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Does Premium Price Act as a Cue To High Quality? (The Relationships Between Premium Price and Quality)


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1 School of Commerce Management and Research, ITM University, Raipur (C.G.), India
 

Customers should use a product's and service's premium price to determine if the product is affordable or not. However, customers also appear to use a product's and service's price as a measurement of the product's and service quality. So many empirical studies (e.g., see reviews by Monroe 1973 and Olson 1977) have shown that when customers have some uncertainty concerning a product's and service's quality, the customer often presumes that a higher product and services price indicates a higher level of quality. Some authors (Gabor and Grange 1966; Tull, Boring and Gonsior 1964) suggest these studies imply that the traditional economical treatment of price and consumer behaviour is wrong.
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Abstract Views: 262

PDF Views: 113




  • Does Premium Price Act as a Cue To High Quality? (The Relationships Between Premium Price and Quality)

Abstract Views: 262  |  PDF Views: 113

Authors

Premendra Kumar Sahu
School of Commerce Management and Research, ITM University, Raipur (C.G.), India
Amit Das
School of Commerce Management and Research, ITM University, Raipur (C.G.), India
Arijit Goswami
School of Commerce Management and Research, ITM University, Raipur (C.G.), India
Anurag Agrawal
School of Commerce Management and Research, ITM University, Raipur (C.G.), India

Abstract


Customers should use a product's and service's premium price to determine if the product is affordable or not. However, customers also appear to use a product's and service's price as a measurement of the product's and service quality. So many empirical studies (e.g., see reviews by Monroe 1973 and Olson 1977) have shown that when customers have some uncertainty concerning a product's and service's quality, the customer often presumes that a higher product and services price indicates a higher level of quality. Some authors (Gabor and Grange 1966; Tull, Boring and Gonsior 1964) suggest these studies imply that the traditional economical treatment of price and consumer behaviour is wrong.

References