Consumer imperfection in observation – is it a boon for manufacturers? The case of India's automobile sector Online publication date: Fri, 07-Aug-2009
by Tanmay Chattopadhyay, Shraddha Shivani, Mahesh Krishnan, Rajesh K. Pillania
International Journal of Electric and Hybrid Vehicles (IJEHV), Vol. 2, No. 1, 2009
Abstract: This study explores the relationship between pricing as a marketing mix element and brand equity in an environment where there is an uncertainty of brand attributes, namely automobile purchase in India. The authors test the hypothesis proposed by Swait et al. (1993) – which suggested that a product of high brand equity signals high quality when consumers imperfectly observe product attributes – and also partially extrapolates the theory of Yoo et al. (2000) for this consumer category. On the basis of exploratory research and stratified sampling techniques, the hypothesis was tested for automobile consumers in India. The results show that there are primary and secondary cues affecting brand equity and pricing. Thus, brand equity and the perceived quality are impacted by pricing (even for multiple-time automobile buyers) though intuitively, they are expected to be less affected by pricing. This is also one of the first studies made for the multiple-time buyers of a product category.
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