promote a range of price discounts for a product line, an entire Consumers are unable to compare services side-by-side as theyCONSUMER BEHAVIOUR department, or sometimes an entire store. do products, so consumers rely on surrogate or extrinsic cues Objective price claims provide a single discount level (e.g., when purchasing services. “save 25 percent”). Marketers try to standardize their services in order to provide Tensile and objective price claims have a potentially greater effect consistency of quality. on consumer shopping and on store traffic than a reference price Service is consumed as it is being produced. advertisement that promotes a single product because of the As a result, defective services are difficult to correct. broader range of merchandise covered by them. Researchers have concluded that the service quality that a a) Consumer evaluations and shopping intentions are least customer perceives is a function of the magnitude and direction favorable for advertisements stating the minimum of the gap between expected service and the customer’s assessment discount level (“save 10 percent or more”). of the service actually delivered. b) Ads that state a maximum discount level (“save up to 40 SERVQUAL, measures the gap between customers’ expecta- percent”) either equal or exceed the effectiveness of ads tions of services and their perceptions of the actual service. stating a discount range (“save 10 to 40 percent”). a) These perceptions are based on the dimensions of; Consumer reactions to tensile price claims are affected by tangibles, reliability, responsiveness, assurance, and the width of the discount range. empathy. c) Studies found that, for broader discount ranges, tensile b) Two dimensions used to measure service quality are outcome claims stating the maximum level of savings have more dimensions—the reliable delivery of the core service—and positive effects than those stating the minimum level or process dimensions—how the core service is delivered. the entire savings range. Transaction satisfaction index is one tool researchers have d) For more narrow discount ranges, tensile claims stating the used to try to integrate the concepts of product quality and maximum level of savings appear to be no more effective service quality. than claims stating the minimum level or the entire savings Conceptual Model of Transaction Satisfaction—the model ranges. suggests that the consumer’s overall satisfaction with the Consumers are less sensitive to price when using credit transaction is based on evaluation of service quality, product cards than when they use cash. quality, and price. e) In a similar vein, a recent study reported that consumers tend to be less sensitive to price when they shop online Price/Quality Relationship rather than when they shop in stores. Perceived product value has been described as a trade-off between the product’s perceived benefits (or quality) and Perceived Quality perceived sacrifice required to acquire it. Consumers often judge the quality of a product (perceived A number of research studies support the view that consumers quality) on the basis of a variety of informational cues. rely on price as an indicator of product quality. a) Intrinsic cues are physical characteristics of the product a) Other studies suggest consumers are actually relying on a itself, such as size, color, flavor, or aroma. well-known brand name as a quality indicator. b) Extrinsic cues are such things as price, store image, service Because price is so often considered to be an indicator of environment, brand image, and promotional message.