Cross-Cultural Differences of Price-Perceived Quality Relationships

Abstract

To determine whether prices cause different levels of perceived quality, the authors survey consumers from two countries (Australia and Japan) that differ greatly in their cultural values. The findings show dramatic differences in the price-perceived quality relationships between the two countries: Varying prices of unbranded tourism packages cause much greater corresponding perceived quality differences for Japanese consumers than for Australian consumers. Japanese consumers perceive much higher quality for high prices and much lower quality for low prices, whereas Australian consumers demonstrate no corresponding changes in perceived quality but instead perceive higher quality for a moderately lowered price and lower quality for increased prices. The authors discuss implications for international pricing and price promotion strategies and the product categories to which such strategies should be targeted.