Lalwani and Forcum

Does a Dollar Get You a Dollar’s Worth of Merchandise? The Impact of Power Distance Belief on Price-Quality Judgments

Lawlwani and Forcum (2016) - Journal of Consumer Research 

OBJECTIVE AND HYPOTHESIS

The objective was to determine whether there is a link between power distance belief and the tendency of consumers to use price as a means to judge the product’s quality, as well as the underlying process responsible for this phenomena. Lalwani and Forcum posit that consumers high in power distance belief have a greater tendency to make judgments on quality based on price because they have a greater need for structure compared to consumers low in power distance belief.

METHODOLOGY

Study 1: The first task manipulated power distance belief. Next, self-construal was primed by having the participants read a passage about an ancient warrior. The final task involved familiarizing participants with characteristics of 33 camcorders. Then they were given a retail price of 10 different anonymous camcorder models, and asked to rate its quality on a scale of 1-100. The final task was repeated with 24 differing computer monitors.

Study 2: 145 MTurk members were recruited from the United States and India for the study. A four item scale was used to measure tendency to make price quality judgments. Next the need for structure was measured through a ten item scale and then holistic thinking was measured through another ten item scale.

Study 3: 297 MTurk members completed a three part survey. The first task manipulated power distance belief. The participants then viewed information on three brands of alarm clocks and microwaves with product information. Participants were then randomly assigned to one of three price salience conditions and asked to rate each of the three products on quality, reliability, and dependability.

RESULTS

Participants with high power distance belief were significantly more likely to perceive a correlation between the price and the quality of a product. The same was was true for participants with an interdependent self construal; however, he effect of power distance belief is independent of that of self-construal. Results from study 2 suggest that the relation between price-quality judgments and power distance belief is mediated by the need for structure. Study 3 showed that individuals with low power distance belief increased price-quality judgments when the price salience was increased, but those with high power distance belief were unaffected by price salience.