Marketing researchers recently have expended considerable effort to investigate how price influences buyers’ decisions yielding a variety of results, some not entirely explainable. This article rev...

Buyers’ Subjective Perceptions of Price:

This paper empirically investigates the impact of winning a quality award on the market value of firms by estimating the mean “abnormal” change in the stock prices of a sample of firms on the date when information about winning a quality award was publicly announced. We note that the abnormal returns generated by the quality award winning announcements provide a lower bound for the impact of implementing an effective quality award improvement program. Our results show that the stock market reacts positively to quality award announcements. Statistically significant mean abnormal returns on the day of the announcements ranged from a low of 0.59% to a high of 0.67% depending on the model used to generate the abnormal returns. The reaction was particularly strong for smaller firms (mean abnormal returns ranged from low of 1.16% to a high of 1.26%), and for firms that won awards from independent organizations such as Malcolm Baldrige, Philip Crosby, etc. (mean abnormal returns ranged from a low of 1.31% to a h...

https://www.jstor.org/stable/info/2634352

Quality awards and the market value of the firm: an empirical investigation

The author reports some empirical results on the strength of the quality-price relation. For many products, the relation between quality and price appears to be very weak; hence, for many products,...

Do Higher Prices Signal Higher Quality

The role of product quality is examined to determine its applicability as a means of gaining a comparative advantage. The authors argue that only by (1) allowing for the possibility of feedback bet...

The Strategic Role of Product Quality

The effect of country-of-origin labelling on consumers’ assessments of product quality, risk to purchase, perceived value and likelihood of purchasing was tested experimentally in a multi-product, multi-cue setting. Country-of-origin information was found to be more important in affecting product quality assessments than were price and brand information. Price was important in value assessment while brand was significant in a few product specific cases. Age, education, sex, and perceptions of ability to judge products were variously related to consumers’ ratings of quality, risk, value and likelihood of purchase especially when the product was more complex and difficult to judge. However, much of the variation in consumer judgments was not accounted for by the variables employed in this study, suggesting that future research should include more detailed studies of information processing whereby intrinsic and extrinsic product cues and a wide range of consumer characteristics are taken into consideration.

J. Douglas McConnell

Papers

An Experimental Examination of the Price-Quality Relationship

The Alphabet and Price as Independent Variables: A Note on the Price: Quality Question