Perception of price and product quality


Perception of price and product quality. In assessing the quality of a product, it really depends on the information attached to the product and also depends on how much the information is understood by each individual. This information can be both intrinsic and extrinsic (Schiffman & Kanuk, 2000).

Intrinsic information is information that comes from within the product itself. For example, for international telephone products/services, connection speed, connection clarity when making overseas calls are the dominant intrinsic factors in assessing product quality.

1. Product extrinsic factors

Meanwhile, extrinsic factors are taken into consideration in the assessment if the individual has not had real experience with the product. So that other parameters are needed that are attached to the physical product.

These parameters can be in the form of price, brand and name of the producer or organizer, advertisement or name of the country of manufacture. The amount of price as one of the extrinsic factors in consumer perception can reflect the quality of the product itself.

And this is reinforced from several studies, that every price attached to a product can reflect the quality of the product itself (Monroe 1990). This theory is reinforced by Nagle & Holden (1995), that the price for certain types of products not only means the amount of money spent but the excellent quality of the product and even has more meaning for the owner of the product.

For example, the expensive price of a Rolls Royce reflects the good quality and image of the owner, which is different from the rest of society. Or in other words, price and perceived quality have a positive relationship, that is, the more expensive the price of the product, the more it will reflect the quality of the product or the general term “money/price has eyes”.

2. Price as an indicator of quality

While the role of the brand on product quality is positive as explained by Kotler, Ang, Leong, & Tan (1999) a brand is not only a symbol, but a brand can also give the wrong meaning that the product has a certain value or quality. And this is reinforced by Keller 1998, that brands for consumers can provide a picture of quality and show promises from producers to consumers.

Consumers use price as an indicator of quality, with the following conditions (Nagle & Holden, 1995):

  • Consumers believe there are quality differences between brands within a product category.
  • Consumers believe that lower quality carries greater risk.
  • Consumers have no other information except for well-known brands as a reference in evaluating quality before making a purchase.

3. Perception of Price Against Value

The definition of perceived value is an overall evaluation of the usefulness of a product based on consumer perceptions of a number of benefits to be received compared to the sacrifices made or generally in the minds of consumers value dikenal dengan istilah “value for money”, “Best value”, dan “ you get what you pay for”, (Morris & Morris, 1990). Sedangkan menurut Zeithaml & Bitner (1996) pengertian harga terhadap nilai dari sisi konsumen dapat dikelompokkan menjadi 4 yaitu:

a. Value is low price

Consumer groups who think that low prices are the most important value for them while quality is a value with a lower level of importance. The price strategy that must be done is:

  • Odd pricing: using prices that are not commonly used in general, for example an 81% discount.
  • Synchro pricing : providing prices with differentiating factors that cause price sensitivity to increase, eg place, timing, quantity.
  • Penetration pricing: setting a low price, especially at the time of introduction to stimulate consumers to do a trial.
  • Discounting: providing discounts to create price sensitivity so as to create purchases.

b. Value is whatever I want in a product or service

For consumers in this group, value is defined as the benefits/quality received, not just price or value. Value is something that can satisfy a desire. Price strategy that can be done:

  • Prestige pricing: setting premium prices to maintain the image as a product with excellent quality and provide a different image for those who own or use it.
  • Skimming pricing: setting a price that is higher than the average willingness to pay, generally when the product is in the introduction stage. This product has more value than the previous product and is supported by high promotional costs.

c. Value is the quality I get for the price I pay

Consumers in this group consider value to be a benefit/quality received in accordance with the amount paid. The price approaches that can be done are:

  • Value Pricing: a pricing strategy that is widely used by creating more value, in terms of benefits or the amount obtained compared to the price itself, usually with a bundling strategy.
  • Market segmentation pricing: a form of pricing strategy, by providing different prices according to the segment based on the value received.

d. Value is what I get for what I give

Perception of price and product quality. Consumers assess value based on the amount of benefits received compared to the sacrifices incurred both in the form of the amount of money spent, time and effort. Price approach that can be done:

  • Price framing: a pricing strategy by providing different rates according to the distribution of groups based on the amount of benefits received.
  • Price Bundling: a pricing strategy where the value of the price will be created if the prices for 2 services/products are complementary.

From the four consumer groups above, it can be concluded that the value of the price is a perception obtained from the results of the overall evaluation of the perceived benefits compared to what should be received. Consumers in accepting a value or value from a price are strongly influenced by (Kotler, 1996):

a. Context :

Perception of price and product quality. The willingness of consumers to make sacrifices by paying a higher price, compared to losing other values ​​that are more important at that time, so that it can be said that the value of the product is very high.

For example, when sunbathing on the beach, consumers will be willing to pay a higher price for a drink than losing the sunburn.

Or another example is that consumers will get value in the form of spending less money and talking longer at the expense of lower product quality by using internet telephony as a means of communicating abroad.

b. Availability of information:

Having lots and complete information, consumers will get value for the product. For example, by having a lot of information about internet telephony provider companies or standard telephones (IDD 001), consumers can be sure that the value they get is in line with their expectations.

4. Association

Perception of price and product quality. In an effort to increase the value of a product by increasing prices, producers must pay attention to consumer associations with the experiences they have so far.

For example, in an effort to increase the value of the Taxi President, he rejuvenated his car by using a car similar to the Bluebird, in fact he has not been able to increase its value, because the association that has been formed so far is through a negative brand image.

Perception of price and product quality (foto/special)
Perception of price and product quality (foto/special)


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