Carl H. Lindner College of BusinessCarl H. Lindner College of BusinessUniversity of Cincinnati

Carl H. Lindner College of Business

Does a Low Price Mean Good Value or Bad Quality?

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Saturday, April 12, 2014 9:39 AM
UC marketing research says value and quality could be a frame of mind.

Some shoppers may perceive products with a low price as a good deal while others deem a bargain as cheap quality.

According to a study in the Journal of Consumer Research, UC marketing Professor Frank Kardes explains this shopper’s dilemma by exploring what he and his co-authors refer to as “naïve theory,” a belief that consumers make product inferences by filling in knowledge gaps with their own theories to help them decide whether a cut-rate product is cheap or a deal.

Kardes, the Donald E. Weston professor of marketing in the Carl H. Lindner College of Business, along with Helene Deval, PhD ‘10, assistant professor of marketing at Dalhousie University, and Susan Powell Mantel, PhD ‘94, associate professor of marketing at Ball State University, and Steven S. Posavac, professor of marketing at Vanderbilt University, wrote “How Naïve Theories Drive Opposing Inferences from the Same Information.”

Kardes’ research was featured in a November 14, 2012 Time article that describes how consumers arrive at buying decisions. Researchers conducted eight experiments that showed, depending upon a consumer’s frame of mind, how varied information used to fill in knowledge gaps does affect how price is perceived and whether we decide to buy.

The research was also highlighted in an October 24, 2012 article on Wine-Searcher. Com that established price matters, as consumers equate higher wine prices with better quality.