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No Small Matter: How Company Size Affects Consumer Expectations and Evaluations

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  • Linyun W Yang
  • Pankaj Aggarwal
  • Laura Peracchio
  • Gita Johar
  • Margaret C Campbell

Abstract

The emphasis on business size has become more overt in recent years. However, it is not clear how company size influences consumers’ evaluations. Five experiments investigate the effect of size on consumers’ expectations and evaluations of company behaviors. Consumers expect higher communion from small compared to large companies, and consequently, small relative to large companies garner lower evaluations when they exhibit low communion behaviors. These high communion expectations are driven by the relatively lower marketplace power of small companies. While study 1 provides real-world evidence for the effect of company size on evaluations of company behaviors, studies 2A and 2B demonstrate that perceptions of power underlie the effect of company size on expectations for communion. Studies 3A and 3B indicate that when a company engages in low communion behavior, small relative to large companies garner lower evaluations and this effect is driven by consumers’ perceived violation of expectations. Incorporating additional studies, two meta-analyses conducted with four studies for consumer expectations and six studies for consumer evaluations provide confirmatory evidence in support of our hypotheses. This research demonstrates that how companies are perceived in terms of size and power creates meaning for consumers that drives their expectations and subsequent evaluations.

Suggested Citation

  • Linyun W Yang & Pankaj Aggarwal & Laura Peracchio & Gita Johar & Margaret C Campbell, 2019. "No Small Matter: How Company Size Affects Consumer Expectations and Evaluations," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 45(6), pages 1369-1384.
  • Handle: RePEc:oup:jconrs:v:45:y:2019:i:6:p:1369-1384.
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    File URL: http://hdl.handle.net/10.1093/jcr/ucy042
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    Citations

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    Cited by:

    1. Jung, Hyukjin & Bae, Joonheui & Kim, Hanku, 2022. "The effect of corporate social responsibility and corporate social irresponsibility: Why company size matters based on consumers’ need for self-expression," Journal of Business Research, Elsevier, vol. 146(C), pages 146-154.
    2. Lu, Zhi & Bolton, Lisa E. & Ng, Sharon & Chen, Haipeng (Allan), 2020. "The Price of Power: How Firm’s Market Power Affects Perceived Fairness of Price Increases," Journal of Retailing, Elsevier, vol. 96(2), pages 220-234.
    3. Abrate, Graziano & Sainaghi, Ruggero & Mauri, Aurelio G., 2022. "Dynamic pricing in Airbnb: Individual versus professional hosts," Journal of Business Research, Elsevier, vol. 141(C), pages 191-199.
    4. Mansur Khamitov & Marina Puzakova, 2022. "Possessive brand names in brand preferences and choice: the role of inferred control," Journal of the Academy of Marketing Science, Springer, vol. 50(5), pages 1032-1051, September.
    5. Beatriz L. Bonetti & Shreyans Goenka & Frank May, 2024. "The effect of firm size on perceived product healthiness," Marketing Letters, Springer, vol. 35(2), pages 303-316, June.
    6. repec:hal:journl:hal-04666015 is not listed on IDEAS
    7. Zhijie Xie & Fangfang Wen & Xiao Tan & Jin Wei & Bin Zuo, 2020. "The preference for potential in competence, not in morality: Asymmetric biases regarding a group's potential for moral improvement and decline," PLOS ONE, Public Library of Science, vol. 15(8), pages 1-19, August.
    8. Wamsler, Julia & Natter, Martin & Algesheimer, René, 2022. "Transitioning to dynamic prices: Should pricing authority remain with the company or be delegated to the service employees instead?," Journal of Business Research, Elsevier, vol. 139(C), pages 1476-1488.
    9. Selamat, Moch Akbar & Windasari, Nila Armelia, 2021. "Chatbot for SMEs: Integrating customer and business owner perspectives," Technology in Society, Elsevier, vol. 66(C).
    10. Shuqair, Saleh & Costa Pinto, Diego & Cruz-Jesus, Frederico & Mattila, Anna S. & da Fonseca Guerreiro, Patricia & Kam Fung So, Kevin, 2022. "Can customer relationships backfire? How relationship norms shape moral obligation in cancelation behavior," Journal of Business Research, Elsevier, vol. 151(C), pages 463-472.
    11. Jakub Horak & Tomas Krulicky & Zuzana Rowland & Veronika Machova, 2020. "Creating a Comprehensive Method for the Evaluation of a Company," Sustainability, MDPI, vol. 12(21), pages 1-23, November.
    12. Rui Chen & Hao Shen & Chun-Ming Yang, 2022. "Chooser or suitor? The effects of mating cues on men’s versus women’s reactions to commercial rejection," Marketing Letters, Springer, vol. 33(4), pages 659-679, December.
    13. Paolo Antonetti & Ilaria Baghi, 2021. "How the sender’s positioning and the target’s CSR record influence the effectiveness of scapegoating crisis communications," Marketing Letters, Springer, vol. 32(4), pages 411-423, December.
    14. Thomas, Veronica L. & Fowler, Kendra, 2023. "Examining the outcomes of influencer activism," Journal of Business Research, Elsevier, vol. 154(C).

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