Signal Of Product Quality Research Articles

Evaluating the influence of digital strategy on the interplay between quality certification and sales performance using data science and machine learning algorithms

In the context of international trade with information asymmetries, business certifications can serve as signals of product quality and reliability for customers and stakeholders. Recognizing this, the current study unbraces “signalling theory” to explore the impact of digital transformation strategy (DTS) on firm’s international quality certification status and sales performance in the global economy. To this end, treating quality certification endogenously, the study relies on bivariate copula regression modeling of 121429 firms’ responses data extracted from the World Bank’s Enterprise Surveys. Consistent with the hypothesized theoretical predictions, the findings revealed that DTS, in the form of website ownership, has a significantly positive impact on sales performance due to increasing firm’s reach, visibility, engagement, conversion, and retention of customers across different channels and touchpoints. As theoretically conjectured, quality certification is also found to positively impact sales performance by enhancing the firm’s reputation, trustworthiness, and attractiveness in the global marketplace. Most importantly, the study found empirical evidence that DTS significantly moderates the relationship between quality certification and sales performance, such that quality certification has a stronger effect on sales performance for firms with a well-defined DTS (web=1) than those without (web=0); leading therefore to the conclusion that DTS can amplify the signal of quality certification by making it more visible, transparent, and consistent across different digital channels and touchpoints. Hence, the study provides valuable empirical and theoretical insights that inform current business practices, future research, and potential policy measures to support business growth, and enhanced competitiveness in the global market place.

Exploring the effects of quality signals on search advertising performance: the moderating role of keyword attributes

PurposeIn online exchange platforms' sponsored search advertising, the array of product quality signals within a keyword search results list plays a crucial role in shaping buyers' purchasing decisions. This research seeks to explore the impact of various quality signals – namely, ranking position, seller reputation and product price – on ad clicks. Additionally, it examines the role of keyword attributes, such as specificity and popularity, in modulating the effects of these quality signals on advertising clicks.Design/methodology/approachA total of 5,763 effective data points were collected from a leading B2B electronic platform company, and we employed negative binomial regression with Heckman correction methods to test the hypotheses.FindingsThe results indicate that in online exchange platforms, search ad clicks are significantly and positively affected by displayed signals such as ranking position, seller reputation and product price information. Notably, a U-shaped relationship emerges between product price and ad clicks. Furthermore, keyword specificity and popularity distinctly moderate the impact of these displayed signals on ad clicks within online exchange platforms.Originality/valueThis paper addresses the gap in existing research on search advertising by methodically analyzing the impact of various signals displayed in search results and how keyword attributes moderate ad clicks, all through a signaling theory lens.

Reputation Spillover from Agencies on Online Platforms: Evidence from the Entertainment Industry

Digital markets have proliferated in recent years, overcoming many market inefficiencies by facilitating direct interactions between consumers and creators. Thanks to this disintermediation, consumers now have access to a vast number of alternatives, while creators can efficiently reach huge markets. However, the success of digital markets has created a concomitant challenge for creators: differentiation. In crowded markets, agencies (e.g., publishing companies in books, freelance agencies in online labor markets, independent labels in music) can differentiate creators by signaling product quality. But how do agencies’ reputations affect product success for creators? Can some agencies do more harm than good? To investigate these research questions, we theorize how variation in creator and agency reputation leads to asymmetric and heterogeneous effects, namely that (1) more reputable agencies have a stronger positive effect on less reputable creators than they have on more reputable creators, and (2) less reputable agencies hurt more reputable creators more than they hurt less reputable ones. Analyses of more than one million observations from two digital markets provide empirical support for these theory-driven arguments. The findings have design implications for markets and contribute to our understanding of how agencies, depending on creator reputation, can either benefit or hurt product success.

Analyzing The Co-branding Marketing Strategy of UNIQLO

Co-branding is an alliance in which businesses join up with other brand names to form joint brands in order to improve brand image and increase product quality signals. Co-branding is a common marketing strategy. As a long-term market strategy, UNIQLO prioritizes co-branding. The goal of this research is to examine the relationship and influence of co-branding, brand image, and purchase intent. This study analyzed and summarized the relationship between co-branding and brand image, the relationship between co-branding and buy intention, and the relationship between brand image and purchase intention using literary analysis. Using UNIQLO as an example, this study did a SWOT analysis. This study suggested that co-branding influences brand image, which leads to customer purchase intentions, and that diverse brand images influence purchase intentions. Furthermore, UNIQLO's business approach ensures co-branding. The plasticity of UNIQLO apparel creates the groundwork for co-branding and establishes a positive brand image for the brand with comfort and simplicity as the brand concept. At the same time, UNIQLO's actual apparel quality issues and market joint involution have jeopardized the company's co-branding plan. As a result, it is vital to make proper use of the co-branding strategy, connect and build a high-quality brand image, make proper use of brand advantages, prevent risks, and encourage the improvement of consumers' purchase intents.

To reduce waste, have it repaired! The quality signaling effect of product repairability

By encouraging product repair, companies might increase product durability and minimize waste. However, the effectiveness of such strategies ultimately depends on consumers’ perceptions of the companies’ communications. The current research seeks to determine whether and when product repairability communications can signal product quality. Three quantitative studies and their meta-analysis affirm that repairability communications function as a signal of firms’ CSR orientation and the product’s durability; consumers rate brands that communicate about product repairability more favorably, and this effect grows stronger if they sense that product reliability is decreasing. According to the qualitative study, these effects further depend on factors such as consumers’ attributions of firms’ motives, and the presence of signal endorsers. These results contribute to quality signaling literature by uncovering the role of product repairability communication as a signal of product durability; and highlight the effects of CSR beliefs on consumers’ evaluations in a repair context.

Prices as signals of product quality in a duopoly

Prices as signals of product quality in a duopoly

The Effect of Brand Perception, Halal Label, and Product Composition of Cosmetics to Habitual Buying Behaviour: The role of Perceived Price as Mediator

As a Muslim individual who lives in a Muslim-majority country, of course, it is necessary to pay attention to brand, halal label and product composition of cosmetics. The development of technology also encourages the creation of new products, which makes people have to be more selective in choosing brand, halal products and consist of natural or organic ingredients in accordance with Islamic law. The purpose of this study was to determine the effect of brand perception, halal label and product composition of cosmetics to habitual buying behaviour. This research was conducted on 169 respondents using SPSS ver.26 and PROCESS macro v.4 model 4 for data analysis and to determine the effect of mediation. The results of this study indicate that brand perceptions, halal labels and product composition of ingredients affect habitual buying behaviour. However, the most influential variables in this research are product composition and halal label. While brand perception contributes only 1% and is negative. The reason is a healthy and safe product composition will increase consumer confidence to buy repeatedly. In addition, the inclusion of halal labels is important not only for consumers, but also for producers. This halal label is intended to provide a sense of security for consumers. Also, as a guarantee for them that produced in a halal and ethical. Price can signal product quality, represent elegance and status, while people tend not to pay attention to brands. Keywords: brand perception, halal label, product composition, price, habitual buying behaviour.

The thin line between tradition and well-being: Consumer responds to health and typicality attributes for dry-cured ham

• The existence of a clearly defined hierarchical order in consumer preferences for attributes of dry-cured ham was found. • The study highlighted the importance attached to the absence of nitrites; the first attribute in terms of positive utility. • Price was considered by many consumers as a signal of product quality. • Men show for first time an increasing attention to low-salt content product. • High-educated consumers accord their preference to healthy and PDO labelled ham with fewer nitrites.

In the consumers’ eye: A mixed-method approach to understanding how VR-Content influences unbranded product quality perceptions

Virtual reality (VR) is an exciting technology that offers great promise as a novel promotional tool. The notion that promotional tools can signal brand quality to consumers is supported in the literature, but the impact for products when brand signals are not paramount is less understood. We use a mixed-method approach to explore how VR-content influences consumers' quality perceptions for products where branding is less relied upon. Findings from a qualitative study reveal that the perception of VR-content's innovativeness acts as a heuristic to signal product quality for unbranded property products. Results from two quasi-experimental studies reveal that while industry-perceived innovative VR-content may not signal consumers' product quality perceptions, consumers' perception of media innovativeness can signal product quality for the offering and increase purchase intentions. Theoretical and managerial implications are discussed.

The Signaling Effect of Sampling Size in Physical Goods Sampling Via Online Channels

Prior literature has focused primarily on offline sampling of physical goods and online sampling of information goods, whereas a new form of sampling campaign—physical goods sampling via online channels—receives little attention. Leveraging a rich data set from Taobao, a large e‐commerce platform in China, this study strives to understand the mechanisms of physical goods sampling via online channels. Specifically, we investigate (1) how the sampling size (number of free samples provided) acts as a signal of product quality and (2) how the signaling effect of sampling size varies across product types (i.e., search, experience, and credence products). We use a structural model to characterize the e‐tailers' decision process as a trade‐off between the incurred cost of free sampling at present and the economic returns in future. We find that a 1% increase in sampling size leads to a total sales increase of 5.34% daily sales over a month. Of all product types, experience products benefit the most from the signaling effect of sampling size, whereas search products benefit the least. We further perform a policy simulation on the sampling threshold, that is, the minimum total value of the sampling product required to join the sampling campaign. Our results show that increasing the threshold leads to decreases in average sales and the number of e‐tailers involved, and vice versa. As one of the first studies focusing on the mechanisms of physical goods sampling in the online context, our study provides empirical evidence of the signaling effect of sampling size.

Consumer self-uncertainty increases price dependency

In this paper we demonstrate how consumers’ self-concept clarity influences their susceptibility to the price-quality heuristic. Low self-concept clarity enhances consumers’ propensity to use price as a cue for product quality. This relationship is mediated by uncertainty-avoidance. Across four studies, where we measure and manipulate self-concept clarity, we provide evidence for this relationship and also show that it is moderated when consumers are provided additional diagnostic cues that signal product quality.

A Comparative Analysis of Consumption: Evidence from a Cultural Goods Market

This study uniquely employs a fuzzy-set qualitative comparative analysis (fsQCA) technique to account for complex relationships in consumption. The fsQCA technique assumes that relationships are based on a set–subset relationship. This assumption is fundamental when decision-makers are affected by information asymmetry and are, thus, required to jointly evaluate the credibility and reliability of a range of external signals. This issue also affects consumers in markets for cultural goods, where the quality of products is not known with certainty in advance of the purchase decision. Our study uses fsQCA to establish the effect of different quality signals on consumption in the US market for video game software. Our results show that reviews from professional critics alongside brand extension and multi-platform release strategies act as signals of product quality and, therefore, lead to high sales performance.

Competing or complementary labels? Estimating spillovers in Chinese green building certification

AbstractResearch summaryMany markets have multiple voluntary certification programs that sellers use to signal product or organizational quality. We argue that there can be positive spillovers in adoption of “competing” certifications and propose a framework for understanding how such spillovers arise through three channels: suppliers, adopters, and users of various labels. Our empirical analysis demonstrates these effects in the context of Chinese green‐building certification. Specifically, we measure spillovers from adoption of the Chinese Green Building Evaluation Label (GBEL) to adoption of the alternative LEED standard within the same city. To isolate the causal impact of GBEL on LEED adoption, we use local government subsidies as an instrumental variable. We find evidence of market‐level spillovers through the supplier and user channels, but little evidence of building‐level scope economies.Managerial summaryMany markets have several voluntary certification programs that sellers can use to signal product or organizational quality. Although many scholars emphasize the potential for competition between labels, we argue that there can be positive spillovers in adoption of “competing” certification schemes and propose a framework for understanding how those spillovers arise through three channels: suppliers, adopters, and audience. Managers of nascent certification programs can use this framework as a roadmap for attracting various stakeholder groups. We use our framework to analyze the diffusion of Chinese green‐building labels and find evidence of large positive spillovers through the supplier and audience channels. These results suggest that the risks of tipping toward a single standard may be small in practice.

The Performance Implications of Crowdfunding

This study explores how crowdfunded products perform in comparison to their non-crowdfunded counterparts and which mechanisms explain differences in performance. Relying on a unique data set of Kickstarter-funded video game ventures, I find strong evidence that products backed by the crowd are more successful. As such, successful crowdfunding is a signal of product quality that helps potential customers in their buying decision. Moreover, crowdfunded products benefit from the contribution of innovative users who modify the product to extend its functionality and share these modifications with other users. The paper thus contributes to lead user and signaling theory.

Buying a New Product with Inconsistent Product Reviews from Multiple Sources: The Role of Information Diagnosticity and Advertising

Product reviews are critical high-scope non-marketing cues for consumers to obtain useful product information from various perspectives. However, the effects of inconsistent reviews among multiple sources on new product sales are underexplored. Based on the cue-diagnosticity framework, this research investigates how multi-source review inconsistency (MSRI) affects purchase intention and new product sales in the context of the U.S. automobile industry when firms signal product quality through advertising as a low-scope cue. Using multi-methods of an experiment and secondary data analysis, the results show the negative effects of MSRI on purchase intention and new product sales and explain the mechanisms through information diagnosticity. Further, the findings show how advertising as a low-scope cue can mitigate the effect of multi-source inconsistency on new product sales.

Using Stated Preference Valuation to Support Sustainable Marine Fishery Management

This study uses a random parameters logit (RPL) model to estimate the Taiwanese preference for northern shrimp (NS) products (NSP) with the Marine Stewardship Council (MSC) label. The estimated results show that, ceteris paribus, the marginal willingness to pay (MWTP) of Taiwanese consumers for NSP with the MSC label is up to New Taiwan dollar (NTD) 84.86 in comparison to products without the label. Moreover, the price of MSC-labeled NSP has a positive effect on the quantity demanded by Taiwanese consumers. They also prefer products in smaller packages and with shorter certification periods. The positive effect can be explained by the Veblen effect or the fact that sometimes prices are perceived as signals of product quality. However, the effects of preference for smaller packages and shorter certification periods are minimal compared with the effects of preference for MSC-labeled products. When consumers are unfamiliar with products or labels, a high price is a viable marketing strategy. However, the advantage cannot sustain the promotion of products and labels.

Fear of fraud and willingness to pay for hybrid maize seed in Kenya

Concerns about poor seed quality and outright fraud in seed supply chains can reduce farmers’ willingness to invest in hybrid seeds and in complementary inputs that increase crop yields and improve food security. In Kenya, seed companies have started marketing their seed using novel packaging features to signal product quality and authenticity. We use experimental auctions with smallholder farmers in Kenya’s Nyanza Province to assess (1) farmer willingness to pay (WTP) for hybrid seed from different sources with different packaging features and (2) how WTP is affected by training on best practices for purchasing seed. We elicited demand for two popular types of hybrid maize seed and a familiar local (non-hybrid) seed. For each hybrid, we examined WTP for one bag purchased directly from the seed company and three bags purchased from local retailers, two of which had compromised packaging. Across both the control and training groups, participants were willing to pay a 15% premium, on average, for bags purchased directly from the seed company compared to mint condition bags purchased from local retailers. Without the training on purchasing seed, farmers did not discount compromised bags; however, farmers who received the training, were willing to pay 15% less for compromised bags. Education and outreach may be required for packaging innovations to increase investments in high-quality hybrid seed that can help enhance the productivity of smallholder farmers.

Dumping, Antidumping Duties, and Price Undertakings: Policy Implications of Trade in Quality-Differentiated Products

This paper examines which types of firms, from a developed country (DC) or a less developed country (LDC), tend to practice dumping, using a two-market equilibrium analysis of trade in like products. Specifically, we present a vertical product differentiation model of duopolistic competition between a DC firm and an LDC firm under free trade to show that the DC firm sells a higher-quality product without dumping. In contrast, the LDC firm sells a lower-quality product and practices dumping in the DC market by charging a price lower than the product's price in its LDC market. As such, dumping is a signal of lower product quality. The imposition of an antidumping duty by the DC government increases domestic welfare. The LDC's social welfare may increase if its exporting firm accepts a price-undertaking rather than dumping. From the perspective of world welfare, defined by aggregating the welfare of the trading countries (DC and LDC), the trade damage measure of imposing antidumping fines on LDC dumping is Pareto-improving compared to free trade (under which dumping takes place) and price-undertakings.

Who Benefits from Platform Entry if Multi-Agent Prices Signal Product Quality?

Merchants are wary of a platform entering as a competitor and adversely affecting sales and margins. A platform wanting to maximize profits is interested also in gaining consumer trust and confidence by providing credible quality information to consumers. As a practical matter, could a platform benefit by entering, by using multi-sender prices as signals to alleviate consumers’ uncertainty of quality? Further, can a merchant also benefit from platform entry? We answer these questions by analyzing strategic pricing by a platform and merchant under quality uncertainty. We innovate by modeling platform-merchant competition in a leader-follower framework and characterizing the sub-game perfect pricing strategy that is also PBE with consumers resolving quality uncertainty using both platform and merchant prices. We find that platform entry and resulting multi-agent signaling can help to inform consumers of quality. Consumers can benefit by lower prices and increased market coverage. An important result is that conditions exist for an equilibrium outcome identical to complete information. Even more interesting, the platform, merchant and consumers could all be made better off by platform entry.

On the Relative Efficiency of Crowdsourced Rating Mechanisms: Experimental Evidence

This paper experimentally tests the effectiveness of three crowdsourced signalling mechanisms on their ability to resolve an asymmetric information problem over product quality for a set of consumers. Motivated by naturally occurring environments, the first mechanism allowed experimental subjects to submit a signal of high product quality only, the second allowed for a signal of high and a signal of low quality, and the third a five star rating scale of quality, which reported the average rating. In support of the primary hypothesis, the experimental results reveal positive returns to the degree of signal specificity in the rating system given to consumers. Namely, the five-star rating mechanism reduces the presence of asymmetric information more than the high quality signal only mechanism. The high-and-low quality signalling mechanism, which offers an intermediate level of signal specificity on quality, is not statistically different from the other two mechanisms. Furthermore, an analysis of individual characteristics finds evidence that the willingness of a subject to rate products, and thus aid in producing valuable information for other consumers, is critically linked to their pro-social tendencies.