Please use this identifier to cite or link to this item: http://hdl.handle.net/10397/8945
Title: The universality of the signal theory for products and services
Authors: Erevelles, S
Roy, A
Yip, LSC
Keywords: Chinese consumers
Price
Quality
Warranty
Issue Date: 2001
Publisher: Elsevier
Source: Journal of business research, 2001, v. 52, no. 2, p. 175-187 How to cite?
Journal: Journal of business research 
Abstract: The effect of price and warranty information, acting together, on Chinese consumers' perceptions of product quality is the primary focus of this study. Specific theories, such as the price-quality relationship and signal theory, are tested by using a structural equations model. A set of hypotheses is developed specifically for Chinese consumers, based on these theories and Chinese cultural values; one model is developed for a consumer durable and another for a service category. The models are calibrated on two different samples of respondents in Guangzhou, China. Relationships between the model constructs are compared across consumer durable and service models. We find a difference in the way warranty information acts as a signal of quality for the service but not for the durable. We believe that, because we used a Chinese sample, this finding is hard evidence of the applicability of signal theory to service categories. Chinese consumers are different from westerners in their use of the price cue - there is no evidence of a price-quality relationship but price appears to have a pure allocation role - it affects risk perception, and has an indirect effect on purchase intention. The implications of the findings for marketing strategy in China are discussed.
URI: http://hdl.handle.net/10397/8945
ISSN: 0148-2963
EISSN: 1873-7978
DOI: 10.1016/S0148-2963(99)00069-7
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