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How Does Objective Quality Affect Perceived Quality? Short-Term Effects, Long-Term Effects, and Asymmetries

Author

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  • Debanjan Mitra

    (Warrington College of Business, University of Florida, P.O. Box 117155, Gainesville, Florida 32611)

  • Peter N. Golder

    (Stern School of Business, New York University, 40 West 4th Street, New York, New York 10012)

Abstract

We examine the relationship between objective and perceived quality for 241 products in 46 product categories over a period of 12 years. On average, we find that the effect of a change in objective quality is not fully reflected in customer perceptions of quality until after about six years. In the first year after a quality change, only about 20% of the total effect over time is realized. These effects are significantly larger and quicker for a decrease in quality relative to an equivalent increase. Interestingly, we also find that brand reputation has a “double” advantage. High-reputation brands are rewarded three years quicker for an increase in quality and punished one year slower for a decrease in quality compared to low-reputation brands. These differences in response time are a meaningful measure of brand equity. Finally, we examine the differences in quality effects across several product- and category-specific variables and discuss the implications of our findings.

Suggested Citation

  • Debanjan Mitra & Peter N. Golder, 2006. "How Does Objective Quality Affect Perceived Quality? Short-Term Effects, Long-Term Effects, and Asymmetries," Marketing Science, INFORMS, vol. 25(3), pages 230-247, 05-06.
    • Handle: RePEc:inm:ormksc:v:25:y:2006:i:3:p:230-247
    DOI: 10.1287/mksc.1050.0175
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