Zeithaml 1988

Consumer Perceptions of Price, Quality, and Value: A Means-End Model and Synthesis of
Evidence
Author(s): Valarie A. Zeithaml
Reviewed work(s):
Source: Journal of Marketing, Vol. 52, No. 3 (Jul., 1988), pp. 2-22
Published by: American Marketing Association
Stable URL: http://www.jstor.org/stable/1251446 .
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Valarie A. Zeithaml
Consumer Perceptions of Price,

Quality, and Value: A Means-End
Model and Synthesis of Evidence
Evidence from past research and insights from an exploratory investigation are combined in a conceptual
model that defines and relates price, perceived quality, and perceived value. Propositions about the con-
cepts and their relationships are presented, then supported with evidence from the literature. Discussion
centers on directions for research and implications for managing price, quality, and value.
THOUGH consumer perceptions of price, quality, Because definition is difficult, researchers often de-
and value are considered pivotal determinants of pend on unidimensional self-report measures to cap-
shopping behavior and product choice (Bishop 1984; ture the concepts (Jacoby, Olson, and Haddock 1973;
Doyle 1984; Jacoby and Olson 1985, Sawyer and McConnell 1968; Shapiro 1973) and thus must as-
Dickson 1984, Schlechter 1984), research on these sume shared meanings among consumers.
concepts and their linkages has provided few conclu- What do consumers mean by quality and value?
sive findings. Research efforts have been criticized for How are perceptions of quality and value formed? Are
inadequate definition and conceptualization (Monroe they similar across consumers and products? How do
and Krishnan 1985; Zeithaml 1983), inconsistent consumers relate quality, price, and value in their de-
measurement procedures (Monroe and Krishnan 1985), liberations about products and services? This article
and methodological problems (Bowbrick 1982; Olson is an attempt to provide answers to these questions by:
1977; Peterson and Wilson 1985). One fundamental
problem limiting work in the area involves the mean- * defining the concepts of price, quality, and value
ing of the concepts: quality and value are indistinct from the consumer's perspective,
and elusive constructs that often are mistaken for im- * relating the concepts in a model, and
precise adjectives like "goodness, or luxury, or shi-
niness, or weight" (Crosby 1979). Quality and value * developing propositions about the concepts, ex-
are not well differentiated from each other and from amining the available evidence in support of the
similar constructs such as perceived worth and utility. propositions, and suggesting areas where re-
search is needed.
A. Zeithaml
Valarie FuquaSchoolof Business,
is AssociateProfessor,
To accomplish these objectives, a review of previous
Theauthorgratefully
DukeUniversity. thefinancial
acknowledges sup-
portandcooperation provided bythe Marketing
forthisresearch Sci- research was augmented by an exploratory investi-
andoneof itscorporate
enceInstitute The
sponsors. authoralsothanks gation of quality and value in the product category of
C.Walker,
Orville Jr.,Richard Lutz,C.WhanPark,DianeSchmalensee, beverages. Company interviews, a focus group inter-
andthreeanonymous
A. Parasuraman, JMreviewersforhelpfulcom-
view, and 30 in-depth consumer interviews conducted
mentson draftsof the manuscript.
by free-elicitation approaches generated qualitative data
Journal of Marketing
2 / Journalof Marketing,July 1988 Vol. 52 (July 1988), 2-22.
that supplementedprevious researchand served as the procedureshad successfully elicited the more impor-
basis for 14 propositions. tant higher levels of abstractionin previous studies
(Gutman and Alden 1985; Reynolds, Gutman, and
Fiedler 1984; Reynoldsand Jamieson1985), they were
The Exploratory Study used to reveal the links among product attributes,
In the exploratory phase of the research, company, quality, and value. After these indirectmethods, sub-
focus group, and in-depth consumer interviews were jects respondedto open-endedquestionscovering such
conducted to gain insight into consumer perceptions topics as informationneeded to makejudgmentsabout
of quality and value. Cooperationwas obtained from quality and value, impact of relatedfactors (e.g., ad-
a nationalcompanythat marketsthree distinctproduct vertising and packaging) on perceptions, and defini-
lines of beverages:a line of 100% fruit-flavoredchil- tions of the concepts. Before debriefing, demographic
dren's drinks, a line of 100% fruit juices, and a line and beverage usage data were collected from respon-
of tomato-basedjuices. In-depthinterviews were held dents.
with the marketingresearchdirector, the senior prod- As is typical in exploratorystudies using means-
uct manager for juices, two company strategic plan- end chains (e.g., Olson and Reynolds 1983), the data
ners, and the president of the company's advertising generatedwere not numerical. Instead, the data were
agency. Open-endedquestionspertainedto issues such in the form of protocols and means-end maps for in-
as company knowledge about quality and value per- dividual consumers. Patterns of responses and ob-
ceptions of consumers, ways the company determined served similarities across individuals form the "re-
those perceptions, and how quality and value were sults"of this type of exploratorystudy. Whencombined
communicatedto consumers. with the descriptivedata from the executive and focus
A focus group interview on the topics of quality group interviews, the observations and insights pro-
and value in beverageswas held in a metropolitanarea vide a frameworkfor speculating about the concepts
in the Southeast. The focus group was formed in ac- and their relationships(Figure 1).
cordance with guidelines traditionallyfollowed in the
marketingresearch field (Bellenger, Bernhardt,and The Model
Goldstucker 1976). Participantswere recruitedto fit
the demographicprofile of purchasersof fruit- and to- Figure 1, an adaptationof a model first proposed by
mato-basedbeverages. All participantswere women Dodds and Monroe (1985), affordsan overview of the
between the ages of 25 and 49 and all had at least one relationshipsamong the concepts of price, perceived
child younger than 10 years of age. Participantswere quality, and perceived value. In the following sec-
screenedto ensurecurrentor recentusage of fruit-and tions, relevant literatureand evidence from the ex-
tomato-basedbeverages. The identity of the partici- ploratoryinvestigationare used to define and describe
pating firm was not revealed in the interview;discus- each concept in the model. To differentiatebetween
sion about price, quality, and value centered on con- proposed relationshipsand empirically supportedre-
sumerexperiencesandperceptionsrelatingto beverages lationships, discussion of each propositionis divided
in general rather than to the specific brands of the into two parts. First, propositions are developed on
sponsoringcompany. The moderator'squestions cov- the basis of the qualitativedata from the exploratory
ered such topics as the meaning of quality and value, study and other conceptual work from the literature.
the attributesused to evaluate quality and value, and Second, for each proposition, empiricalevidence that
the role of price in quality and value judgments. supportsand refutes the propositionis reviewed.
A total of 30 in-depthinterviews with female con-
sumers were held in three metropolitanareas (one in
the Southwest, one on the East Coast, and one in the The Concept of Perceived Quality
Midwest). Free-elicitation approaches recommended Quality can be defined broadly as superiorityor ex-
by Olson and Reynolds (1983) were used to obtain cellence. By extension, perceived quality can be de-
information about the cognitive structures of con- fined as the consumer's judgment about a product's
sumers. These techniquesincludedtriadsorts and lad- overall excellence or superiority.1Perceivedquality is
dering. In the triad sorts, similar brands in the bev- (1) different from objective or actual quality, (2) a
erage category were divided into sets of three and higher level abstractionratherthan a specific attribute
subjectswere probedfor distinctionsamongthem. This of a product,(3) a global assessmentthatin some cases
initialprocess uncoveredthe importantdistinctionsthat
respondentsused to discriminateamong products.The 'Lewin's (1936) field theoretic approach to evaluating the instru-
mentality of actions and objects in achieving ends could be viewed
ladderingprocess, which followed the triad sorts, in- as a foundation for this definition. In his view, instrumentality is the
volved a sequenceof in-depthprobesdesignedto force extent to which an object or action will achieve an end. In this case,
the consumer up the ladder of abstraction.As these quality could be viewed as instrumentality.
ConsumerPerceptionsof Price,Quality,and Value/ 3

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 made Curryand Faulds 1986). In recent years, researchers
within a consumer's evoked set. have debated the use of these measuresof quality on
methodological grounds (Curry and Faulds 1986;
Objective quality versus perceived quality. Sev- Hjorth-Anderson1984, 1986; Maynes 1976; Sproles
eralresearchers(Dodds and Monroe1984;Garvin1983; 1986). Concern centers on the selection of attributes
Holbrookand Corfman 1985; Jacoby and Olson 1985, and weights to measureobjective quality; researchers
Parasuraman,Zeithaml, and Berry 1986) have em- and experts (e.g., ConsumerReports)do not agree on
phasized the difference between objective and per- what the ideal standardor standardsshouldbe. Others
ceived quality. Holbrookand Corfman(1985), for ex- (such as Maynes 1976) claim that objective quality
ample, distinguishbetweenmechanisticand humanistic does not exist, that all quality evaluationsare subjec-
quality: ". .. mechanistic [quality] involves an ob- tive.
jective aspect or feature of a thing or event; human- The term "objectivequality"is relatedclosely to-
istic [quality]involves the subjective response of peo- but not the same as-other concepts used to describe
ple to objects and is therefore a highly relativistic technical superiorityof a product. For example, Gar-
phenomenon that differs between judges" (p. 33). vin (1983) discusses product-basedquality and man-
"Objective quality" is the term used in the literature ufacturing-basedquality. Product-basedquality refers
(e.g., Hjorth-Anderson1984; Monroe and Krishnan to amounts of specific attributesor ingredientsof a
1985) to describe the actual technical superiorityor product. Manufacturing-basedquality involves con-
excellence of the products. formance to manufacturingspecifications or service
As it has been used in the literature,the term "ob- standards. In the prevailing Japanese philosophy,
jective quality"refers to measurableand verifiable su- quality means "zero defects-doing it right the first
periority on some predeterminedideal standard or time." Conformanceto requirements(Crosby 1979)
standards.Publishedqualityratingsfrom sources such and incidence of internaland externalfailures(Garvin
as Consumer Reports are used to operationalize the 1983) are other definitions that illustratemanufactur-
constructof objective quality in research studies (see ing-orientednotions of quality.
4 / Journalof Marketing,
July1988
These concepts are not identical to objective qual- ers), but perceived quality is instead a second-order
ity becausethey, too, arebased on perceptions.Though phenomenon:an abstractattributein Olson and Rey-
measuresof specifications may be actual (ratherthan nold's (1983) terms, a "B" attribute(somewhat ab-
perceptual), the specifications themselves are set on stract, multidimensional but measurable) in Myers and
the basis of what managersperceive to be important. Shockers' (1981) formulation.
Managers' views may differ considerably from con- Global assessment similar to attitude. Olshavsky
sumers'or users' views. ConsumerReportsratingsmay
not agreewith managers'assessmentsin termsof either (1985) views quality as a form of overall evaluation
of a product, similar in some ways to attitude. Hol-
salient attributesor weights assigned to the attributes.
In a researchstudyfor GeneralElectric,Morgan(1985) brook and Corfman (1985) concur, suggesting that
quality is a relatively global value judgment. Lutz
points out striking differences between consumer,
(1986) proposes two forms of quality, "affective qual-
dealer, and managerperceptionsof appliancequality.
When asked how consumers perceive quality, man- ity" and "cognitive quality." Affective quality par-
allels Olshavsky's and Holbrook and Corfman's views
agers listed workmanship,performance,and form as of perceived quality as overall attitude. Cognitive
critical components. Consumersactually keyed in on
different components: appearance, cleanability, and quality is the case of a superordinateinferential as-
sessment of quality interveningbetween lower order
durability. Similarly, company researchersin the ex- cues and an eventual overall productevaluation (Lutz
ploratorystudy measuredbeverage quality in terms of
"flavorroundedness"and "astringency"whereascon- 1986). In Lutz's view, the higher the proportion of
sumers focused on purity (100% fruit juice) and attributesthat can be assessed before purchase(search
sweetness. attributes) to those that can be assessed only during
To reiterate, perceived quality is defined in the consumption (experience attributes),the more likely
it is that quality is a higher level cognitive judgment.
model as the consumer's judgment about the superi-
Conversely, as the proportion of experience attributes
ority or excellence of a product. This perspective is
similar to the user-based approachof Garvin (1983) increases, quality tends to be an affective judgment.
Lutz extends this line of reasoning to propose that af-
and differs from product-basedand manufacturing-
fective quality is relatively more likely for services
based approaches. Perceived quality is also different
and consumer nondurable goods (where experience
from objective quality, which arguablymay not exist
attributes dominate) whereas cognitive quality is more
because all quality is perceived by someone, be it
consumers or managers or researchersat Consumer likely for industrial products and consumer durable
goods (where search attributes dominate).
Reports.
Judgment made within consumer's evoked set.
Higher level abstraction rather than an attribute.
Evaluations of quality usually take place in a com-
The means-end chain approachto understandingthe
parison context. Maynes (1976) claimed that quality
cognitive structureof consumers holds that product evaluations are made within "the set of goods which
informationis retainedin memory at several levels of
. . . would in the consumer's judgement serve the
abstraction(Cohen 1979; Myers and Shocker 1981;
same general purpose for some maximum outlay." On
Olson and Reynolds 1983; Young and Feigen 1975).
the basis of the qualitative study, and consistent with
The simplest level is a product attribute;the most
Maynes' contention, the set of products used in com-
complex level is the value or payoff of the productto
the consumer. Young and Feigen (1975) depicted this paring quality appears to be the consumer's evoked
set. A product's quality is evaluated as high or low
view in the "Greybenefitchain,"which illustrateshow
a product is linked through a chain of benefits to a depending on its relative excellence or superiority
among products or services that are viewed as sub-
concept called the "emotionalpayoff." stitutes by the consumer. It is critical to note that the
Product -> Functional > Practical -> Emotional specific set of products used for comparison depends
Benefit Benefit Payoff on the consumer's, not the firm's, assessment of com-
peting products. For example, consumers in the ex-
Related conceptualizations (Table 1) pose the same ploratory study compared the quality of different brands
essential idea: consumers organize information at var- of orange juice (which would be the comparison con-
ious levels of abstraction ranging from simple product text of the firm), the quality of different forms (re-
attributes (e.g., physical characteristics of Myers and frigerated vs. canned), and the quality of purchased
Shocker 1981, defining attributes of Cohen 1979, versus homemade orange juice.
concrete attributesof Olson and Reynolds 1983) to Figure 2 depicts the perceived quality component
complex personal values. Quality has been included of the conceptual model in Figure 1.
in multiattributemodels as though it were a lower level
attribute(criticisms of this practice have been leveled PQI: Consumers use lower level attribute cues
by Ahtola 1984, Myers and Shocker 1981, and oth- to infer quality.
ConsumerPerceptionsof Price,Quality,and Value/ 5

TABLE 1
Selected Means-End Chain Models and Their Proposed Relationships with Quality and Value
Personal Value
Scheme Attribute Level Quality Level Value Level Level
Young and Feigin
(1975) Functional benefits Practical benefit Emotional payoff
Rokeach (1973) Product attributes Choice criteria Instrumental values Terminal values
Howard (1977)
Myers and Physical characteristics Pseudophysical Task or outcome User referent
Shocker (1981) characteristics referent
Geistfeld, Sproles, Concrete, Somewhat abstract, Abstract, multidimensional, and difficult
and Badenhop unidimensional, and multidimensional but to measure attributes (A)
(1977) measurable measurable (B)
attributes (C)
Cohen (1979) Defining attributes Instrumental attributes Highly valued
states
Gutman and Attributes Consequences Va
Reynolds (1979)
Olson and Concrete attributes Abstract attributes Functional Terminal values
Reynolds (1983) consequences
Psychosocial
consequences
Instrumental values
Holbrook and Corfman (1985) note that early phi- ceptual difficulties.2 A small number of cues, most
notably those involving the product's package, are
losophers used the word "quality" to refer to explicit difficult to classify as either intrinsic or extrinsic.
features (i.e., properties or characteristics) of an ob-
Package could be considered an intrinsic or an extrin-
ject as perceived by a subject (e.g., Austin 1964, p. sic cue depending on whether the package is part of
44; Russell 1912). Olshavsky (1985) terms this ten- the physical composition of the product (e.g., a drip-
dency to infer quality from specific attributes "sur- less spout in detergent or a squeezable ketchup con-
rogate-based preference forming behavior" and cites tainer), in which case it would be an intrinsic cue, or
examples of product categories in which a given sur-
protection and promotion for the product (e.g., a card-
rogate is highly associated with quality (e.g., size sig- board container for a computer), in which case it would
nals quality in stereo speakers, style signals quality in be an extrinsic cue. For purposes of the model, pack-
cars and clothes). In the exploratory study, consumers
age is considered an intrinsic cue but the information
repeatedly associated quality in fruit juices with purity that appears on the package (e.g., brand name, price,
(e.g., 100% fruit juice with no sugar added) or fresh- logo) is considered an extrinsic cue.
ness. In these and other product categories, one or a
few attributes from the total set of attributes appear Evidence. Researchers have identified key lower
to serve as reliable signals of product quality. level attributes used by consumers to infer quality in
Attributes that signal quality have been dichotom- only a few product categories. These lower level cues
ized into intrinsic and extrinsic cues (Olson 1977; Ol- include price (Olson 1977; Olson and Jacoby 1972),
son and Jacoby 1972). Intrinsic cues involve the phys- suds level for detergents, size for stereo speakers (01-
ical composition of the product. In a beverage, intrinsic shavsky 1985), odor for bleach and stockings (Laird
cues would include such attributes as flavor, color, 1932), and produce freshness for supermarkets (Bon-
texture, and degree of sweetness. Intrinsic attributes ner and Nelson 1985).
cannot be changed without altering the nature of the
product itself and are consumed as the product is con- 2Othermethods of classification could have been used for these cues.
sumed (Olson 1977; Olson and Jacoby 1972). Extrin- Possible alternative classification schemes include (1) tangible/intan-
sic cues are product-related but not part of the phys- gible, (2) distal/proximal (Brunswick 1956), and (3) direct/inferen-
tial. However, each of these dichotomies has the same "fuzzy set"
ical product itself. They are, by definition, outside the problems that are inherent in the intrinsic/extrinsic dichotomy. No-
product. Price, brand name, and level of advertising tably, with each scheme, some cues (particularly package) would be
difficult to classify. Because the intrinsic/extrinsic dichotomy has a
are examples of extrinsic cues to quality. literature underpinning it, because it is widely used and recognized,
The intrinsic-extrinsic dichotomy of quality cues and because it has clear managerial implications, it was retained in
is useful for discussing quality but is not without con- this review.
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 quality are product-specific, but di- mon to more alternatives. Garvin (1987), for exam-
mensions of quality can be generalized ple, proposes that productquality can be capturedin
to productclasses or categories. eight dimensions: performance, features, reliability,
conformance,durability,serviceability,aesthetics,and
Generalizingaboutqualityacrossproductshas been perceived quality (i.e., image). Abstract dimensions
difficult for managers and researchers. Specific or that capturediverse specific attributeshave been dis-
concrete intrinsic attributesdiffer widely across prod- cussed by Johnson(1983) and Achrol, Reve, and Stem
ucts, as do the attributesconsumers use to infer qual- (1983). In describing the way consumers compare
ity. Obviously, attributesthat signal quality in fruit noncomparablealternatives (e.g., how they choose
juice are not the same as those indicating quality in between such diverse alternatives as a stereo and a
washing machines or automobiles. Even within a Hawaiian vacation), Johnson posited that consumers
productcategory, specific attributesmay provide dif- representthe attributesin memory at abstractlevels
ferent signals about quality. For example, thickness (e.g., using entertainmentvalue as the dimension on
is related to high quality in tomato-basedjuices but which to compare stereos and Hawaiian vacations).
not in fruit-flavoredchildren's drinks. The presence Similarly, Achrol, Reve, and Ster proposedthat the
of pulp suggests high quality in orangejuice but low multitudeof specific variables affecting a firm in the
quality in apple juice. environmentcan be capturedin abstractdimensions.
Though the concrete attributesthat signal quality Rather than itemizing specific variables that affect
differ across products, higher level abstract dimen- particularfirms in different industries under varying
sions of quality can be generalized to categories of circumstances,they proposedconceptualizingthe en-
products.As attributesbecome more abstract(i.e., are vironmentin terms of its abstractqualities or dimen-
Consumer of Price,Quality,andValue/ 7
Perceptions
sions (e.g., homogeneity-heterogeneity, stability-in- not product-specific and can serve as general indica-
stability, concentration-dispersion, and turbulence). tors of quality across all types of products. Price, brand
Olson (1978) pointed out that consumers may use name, and level of advertising are three extrinsic cues
informational cues to develop beliefs about products frequently associated with quality in research, yet many
and that task response (i.e., choice or evaluation) may other extrinsic cues are useful to consumers. Of spe-
be a direct function of these mediating beliefs. Ac- cial note are extrinsic cues such as product warranties
cording to Olson, these beliefs may be of two types: and seals of approval (e.g., Good Housekeeping). Price,
descriptive, which involve a restatement of the orig- the extrinsic cue receiving the most research attention
inal information in more abstract terms (e.g., "accel- (see Olson 1977 for a complete review of this liter-
erates from 0 to 60 in 5 seconds" generates the belief ature), appears to function as a surrogate for quality
"high performance") and inferential, which involve when the consumer has inadequate information about
an inference to information missing in the environ- intrinsic attributes. Similarly, brand name serves as a
ment (e.g., "accelerates from 0 to 60 in 5 seconds" "shorthand" for quality by providing consumers with
generates the belief "probably corers well, too"). This a bundle of information about the product (Jacoby et
distinction roughly parallels Alba and Hutchinson's al. 1978; Jacoby, Szybillo, and Busato-Schach 1977).
(1987) distinction between interpretive and embellish- Level of advertising has been related to product qual-
ment inferences and both dichotomies illustrate the level ity by economists Nelson (1970, 1974), Milgrom and
at which dimensions of quality can be conceptualized. Roberts (1986), and Schmalensee (1978). The basic
Interviews with subjects in the exploratory study argument holds that for goods whose attributes are de-
suggested that specific intrinsic attributes used to infer termined largely during use (experience goods), higher
quality could not be generalized across beverages, but levels of advertising signal higher quality. Schmalen-
that higher level abstract dimensions could capture the see argues that level of advertising, rather than actual
meaning of perceived quality in whole categories or claims made, informs consumers that the company
classes of beverages. Purity, freshness, flavor, and believes the goods are worth advertising (i.e., of high
appearance were the higher level abstract dimensions quality). Supporting this argument is the finding that
subjects discussed in defining quality in the beverage many subjects in the exploratory study perceived
category. heavily advertised brands to be generally higher in
Evidence. In a study of quality in long distance quality than brands with less advertising.
The exploratory investigation of beverages pro-
telephone, banking, repair and maintenance, and bro- vided evidence that form of the product (e.g., frozen
kerage services, Parasuraman, Zeithaml, and Berry vs. canned vs. refrigerated) is an additional important
(1985) found consistent dimensions of perceived qual- extrinsic cue in beverages. Consumers held consistent
ity across four consumer service industries. These ab-
stract dimensions included reliability, empathy, as- perceptions of the relative quality of different forms
of fruit juice: quality perceptions were highest for fresh
surance, responsiveness, and tangibles. Similarly,
Bonner and Nelson (1985) found that sensory signals products, next highest for refrigerated products, then
bottled, then frozen, then canned, and lowest for dry
such as rich/full flavor, natural taste, fresh taste, good
product forms.
aroma, and appetizing looks-all higher level abstract
dimensions of perceived quality-were relevant across
Evidence. The literature on hedonic quality mea-
33 food product categories. Brucks and Zeithaml (1987)
surement (Court 1939; Griliches 1971) maintains that
contend on the basis of exploratory work that six ab-
stract dimensions (ease of use, functionality, perfor- price is the best measure of product quality. Consid-
erable empirical research has investigated the rela-
mance, durability, serviceability, and prestige) can be
tionship between price and quality (see Olson 1977
generalized across categories of durable goods. Though for a review of this literature in marketing) and has
empirical research has not verified the generalizability shown that consumers use price to infer quality when
of dimensions for categories of packaged goods other
it is the only available cue. When price is combined
than food products, for durable goods, or for indus- with other (usually intrinsic) cues, the evidence is less
trial goods, abstract dimensions spanning these cate-
convincing.
gories could be conceptualized, verified, and then used In forming impressions about quality of merchan-
to develop general measures of quality in product cat-
dise, respondents in a study by Mazursky and Jacoby
egories. (1985) selected brand name more frequently than any
other information. Gardner (1970, 1971) found sig-
PQ3: Extrinsic cues serve as generalized qual-
nificant main effects on quality perceptions due to brand
ity indicators across brands, products, and
name.
categories.
Kirmani and Wright (1987a,b) found empirical
Extrinsic attributes (e.g., price, brand name) are support for the relationship between level of spending
July1988
on advertising and quality inferences. Manipulating expressingconcernfor their chidren'shealthand teeth,
expenditureson media budgets and on productionele- unequivocally stated that purity (100% juice, no sugar)
ments in advertisements, they found significant ef- was the criterionthey used to judge quality across the
fects of both on consumers' quality perceptions. broad fruit juice category. The link between quality
Bonner and Nelson (1985) confirm that product and this intrinsic attributewas clear and strong: all
form relatesto qualityperceptions.An empiricalstudy fruit beverages with 100% juice were high quality
revealedthe same hierarchyof qualityin packageform beverages and all others were not.
(fresh, refrigerated,frozen, bottled, canned, dried) as Evidence. Researchers addressing this question
was found in the exploratorystudy. Bonner and Nel-
son conclude: "The sensory maintenance ability of (Darden and Schwinghammer 1985; Etgar and Mal-
hotra 1978; Olson and Jacoby 1972; Rigaux-Bricmont
packaging differs by type and those packaging forms 1982; Szybillo and Jacoby 1974) have concluded that
that can best deliver a rich/full flavor, natural and
intrinsiccues were in general more importantto con-
fresh taste, good aroma, and an appetizing appear-
sumers in judging quality because they had higher
ance, are likely to gain marketshare" (p. 75).
predictive value than extrinsic cues. This conclusion
PQ4:Consumersdependon intrinsicattributes does not account for the fact that many assessments
more than extrinsic attributes about quality are made with insufficient information
(a) at the point of consumption, about intrinsiccues. Selected individualstudies (e.g.,
(b) in prepurchasesituations when in- Sawyer, Worthing,and Sendak 1979) have shown that
trinsic attributesare searchattributes extrinsiccues can be more importantto consumersthan
(rather than experience attributes), intrinsic cues. Conflicting evidence about the impor-
and tance of intrinsic and extrinsic cues becomes clearer
(c) when the intrinsicattributeshave high if the conditions under which each type of cue be-
predictive value. comes importantare investigated.
Which type of cue-intrinsic or extrinsic-is more PQ5:Consumers depend on extrinsic attri-
importantin signaling quality to the consumer? An butes more than intrinsic attributes
answerto this questionwouldhelp firmsdecidewhether (a) in initial purchase situations when
to invest resourcesin productimprovements(intrinsic intrinsiccues are not available (e.g.,
cues) or in marketing(extrinsic cues) to improve perfor services),
ceptions of quality. Finding a simple and definitive (b) when evaluationof intrinsiccues re-
answerto this question is unlikely, but the exploratory quires more effort and time than the
study suggests the type of attributethatdominatesde- consumer perceives is worthwhile,
pends on several key contingencies. and
The first contingency relates to the point in the (c) when quality is difficult to evaluate
purchasedecision and consumptionprocess at which (experience and credence goods).
quality evaluation occurs. Consumers may evaluate
quality at the point of purchase (buying a beverage) Extrinsic cues are posited to be used as quality
or at the point of consumption(drinkinga beverage). indicatorswhen the consumeris operatingwithout ad-
The salience of intrinsicattributesat the point of pur- equate informationabout intrinsic product attributes.
chase depends on whether they can be sensed and This situation may occur when the consumer (1) has
evaluated at that time, that is, whether they contain little or no experience with the product, (2) has in-
search attributes(Nelson 1970). Where search attri- sufficient time or interest to evaluate the intrinsic at-
butes are present (e.g., sugar content of a fruit juice tributes, and (3) cannot readily evaluate the intrinsic
or color or cloudiness of a drink in a glass jar), they attributes.
may be importantquality indicators.In their absence, At point of purchase, consumers cannot always
consumers depend on extrinsic cues. evaluate relevantintrinsicattributesof a product. Un-
At the point of consumption, most intrinsic attri- less free samples are being provided, consumerscan-
butes can be evaluated and therefore become acces- not taste new food productsbefore buying them. Con-
sible as quality indicators.Many consumersin the ex- sumers do not know for certain how long a washing
ploratorystudy on beverages used taste as the signal machine or automobile will last until they purchase
of quality at consumption. If a beverage did not taste and consume it. In these and similar situations, the
fresh or tasted "tinny"or too thin, the evaluationwas consumer relies on extrinsic attributessuch as war-
that quality was low. ranty, brandname, and package as surrogatesfor in-
Consumersdepend on intrinsicattributeswhen the trinsic productattributes.
cues have high predictive value (Cox 1962). Many At other times, intrinsic attributes on which to
respondentsin the exploratorystudy, especially those evaluate quality are available but the consumer is un-
Perceptions
rics have changed, laundry habits have changed, and
willing or unable to expend the time and effort to has changed. . . . These are just a few
competition
evaluate them. Working women, men, and single of the more significant changes in the household
shoppers, for example, have been reported to use su- laundry market, and every one of these changes has
a meaning for the performanceand the marketingplans
permarket product information significantly less than for Tide. The product which we are selling today is
other demographic segments (Zeithaml 1985), in part importantly different from the Tide product which we
because these segments are more time-conscious than introduced in 1947. It is different in its cleaning per-
other segments (Zeithaml 1985; Zeithaml and Berry formance, in sudsing characteristics, aesthetics,
physical properties, packaging. In total, there have
1987). Working women interviewed in the explora- been 55 significant modifications in this one brand
tory study reported that they shopped quickly and could during its 30-year lifetime.
not study nutritional information carefully on bever-
age containers. They selected beverages on the basis The Concept of Perceived Price
of the freshness or quality conveyed by packages or
brand names. From the consumer's perspective, price is what is given
In other situations, intrinsic product attributes in- up or sacrificed to obtain a product. This definition is
dicating quality are simply too difficult for the con- congruent with Ahtola's (1984) argument against in-
sumer to evaluate. Evaluation may be difficult prior cluding monetary price as a lower level attribute in
to purchase, as with haircuts, restaurant meals, and multiattribute models because price is a "give" com-
other experience goods. Complex stereo equipment, ponent of the model, rather than a "get" component.
insurance policies, and major auto repairs are exam- Defining price as a sacrifice is consistent with con-
ples of products that for many consumers are difficult ceptualizations by other pricing researchers (Chapman
to evaluate even after purchase and consumption. For 1986; Mazumdar 1986; Monroe and Krishnan 1985).
these "credence goods" (Darby and Karni 1973), con- Figure 1 delineates the components of price: ob-
sumers may rely on extrinsic cues because they are jective price, perceived nonmonetary price, and sac-
simpler to access and evaluate. rifice. Jacoby and Olson (1977) distinguished be-
tween objective price (the actual price of a product)
Evidence. Research has shown that price is used
and perceived price (the price as encoded by the con-
as a quality cue to a greater degree when brands are
unfamiliar than when brands are familiar (Smith and sumer). Figure 1 emphasizes this distinction: objec-
tive monetary price is frequently not the price encoded
Broome 1966; Stokes 1985). Research also has shown
that when perceived risk of making an unsatisfactory by consumers. Some consumers may notice that the
exact price of Hi-C fruit juice is $1.69 for a 6-pack,
choice is high, consumers select higher priced prod-
but others may encode and remember the price only
ucts (Lambert 1972; Peterson and Wilson 1985; Shap-
as "expensive" or "cheap." Still others may not en-
iro 1968, 1973).
code price at all.
PQ6: The cues that signal quality change over A growing body of research supports this distinc-
time because of tion between objective and perceived price (Allen,
(a) competition, Harrell, and Hutt 1976; Gabor and Granger 1961;
(b) promotional efforts of companies, Progressive Grocer 1964). Studies reveal that con-
(c) changing consumer tastes, and sumers do not always know or remember actual prices
(d) information. of products. Instead, they encode prices in ways that
are meaningful to them (Dickson and Sawyer 1985;
As improved technology and increasing competi- Zeithaml 1982, 1983). Levels of consumer attention,
tion lead to the development of technically better awareness, and knowledge of prices appear to be con-
products, the features that signal superiority change. siderably lower than necessary for consumers to have
The exploratory study suggested that the attribute cues accurate internal reference prices for many products
signaling quality in beverages are not static, but in- (Dickson and Sawyer 1985; Zeithaml 1982). Dickson
stead change over time. The shift from canned orange and Sawyer reported that the proportions of con-
juice to frozen orange juice to refrigerated orange juice sumers checking prices of four types of products
is one example of the evolving standards of quality in (margarine, cold cereal, toothpaste, and coffee) at point
beverages. The replacement of saccharin with Nutra- of purchase ranged from 54.2 to 60.6%. Among the
sweet in beverages is another. groups of consumers not checking prices in these
Harness (1978, p. 17) illustrates the forces of change studies, a large proportion (from 58.5 to 76.7% in the
and the responses made by Procter & Gamble to keep four product categories) stated that price was just not
Tide detergent the highest quality brand in the pack- important. Another recent study indicates that price
aged soap category: awareness differs among demographic groups, the
Since Tide was first introducedin 1947, consumers greatest levels of awareness being in consumers who
havechanged,washingmachineshave changed,fab- are female, married, older, and do not work outside
10 / Journalof Marketing,July 1988

the home (ZeithamlandBerry1987). Attentionto prices (Monroe and Krishnan1985; Olson 1977). Bowbrick
is likely to be greaterfor higherpricedpackagedgoods, (1982) questioned the universality of the price-per-
durablegoods, and services than for low priced bev- ceived quality relationship,called the streamof stud-
erages, but other factors in these categories-com- ies on the topic "pseudoresearch,"and claimed that
plexity, lack of price information,and processingtime the price-perceived quality hypothesis is too general
required-may interfere with accurateknowledge of and untestable to produce anything other than trivial
prices. An additional factor contributingto the gap results. Petersonand Wilson (1985) argue that the re-
between actual and perceived price is price disper- lationship between price and perceived quality is not
sion, the tendency for the same brands to be priced universaland thatthe directionof the relationshipmay
differently across stores or for products of the same not always be positive.
type and quality to have wide price variance(Maynes
and Assum 1982). Evidence. Monroe and Krishnan(1985) concluded
thata positive price-perceivedqualityrelationshipdoes
Ppl: Monetary price is not the only sacrifice appearto exist despite the inconsistency of the statis-
perceived by consumers. tical significance of the research findings. They also
Full price models in economics(e.g., Becker 1965) noted, however, that multipleconceptualproblemsand
acknowledge that monetaryprice is not the only sac- methodological limitationscompromisedprevious re-
rifice consumersmake to obtainproducts.Time costs, search. Monroe and Dodds (1988) describe these lim-
search costs, and psychic costs all enter either explic- itations in greaterdetail and delineate a researchpro-
itly or implicitly into the consumer's perception of gram for establishing the validity of the price-quality
sacrifice. If consumers cannot find products on the relationship.
shelf, or if they must travel distances to buy them, a Many empiricalstudies have producedresults that
sacrifice has been made. If consumers must expend conflict with Monroe and Krishnan'sassessment of a
effort to assemble durableproductsor time to prepare positiverelationship.In severalstudies(Friedman1967;
Swan 1974), overall association between price and
packaged goods, and if this time and effort does not
provide satisfaction to the consumer in the form of perceived quality is low. Other studies show the re-
recreationor a hobby, a sacrifice has been made. lationshipto be nonlinear(Peterson1970; Petersonand
Jolibert 1976), highly variable across individuals
Evidence. Researchin economics, home econom-
(Shapiro 1973), and variable across products being
ics, and marketingsupportsthe propositionthat other judged (Gardner1971). Other research, summarized
costs-time, effort, search, psychic-are salient to by Olson (1977), shows that price becomes less im-
consumers(Down 1961; Gronau1973;Leibowitz 1974;
portantas a quality indicatorwhen other productqual-
Leuthold1981;Linder1970;Mabry1970;Mincer1963;
ity cues, such as brandname (Gardner1971) or store
Nichols, Smolensky, and Tideman1971; Zeithamland image (Stafford and Enis 1969), are present. Explor-
Berry 1987). atory and survey research (Bonner and Nelson 1985;
Parasuraman,Zeithaml,and Berry 1985) indicatesthat
The Price-QualityRelationship price is among the least importantattributesthat con-
sumers associate with quality.
Nearly 90 research studies in the past 30 years have Related studies (summarizedby Hjorth-Anderson
been designed to test the general wisdom that price 1984) have consistently shown price to be correlated
and quality are positively related. Despite the expec- only weakly with objective (rather than perceived)
tation of a positive relationship,results of these stud- quality. Typical of these studies is work by Sproles
ies have provided mixed evidence. (1977), who correlated the prices of products with
qualityratingsobtainedthroughConsumerReportsand
PPQI:A general price-perceived quality re- Consumers' Research Magazine. Though a positive
lationship does not exist.
price-objective qualityrelationshipwas found in 51%
Price reliance is a general tendency in some con- of the 135 productcategories,no relationshipwas found
sumers to depend on price as a cue to quality (Lam- in 35% and a negative relationshipwas found in 14%.
bert 1972; Shapiro 1968, 1973). The body of litera- Similarly, Riesz found the mean rank correlationbe-
ture summarized by Olson (1977) is based on the tween price and objective quality to be .26 for 685
assumptionthat a general price-perceived quality re- productcategories reportedin ConsumerReports be-
lationshipexists. Despite a multitudeof experimental tween 1961 and 1975 and .09 for 679 brandsof pack-
studies on the topic, however, the relationshiphas not aged foods (Riesz 1978). Geistfeld (1982) found vari-
surfaced clearly except in situations where methodo- ability among marketsand across stores in the price-
logicalconcernssuch as demandartifacts(Sawyer1975) objective qualityrelationship.Most recently, Gerstner
could offer alternative explanations for the results (1985) assessed the correlation between quality and
Perceptions
price for 145 products and concluded that the rela- dividual difference is consumers' ability to detect
tionshipappearedto be product-specificand generally quality variation among products (Lambert 1972). If
weak. the consumerdoes not have sufficient productknowl-
Both Peterson and Wilson (1985) and Olshavsky edge (or perhapseven interest)to understandthe vari-
(1985) arguethatthe emphasisin price-qualitystudies ation in quality (e.g., French, Williams, and Chance
should not be on documentingthe general price-per- 1973), price and other extrinsic cues may be used to
ceived quality relationship,but on the conditions un- a greaterdegree.
der which price informationis likely to lead to an in- Consumers appear to depend more on price as a
ference about productquality. One possibility is that quality signal in some productcategories than in oth-
some individualsrely heavily on price as a quality sig- ers. One explanationfor this variationmay be differ-
nal whereasothersdo not. Petersonand Wilson sorted ences in price-objective quality relationshipsby cat-
respondentsinto groups on the basis of their having egory (e.g., the low price of Japaneseautomobilesdoes
a price-relianceschema and confirmed in an experi- not diminishthe well-establishedperceptionof quality
ment that "schematics"perceive a stronger relation- in the category). Another explanation may be price
ship between price and quality than "aschematics." variationin a category. In packaged goods categories
This general tendency on the part of some consumers (such as beverages)whereproductsdifferlittle in price,
to associate price and quality has been examined in the consumermay not attributehigher quality to prod-
the contextof covariationassessmentby Roedder-John, ucts that cost only a few cents more than those of
Scott, and Bettman (1986), who confirmed that con- competitors.Respondentsin the exploratorystudy, for
sumersdiffer in their beliefs about the associationbe- example, did not associate beverage price with qual-
tween the price and quality variables. These studies ity. Still anothercategory-specificcontingencyis quality
provideevidence that some consumershave a schema variation: in categories where little variation is ex-
of price reliance, ratherthan indicating a generalized pected among brands(such as salt or paper sandwich
tendency in consumersto associate price and quality. bags), price may functiononly as an indicationof sac-
rifice whereas in categories where quality variationis
PPQ2:The use of price as an indicatorof qual- expected (such as canned seafood or washing ma-
ity depends on chines), price may function also as an indication of
(a) availabilityof othercues to quality,
quality.
(b) price variation within a class of
products, Evidence. Olson (1977) showed that availability
(c) product quality variation within a of intrinsic and extrinsic cues other than price typi-
category of products, cally results in weighting those factors (e.g., brand
(d) level of price awareness of con- name) as more importantthan price. He concluded
sumers, and that brandname is a strongercue than price for eval-
(e) consumers' ability to detect quality
variationin a group of products. uating overall quality (Gardner1971; Jacoby, Olson,
and Haddock 1973; Smith and Broome 1966; Stokes
Monroeand Krishnan(1985) contendthatmost past 1985).
price-perceived quality researchhas been exploratory Studies have indicated that use of price as a qual-
andhas not succeededin resolvingthe questionof when ity indicator differs by product category. Except for
price is used to infer quality. Contingencies affecting wine and perfume,most positive links have been found
the use of price as a quality indicator fit into three in durable rather than in nondurableor consumable
groups: informationalfactors, individual factors, and products(Gardner1970; Lambert1972; Peterson and
productcategory factors. Wilson 1985). In an experimentalsetting, Petersonand
The first category of factors believed to affect the Wilson documented the relationship between price
price-perceived quality relationshipconsists of other variationand price-perceived quality association:the
informationavailableto the consumer. When intrinsic greaterthe price variation,the greaterthe tendencyfor
cues to qualityarereadilyaccessible,whenbrandnames consumers to use price as a quality indicator.
provide evidence of a company's reputation,or when In a recent meta-analysisof 41 studies investigat-
level of advertisingcommunicatesthe company's being the association between price and perceived qual-
lief in the brand,the consumermay preferto use those ity, Rao and Monroe (1987) found that the type of
cues instead of price. experimental design and the magnitude of the price
Several individualdifference factors may account manipulationsignificantly influenced the size of the
for the variationin the use of price as a quality signal. price-perceived quality effects obtained. The number
One explanatory variable is price awareness of the of cues manipulatedand the price level were not found
consumer:consumers unaware of product prices ob- to have a significanteffect. Because of constraintsim-
viously cannot use price to infer quality. Another in- posed by the meta-analysis,the reviewersincludedonly
July1988
of Marketing,
12 / Journal
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 investigated.
* Little containers because then there is no waste.
Considerable empirical research supports individ-
ual differences in consumer knowledge of prices. * Value to me is what is convenient. When I can
Consumers are not uniformly aware of prices and cer- take it out of the refrigerator and not have to
tain consumer segments (such as working women and mix it up, then it has value.
men) are less aware of prices than other segments This second definition is essentially the same as the
(Zeithaml 1985; Zeithaml and Berry 1987; Zeithaml economist's definition of utility, that is, a subjective
and Fuerst 1983). Price awareness level has not been measure of the usefulness or want satisfaction that re-
studied as it relates to quality perceptions, though Rao sults from consumption. This definition also has been
(1987) documented the impact of prior knowledge of expressed in the trade literature. Value has been de-
products on the use of price as a quality cue. fined as "whatever it is that the customer seeks in
making decisions as to which store to shop or which
The Concept of Perceived Value product to buy" (Chain Store Age 1985). Schechter
When respondents in the exploratory study discussed (1984) defines value as all factors, both qualitative
and quantitative, subjective and objective, that make
value, they used the term in many different ways, de-
up the complete shopping experience. In these defi-
scribing a wide variety of attributes and higher level nitions, value encompasses all relevant choice crite-
abstractions that provided value to them. What con-
ria.
stitutes value-even in a single product category-
appears to be highly personal and idiosyncratic. Though Value is the quality I get for the price I pay. Other
many respondents in the exploratory study agreed on respondents conceptualized value as a tradeoff be-
cues that signaled quality, they differed considerably tween one "give" component, price, and one "get"
in expressions of value. Patterns of responses from the component, quality:
exploratory study can be grouped into four consumer * Value is price first and quality second.
definitions of value: (1) value is low price, (2) value
* Value is the lowest price for a quality brand.
is whatever I want in a product, (3) value is the qual-
* Value is the same as quality. No-value is af-
ity I get for the price I pay, and (4) value is what I
get for what I give. Each definition involves a dif- fordable quality.
ferent set of linkages among the elements in the model This definition is consistent with several others that
and each consumer definition has its counterpart in the
appear in the literature (Bishop 1984; Dodds and
academic or trade literature on the subject. The di- Monroe 1984; Doyle 1984; Shapiro and Associates
versity in meanings of value is illustrated in the fol- 1985).
lowing four definitions and provides a partial expla-
nation for the difficulty in conceptualizing and Value is what I get for what I give. Finally, some
measuring the value construct in research. respondents considered all relevant "get" components
as well as all relevant "give" components when de-
Value is low price. Some respondents equated value
scribing value:
with low price, indicating that what they had to give
up was most salient in their perceptions of value. In * Value is how many drinks you can get out of a
their own words: certain package. Frozen juices have more be-
cause you can water them down and get more
* Value is price-which one is on sale.
out of them.
* When I can use coupons, I feel that the juice is
* How many gallons you get out of it for what
a value.
the price is.
* Value means low price.
* Whatever makes the most for the least money.
* Value is whatever is on special this week.
* Which juice is more economical.
In industry studies, Schechter (1984) and Bishop (1984) 0 Value is what you are paying for what you are
identified subsets of consumers that equate value with
getting.
price. Other industry studies, including Hoffman's * Value is price and having single portions so that
(1984), reveal the salience of price in the value equa-
tions of consumers. there is no waste.
Value is whatever I want in a product. Other re- This fourth definition is consistent with Sawyer and
spondents emphasized the benefits they received from Dickson's (1984) conceptualization of value as a ratio
the product as the most important components of value: of attributes weighted by their evaluations divided by
Perceptions
price weighted by its evaluation. This meaning is also attributes,other higher level abstractionscontributed
similar to the utility per dollar measureof value used to perceptionsof value. A frequentlymentionedhigher
by Hauser and Urban (1986), Hauser and Simmie level abstractionfor fruitjuice was convenience. Some
(1981), Hauser and Shugan (1983), and others. consumersdid not want to reconstitutethe juice. Oth-
These four consumer expressions of value can be ers wanted self-serve containersso that childrencould
capturedin one overall definition: perceived value is get juice from the refrigeratorby themselves. For this
the consumer's overall assessment of the utility of a reason, small cans with difficult-to-opentops were not
productbased on perceptionsof what is received and as convenient as little boxes with insertable straws.
what is given. Though what is received varies across Fully reconsituted, ready-to-serve, and easy-to-open
consumers (i.e., some may want volume, others high containerswere keys to adding value in the category.
quality, still others convenience) and what is given These intrinsicandextrinsiclower level attributesadded
varies (i.e., some are concernedonly with money ex- value through the higher level abstractionof conve-
pended, others with time and effort), value represents nience.
a tradeoff of the salient give and get components. Anotherhigher level abstractionimportantin pro-
Value and quality. In the means-endchains, value viding value in children's fruit juices was apprecia-
tion. When children drankbeverages the mothers se-
(like quality) is proposedto be a higher level abstrac-
tion. It differs from quality in two ways. First, value lected, when they mentioned them to mother or
evidenced thanks, the mothers obtained value. This
is more individualisticand personal than quality and
is therefore a higher level concept than quality. As particularpsychological benefit was not evoked di-
shown in Table 1, value may be similar to the "emo- rectly in any of the consumer interviews, but came
tional payoff" of Young and Feigen (1975), to "ab- through strongly in the ladderingprocess. The value
stract, multi-dimensional, difficult-to-measure attri- perceptions filtered through the higher level abstrac-
tion of appreciationand did not come directly through
butes" of Geistfeld, Sproles, and Badenhop (1977),
intrinsicor extrinsic attributes.This indirectinferenc-
and to "instrumentalvalues" of Olson and Reynolds
ing process illustratesa major difficulty in using tra-
(1983). Second, value (unlike quality) involves a ditional multiattributeor utility models in measuring
tradeoff of give and get components. Though many
perceived value. The intrinsic attributesthemselves
conceptualizationsof value have specified quality as are not always directly linked to value, but instead
the only "get" component in the value equation, the
filter through other personal benefits that are them-
consumer may implicitly include other factors, sev-
selves abstract.
eral that are in themselves higher level abstractions,
such as prestige and convenience (see Holbrook and Evidence. Though no empirical researchhas been
Corfman 1985 for a discussion of the difficulty in- reported on the pivotal higher level abstractionsre-
volved in separatingthese abstractionsin the value lated to value, several dimensionshave been proposed
construct). in selected categories. Bishop (1984), for example,
claimed that value in supermarketshopping is a com-
Pv1: The benefit componentsof value include posite of the higher level abstractionsof variety, ser-
salient intrinsic attributes, extrinsic at- vice, and facilities in addition to quality and price.
tributes,perceivedquality, and otherrel- Doyle (1984) identified convenience, freshness, and
evant high level abstractions. time as major higher level abstractionsthat combine
with price and quality to producevalue perceptionsin
Differences among the benefit or get components
shown in the model and listed in Pvl can be illustrated supermarketconsumers.
by findings from the exploratorystudy of fruitjuices. Pv2: The sacrifice components of perceived
As discussed before, perceived quality in fruit juices value include monetaryprices and non-
was signaled by the attribute "100% fruit juice" plus monetaryprices.
sensory attributessuch as taste and texture.
Some intrinsicattributesof fruitjuices-other than Consumers sacrifice both money and other re-
those signalingquality-were cited as providingvalue sources (e.g., time, energy, effort) to obtain products
to respondents.Color was one importantintrinsic at- and services. To some consumers, the monetarysac-
tribute. Most mothers knew which colors or flavors rifice is pivotal: some supermarketshoppers will in-
of juice their childrenwould drink;only those flavors vest hours clipping coupons, readingfood advertising
were considered to be acceptable to the child and in the newspaper, and traveling to different stores to
thereforeto have value for the mother. Otherintrinsic obtain the best bargains. To these consumers, any-
attributes(e.g., absence of pulp and visible consis- thing that reduces the monetarysacrifice will increase
tency of the drinks) also affected value perceptions. the perceived value of the product. Less price-con-
In additionto perceived quality and these intrinsic scious consumers will find value in store proximity,
July1988
ready-to-servefood products,and home delivery-even Evidence. To date, no reportedempirical studies
at the expense of higher costs-because time and ef- have investigatedthe potentialof triggers that lead to
fort are perceived as more costly. perceptionsof value.
Evidence. Recent researchreveals that saving time Pv4: The perceptionof value depends on the
has become a pivotal concern of consumers in super- frame of reference in which the con-
marketshopping and cooking. Supermarketshoppers sumer is making an evaluation.
have cited fast checkout as more importantthan low
prices in selecting grocery stores (Food MarketingIn- Holbrookand Corfman(1985) maintainthat value
stitute 1985, 1986). Studies also show that consumers perceptions are situational and hinge on the context
are willing to spend money to get more convenient withinwhich an evaluativejudgmentoccurs. This view
packaging in food products(Morris 1985). may help explain the diversity of meanings of value.
In the beverage category, for example, the frame of
Pv3: Extrinsic attributesserve as "value sig- reference used by the consumer in providing mean-
nals" and can substitute for active ings includedpoint of purchase,preparation,and con-
weighing of benefits and costs. sumption.Value meantdifferentthingsat each of these
points. At the point of purchase, value often meant
How carefully do consumers evaluate these com- low price, sale, or coupons. At the point of prepa-
ponents of productsin making assessments of value? ration, value often involved some calculation about
To judge from the product category of beverages, whetherthe productwas easy to prepareand how much
cognitive assessment is limited. Ratherthan carefully the consumercould obtain for what she paid. At con-
consideringprices and benefits, most respondentsde- sumption, value was judged in terms of whether the
pended on cues-often extrinsic cues-in forming children would drink the beverage, whether some of
impressions of value. A few respondents carefully the beverage was wasted, or whetherthe children ap-
calculatedthe cheapest brandin their set on a regular preciatedthe mother for buying the drinks.
basis, but most seemed to follow Langer's (1978) no-
tion of mindlessness: most respondentsbought bev- Evidence. No empirical studies have been con-
ductedto investigatethe variationin value perceptions
erages with only minimal processing of available in-
formation.They repeatedlyboughta brandthey trusted across evaluation contexts.
or used extrinsic value cues to simplify their choice Pv5: Perceived value affects the relationship
process. between quality and purchase.
These value triggerswere presentregardlessof the
way consumers defined value. Many consumers who As Olshavsky (1985) suggested, not all consumers
defined value as low price reportedusing a coupon as want to buy the highest quality item in every cate-
a signal to low price without actually comparingthe gory. Instead, quality appearsto be factored into the
reduced price of the couponed brand with the prices implicit or explicit valuation of a product by many
of other brands, or they reportedthat "cents-off" or consumers (Dodds and Monroe 1985; Sawyer and
"everyday low price" signs or a private label brand Dickson 1984). A given productmay be high quality,
triggeredthe value perception. Respondentswho de- but if the consumer does not have enough money to
fined value in terms of what they wanted in products buy it (or does not want to spend the amount re-
cited small containers, single-serving portions, and quired), its value will not be perceived as being as
ready-to-serve containers. Consumers who defined high as that of a productwith lower qualitybut a more
value as the quality they get for the price they pay affordableprice. In other words, when geta - givea
used signals such as 100% fruit juice on special or > getb - giveb but the shopper has a budget con-
brand name on special. Finally, consumers who de- straint, then givea > budget constraints > giveb and
fined value as what they get for what they pay de- hence b is chosen. The same logic may apply to prod-
pended on form (frozen vs. canned juice) and econ- ucts that need more preparationtime thanthe consum-
omy-sized packages as signals. er's time constraintallows.
Not all consumersrespondedin this mindless way The respondentsin the beverage study illustrated
-many saw their role as economical shopper to be this point as they discussed their typical purchasing
importantenough to spend time and effort to weigh behavior. For respondentswith several children, bev-
carefully the give and get components in their own erages accounted for a large portion of their weekly
equationsof value. Moreover, not all productsare as food bill. Though most believed that pure fruit juice
simple or inexpensive as beverages. One would ex- was of higher quality than fruit drinks, many of these
pect to find more rational evaluation in situations of respondentsdid not buy only pure fruitjuice because
high informationavailability, processing ability, time it was too expensive. They tended to buy some pro-
availability, and involvement in purchase. portion of pure fruitjuice, then round out these more
Perceptions
expensive purchases with fruit drinks. In their eval- and how they are perceived and combined (see also
uation,high qualitywas not worthits expense, so lower Gutmanand Alden 1985, Olson 1977, and Olson and
levels of quality were tolerated in a portion of the Jacoby 1972 for similar expressions of needed re-
weekly beverages. These consumers obtained more search). Finally, the relationship between the con-
value from the lower quality juices because the low structsof attitudeand qualityshouldbe examined.The
costs compensatedfor the reductionin quality. instrumentalityof a productfeature(Lewin 1936) and
Evidence. Several empirical studies have inves- the quality rating of such a feature in separately de-
tigated the relationshipbetween quality and purchase, terminingchoice may be an interestingresearchissue.
but no empirical studies have investigated explicitly The convergent and discriminantvalidity of the con-
the role of value as an interveningfactorbetweenquality structs of attitudeand quality also warrantinvestiga-
andpurchase.However, studieson the use of unit price tion. Quality measurementscales remain to be devel-
information(e.g., Aaker and Ford 1983; Dickson and oped and validated.
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
value) in making productchoices in supermarkets. Three aspects of modeling consumerdecision making
can be questioned if the propositionsprove to be ac-
Research Implications curate representations:the tendency to use actual at-
tributesof productsratherthan consumerperceptions
The precedingpropositionsraise questionsabout ways of those attributes, the practice of duplicating and
in which quality and value have been studied in the
comingling physical attributeswith higher order at-
past and suggest avenues for future research. tributes(Myers and Shocker 1981), and the failure to
Current Practices in Measuring Quality distinguish between the give and get (Ahtola 1984)
components of the model.
Academic research measuring quality has depended Howard(1977, p. 28) clearly states the first prob-
heavily on unidimensional rating scales, allowing lem.
quality to be interpretedin any way the respondent It is essentialto distinguishbetweenthe attributesper
chooses. This practice does not ensure that response andconsumers'perceptionsof these attributes,be-
dents are interpretingquality similarly or in the way cause consumersdiffer in theirperceptions.It is the
the researcherintends. Hjorth-Anderson (1984) claims perceptionthat affects behavior,not the attributeit-
self. "Attribute"is often used to mean choice crite-
that unidimensional scales are methodologically in- ria, but this leads to confusion. To use "attribute"
valid by showing that the concept of overall quality when you mean not the attributeitself but the con-
has many dimensions. Holbrookand Corfman(1985) sumer'smentalimage of it, is to reify whatis in the
consumer'smind.
call for ambiguous quality measures to be replaced
with scales based on conceptualdefinitionsof quality. Jacoby and Olson (1985) concur, claiming that the fo-
An example of the approachthey recommend is il- cus of marketersshould not be objective reality but
lustratedby Parasuraman, Zeithaml,and Berry (1985), instead consumer perceptions, which may be altered
who investigated service quality in an extensive ex- either by changing objective reality or by reinterpret-
ploratorystudy, conceptualizedit in dimensionsbased ing objective reality for consumers.
on that investigation, and operationalizedit using the Myers and Shocker (1981) point out that comin-
conceptual domain specified in the first phase (Para- gling quality, a higher level abstraction, with lower
suraman,Zeithaml, and Berry 1986). In that stream level physical attributes in models limits the validity
of research, quality was defined as a comparisonbe- and confounds the interpretation of many studies, es-
tween consumer expectations and perceptionsof per- pecially when this practice duplicates lower level at-
formancebased on those dimensions,an approachthat tributes. Therefore, it is necessary to use attributesfrom
allows for individualdifferences across subjectsin the the same general classification or level in the hier-
attributesthat signal quality. archy in modeling consumer decision making. Ahtola
The researchapproachused by Parasuraman,Zei- (1984) confirms that when the hierarchical nature of
thaml, and Berry (1985) could be used in different attributes is not recognized in consumer decision
categories of products (e.g., packaged goods, indus- models, double and triple counting of the impact of
trial products, durablegoods) to find the abstractdi- some attributes results. Techniques to elicit and or-
mensionsthat capturequalityin those categories.Such ganize attributes,in his opinion, should precede mod-
an attemptis currentlyunderwayby Brucksand Zeith- eling of the attributes.Myers and Shocker (1981) dis-
mal (1987) for durablegoods. Studies also are needed cuss different consumer decision models appropriate
to determinewhich attributessignal these dimensions, for the levels and ways attributesshould be presented
when and why they are selected instead of other cues, in researchinstrumentsand analyzed later. Huberand
July1988
McCann(1982) reveal the impactof inferentialbeliefs dures to link attributes with perceptions. Holbrook
on product evaluations and acknowledge that under- (1981) provides a theoreticalframeworkand analytic
standingconsumer inferences is essential both in get- procedurefor representingthe interveningrole of per-
ting informationfrom consumers and in giving infor- ceptions in evaluative judgments. Neslin (1981) de-
mation to consumers. Finally, Ahtola (1984) calls for scribes the superiorityof statisticallyrevealed impor-
expandingand revising models to incorporatethe sac- tance weights over self-stated importanceweights in
rifice aspects of price. Sacrifice should not be limited linking productfeatures to perceptions.
to monetaryprice alone, especially in situationswhere
time costs, search costs, and convenience costs are Researching Value
salient to the consumer. A major difficulty in researchingvalue is the variety
of meanings of value held by consumers. Building a
Methods Appropriate for Studying Quality model of value requiresthat the researcherunderstand
and Value which of many (at least of four) meanings are implicit
The approachused in the exploratoryinvestigation is in consumers'expressionsof value. Utility models are
appropriatefor investigating quality in other product rich in terms of methodological refinements (see
categories. Olson and Reynolds (1983) developed Schmalensee and Thisse 1985 for a discussion of dif-
methods to aggregate the qualitative data from indi- ferent utility measures and equations), but do not ad-
vidual consumers. Aggregate cognitive mapping, dress the distinctionbetweenattributesand higherlevel
structuralanalysis, cognitive differentiationanalysis, abstractions.They also presumethat consumerscare-
and value structuremapping are all techniques de- fully calculate the give and get componentsof value,
signed especially to analyze and representhigher or- an assumption that did not hold true for most con-
der abstractionssuch as quality. These techniquesare sumers in the exploratorystudy.
more appropriatethan preference mapping or mul-
tiattribute modeling for investigating concepts like Price as a Quality Indicator
quality and value (for a complete discussion and ex- Most experimentalstudies related to quality have fo-
plication of these techniques, see Gutmanand Alden cused on price as the key extrinsic quality signal. As
1985 or Reynolds and Jamieson 1985). suggested in the propositions,price is but one of sev-
Several researchershave developed approachesto eral potentially useful extrinsic cues; brand name or
link product attributesto perceptions of higher level packagemay be equally or more important,especially
abstractions.Mehrotraand Palmer (1985) suggest a in packagedgoods. Further,evidence of a generalized
methodological approachto relating product features price-perceived quality relationshipis inconclusive.
to perceptionsof quality based on the work of Olson Quality researchmay benefit from a de-emphasis on
and Reynolds (1983). In their procedure,lists of cues price as the main extrinsic quality indicator.Inclusion
and benefits are developed from focus groups or in- of other importantindicators,as well as identification
depth interviews with consumers, semantic differen- of situations in which each of those indicatorsis im-
tial scales are constructed to capture the benefits, a portant,may provide more interestingand useful an-
tradeoff procedure is used to determine the impor- swers about the extrinsic signals consumers use.
tance of the cues, and respondents match cues to
productconcepts. Through this type of analysis, de-
gree of linkage (between cues and benefits), value of Management Implications
a cue, and competitive brand information are pro- An understandingof what quality and value mean to
vided. consumersoffers the promise of improvingbrandpo-
Mazursky and Jacoby (1985) also recognized the sitions throughmore precise marketanalysis and seg-
need for proceduresto trackthe inferenceprocessfrom mentation, productplanning, promotion, and pricing
considerationof objective cues to the higher level im- strategy. The model presentedhere suggests the fol-
age of quality. Instead of free-elicitationprocedures, lowing strategies that can be implemented to under-
they used a behavioralprocessing simulationwhereby stand and capitalize on brandquality and value.
they presentedattributeinformationto respondentsand
asked them to form an impressionof qualityby choos- Close the Quality Perception Gap
ing any informationthey wished. Though this method Though managers increasingly acknowledge the im-
can be criticizedas unrealistic,it providesinsightsinto portanceof quality, many continueto define and mea-
the types of informationthat consumersbelieve signal sure it from the company's perspective. Closing the
quality. Modifications of the method to make the en- gap between objective and perceived quality requires
vironmentmore realistic (such as by Brucks 1985) are that the company view quality the way the consumer
also possible. does. Research that investigates which cues are im-
Other researchershave described analytic proce- portantand how consumersform impressionsof qual-
Consumer of Price,Quality,
Perceptions andValue
/ 17
ity based on those technical, objective cues is nec- may be able to educate consumers on ways to evaluate
essary. Companies also may benefit from research that quality. Advertising, the information provided in
identifies the abstract dimensions of quality desired by packaging, and visible cues associated with products
consumers in a product class. can be managed to evoke desired quality perceptions.
Identify Key Intrinsic and Extrinsic Attribute Understand How Consumers Encode
Signals Monetary and Nonmonetary Prices
A top priority for marketers is finding which of the The model proposes a gap between actual and per-
many extrinsic and intrinsic cues consumers use to ceived price, making it important to understand how
signal quality. This process involves a careful look at consumers encode prices of products. Nonmonetary
situational factors surrounding the purchase and use costs-such as time and effort-must be acknowl-
of the product. Does quality vary greatly among prod- edged. Many consumers, especially the 50 million
ucts in the category? Is quality difficult to evaluate? working women in the U.S. today, consider time an
Do consumers have enough information about intrin- important commodity. Anything that can be built into
sic attributes before purchase, or do they depend on products to reduce time, effort, and search costs can
simpler extrinsic cues until after their first purchase? reduce perceived sacrifice and thereby increase per-
What cues are provided by competitors? Identifying ceptions of value.
the important quality signals from the consumer's
Recognize Multiple Ways to Add Value
viewpoint, then communicating those signals rather
than generalities, is likely to lead to more vivid per- Finally, the model delineates several strategies for
ceptions of quality. Linking lower level attributes with adding value in products and services. Each of the
their higher level abstractions locates the "driving force" boxes feeding into perceived value provides an ave-
and "leverage point" for advertising strategy (Olson nue for increasing value perceptions. Reducing mon-
and Reynolds 1983). etary and nonmonetary costs, decreasing perceptions
of sacrifice, adding salient intrinsic attributes, evok-
Acknowledge the Dynamic Nature of Quality
ing perceptions of relevant high level abstractions, and
Perceptions using extrinsic cues to signal value are all possible
Consumers' perceptions of quality change over time strategies that companies can use to affect value per-
as a result of added information, increased competi- ceptions. The selection of a strategy for a particular
tion in a product category, and changing expectations. product or market segment depends on its customers'
The dynamic nature of quality suggests that marketers definition of value. Strategies based on customer value
must track perceptions over time and align product standards and perceptions will channel resources more
and promotion strategies with these changing views. effectively and will meet customer expectations better
Because products and perceptions change, marketers than those based only on company standards.
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andValue
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ness of SupermarketShoppers," working paper, Texas A&M Response to Grocery Store Price Information," Journal of
University. Consumer Affairs, 17 (2), 403-20.
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Consumer Perceptions of Price, Quality, and Value: A Means-End Model and Synthesis of

Consumer Perceptions of Price,

ConsumerPerceptionsof Price,Quality,and Value/ 3

ConsumerPerceptionsof Price,Quality,and Value/ 5

10 / Journalof Marketing,July 1988

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