Study shows how consumers rely on price and locality to determine quality of products

The study suggests that marketers can use this understanding of local identity versus global identity to shape consumers’ price perceptions and behavior. UTA and three other universities contributed to the study.

“Consumers tend to use price to judge a product’s quality when their local identity is most important to them,” Janakiraman said. “When promoting high-priced or branded products, marketers can situationally activate consumers’ local identity. To accomplish this objective, businesses can encourage consumers to think locally or employ local cultural symbols in advertising and other promotional material.”

Findings also suggest that discount stores, such as dollar stores, should discourage consumers from using the price of a product to infer its quality.

“Discount stores, therefore, would be better served by temporarily making consumers’ global identity more prominent,” Janakiraman said. “Cues in advertisements that focus on a product’s global appeal would help achieve that goal.”

Source: Study shows how consumers rely on price to determine quality of products