IDEAS home Printed from https://ideas.repec.org/a/kap/mktlet/v28y2017i1d10.1007_s11002-015-9392-8.html
   My bibliography  Save this article

A longitudinal examination of the impact of quality perception gap on brand performance in the US Automotive Industry

Author

Listed:
  • M. Billur Akdeniz

    (University of New Hampshire)

  • Roger J. Calantone

    (Michigan State University)

Abstract

A quality perception gap, defined as the difference between perceived and objective quality, indicates either consumers’ overappreciation or underappreciation of product or brand quality and can have critical effects on performance. The purpose of this research is to examine the impact of a quality perception gap on brand performance and its moderating role in the relationship between marketing-mix signals and performance. Analyses based on a longitudinal dataset from the US automotive industry reveal that the relationship between the quality perception gap and brand performance has an inverted U-shape. Findings also demonstrate that, except for advertising, the impact of marketing signals on performance is higher when the quality of a brand is perceived as higher than its actual quality. Finally, over an 18-year period, the average gap between perceived and objective quality demonstrates a decreasing trend, indicating that the nature of demand in the automotive industry has become more utilitarian.

Suggested Citation

  • M. Billur Akdeniz & Roger J. Calantone, 2017. "A longitudinal examination of the impact of quality perception gap on brand performance in the US Automotive Industry," Marketing Letters, Springer, vol. 28(1), pages 43-57, March.
    • Handle: RePEc:kap:mktlet:v:28:y:2017:i:1:d:10.1007_s11002-015-9392-8
    DOI: 10.1007/s11002-015-9392-8
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11002-015-9392-8
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s11002-015-9392-8?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. 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.
    2. Gerard J. Tellis & Joseph Johnson, 2007. "The Value of Quality," Marketing Science, INFORMS, vol. 26(6), pages 758-773, 11-12.
    3. Bart J. Bronnenberg & Luc Wathieu, 1996. "Asymmetric Promotion Effects and Brand Positioning," Marketing Science, INFORMS, vol. 15(4), pages 379-394.
    4. Roland T. Rust & J. Jeffrey Inman & Jianmin Jia & Anthony Zahorik, 1999. "What You Know About Customer-Perceived Quality: The Role of Customer Expectation Distributions," Marketing Science, INFORMS, vol. 18(1), pages 77-92.
    5. Mooweon Rhee & Pamela R. Haunschild, 2006. "The Liability of Good Reputation: A Study of Product Recalls in the U.S. Automobile Industry," Organization Science, INFORMS, vol. 17(1), pages 101-117, February.
    6. Praveen K. Kopalle & João L. Assunção, 2000. "When (not) to indulge in 'puffery': the role of consumer expectations and brand goodwill in determining advertised and actual product quality," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 21(6), pages 223-241.
    7. Hao Zhao, 2000. "Raising Awareness and Signaling Quality to Uninformed Consumers: A Price-Advertising Model," Marketing Science, INFORMS, vol. 19(4), pages 390-396, January.
    8. V. Padmanabhan & Ram C. Rao, 1993. "Warranty Policy and Extended Service Contracts: Theory and an Application to Automobiles," Marketing Science, INFORMS, vol. 12(3), pages 230-247.
    9. Devavrat Purohit, 1997. "Dual Distribution Channels: The Competition Between Rental Agencies and Dealers," Marketing Science, INFORMS, vol. 16(3), pages 228-245.
    10. Birger Wernerfelt, 1988. "Umbrella Branding as a Signal of New Product Quality: An Example of Signalling by Posting a Bond," RAND Journal of Economics, The RAND Corporation, vol. 19(3), pages 458-466, Autumn.
    11. Bolton, Ruth N & Drew, James H, 1991. "A Multistage Model of Customers' Assessments of Service Quality and Value," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 17(4), pages 375-384, March.
    12. David M. Drukker, 2003. "Testing for serial correlation in linear panel-data models," Stata Journal, StataCorp LP, vol. 3(2), pages 168-177, June.
    13. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 84(3), pages 488-500.
    14. Praveen K. Kopalle & Donald R. Lehmann, 2006. "Setting Quality Expectations When Entering a Market: What Should the Promise Be?," Marketing Science, INFORMS, vol. 25(1), pages 8-24, 01-02.
    15. Boulding, William & Kirmani, Amna, 1993. "A Consumer-Side Experimental Examination of Signaling Theory: Do Consumers Perceive Warranties as Signals of Quality?," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 20(1), pages 111-123, June.
    16. William Boulding & Richard Staelin, 1995. "Identifying Generalizable Effects of Strategic Actions on Firm Performance: The Case of Demand-Side Returns to R&D Spending," Marketing Science, INFORMS, vol. 14(3_supplem), pages 222-236.
    17. Michael Spence, 1973. "Job Market Signaling," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 87(3), pages 355-374.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yu, Luqing & Gao, Zhifeng, 2020. "Better image for better price: how store image affects consumer’s willingness to pay for national brand in different stores," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304625, Agricultural and Applied Economics Association.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Carlyle Farrell & Gervan Fearon, 2005. "Renting Goodwill in International Marketing Channels: An Analysis of Pricing Strategies and Bargaining Power," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 33(3), pages 285-296, September.
    2. Dror Etzion & Aviad Pe'er, 2014. "Mixed signals: A dynamic analysis of warranty provision in the automotive industry, 1960–2008," Strategic Management Journal, Wiley Blackwell, vol. 35(11), pages 1605-1625, November.
    3. Mitra, Debanjan & Fay, Scott, 2010. "Managing Service Expectations in Online Markets: A Signaling Theory of E-tailer Pricing and Empirical Tests," Journal of Retailing, Elsevier, vol. 86(2), pages 184-199.
    4. Lei, Yong & Liu, Qian & Shum, Stephen, 2017. "Warranty pricing with consumer learning," European Journal of Operational Research, Elsevier, vol. 263(2), pages 596-610.
    5. Cho, Jihoon & Janda, Swinder, 2023. "Reciprocity in upward product line extensions: A longitudinal study," Journal of Retailing and Consumer Services, Elsevier, vol. 70(C).
    6. Tsao, Hsiu-Yuan & Pitt, Leyland F. & Berthon, Pierre, 2006. "An experimental study of brand signal quality of products in an asymmetric information environment," Omega, Elsevier, vol. 34(4), pages 397-405, August.
    7. Rokonuzzaman, Md & Iyer, Pramod & Harun, Ahasan, 2021. "Return policy, No joke: An investigation into the impact of a retailer's return policy on consumers' decision making," Journal of Retailing and Consumer Services, Elsevier, vol. 59(C).
    8. Fabrice Larceneux & Florence Benoît-Moreau & Valérie Renaudin, 2012. "Why Might Organic Labels Fail to Influence Consumer Choices? Marginal Labelling and Brand Equity Effects," Post-Print hal-00656485, HAL.
    9. Kurt, Didem & Pauwels, Koen & Kurt, Ahmet C. & Srinivasan, Shuba, 2021. "The asymmetric effect of warranty payments on firm value: The moderating role of advertising, R&D, and industry concentration," International Journal of Research in Marketing, Elsevier, vol. 38(4), pages 817-837.
    10. Roland T. Rust & Tuck Siong Chung, 2006. "Marketing Models of Service and Relationships," Marketing Science, INFORMS, vol. 25(6), pages 560-580, 11-12.
    11. Ali Besharat & Kimberly A. Whitler & Saim Kashmiri, 2024. "When CEO Pay Becomes a Brand Problem," Journal of Business Ethics, Springer, vol. 190(4), pages 941-973, April.
    12. Fabrice Larceneux & Florence Benoit-Moreau & Valérie Renaudin, 2012. "Why Might Organic Labels Fail to Influence Consumer Choices? Marginal Labelling and Brand Equity Effects," Journal of Consumer Policy, Springer, vol. 35(1), pages 85-104, March.
    13. Ajay Kalra & Shibo Li, 2008. "Signaling Quality Through Specialization," Marketing Science, INFORMS, vol. 27(2), pages 168-184, 03-04.
    14. Liang Guo & Ying Zhao, 2009. "Voluntary Quality Disclosure and Market Interaction," Marketing Science, INFORMS, vol. 28(3), pages 488-501, 05-06.
    15. Sewaid, Ahmed & Garcia-Cestona, Miguel & Silaghi, Florina, 2021. "Resolving information asymmetries in financing new product development: The case of reward-based crowdfunding," Research Policy, Elsevier, vol. 50(10).
    16. Wang, Chao-Hung, 2014. "How relational capital mediates the effect of corporate reputation on competitive advantage: Evidence from Taiwan high-tech industry," Technological Forecasting and Social Change, Elsevier, vol. 82(C), pages 167-176.
    17. Padmanabhan, V, 1995. "Usage Heterogeneity and Extended Warranties," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 4(1), pages 33-53, Spring.
    18. Kopalle, Praveen K. & Lehmann, Donald R., 2015. "The Truth Hurts: How Customers May Lose From Honest Advertising," International Journal of Research in Marketing, Elsevier, vol. 32(3), pages 251-262.
    19. Ernst, Holger & Wickede, Anje, 1999. "Einflußfaktoren auf die Glaubwürdigkeit kundenorientierter Produkt-Vorankündigungen: Ein signaltheoretischer Ansatz," Manuskripte aus den Instituten für Betriebswirtschaftslehre der Universität Kiel 515, Christian-Albrechts-Universität zu Kiel, Institut für Betriebswirtschaftslehre.
    20. repec:dau:papers:123456789/4674 is not listed on IDEAS
    21. Reo Song & Sungha Jang & Gangshu (George) Cai, 2016. "Does advertising indicate product quality? Evidence from prelaunch and postlaunch advertising in the movie industry," Marketing Letters, Springer, vol. 27(4), pages 791-804, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:mktlet:v:28:y:2017:i:1:d:10.1007_s11002-015-9392-8. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.