Article ID: | iaor2007580 |
Country: | United States |
Volume: | 25 |
Issue: | 3 |
Start Page Number: | 230 |
End Page Number: | 247 |
Publication Date: | May 2006 |
Journal: | Marketing Science |
Authors: | Golder Peter N., Mitra Debanjan |
Keywords: | behaviour |
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.