Firms routinely offer warranties, often as attempts to differentiate their offerings from those of competitors. Despite this practice common to virtually every consumer durable category, extant research has been inconclusive regarding the effect of warranties on quality judgments. One potential limitation of these prior investigations is the failure to model a key element of a product warranty—consumer-side transaction costs associated with warranty redemption. In this article, we introduce the role of consumer-side transaction costs associated with warranty redemption and examine the joint impact of warranty length and warranty redemption costs for brand names of varying strength on consumers’ judgments of product quality. Two experiments show that warranty length signals security but not quality, and that perceived quality increases as consumers’ warranty redemption costs decrease, provided that the warranty length is short. Different dimensions or aspects of warranties have different effects on perceived quality. The implications of the results for understanding conflicting findings in the warranty-quality literature are discussed.
#1Richard H. Thaler(SPbU: Saint Petersburg State University)H-Index: 106
A new model of consumer behavior is developed using a hybrid of cognitive psychology and microeconomics. The development of the model starts with the mental coding of combinations of gains and losses using the prospect theory value function. Then the evaluation of purchases is modeled using the new concept of “transaction utility.” The household budgeting process is also incorporated to complete the characterization of mental accounting. Several implications to marketing, particularly in the are...
Abstract Research on customer equity has reemphasized the value of understanding the factors that influence satisfaction and quality. Although research has shown that many factors influence perceptions of satisfaction and quality, it has failed to consider the potential for asymmetric effects that shift over time and are based on the attributes used to form such perceptions. Using automobile ownership experiences during the manufacturer warranty period, the authors show that as consumers approac...
This research demonstrates that people's goals associated with regulatory focus moderate the effect of message framing on persuasion. The results of 6 experiments show that appeals presented in gain frames are more persuasive when the message is promotion focused, whereas loss-framed appeals are more persuasive when the message is prevention focused. These regulatory focus effects suggesting heightened vigilance against negative outcomes and heightened eagerness toward positive outcomes are repl...
Because products are rarely described completely, consumers often form inferences that go beyond the information given. We review research on the processes, bases, and the judgment contexts in which inferences are formed. The most basic processes are induction (inferences from specific instances to general principles) versus deduction (inferences from general principles to specific instances). Stimulus-based inferences are formed on-line (as information is encountered) using situationally availa...
Building upon Transaction Cost Economics (TCE) theory, this paper hypothesises that consumers' transaction cost of online shopping is affected by six antecedents: product uncertainty, behavioural uncertainty, convenience, economic utility, dependability, and asset specificity. In turn, transaction cost has a negative relationship with consumers' willingness to buy online. We test the model using data gathered from the USA and China. The results show that behavioural uncertainty and asset specifi...
The increased priority placed on branding by marketers in recent years offers an opportunity for consumer researchers to provide valuable insights and guidance. In particular, in highly competitive marketplaces, marketers often must link their brands to other entities, for example, people, places, things, or other brands, as a means to improve their brand equity. Understanding this leveraging process requires understanding consumer brand knowledge and how it changes from such associations. In th...
#1Lydia J. Price(HKUST: Hong Kong University of Science and Technology)H-Index: 5
#2Niraj Dawar(UWO: University of Western Ontario)H-Index: 19
The results of prior empirical research on the influence of warranties on consumer perceptions of product quality are mixed in terms of the effect's intensity as well as its focus along two different dimensions of quality. While earlier researchers have recognized this inconsistency, no unified explanation has been proposed to account for the mixed results. We propose that brand information interacts with warranty information to determine quality perception outcomes. We argue that joint signalin...
I propose that different relations among basic components of self-regulation produce distinct types of decision value: (a) Outcome value is produced when the consequences of a decision are relevant to the regulatory orientation of the decision maker, (b) value from fit is produced when goal pursuit means suit the regulatory orientation of the decision maker, and (c) value from proper means is produced when goal pursuit means are in agreement with established rules and normative principles. I use...
Last. Kathleen D. Vohs(Case Western Reserve University)H-Index: 91
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The greater power of bad events over good ones is found in everyday events, major life events (e.g., trauma), close relationship outcomes, social network patterns, interpersonal interactions, and learning processes. Bad emotions, bad parents, and bad feedback have more impact than good ones, and bad information is processed more thoroughly than good. The self is more motivated to avoid bad self-definitions than to pursue good ones. Bad impressions and bad stereotypes are quicker to form and more...
#2Luis F. Martinez(NOVA: Universidade Nova de Lisboa)H-Index: 15
Last. Aristides I. Ferreira(ISCTE-IUL: ISCTE – University Institute of Lisbon)H-Index: 21
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Abstract The sequence of informational cues and the level of distraction have an impact on the judgment of a product’s quality and preference. Two quasi-experimental studies (Ntotal = 340) investigate the influence of the force behind the processing of these cues – working memory (WM). Previous research found that, in the presence of a distractor, high WM individuals are more able to recall the initial cue, and thus derive their product judgment from the initial strong cue. Study 1 contradicts t...
Purpose Branded car dealerships with best revenue by serviced car also have the best after-sales customers’ satisfaction level. The purpose of this paper is to present the analysis of the after-sales quality management practices adopted by dealerships with the best performance in terms of customer’s satisfaction and revenue and how such practices contribute to these results. Design/methodology/approach A multiple case study was performed with nine leader branded car dealerships in an emerging co...
Purpose Research in marketing has extensively examined the signaling effects of product warranties on consumer perceptions. Although this stream of research has focused on initial product warranties offered by the manufacturer, studies of extended warranties, which protect consumers against product breakdowns beyond the warranty constraints of the manufacturer, are relatively scarce. This paper aims to empirically establish the effects of variables which influence the pricing of extended warrant...
As defined by Friestad and Wright (1994), persuasion knowledge is personal knowledge about persuasion attempts that consumers develop and use whenever they believe they are targets of persuasion. A significant majority of research on persuasion knowledge has suggested that persuasion knowledge and skepticism invariably go hand in hand, and that accessing persuasion knowledge therefore leads consumers to evaluate the agent and its offering less favorably. Across four studies, the authors demonstr...
Kniha se věnuje oblasti, již zahranicni literatura oznacuje jako return policy.Do cestiny je zde přeložena jako reklamacni politika a rozumi se ji způsob řizeni reklamaci, ktere prodavajici obdrži z titulu faktických vad produktu a připadně i vad subjektivně vnimaných zakaznikem. Reklamacni politika je představena primarně jako marketingový nastroj spoluutvařejici tzv. rozsiřený produkt. Text doplňuji tři empiricke studie zkoumajici chovani ceských spotřebitelů.
Abstract Consumers frequently evaluate multiple sequential cues of varying strengths in order to draw inferences about a product's quality. The results of three experiments show that when consumers are not distracted, they judge a product's quality more favorably following a strong–weak cue sequence relative to a weak–strong sequence (a primacy effect). However once consumers are distracted from the evaluation task, the primacy effect reverses to a recency effect, whereby consumers judge a produ...
#1Justin Kruger(NYU: New York University)H-Index: 26
#2Patrick T. Vargas(UIUC: University of Illinois at Urbana–Champaign)H-Index: 19
Abstract The present research investigated consumers' intuitions about percent differences. We found that the perceived difference between two quantities compared on a percent scale varies as a function of the target of the comparison. The subjective price difference between a 1500 and a 000 moped, for instance, increased when the former was described as 50% more than the latter than when the latter was described as 33% less than the former (Experiment 1). This effect (1) is limited to compar...