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Tradeoffs Between Price and Quality: How a Value Index Affects
Author(s) -
CREYER ELIZABETH H.,
ROSS WILLIAM T.
Publication year - 1997
Publication title -
journal of consumer affairs
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.582
H-Index - 62
eISSN - 1745-6606
pISSN - 0022-0078
DOI - 10.1111/j.1745-6606.1997.tb00392.x
Subject(s) - attractiveness , quality (philosophy) , liberian dollar , conjoint analysis , index (typography) , task (project management) , preference , economics , value (mathematics) , product (mathematics) , choice set , microeconomics , set (abstract data type) , consumer choice , marketing , business , econometrics , computer science , statistics , mathematics , psychology , geometry , management , epistemology , finance , psychoanalysis , programming language , philosophy , world wide web
The present research examines how the availability of information about the value of a product, expressed as a ratio of the quality received per dollar, influences preference formation. This index, similar to unit price which provides information about how much quantity is received per dollar, presents consumers with information regarding the quality received per dollar. An experiment that compares consumers' preferences inferred from a choice task with their preferences inferred from a conjoint task was conducted. In the choice task consumers selected the most attractive alternative from a set of options, while in the conjoint task the attractiveness of each option was rated. Consumers, presented with an index of quality received per dollar paid (the value index), are more likely to choose a lower priced, higher value option rather than a higher priced, higher quality option compared to consumers presented with only price and quality information. Clearly, how a consumer chooses to “get the best for his or her money” depends on the ease with which information about the choices can be processed.