Market Cues Affect on Consumers’ Product Evaluations

Abstract

This paper reports the effects of market cues, price and store name information, on consumers’ evaluations of quality, monetary sacrifice, and value and on their subsequent willingness to buy. Retailers use market cues as perceptual indicators to influence consumer behavior and consumers need to be better informed so that they can evaluate these cues. The study reexamines the conceptual model of Dodds, Monroe, and Grewal (1991) with emphasis on testing the quadratic relationship between the price cue and perceived value and willingness to buy. This study found that as prices increase, buyers assume increases in product quality and monetary sacrifice. However, buyers’ perceptions of the value of the goods and their willingness to buy initially increase and then decrease. The effect of store name information does not influence buyers’ perceptions of value but does influence their opinions of quality, intention to buy, and the perception of price.