Does a higher perceived product quality need less advertisement to be sold?

Scientific Study , 2009 , 20 Pages

Business economics - Trade and Distribution

In this scientific paper, it is about to prove that higher perceived product quality needs
less advertisement to be sold.
The reader will find theoretical sources as well as an own empirical finding. In this the
effect of "Stiftung Warentest" on the customers purchase decision will be proved. At
the end, it comes out that customer's decision for or against a product is also depends on
seals of quality even if they never heard about this product before.
That means if a product reaches good test results (e.g. in a product test about sun lotions
by Stiftung Warentest), sales should increase while displaying that seal of quality on the
package true to the motto: good products sell themselves.

Table of Content

Table of Figures

Abstract

1. Introduction

2. Quality
2.1 Definition
2.2 Importance
2.3 Cost of producing quality

3. Seal of quality
3.1 Origin
3.2 Function
3.3 “Stiftung Warentest”
3.3.1 History
3.3.2 Facts, Figures and Financing
3.3.3 Example “Sun lotions”
3.4 ICRT (International Consumer Research and Testing Ltd.)

4. Brands, Quality & Advertisement

5. Own empirical finding – Experiment
5.1. Presentation of products
5.2 Data interpretation

6. Conclusion

7. Bibliographie

8. Affidavit

Table of Figures

Fig. 1: Quality Seal - DIN certified

Fig. 2: tested emblem

Fig. 3: test winner - Sun Ozon

Fig. 4: ICRT

Fig. 6: New Yorker

Fig. 5: Dior

Fig. 7: Nokia 5310 Xpress Music

Abstract

In this scientific paper, it is about to prove that higher perceived product quality needs less advertisement to be sold.

The reader will find theoretical sources as well as an own empiri­cal finding. In this the effect of “Stiftung Warentest” on the customers purchase deci­sion will be proved. At the end, it comes out that customer’s decision for or against a product is also depends on seals of quality – even if they never heard about this product be­fore.

That means if a product reaches good test results (e.g. in a product test about sun lotions by Stiftung Warentest), sales should increase while displaying that seal of quality on the package – true to the motto: good products sell themselves.

1. Introduction

For the consumer it’s not always an easy way to keep track of all wide ranges of differ­ent products. A survey of Stiftung Warentest demonstrates that the seal of quality en­joys a great popularity among customers.^[1] They should provide them with confidence on supplier’s products.

This paper will help to understand the meaning of seals of quality and the impor­tance of Stiftung Warentest. It will explain the internal action of Stiftung Warentest and inform about employer’s opinion on the mentioned enterprise.

The hypothesis, which forms the basis of this paper, is as follows: The higher the qual­ity of a product perceived by the customer, the less advertisement is required to sell it. It can be assumed that due to quality seals as an independent indicator for product quality (dis­played on products), advertisement wouldn’t be necessary anymore.

This paper will start with explaining the importance of the word quality and everything what relates to that theme. Afterwards it will tell about seals of quality and the most popular ex­ample for Germany, called Stiftung Warentest. At the end an own empiri­cal finding will be presented, a final summary will complete the paper.

2. Quality

(lat.: qualitas = composition, attribute, character, condition)^[2]

Nowadays the functionality of a product is irrevocably connected to its quality.

The meaning, importance and costs of producing are pointed out in order to show the significance of quality.

2.1 Definition

One can find many definitions of quality. A widely-known-one doesn’t exist. Within the society it seems that quality is more likely an indicator for good products. According to Jacob Jacobi examples for that phenomenon can be found in advertisements and other promotional materials.^[3]

“… among automotive manufacturers alone, one finds insistent quality claims made by Ford (“Quality is Job 1), Lincoln Mercury (“the highest quality cars of any major American car company…a commitment to quality”), Chrysler (“Quality engineered to be the best”), Corvette (“This is a car with…impressive quality”), GMC trucks (“Qual­ity-built yet economical”), American Motors (“When it comes to building quality cars, we mean business”), Oldsmobile (“Fulfilling the…quality needs…of…American driv­ers”), Audi (“Quality Backed by our Outstanding New Warranty”) and Datsun (“the world-wide company whose name stands for quality”)”.

(Jacoby, 1985)^[4]

It can be comprehended that 25 years ago the majority of car manufacturers used the word quality to describe the value of their product. Even nowadays it seems hard to en­ter for example a drugstore without stumbling across labels with the printed word qual­ity. These labels are gladly accepted to show the class, superiority and excellence of their product. The con­sumer should feel referred to the uniqueness of an item in com­parison to similar products of competitors.

2.2 Importance

The decision for or against a product is influenced by the quality of that item. Peter Bowbrick thought that consumers normally do not face the choice between two com­peting goods which is the basic of classical economics. Instead, each product is divided in many competing product lines of different quality grades. A normal supermarket dis­poses of very few items like fish, champagne and cheese, but thousands of competing product lines, each providing dif­ferent quality.^[5]

2.3 Cost of producing quality

As we learned in the last preceding text, the quality of each product depends on the manufacturer. You can spend lots of money to produce real good quality. You can spend less money than others to produce better quality. Later in this paper, we will see that quality is not in general influenced by the costs a person is spending for its produc­tion. Quality could be perceived by the package, the design, the expiry date, the taste, the function, the weight, the color or / and the brand of a product.

[...]

---

^[1] Translated from: http://www.jugend-finanztest.de/?page_id=23/Access:26.12.2009

^[2] Translation from: Duden Band 1, Rechtschreibung der deutschen Sprache 21., 1996, p.598

^[3] See: J. Jacoby, Perceived Quality, 1985, p. 32

^[4] Ibid., p. 32

^[5] Compare: P. Bowbrick, The Economy of Quality, Grades and Brands, 1992, p. 6

• Author: Lisa Hamann (Author)
• Publication Year: 2009
• Pages: 20
• Catalog Number: V144980
• ISBN (eBook): 9783640730766
• ISBN (Book): 9783640731046
• Language: English
• Tags: Does