ISSN:
1573-059X
Keywords:
Advertising spending
;
perceived quality
Source:
Springer Online Journal Archives 1860-2000
Topics:
Economics
Notes:
Abstract In this paper we examine the relationship between advertising spending and perceived product quality. The questions we ask are: Does a product's advertising spending influence consumers' perceptions of its quality? If so, does the effect remain even after accounting for objective quality, price and market share? Does knowledge about objective quality, from Consumer Reports or usage experience, attenuate the effect of advertising spending on perceived quality? Do nondurable goods differ from durable goods in these effects? In ten product categories, five nondurable and five durable, comprising a total of 162 brands, we find that advertising expenditure and perceived quality are generally positively correlated even after accounting for objective quality, price, and market share—for both nondurable goods and durable goods. Objective quality, however, is significantly correlated with perceived quality only for durable goods, after advertising spending, price and market share are accounted for. Finally, previous purchase experience, but not Consumer Reports readership, reduces the effect of advertising spending on perceived quality.
Type of Medium:
Electronic Resource
URL:
http://dx.doi.org/10.1023/A:1008135126025
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