Introduction
Does price signal product quality to consumers or not? If it does, what market prevailing situations support this consumer behavior? It is a common phenomenon for marketers to influence the purchasing behavior of consumers. One of such factors includes price variation.
This report provides an analysis of the relationship between product pricing and consumer perception on the most appropriate promotional strategy that signals high quality.
Price-Quality Relationship
Numerous market researchers have revealed that consumers use different cues to infer product quality. Most consumers have insufficient time, training, and/or inclination to judge the actual quality of a product. Some of the common product quality inferences used by consumers include simple signals such as the weight of the promotional methods used for the product, country of origin, and/or its price.
In this regard, highly priced goods are perceived as more quality (Yung-Sung & Han-Jen, 2013). Lalwani and Shavitt (2013) posit that product judgments are made at a glance due to the tendency of consumers to search information about products. The discussion is based on two alternative market signals for quality namely price and advertising.
A substantial amount of literature suggests that price can convey both demand-related and supply-related quality information. In support of this observation, Lalwani and Shavitt (2013) affirm that a high price can mirror a high market demand or high production costs incurred in the production of superior products.
For instance, products from the Essie Company are highly priced and consumers have an unmatched loyalty for them. A recent study of the purchase patterns revealed that most consumers were willing to pay whatever price to get the best quality nail polish offered by the Essie Company.
Consumers expressed their condescending attitudes towards the cheaply priced nail polishes from other brands claiming that ‘cheap is expensive’ (Lalwani & Shavitt, 2013). In the light of this market survey, the new washable nail polish is scheduled to appear in movie shows and billboards using highly regarded celebrities to reveal the products importance and superiority to both the new and existing Essie customers.
Contrastingly, the price-quality relationship has been deemed weak, particularly in competitive beauty products and foodstuffs. The nail polish falls under the beauty products. Lalwani and Shavitt (2013) attribute the weak correlation to the intensive search for the best products among many brands.
For internationally consumed products such as the nail polish, different market regions and countries post varying results concerning the relationship. This variation arises due to the different market dynamics including consumer levels of income in diverse countries.
It is evident that the presence of other quality inferences such as product information reduces the extent to which the price influences the quality perceptions of consumers.
The consumer views on the quality of a particular brand is influenced by the availability of conspicuous cues including the modes of advertising and product characteristics, brand image, shelf displays, distribution channels, and corporate name among others (Lalwani & Shavitt, 2013).
In the event where the other product attributes are highly considered by the consumers, the pricing strategy can have low influence on their perceptions (Yung-Sung & Han-Jen, 2013).
The stance of this article is that there exists a relationship between the price and product quality. It is a common market practice that superior quality products are highly priced whereas ordinary products attract low prices.
Marketers rely on this practice to manipulate the consumer-purchasing behavior. Other market forces such as the level of income also guide the pricing strategy, product class, and the availability of close substitutes. The sellers make such considerations in pricing to avoid major blunders in the design of the marketing strategies.
Choice of Advertising Modes to Boost Consumer Quality Perception
The choice of the promotion strategy has been shown to leverage a great effect the consumer perceptions on the quality of the products. Advertising spending on a particular product has a positive correlation with its perceived quality (Yung-Sung & Han-Jen, 2013).
Drawing on the signaling and information processing theories, it has been revealed that consumer awareness of ad-based information and the familiarity created by frequent advertising convinces them that the product is worth buying. Repeated advertising implies that the quality of the product has been tested; hence, it can be regarded as superior.
A product that appears once or twice and disappears from the mainstream media advertising avenues can imply low quality and a probability being dismissed. Owing to this fact, the Essie Company intends to launch a robust advertising campaign for the new washable nail polish.
Famous programs such as the Wendy Show and new generation movies will be used to illustrate the importance and superiority of the product. Using the digital media, TV shows, and news ads can catch a broad attention of the viewers; hence, promoting the Essie nail polish brand (Yung-Sung & Han-Jen 2013).
Conclusion
This report reveals the nature of the relationship that price and other cues have on the consumer perceptions on the quality of market products. An in-depth discussion has been provided with considerable literature attesting that a high price paints a positive picture of superior quality on the minds of the consumers.
The contrary effect has also been reviewed where the presence of other cues can limit the impact of pricing on the perceived product quality. Advertising is an important inference that consumers utilize to judge the quality of a product. Heavy spending on advertising, which manifests itself in frequent ads, implies a high quality of the concerned product.
Reference List
Yung-Sung, C., & Han-Jen, N. (2013). Advertising Expenditure and Price as Joint Indicators of Product Quality Perceptions: A Perspective from Game Theory. International Management Review, 9(1), 78-86.
Lalwani, A., & Shavitt, S. (2013). You Get What You Pay For? Self-Construal Influences Price-Quality Judgments. Journal of Consumer Research, 40(2), 255-267.