Effect of Manufacturer Reputation, Retailer Reputation, and Product Warranty on Consumer Judgments of Product Quality: A Cue Diagnosticity Framework

Abstract

In this article, we examine how consumers assess product quality when confronted with multiple cues. Based on cue diagnosticity, a conceptual framework is developed that differentiates between cue types and suggests that the diagnosticity of some cue types depends on the valence of other cue types in the environment. The cue diagnosticity framework is then used to assess the effects of manufacturer reputation, retailer reputation, and product warranty on consumer perceptions of product quality. Consistent with the conceptual framework, we find in 2 studies that warranty is not used in judgments of product quality when a manufacturer with a poor reputation sells directly to consumers or sells through a retailer with a poor reputation. However, when the same manufacturer sells through a reputed retailer, then the warranty is used in making quality evaluations. The results not only support the conceptual framework, but also highlight the important role that the retailer plays in assessments of product quality. The implications of the findings are discussed along with directions for future research.