some individuals on as a in some than
rely heavily price quality sig-nal quality signal productcategories in oth-ers. One
whereas others do not. Petersonand Wilson sorted explanationfor this variationmay be differ-
into on the basis of their ences in cat-
respondents groups having price-objective quality relationshipsby egory (e.g.,
a price-relianceschema and confirmed in an experi-ment that the low price of Japaneseautomobilesdoes not diminish the well-
in the Another
"schematics"perceive a stronger relation-ship between price and establishedperceptionof quality category).
be variationin a In
explanation may price category. packaged
quality than "aschematics." This general tendency on the part as
goods categories (such beverages)where productsdiffer little in
of some consumers to associate price and quality has been price,
the consumer may not attribute to prod-
examined in the contextof covariationassessment by Roedder-John, higher quality
Scott, and Bettman (1986), who confirmed that con-sumers differ in ucts that cost only a few cents more than those of
their beliefs about the association be- in the for did
competitors.Respondents exploratorystudy, example,
tween the price and quality variables. These studies provide not associate with
beverage price qual-
evidence that some consumershave a schema of price reliance, ity. Still another is
a category-specificcontingency quality
ratherthan indicating generalized tendency in consumers to variation: in categories where little variation is ex-pected among
associate price and quality. brands as salt
(such or paper sandwich bags), price may
PPQ2:The use of price as an indicatorof qual- function only as an indicationof sac-rifice whereas in categories
on as
ity depends where quality variationis expected (such canned seafood or
of other cues to
(a) availability quality,
washing ma-chines), price may function also as an indication of
(b) price variation within a class of
quality.
products,
(c) product quality variation within a category Evidence. Olson (1977) showed that availability of
of
products, intrinsic and extrinsic cues other than price typi-cally
as
(d) level of price awareness of con- results in weighting those factors (e.g., brand name)
sumers, and more than He concluded
important price. that brand
(e) consumers' ability to detect quality overall
variationin a group of products. name is a strongercue than price for eval-uating
quality (Gardner1971; Jacoby, Olson, and Haddock 1973;
Monroeand Krishnan(1985) contendthatmost past Smith and Broome 1966; Stokes
researchhas been 1985).
price-perceived quality exploratory
and has not succeededin resolvingthe questionof when Studies have indicated that use of price as a qual-ity
price is used to infer quality. Contingencies affecting the indicator differs for
by product category. Except wine and
use of price as a quality indicator fit into three groups: perfume,most positive links have been found in durable rather
informationalfactors, individual factors, and than in nondurableor consumable
factors. and
productcategory products(Gardner1970; Lambert 1972; Peterson Wilson
In an Petersonand
The first category of factors believed to affect the price- 1985). experimentalsetting, Wilson
consists of other documented the relationship between price variationand price-
perceived quality relationship
informationavailable to the consumer. When intrinsic perceived quality association: the
when brandnames greaterthe price variation,the greater
the
tendency
for
consumers
cues to qualityarereadilyaccessible,
of a or when to use price as a quality indicator.
provide evidence company's reputation, level of
of 41 studies
advertisingcommunicatesthe company's be-lief in the In a recent meta-analysis investigat-ing the
brand,the consumermay preferto use those between and
association price perceived qual-ity, Rao and
cues instead of price. Monroe (1987) found that the type of
and the of the
Several individual difference factors may account experimental design magnitude price
for the variationin the use of price as a quality signal. manipulationsignificantly influenced the size of the price-
One explanatory variable is price awareness of the perceived quality effects obtained. The number
consumer: consumers unaware of product prices ob- of cues manipulated
and the price level were not found
viously cannot use price to infer quality. Another in- to have a significanteffect. Because of constraintsim-
posed by the meta-analysis,the reviewersincludedonly
12 / Journalof Marketing,July1988
consumer products and eliminated several studies as * Value is what is good for you.
outliers, so the full range of prices and types of prod- * Value is what my kids will drink.
ucts was not * Little containers because then there is no waste.
investigated.
* Value to me is what is convenient. When I can take it
Considerable empirical research supports individ-ual out of the refrigerator and not have to mix it up,
then it has value.
differences in consumer knowledge of prices. Consumers are
tain consumer essentially the same as the
This second definition is
not uniformly aware of prices and cer-
as women and are less aware economist's definition of
segments (such working men) utility, that is, a
of than other subjective measure of the usefulness or want
prices segments (Zeithaml 1985; Zeithaml and
satisfaction that re-
Berry 1987; Zeithaml and Fuerst1983). Price awareness level
studied as it relates to sults from consumption. This definition also has been
has not been quality perceptions,
Rao documented the of expressed in the trade literature. Value has been de-fined as
though (1987) impact prior
of on the use of as a cue. "whatever it is that the customer seeks in
knowledge products price quality to
making decisions as to which store to shop or which product
Store Schechter
buy" (Chain Age 1985). (1984) defines value as all
The Concept of Perceived Value factors,
both
qualitative
and
quantitative, subjective
and
objective,
When in the discussed that make
respondents exploratory study value,
they used the term in many different ways, de-scribing a wide the In these defi-
up complete shopping experience.
variety of attributes and higher level abstractions that choice crite-
stitutes value-even in a nitions, value encompasses all relevant ria.
provided value to them. What con-
single product category- Value is the I the I Other
to be and quality get for price pay.
appears highly personal idiosyncratic. Though value as a tradeoff be-
in the on respondents conceptualized
many respondents exploratory study agreed cues that
differed tween one and one
signaled quality, they considerably in expressions of "give" component, price, "get"
can be component, quality:
value. Patterns of responses from the exploratory study
into four consumer * Value is price first and quality second.
grouped definitions of value: (1) value is
low price, (2) value is whatever I want in a product, (3) value is * Value is the lowest price for a quality brand.
I and value is what I
the qual-ity I get for the price pay, (4) get * Value is the same as quality. No-value is af-
for what I give. Each definition involves a dif-ferent set of fordable
quality.
linkages among the elements in the model and each consumer This definition is consistent with several others that
definition has its counterpart in the academic or trade Dodds and
appear in the literature (Bishop 1984; Monroe
literature on the subject. The di-versity in meanings of value and Associates
definitions and a 1984; Doyle 1984; Shapiro
is illustrated in the fol-lowing four provides 1985).
partial expla-
nation for the in and
Value is what I get for what I give. Finally, some
difficulty conceptualizing respondents
considered all relevant
"get" components as
measuring the value construct in research. well as all relevant "give" components when de-scribing
Value is low Some value value:
price. respondents equated
that what had to
with low price, indicating they give up was * Value is how many drinks you can get out of a
most salient in their perceptions of value. In their own words: certain package. Frozen juices have more be-cause
you can water them down and get more out of them.
* Value is price-which one is on sale.
* How many gallons you get out of it for what the
* When I can use coupons, I feel that the juice is
price is.
a value.
* Whatever makes the most for the least money.
* Value means low price.
* Which juice is more economical.
* Value is whatever is on special this week.
0
and Value is what you are paying for what you
In industry studies, Schechter (1984) Bishop (1984) are getting.
identified subsets of consumers that equate value with price. * Value is and so that
price having single portions
Hoffman's there is no waste.
Other industry studies, including (1984), reveal
the salience of price in the value equa-tions of consumers. This fourth definition is consistent with Sawyer and
Dickson's of value as a ratio
(1984) conceptualization
Value is whatever I want in a product. Other re-
the benefits received from of attributes weighted by their evaluations divided by
spondents emphasized they
the as the most of value:
product important components
Consumer of andValue 13
Perceptions Price,Quality, /
price weighted by its evaluation. This meaning is attributes,other higher level abstractionscontributed
also similar to the utility per dollar measure of value to of value. A
perceptions frequentlymentionedhigher level
used by Hauser and Urban (1986), Hauser and Simmie abstractionfor fruitjuice was convenience. Some consumersdid not
(1981), Hauser and Shugan (1983), and others. want to reconstitutethe juice. Oth-ers wanted self-serve
These four consumer expressions of value can be capturedin containersso that childrencould
from the
one overall definition: perceived value is the consumer's overall get juice refrigeratorby themselves. For this reason,
assessment of the utility of a productbased on perceptionsof small cans with difficult-to-opentops were not as
convenient as little boxes with insertable straws.
what is received and what is given. Though what is received and
varies across consumers (i.e., some may want volume, others high
Fully reconsituted, ready-to-serve, easy-to-open
still others and what is containerswere keys to adding value in the category. These
quality, convenience) given varies (i.e.,
others with intrinsicand extrinsiclower level attributesadded
some are concernedonly with money ex-pended,
time and value through the higher level abstractionof conve-
effort), value represents a tradeoff of the salient give nience.
and get components. Another higher level abstractionimportantin pro-viding
Value and quality. In the means-endchains, value (like value in children's fruit juices was apprecia-tion. When children
is to be a level abstrac-
quality) proposed higher tion. It differs drankbeverages the mothers se-lected, when they mentioned
them to mother or
from quality in two ways. First, value is more individualisticand evidenced thanks, the mothers obtained value. This
personal than quality and is therefore a higher level concept in
particularpsychological benefit was not evoked di-rectly
than quality. As shown in Table 1, value may be similar to the of the
any consumer interviews, but came
"emo- in the The value
tional of and to "ab- through strongly ladderingprocess. perceptions
payoff" Young Feigen (1975), stract, filtered the level abstrac-
through higher
multi-dimensional, difficult-to-measure attri- tion of and did not come
butes" of Geistfeld, Sproles, and Badenhop (1977), and to appreciation directly through
intrinsicor extrinsic attributes.This indirect inferenc-
"instrumentalvalues" of Olson and Reynolds (1983). Second, illustratesa in tra-
involves a tradeoff of and ing process major difficulty using ditional
value (unlike quality) give get
components. Though many multiattributeor utility models in measuring perceived
of value have as the value. The intrinsic attributes themselves are not always
conceptualizations specified quality only directly linked to value, but instead filter through other
in the value the
"get" component equation, consumer may
implicitly include other factors, sev-eral that are in themselves
personal benefits that are them-selves abstract.
Evidence. Though no empirical researchhas been
higher level abstractions, such as prestige and convenience
(see Holbrook and Corfman 1985 for a discussion of the reported on the pivotal higher level abstractionsre-lated to
in
difficulty in-volved in separating these abstractions in the value, several dimensionshave been proposed selected
value for
categories. Bishop (1984), example, claimed that value in
construct). is a com-
supermarketshopping posite of the higher level
Pv1: The benefit componentsof value abstractionsof variety, ser-vice, and facilities in addition to
include salient intrinsic attributes, extrinsic at- quality and price. Doyle (1984) identified convenience,
and other rel- freshness, and time as major higher level abstractionsthat
tributes,perceived quality, evant
combine
high level abstractions. with and to value in
price quality produce perceptions
consumers.
14 / Journalof Marketing,July1988
ready-to-serve
food products,
and home delivery-even Evidence. To date, no reportedempirical studies
fort have the of that
at the expense of higher costs-because time and ef- investigated potential triggers lead to
are as more of value.
perceived costly. perceptions
Evidence. Recent researchreveals that saving time has become a Pv4: The perceptionof value depends on the
pivotal concern of consumers in super- frame of reference in which the con-
market and
shopping cooking. Supermarketshoppers have cited sumer is making an evaluation.
in
fast checkout as more importantthan low prices selecting Holbrookand Corfman(1985) maintainthat value
In-
grocery stores (Food Marketing stitute 1985, 1986). Studies also
perceptions are situational and hinge on the context
show that consumers are willing to spend money to get more
convenient within which an evaluative occurs. This view
in food judgment
packaging products (Morris 1985). may help explain
the
diversity
of
meanings
of value. In the
beverage
Pv3: Extrinsic attributesserve as "value sig-nals" for the frame of
category, example, reference used by the consumer
and can substitute for active weighing of included of and
in providing mean-ings point purchase,preparation,
benefits and costs.
con-
sumption.Value meantdifferentthings at each of these points.
How carefully do consumers evaluate these com-
of in assessments of value? At the point of purchase, value often meant
ponents products making low
To from the of price, sale, or coupons. At the point of prepa-ration,
judge product category beverages, cognitive value often involved some calculation about
assessment is limited. Ratherthan carefully whetherthe was easy to and how much
product
prepare
consideringprices and benefits, most respondentsde-
the consumer could obtain for what she paid. At con-sumption,
pended on cues-often extrinsic cues-in forming value was judged in terms of whether the children would drink
of value. A few
impressions respondents carefully calculated the
the beverage, whether some of the beverage was wasted, or
cheapest brandin their set on a regular basis, but most seemed to whether the children ap-preciated the mother for buying the
follow Langer's (1978) no-tion of mindlessness: most respondents drinks.
bought bev-erages with only minimal processing of available in- Evidence. No
empirical studies have been con-
formation. a brand trusted
They repeatedlybought they or used ductedto investigatethe variationin value perceptions
extrinsic value cues to simplify their choice across evaluation contexts.
process. Pv5: Perceived value affects the relationship
These value were of the
triggers presentregardless way between and
consumers defined value. Many consumers who purchase. quality
defined value as low a as As not all consumers
price reportedusing coupon Olshavsky (1985) suggested,
a to low without the
signal price actually comparing reduced want to the item in cate-
buy highest quality every gory.
price of the couponed brand with the prices of other brands, or or
low or a Instead, quality appearsto be factored into the implicit
they reportedthat "cents-off" or "everyday price" signs valuation of a consumers
label brand explicit product by many (Dodds
private
the value who de- and Dickson A
triggered perception. Respondents fined value in and Monroe 1985; Sawyer 1984). given
terms of what they wanted in products productmay be high quality, but if the consumer does not have
and enough money to buy it (or does not want to spend the
cited small containers, single-serving portions, ready-to-
value as the its value will not be as
serve containers. Consumers who defined quality amount re-quired), perceived being
for the as
they get price they pay high as that of a productwith lower qualitybut a more
such as 100% fruit juice or
affordable In -
used signals on special price. other words, when geta givea
brand name on special. Finally, consumers who de-fined value as > - but the has a con- >
getb giveb shopper budget straint, then givea
on form vs. >
what they get for what they pay de-pended (frozen budget constraints giveb and hence b is chosen. The same logic may
canned and econ-
juice) apply to prod-
as ucts that need more time than the consum-
Consumer of andValue 15
Perceptions Price,Quality, /
expensive purchases with fruit drinks. In their eval-
uation,high qualitywas not worthits expense, so lower levels and how they are perceived and combined (see also
of quality were tolerated in a portion of the weekly Gutmanand Alden 1985, Olson 1977, and Olson and
Jacoby 1972 for similar expressions of needed re-
beverages. These consumers obtained more value from search). Finally, the relationship between the con-structsof
the lower quality juices because the low costs attitudeand qualityshould be examined. The
compensatedfor the reduction in quality. instrumentality
of a feature (Lewin 1936) and
product
Evidence. Several empirical studies have inves-tigated the quality rating of such a feature in separately de-
the between and but no choice be an
relationship quality purchase, termining may interestingresearchissue. The
studies have
empirical
the role of value as an
investigated explicitly
factorbetween
convergent and discriminantvalidity of the con-structs of
intervening quality and attitude and quality also warrantinvestiga-tion. Quality
purchase.However, studieson the use of unit price
measurementscales remain to be devel-oped and validated.
information(e.g., Aaker and Ford 1983; Dickson and
Sawyer 1985; Zeithaml 1982) suggest that many con- Current Practices in Modeling Consumer
sumers use unit price information(i.e., a measure of Decision Making
in choices in can
value) making product supermarkets. Three aspects of modeling consumer decision making
be if the to be ac-
Research questioned
curate
propositionsprove
the tendency to use actual at-
Implications representations:
16 / Journalof Marketing,July1988
McCann(1982) reveal the impact of inferentialbeliefs on dures to link attributes with perceptions. Holbrook
product evaluations and acknowledge that under-
(1981) provides a theoreticalframeworkand analytic
standingconsumer inferences is essential both in get-ting procedure
for
representing
the
interveningrole of per-ceptions
in
informationfrom consumers and in giving infor-mation to evaluative scribes the of
judgments. Neslin (1981) de- superiority
consumers. Finally, Ahtola (1984) calls for revealed
statistically impor-
and models to the tance over self-stated in
expanding revising incorporate weights importanceweights
sac- features to
rifice aspects of price. Sacrifice should not be linking product perceptions.
limited to monetaryprice alone, especially in Value
situationswhere time costs, search costs, and Researching
convenience costs are salient to the consumer. A in value is the
major difficulty researching variety of
Methods for meanings of value held by consumers. Building a model of
Appropriate Studying Quality which of
and Value value requiresthat the researcherunderstand many
The used in the is (at least of four) meanings are implicit in consumers'
approach exploratoryinvestigation rich in terms of
expressions of value. Utility models are
for in other product refinements
appropriate investigating quality methodological (see Schmalensee and Thisse 1985
categories. Olson and Reynolds (1983) developed methods to for a discussion of dif-
vidual consumers.
aggregate the qualitative data from indi- ferent utility measures and equations), but do not ad-dress the
structural
Aggregate cognitive mapping, analysis, cognitive distinctionbetween attributesand higherlevel
differentiation
analysis, and value structure mapping are all
abstractions.They also presume that consumers care-
techniques de- fully calculate the give and get components of value, an
to and or- sumers
signed especially analyze representhigher der
assumption that did not hold true for most con-
abstractionssuch as quality. These techniques are in the
more than or mul-tiattribute exploratorystudy.
appropriatepreference mapping
for like a Price as a Quality Indicator
modeling investigating concepts quality and value (for
discussion and ex- Most experimentalstudies related to quality have fo-cused
complete plication of these techniques, see
Gutman and Alden 1985 or Reynolds and Jamieson 1985). on price as the key extrinsic quality signal. As
link in the is but one of sev-
Several researchershave developed approachesto suggested propositions, price eral
attributesto of level
product perceptions higher abstractions. potentially useful extrinsic cues; brand name or
be or more in
Mehrotraand Palmer (1985) suggest a methodological package may equally important,especially
to features packagedgoods. Further,evidence of a generalized price-perceived
approach relating product to perceptions of quality is inconclusive.
In their quality relationship Quality research may
based on the work of Olson and Reynolds (1983).
lists of cues benefit from a de-emphasis on price as the main extrinsic
procedure, and benefits are developed from focus
groups or in- depth interviews with consumers, semantic differen- quality indicator.Inclusion
of other importantindicators, as well as identification
tial scales are constructed to capture the benefits, a tradeoff
of situations in which each of those indicatorsis im-
procedure is used to determine the impor-tance of the cues, more and useful an-
portant, may provide interesting swers
and respondents match cues to
this of de- of about the extrinsic signals consumers use.
product concepts. Through type analysis, gree linkage
value of
(between cues and benefits),
a cue, and competitive brand information are pro- Management Implications
vided.
and also the An of what quality and value mean to
Mazursky Jacoby (1985) recognized understanding
sitions
need for to trackthe inferenceprocess from
asked them to form an impressionof quality by choos-ing any capitalize on brand quality and value.
informationthey wished. Though this method can be criticizedas Close the
unrealistic,it providesinsights into the types of informationthat
Quality Perception Gap
the im-
consumersbelieve signal Though managers increasingly acknowledge portanceof
sure it from the
quality. Modifications of the method to make the en- quality, many continue to define and mea-
the
vironmentmore realistic (such as by Brucks 1985) are company's perspective. Closing
also between and
possible. gap objective perceived quality requires that
Other researchershave described analytic proce- the company view quality the way the consumer does.
and
Research that investigates which cues are im-portant
how consumersform of
impressions qual-
ConsumerPerceptionsofPrice,Quality,andValue/ 17
cues is nec- may be able to educate consumers on ways to evaluate
ity based on those technical, objective the information in
quality. Advertising, provided
essary. Companies also may benefit from research that packaging, and visible cues associated with products
can be to evoke desired
identifies the abstract dimensions of quality desired by managed quality perceptions.
Understand How Consumers Encode
consumers in a product class. and Prices
Monetary Nonmonetary
Identify Key Intrinsic
and The model proposes a gap between actual and per-ceived
Extrinsic Attribute Signals price, making it important to understand how
consumers
A top priority for marketers is finding which of the many encode of
prices products. Nonmonetary
extrinsic and intrinsic cues consumers use to signal quality. This costs-such as time and effort-must be acknowl-
process involves a careful look at situational factors the 50 million
edged. Many consumers, especially working
surrounding the purchase and use
of the
product.
Does
quality vary greatly among prod-ucts in the
women in the U.S. today, consider time an important
that can be built into
category? Is quality difficult to evaluate? Do consumers have commodity. Anything products to
and search costs can
enough information about intrin- reduce time, effort, reduce perceived
sic attributes before purchase, or do they depend on simpler sacrifice and thereby increase per-ceptions of value.
extrinsic cues until after their first purchase?
What cues are
provided by competitors? Identifying the
to Add Value
Recognize Multiple Ways
important quality signals from the consumer's Finally, the model delineates several strategies for adding value in
then those rather boxes into
viewpoint, communicating signals than products and services. Each of the feeding perceived
is to lead to more vivid value an ave-nue for value
generalities, likely per-ceptions of provides increasing perceptions.
mon-
quality. Linking lower level attributes with their higher level Reducing
abstractions locates the "driving force"
for and
and "leverage point" advertising strategy (Olson and etary nonmonetary costs, decreasing perceptions
Reynolds 1983). of sacrifice, adding salient intrinsic attributes, evok-
and
Nature of ing perceptions of relevant high level abstractions, using
Acknowledge the Dynamic Quality that
extrinsic cues to signal value are all possible strategies
Perceptions can use to affect value The selection of
companies per-ceptions.
of over time a for a
strategy particular product or market segment depends
Consumers' perceptions quality change
as a result of added information, increased competi- on its customers' definition of value. Strategies based on customer
in a and
tion product category, changing expectations. The value standards and perceptions will channel resources more
dynamic nature of quality suggests that marketers effectively and will meet customer expectations better than those
over time and
must track perceptions align product and based only on company standards.
with these views.
promotion strategies changing Because
and marketers
products perceptions change,
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