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MAY 1 5' 200; £508“ CONSUMERS' PERCEPTION OF QUALITY AND ESTIMATION OF RETAIL PRICE GIVEN THE INFORMATION CUES OE COUNTRY OF ORIGIN, STORE IMAGE AND THE BUY AMERICAN CAMPAIGN BY Sue Ann Kern A THESIS Submitted to Michigan State University In partial fulfillment of the requirements for the degree of MASTER OF ARTS Department of Human Environment and Design 1986 ABSTRACT CONSUMERS' PERCEPTION OF QUALITY AND ESTIMATION OF RETAIL PRICE GIVEN THE INFORMATION CUES OF COUNTRY OF ORIGIN, STORE IMAGE AND THE BUY AMERICAN CAMPAIGN BY Sue Ann Kern The research objectives for this study were to determine if consumers perceive quality and price differences as a result of manipulation of the information cues of domestic versus foreign product origin, high versus low store prestige and the absence or presence of Buy American campaign materials. An additional objective was to determine if the presence of Buy American campaign materials influences consumers to select domestic versus imported apparel. It was found that the country of origin cue had little effect on the consumers' judgement of quality and price. The store prestige cue had highly significant effects on estimation of retail price differences. The store image cue proved to be the strongest of the three cues and was apparently used more often tn! consumers in Inaking decisions. The Buy American campaign materials had no significant effect on perception of quality or estimation of retail price differences except when cwnsidered within the influence of store prestige. It influenced the consumer to select domestic shirts and imported sweaters. ACKNOWLEDGMENTS Thank you to Dr. Brenda Sternquist for her invaluable guidance, encouragement. and suggestions as hug major professor. Thank you also to my committee members Dr. Dawn Pysarchik, Merchandising Management and Mrs. Irene Hathaway, Extension Specialist for their recommendations and time spent on this project. A very special thank you to Bonnie Davis, who assisted with the statistical analysis, data collection and use of the computer. Her friendship and infinite patience were deeply appreciated. Gratitude is expressed to Marianne Mahoney, Kris Carnahan and Shiela Marga Tolbert for sharing their valuable time to help collect data. I have enjoyed their comaraderie as fellow graduate students and wish them the best of luck in their future endeavors. Thank you also to Dr. Jane Stolper and the Department of Human Environment and Design for granting financial support to carry out various aspects of the study. Funds from AURIG were sincerely appreciated. Special recognition is extended to Mrs. Stephania Winkler who has been a friend and mentor since my return to Michigan State Universityu Her belief’ in my' ability has provided me with the courage to achieve my academic goals. Finally, I would like to thank my dear friends, Barbara Klein and Joe Schwinger for their encouragement and emotional support. throughout Imy progrann This thesis is dedicated to them for their special friendships. ii TABLE OF CONTENTS Chapter Page I. INTRODUCTION..................................... Statement of the Problem..................... Justification for the Study.................. Theoretical Framework........................ Research Objectives.......................... GWWNH II. REVIEW OF LITERATURE............................. Consumer Behavior and Quality Perception..... Price-Quality Relationship Investigation..... 1 Store Image - High Prestige versus Low Prestige................................. 22 Country of Origin............................ 25 moooo .. III. METHODS AND PROCEDURES........................... 35 The Apparel Products......................... 35 The Retailers................................ 36 Information Cue Manipulation................. 36 Sample and Experimental Treatment............ 37 The Instrument............................... 4G Hypotheses and Statistical Analyses.......... 41 IV. THE SAMPLE AND RESULTS........................... 43 Demographic Information...................... 43 Age...................................... 44 Education................................ 45 Occupation............................... 45 Income................................... 46 Number of Dependents on Income........... 46 Race..................................... 46 Statistical Testing of the Hypotheses........ 50 Analysis of the Variables as Predictor of Quality and Price..................... 51 Quality.............................. 51 Price................................ 55 Testing the Hypotheses....................... 61 Overall Quality and Price Differences.... 61 Country of Origin........................ 63 Store Image.............................. 67 Buy American Cue Manipulation............ 71 Summary of Statistical Findings.......... 82 iii V. DISCUSSIONOCOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO VI. SUMMARY AND RECOMMENDATIONS............... APPENDICES AOOOOOOOOOOOOO00.0.0.0...OOOOOOOOOOOOOOOOOOO BOOOOOOOOOOOOO0.000......OOOOOOOOOOOOOOOOOOO LIST OF REFERENCESOOOOOOOOOOOOOOOOOOOOOOOOOOIOOO iv 86 93 98 107 113 LIST OF TABLES Table Page 4.1 General Demographic Overview of Consumers........ 44 4.2 Summary of Demographic Information............... 47 4.3 Stepwise Regression Analysis for Quality with Origin, Prestige, Buy American and Interactions: Shirts....OOOOOOOO0.....00...OOOOOOOOOOOOOOOOOOOO 52 4.4 Stepwise Regression Analysis for Quality with Origin, Prestige, Buy American and Interactions: sweaterSOOOOOOOOOOCO000......OOOOOOOOOOOOOOOOOOOO 54 4.5 Stepwise Analysis for Price with Origin, Prestige, Buy American and Interactions: Shirts........... 56 4.6 Stepwise Analysis forflPrice with Origin, Prestige, Buy American and Interactions: Sweaters......... 58 4.7 Correlation Coefficients for Variables: Shirts.. 59 4.8 Correlation Coefficients for Variables: Sweaters 60 4.9 Overall Perceived Quality and Price: Shirts..... 62 4.10 Overall Perceived Quality and Price: Sweaters... 62 4.11 Mean Overall Quality and Price Ratings........... 63 4.12 Country of Origin and Store Image, Mean Response and Tukey Multiple Comparisons for Price: Shirts 64 4.13 Country of Origin and Store Image, Mean Response and Tukey Multiple Comparisons for Price: sweaters.OOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO 64 4.14 Perceived Quality and Price as a Function of Country of Origin (Domestic vs. Imported): Shirts.....OOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO 65 4.15 Perceived Quality and Price as a Function of Country of Origin(Domestic vs. Imported): sweaterSOOOOOOOCOOOO0.0.0....OOOOOOOOOOOOOOOOOOIO 66 V 4.16 Mean Domestic vs. Imported Quality and Price RatingSOOOOOOOOOOO0.000000000000000000000000.0... 4.17 Perceived Quality and Price as a Function of Store Prestige (High Prestige vs. Low Prestige): ShittSoooooooooo.00000000000ooooooooooooooooooooo 4.18 Perceived Quality and Price as a Function of Store Prestige (High Prestige vs. Low Prestige): sweaterSOOOOOOOOOO0...0.0000000000000000000000000 4.19 Mean Quality and Price Ratings as a Function of Store Prestige: High Prestige vs. Low Prestige.. 4.20 Perceived Quality and Price Between Domestic and Imported Apparel as a function of the High Prestige Store Cue: Shirts...................... 4.21 Perceived Quality and Price Between Domestic and Imported Apparel as a Function of the High Prestige Store Cue: Sweaters.................... 4.22 Perceived Quality and Price Between Domestic and Imported Apparel as a Function of the Low Prestige Store cue: Shirts.OOOOOOOOOOOOOOOOOOOOO 4.23 Perceived Quality and Price Between Domestic and Imported Apparel as a Function of the Low Prestige Store Cue: Sweaters.................... 4.24 Perceived Quality and Price with No Buy American Cue (Domestic vs. Imported): Shirts............. 4.25 Perceived Quality and Price with No Buy American Cue (Domestic vs. Imported): Sweaters........... 4.26 Perceived Quality and Price with the Buy American Cue (Domestic vs. Imported): Shirts............. 4.27 Perceived Quality and Price with the Buy American Cue (Domestic vs. Imported): Sweaters .......... 4.28 Chi Square Results of Shirt Choice by the Buy American Cue Manipulation.................... 4.29 Chi Square Results of Sweater choice by the Buy American Cue Manipulation............ ....... . 4.30 Multiple Analysis of Variance for Shirt Quality.. 4.31 Multiple Analysis of Variance for Shirt Price.... 4.32 Multiple Analysis of Variance for Sweater Quality vi ; 66 68 68 69 70 70 72 72 74 74 75 75 77 77 79 79 80 Multiple Combined Prestige Combined Prestige Analysis of Variance for Sweater Price.. Quality Means for Buy American by by origin00OOOOOOOOOOOOOOOOOOOOOOOO0.00. Price Means for Buy American by by originOOOOOOOOOOOOOOOO0.0000000000000 Summary of Hypothesis Testing.................... vii 80 81 82 84 APPENDIX A - LIST OF TABLES Chi Square Results for Shirt Choice by Age....... Chi Square Results for Sweater Choice by Age..... Chi Square Results for Shirt Choice by Education. Chi Square Results for Sweater Choice by EducationOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO0.0.0.0... Chi Square Results for Shirt Choice by occupationOOOOOOOOOOOOOOOOOO0.0000000000000000000 Chi Square Results for Sweater Choice by occupationOOOOOOOOCOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO Chi Square Results for Shirt Choice by Income.... Chi Square Results for Sweater Choice by Income.. Chi Square Results for Shirt Choice by Dependents Chi Square Results for Sweater Choice by DependentSOOOOOOIOOOO0.0.0.0...OOOOOOOOOOOOOO0.0. Chi Square Results for Shirt Choice by Race ...... Chi Square Results for Sweater Choice by Race.... Multiple Analysis of Variance for Shirt Quality.. Multiple Analysis of Variance for Shirt Price.... Multiple Analysis of Variance for Sweater Quality Multiple Analysis of Variance for Sweater Price.. viii Page 98 98 99 99 100 101 102 102 103 103 104 104 105 105 I06 I06 APPENDIX B - LIST OF FIGURES Figure B.l Random Number Order........................ 107 Figure 8.2 Diagram of the Experimental Design......... 108 StUdy QuestionnaireOOOOOOOOO00....OOOOOOOOOOOOOOOOOOOOO 109 ix CHAPTER I INTRODUCTION To combat the negative effects imports are having on domestic industries, the American Fiber, Textile, Apparel Coalition (AFTAC) launched a campaign in July 1984 to change consumers' attitudes about domestic versus imported products (AFTAC News, 1984). The AFTAC campaign is attempting to influence consumer beliefs about the quality, value and economic importance of buying U.S. products through a public information program (Milliken, 1985). The purpose of the Buy American campaign is to raise consumer awareness of "Made in U.S.A." labeling of apparel. The "Made in U.S.A." label is now mandatory due to the recently passed legislation supported by the AFTAC. This law, signed by President Reagan in September 1984, requires that all apparel manufactured in the United States after December 24, 1984 must contain "Made in U.S.A." labels. The Buy American message has been promoted through grassroots activities such as rallies, festivals and parades. The intention is to tie in the campaign with the new surge of patriotism and pride brought about by the 1984 Olympics and the restoration of the Statue of Liberty (McKissick, 1984). The AFTAC consists of cotton and wool growers; producers of man-made fibers; the International Ladies' Garment Workers' Union and the Amalgamated Clothing and Textile Workers‘ Union; and most manufacturing associations involved with fiber, textiles and apparel production. They have designed a campaign logo of a red-white-and-blue star encircled by the slogan "Crafted with Pride in U.S.A." Their major aim is to promote American made products by raising consumer consciousness with high visibility' of the logo. The program is encouraging other non—textile and non—apparel industries in the United States to also use the logo to increase exposure. Additional goals of the coalition are to convince retailers that American consumers would purchase U.S. made products if they could recognize them as such and that the retailers could also benefit from carrying and promoting these products. Statement of the Problem Although much research has been conducted on buyers of industrial and non-textile/apparel products, there is little information about the average consumers' perception of apparel quality and price. There is a need to discover the consumers‘ opinions of domestic versus imported apparel since this is virtually an unexplored area. Also since the Buy American campaign is 23 very recent endeavor, there has been very little reseandn dome to determine its impact on the American consumer. This study provides an opportunity to investigate consumers' opinions about apparel quality and price as influenced by source of product origin, prestige of the retailer' and 'marketing' efforts tx> promote» purchasing 'domestic products. Justification for the Study Presently, the American consumer is concerned with obtaining the best value in merchandise by balancing the quality and price of an apparel purchase. The average consumer uses various information cues to evaluate the quality/price relationship (NE a product. Researchers have investigated many different information cues such as price, physical composition and brand name, as being important enough to the consumers in judging quality to warrant being studied. Country of origin, store prestige and Buy American campaign information were determined to be of current importance im1 influencing consumers' perception (HE apparel quality and price estimates. While many previous studies attempted to analyze the price—quality relationship using price as the independent variable, the present study uses quality and price as the two dependent variables. This will provide an opportunity to study the way in which the consumer translates the cues of country of origin, store prestige amd the Buy American campaign information into a perceived quality rating and a "“-I' monetary estimate of value. The first manipulated independent variable will be country of origin. Of major interest is whether or not consumers perceive a difference in quality or price based on the country the apparel was produced in. with the present conflicts over quota restrictions on imports, textile and apparel industries' unemployment rates and time escalating U.S. trade deficit, there is a need to determine the attitudes and buying behavior of consumers toward imported merchandise. Therefore, the effect of cues for both imported merchandise, specifically from less developed Asian countries, and domestically made merchandise will be investigated. The second manipulated independent variable will be store prestige. Retail practices by different types of stores in purchasing and pricing imported merchandise may lead to confusion on the part of the consumers as to the actual value they are receiving for the price they are paying. Therefore, the various store types' projected images' may influence consumers' perceptions of quality and estimated retail price. The two levels of prestige which will be used are high - the traditional department store versus low - a discount department store. The third independent variable to be manipulated consists of Buy American campaign materials. Domestic manufacturers through the "Crafted With Pride" program are attempting to influence consumers' attitudes and buying habits in favor of products produced in the U.S.A. This is an attempt to appeal to their patriotism and assure them of the superior quality cfif domestically produced goods. The Buy American campaign materials will either 1x2 present or absent during the experimental manipulations. Finally, much of the previous research on these issues has used abstract stimuli to study consumers' attitudes and behavior toward a retail product. This study utilizes actual products and consumers in a normal shopping setting. According to a study by Holbrook (1973), research conducted in this manner should produce strengthened results. Theoretical Framework Bauer (1960) introduced the concept of perceived risk in consumer product selection where consumers would seek out information cues to reduce their perceived risk in making the optimum selection decision. Ihi 1967 Cox investigated perceived risk in terms of the consumers' ability to identify decision alternatives and their personal involvement with the results of their decision. Cox viewed products as having multiple cues which consumers use to make quality judgements. Olson and Jacoby (1972) noted that consumers evaluate cues as 1x) their predictive value (the probability that the cue is related to an attribute of a product) and confidence value (how certain a consumer felt he could interpret that cue accurately). A model was developed to describe and classify cue utilization in terms of (predictive value~ and confidence value along with the concept of intrinsic and extrinsic cues in quality perception. In tying these concepts together, the present study attempted to investigate the consumers' use of specific information cues to arrive at a decision concerning perceived quality ratings, retail price estimates and selection of an item in an apparel purchase situation. The subjects had ix) rely (x1 past experiences, various personal factors and available infprmation cues to identify the decision alternatives and rmflue the decisions requested of them in the study. The subjects evaluated the available extrinsic information cues of country of origin, store prestige and Buy American campaign materials using the predictive value of these cues and their own level of confidence in interpreting the cues to complete the rating task. Because so little research has addressed this issue, the model will serve as a theoretical framework rather than as a quantitative model. Research Objectives The research objectives of this study were as follows. 1. To determine if the consumers' perception of quality of the garments differ as a result of manipulation of the 7 following information cues: a) Domestic versus Import b) High Prestige versus Low Prestige Store Image c) Buy American Campaign Materials versus No Buy American Campaign Materials To determine if the consumers' estimation of retail price for the garments differ as a result of the manipulation of the following information cues: a) Domestic versus Import b) High Prestige versus Low Prestige Store Image c) Buy American Campaign Materials versus No Buy American Campaign Materials To determine if the presence of Buy American campaign materials influenced consumers to select domestic versus imported garments. CHAPTER II REVIEW OF LITERATURE Consumer Behavior and Quality Perception In 1960 Bauer introduced the concept of perceived risk which deals with the consumer's fear of unpleasant post-purchase consequences and the pre—purchase uncertainty of those outcomes. The magnitude of a consumer's perceived risk depends upon how well the consumer can define decision alternatives, and the consumer's involvement in the decision outcomes (Cox, 1967). In ”other words, {fine consumer Inust know what will meet her apparel needs and buying goals and what product attributes will satisfy them. Then the consumer must deal with the result of whether or not the item purchased successfully fulfilled those needs and goals. Jacoby and Kaplan (1972) found that there were five types of perceived risk involved with product performance. Given in rank order for apparel items they are as follows: social, psychological, financial, functional performance and physical. The term used to represent a product's ability to fulfill the consumer's expectations for these aspects of product performance will be "quality". Risk theorticians in expanding and refining the perceived risk concept, have found that consumers resorted to numerous risk-reducing strategies such as brand or store loyality, searching for sources of reliable information such as advertising or word-of-mouth recommendations, or relying on one's own past experiences. The extent of use of the above strategies increases with the expense, complexity, unfamiliarity or personal involvement with the product to be purchased. Therefore, the higher the risk associated with a product, the more likely it is that the consumer will seek information cues with which to reduce the risk of their choice meeting Jacoby and Kaplan‘s five aspects of product performance. Information cues are detectable characteristics of an object which are used to form a belief or an attitude about the object. Among the many cues used by consumers to judge apparel quality are such characteristics as price, brand name, fit or style. In View of the fact that product quality has always been an important attribute to consumers in making a purchase' decision, Inuch research, has been. done to study information cue utilization in the consumer's quality percepticwl process. Olson. and (Jacoby (1972) specifically set out 1x) determine which cues consumers consider when deciding on 51 purchase and which cues have» the greatest influence upon perceptions of quality. They found that multiple cues were utilized to make a decision, that accuracy of cues is product specific and that findings were 10 also specific to tine product or consumer studied. Additionally, they found that tflma most important cues and most accurate indicators of quality' were intrinsic. In other words the cues were an inherent physical characteristic of the product which could not be altered (i.e. taste, aroma, color, style, density). Extrinsic cues are external characteristics of the product which can be easily changed or manipulated without affecting the physical composition of the product (i.e. brand name, price, country of origin). It should be noted here that in a study by Wheatley, Chiu and Goldman (1981) that although intrinsic cues were better determinants (ME quality, extrinsic cues were more easily perceived and therefore would be utilized more often by consumers. * Olson and Jacoby's findings resulted in a model to describe and categorize quality cues in dimensions of cue predictive value and cue confidence value along with the previously described dichotomous classification of extrinsic/intrinsic cues (1972). The predictive value of a cue is the degree to whiCh a consumer believes that a cue accurately represents a certain attribute of the item (brand name reflects quality). The confidence value is the extent to which a consumer is certain that he can accurately identify and evaluate a cue (detecting the density of a knit for warmth). Further findings from the Olson and Jacoby study showed that although price was not found to be a good 11 indicator of quality, it was taken into consideration by the consumer when making a final decision, i.e. is the product affordable and is the price equal to its value. Many consumer behaviorists hold the belief that "consumers are rational, utility maximizers; i.e. they choose alternatives that will offer the greatest value" (Obermiller and Wheatley, 1984, p. 453). Rao began research in this area in 1971 when he set out to discover the process used by consumers to judge the relative quality of various brands. A sample (n? 144 business school graduate students participated in the experiment featuring two product classes of men‘s electric shavers anui double-edged safety razors. The phenomenon of quality perception was viewed in two ways, the prediction of price from available cue information on the brands and the prediction of perceived quality from selected information cues. The first cue, price, was manipulated at five different levels: 1) no information on price, 2) actual prices, 3) distorted price sets 1, 2 and 3. The second cue, product information, was manipulated at two levels, consisting of the 1) absence or 2) presence of consumer reports test results on closeness of shave, lack of irritation, and number of shaves (disposable blades). It was found that the subjects' price estimates were closely aligned with the actual prices and the distorted prices did not affect correct quality detection. Consumer test report information was considered more important than 12 other market information cues. This was interpreted to mean that since subjects could accurately predict retail prices, using available correct and incorrect price along with other information cues, that the importance of price in quality perceptions was negligible (Rao, 1971). Expanding upon these findings, Rao (1972) investigated the price-quality-value relationship by analyzing consumers' preference behavior for different brands. He developed a model to explain consumer's brand choice in a purchase situation using judgements of brand value as determined by perceived brand quality and (price (Rao, 1972). In this experiment, the subjects were 96 business school graduate students who indicated their preferences in buying between several different brands of electric shavers and double-edge razor blades. The products were displayed with all available market information, including the actual price experimentally assigned to half of the subjects. The subjects ranked the products on (1) similarity of pairs of brands, (2) preference in order of quality perception with no cost involved, (3) preference when given the exact amount of money to purchase the expensive item or the inexpensive item and keeping the change resulting from buying the lower priced. brand. The' half of the subjects not given price information served as the control group which had to estimate their own subjective prices. Again the assumed retail prices were very close to the actual retail prices. 13 The statistical models whiCh were tested and accepted by this study were as follows: Q = a + b log P + error Where: Q = Perceived Brand Quality P = Brand Price a and b = Parameters (Rao, 1972, p. 368) This model shows a consumer's perception of product quality in terms of price and value. v = bgm/P)b1 Where: V = Perceived Brand Value Q = Perceived Brand Quality P = Brand Price bg, b1' b2 = Parameters (Rao, 1972, p. 368) This second model shows the utility maximizing behavior of consumers in making a brand choice when price is a consideration affecting quality evaluations. Obermiller and Wheatley (1984, p. 453) simplified Rao's 1972 model of value to: value = perceived quality per unit perceived price In this instance, preference for ea particular brand indicates that the consumer perceives it as higher in quality or lower in price than the alternative brand. l4 Whenever actual differences in quality are not discernable, price may be taken into consideration and a choice made on the individual's judgement of marginal differences between quality and price to arrive at the best value (Obermiller and Wheatley, 1984). For some consumers, this is an extremely difficult task which requires experience and information to make a decision. Prior experience and product knowledge allow the consumer to become familiar with information cues which help to form beliefs and attitudes. Obermiller and Wheatley (1984) investigated the importance of the consumer's prior beliefs about the quality differences they perceived between brands. After a pretest to screen for definite preferences, one hundred sixty male and female university students were chosen to participate in the study. They were presented with identical products consisting of two six packs of cola and two bags of popcorn with both products at two price ranges, $1.29 and $1.99. They were given information that the two brands were very similar or only irrelevant information such as sales figures for the brands. The subjects were told they could choose to receive the high priced product (n: the low priced product plus the $.70 difference in price. They were given samples of each of the high and low priced products and were asked to indicate their choice of products after the tasting experience. In the Obermiller and Wheatley study, the majority of 15 the subjects accepted the evidence of similarity of brands and changed their beliefs, attitudes and behavior in accordance with their taste experience and information. However, some of the individuals still opted for the high priced brand which they perceived as higher in quality in spite of information and actual taste evidence showing quality to be at the same level for both brands. Price-Quality Relationship Investigation In many of the early investigations into the consumer's perception of quality, price was the researcher's primary concern and was studied in combination with various other information cues. Additional cues often. used ‘were .store image, brand name and physical composition. One of the earliest studies by Stafford and Enis (1960) studied the functional relationship between quality, price and store image information. for identical carpet samples carrying information cues from a high and a low prestige store and at two different price cue levels. The subjects were 178 university home economics students who rated the quality of the carpet samples on a five point interval scale. They found that the subjects used price as an indicator of quality, especially when it was the only available cue. Although store image was not statistically significant when used alone, when combined with price, the result was 23 statistically significant difference in l6 perceived product quality. This finding confirmed their hypothesis that multiple cues could influence consumer quality perception even though (Mme of the cues may not be effective when used by itself. In an experiment testing 88 college students' perceptions of the price—quality relationship in toothpaste, men's shirts and men's suits, Gardner (1970) found that brand. names luni a strong influence (M1 the price-quality relationship. Price was used as a cue when other quality cues were difficult to discern or were unfamiliar to the subjects. Higher prices were associated with prestige stores for the shirts and suits. The results of this study indicate that price may not be as important to consumers in determining quality as was previously thought. In a study by Andrews and Valenzi (1971) 50 female university students used price, brand name and store name cues in making a judgement of product quality in dress shoes and sweaters. They completed three individual quality rating tasks. In the first task each cue, price, brand name and store name, was individually rated in quality on a nine point scale. For example, what level of quality from 1 to 9 would be expected if the price was $5, $7, $9, up to $30 for a sweater. For the second task all three cues were combined as in what level of quality would be expected if the price was $15 at 21 discount store for an1 unknown brand sweater. The third task was the same as above only the subjects 17 switched items, rating shoes instead of sweaters. The findings were that in the combined cue judgements, price was by far the dominant information cue affecting perception of quality. The interaction between price and brand name was small but statistically significant for both sweaters and shoes. In the combined ratings for the cues, the lower the price, the greater the influence of brand names. Syzbillo and Jacoby (1972) investigated the strength of intrinsic versus extrinsic cues In! manipulating cues for price, store image and physical differences in panty hose. The subjects consisted of 90 female university students. In conducting the experimental procedure, the price cue was either withheld or present at $.98, $1.67 or $2.49. The store image cue was either absent or present at high or low prestige images. The panty hose samples were identified by I - low quality, :I - medium quality and E2-— high quality. The results of the experiment were that the intrinsic cue of physical composition accounted for 73 per cent of the quality rating variance, therefore having 23 greater effect than either price or store information. The effect of store image was statistically significant in influencing the subjects' perception of quality; the effect of price was not significant. Again studying the relationship between price and perceived quality, Shapiro (1973) conducted an experiment based on ratings for five different products. The 616 18 female subjects rated two similar but differentiated pairs of stockings, Colognes, and carpet samples on several characteristics. The subjects then rated two similar but different sweaters and upholstered recliners. The two items in each category were approximateLy the same retail price and quality. However, the prices shown to the subjects were either increased or decreased 20% from the original retail price. The results of comparing the mean differences between the high-priced ratings and the low-priced ratings; and comparing the ranking of tdgh-priced versus low-priced products indicated that high price was consistently associated with high quality. However, because of the substantial number of subjects who ranked the high and low priced items as equal in quaIity, it was evident that price was not a strong indicator of quality. In 1973 Monroe attempted to review and organize the preceeding conflicting research on the price-quality relationship. He came to the conclusion that "there are indications that 21 positive relationship exists at least over some range of prices for some product categories (Monroe, 1973, p. 78). He also suggested that brand name is important, maybe even more so than price. However, for apparel he noted that price was increasingly important although it was still in competition with brand name for dominance. Expanding on the work of Stafford and Enis, Wheatley l9 and Chiu (1977) again used carpet samples which were identical except for tflma additional variable, color which was manipulated along with the original cues of price and store image. They also investigated demographic influences on quality perception. The subjects in this study were 157 housewives who had experience in buying carpeting and were considered to be representative of the city's population of housewives. They rated eight carpet samples on quality from 1 to 5 with the manipulated cues of price at $11.98 and $14.98 per yard, a high prestige and a low prestige store name, and a light green and a dark green color. The results confirmed that "high quality was associated consistently with a high prestige store, a high price and a dark color as hypothesized" (Wheatley and “Chiu, 1977, p.183). The price cue was found to be responsible for the greatest difference in the subjects' perceptions of quality. The color variable results indicated that consumers' attitudes towards color could influence their perception of quality in that the dark green carpet sample was rated higher in quality than the lighter shade. Color as an intrinsic cue did not have as much impact on perception of quality as did either price or store image, Ixflfli extrinshc cues. Demographic effects on quality perception were small but statistically significant and possibly interacted with other variables in influencing perceptions of quality. It was reasoned that demographic variables are not as important in the perception of quality as information cues which can be controlled by marketers. 20 In an attempt to assess the efficiency of consumer decision making, Sproles, Geistfeld and Badenhop (1980) conducted a consumer information seeking and decision making experiment. The subjects were 142 undergraduate women at a midwestern university which were divided into three groups. In the control group, subjects were asked to rate four brands of blankets and slow cookers of varying quality without any information about the products. Group two had information available for both products on brand name, care instructions, colors, fiber content and price. Group three had access ix) the above marketing information plus additional information on durability, warmth, etc. The information was on cards which the subjects could select to help them make a rating decision. The type and amount of information cues chosen by the subjects were thus recorded. Results showed that as the amount of information available increased and the nmre information the subjects elected to use, the better their quality ratings matched those given in the Consumer Reports for the products. The subjects first sought out compositional and performance information. Secondly, they acquired the price and brand name cues as additional indicators of quality, apparently to make a final decision. Wheatley, Chiu and Goldman (1981) examined actual quality cdifferences III carpet. samples 1h) combination Idlth price cues. Their theoretical basis for the study consisted F: 21 of both the intrinsic/extrinsic cue concept in judging quality and Weber's law concerning an individual's ability to detect differences in stimuli. Their convenience sample was 171 women who had previously purchased carpeting and were representative of that area's female population. The subjects rated nine identically colored samples of carpeting on a 1 to 5 scale of quality. Three of the samples were low quality with the actual retail price of $9 per yard; three were medium quality with a retail price of $11 per yard; and three were high quality at $13 per yard. Each of the three samples of the same quality level were labeled with one of the three different price levels. Ultimately, this study showed that high prices were associated with high quality because although obvious differences in physical quality had more impact on quality perceptions, the more difficult it was for the consumer to detect physical differences, the more they relied on easily detected differences in price as a cue to quality. The researchers concluded that a 'ngh price cue may serve as a mechanism to call the consumer's attention to the physical characteristics of the high—quality sample" (Wheatley, Chiu euui Goldman, 1981, p. 107). Venkataraman (1981) looked into time relationship of income levels, price levels and ratings of familiar and unknown brands. Fifty housewives from a recently developed neighborhood in a Canadian city rated six brands of various m~-.. u...~.-....,. 22 asked to rate the quality of imported products in general, for selected product classes and for specific items. They were also asked to rate the quality' of well-known U.S. brands with half of the subjects receiving the information that the product was made in a foreign country. The U.S. made products were rated highest for specific, classes and general product categories. The subjects' opinions indicated that individual countries could rank high for one product class and low for another, i.e. Hong Kong ranked high in textiles but low in food products (Gaedeke, 1973). Country of origin information did not affect quality ratings for branded products 111 general, either positively or negatively. For specific products, however, the quality rating could be positively or negatively affected by the named country's reputation for producing the product. Dickerson (1982) conducted a study to investigate consumers' views of imported and U.S. made apparel, to find which product qualities determined a purchase, and to relate attitudes concerning imported apparel with purchase decisions and demographic variables. Results of a telephone survey of 408 consumers in ten areas in the Eastern U.S. indicated that consumers took notice of whether or not clothing was imported. 4Consumers stated that they preferred domestically produced apparel, primarily because they perceived items produced in foreign countries as being of poorer quality (Dickerson, 1982). Department store customers 23 is a tendency for consumer's to evaluate their own country's products relatively more favorably than do foreigners" (Bilkey and Nes, 1982, p.90). In other words, U.S. consumers rated U.S. products higher than foreign consumers. Whereas, European studies show that consumers rated U.S. products lower than their own products. Foreign students at U.S. universities rated products from their own less developed countries lower than U.S. made products. They also found a hierarchy of biases such as a positive relationship between product ratings and the country's extent of economic development. Other factors contributing to the biases were the different cultures, beliefs and political systems. It was found, however, that these consumer biases towards foreign goods could be overcome by lowering the price of the imported products. In general, a foreign (produced itenl was associated ‘with increased perceived risk by the consumer unless that item was produced in a country with a positive reputation for quality of the product (i.e. coffee from ‘Brazil). Again a ‘hierarchy of perceived risk was found with an inverse relationship to the degree of economic development of a country. A study by Gaedeke (1973) surveyed consumers' attitudes concerning quality of items produced in developing countries and how these attitudes were affected when well-known U.S. brands contained information that they were manufactured in a. developing country. fhma hundred college students were 24 certain discount department stores. Once the retailer's image has been established and customer loyality has been developed, these consumer attitudes (Rfll be transferred to the store's private label items. The store can achieve a favorable ‘balance between private euui national brands to better satisfy their customers' needs and increase profits. Department store president, Howard Sands (1983) gave the following advantages in using pmivate label products; they can differentiate the store in the marketplace, a better markon can be attained while giving the customer good value, and they create additional advertising opportunities for the store's image. Or. Country of Origin Since the majority of country of origin research has been done on industrial products, there is a limited amount of research investigating actual consumers' attitudes toward apparel based on source of origin. According to Bilkey and Nes, county of origin is usually designated by the wording "Made in (name of country)" (1982, p.89). They go on to note that "Both empirical observations and experiments indicate that country of origin has a considerable influence on the quality perceptions of a product" (1982, p.89). Bilkey and Nes conducted a review of the available literature on how country of origin effects consumers‘ perceptions of product quality. They concluded that "There f9? . 25 were willing to pay. The shoppers depended on the store's image as an indication of whether or not they would find the appropriate balance between price and quality at that establishment. Lindquist in 1974 suggested that store and brand were interchangeable ix) image definitions. Their relationship was further investigated by Jacoby and Mazursky (1984) in a study which indicated that the consumer averaged out the images of the retailer and brand when viewed in combination. Whichever of the two with the more favorable image would be brought down by the poorer image of the other. However, the one with the less favorable image would be rated higher when combined with the more favorable image. This concept is“ becoming an important marketing issue for both prestige department stores and discounters. Many manufacturers, in order to make production profitable, are producing brand name items in quantities which cannot be absorbed and distributed by the prestige retailers alone. Therefore, the ‘manufacturers must find a Imarket for the excess production which often ends up in low prestige discount stores or their own factory outlets. This is beneficial to the discounter's image but detrimental to the prestige store's image. One solution to this problem has been for the stores to develop thier own private label brands. This has proven to be very successful for both prestige and, more recently, 26 (1964) revealed that traditional department stores were viewed as having an image of merchandise quality and assortment, reliability and services. Discount department stores were seen as having low prices and bargains. The traditional department store may be described as a high prestige retailer and the discount department store as a low prestige retailer. Martineau (1958) observed that consumers will seek out those stores whose image most closely correlates with the total self status image. The consumer must feel comfortable with the image in that it does not intimidate nor is it beneath one's own lhnits (ME acceptability. Therefore, a retailer must develop an image that appeahs to a specific market segment which fits somewhere on this image continuum. Berry (1969) noted that consumers formed an image through experience and therefore image is learned. A positive shopping experience forms a favorable image in the consumer's mind establishing loyalty while a negative experience results :hi an unfavorable image inducing avoidance. Brown and Fisk (1965) in relation to the trade-off and perceived risk theories in attaining quality, suggested that shoppers would seek out the store in which they would receive the highest quality merchandise for the price they 27 to the level of quality present. The consumer may then employ trade-off techniques to eventually arrive at a balance between price and quality which he feels will result in a good value judgement. Store Image - High Prestige versus Low Prestige As can 1x2 seen in the previously cited literature, store image plays a significant part in the consumer's percepticna of quality. Martineau. defines store image or personality as "the way the store is defined in the shoppers mind, partLy by its functional qualities and partly by an aura of psychological attributes" (1958, p.47). Hirschman (1978) notes- that traditional department stores are perceived as being high on the price-quality continuum, while discount department stores are on the lower end. Also "Traditional department stores will dominate fashion goods and luxury items where the prestige of the store and the products' social conspicuousness are of integral importance (i.e. there is high social risk)" (Hirschman, 1978, p.36). "Discount department stores will dominate branded hard goods...where economic risk is reduced by low prices, and social risk is overcome by brand name" (Hirschman, p.41). As txJ the aggregate finage of traditional department stores and discount stores, a: study' by Rich and Portis 28 magazine's quality rating, the degree (n? the stability of the price-quality relationship was determined by finding and plotting the mean coefficient between the price and quality rating for each year. The actual price-quality relationship had not changed significantly over the years for the aggregate of products studied. More importantly, nondurables 'had ea much. weaker price-quality relationship than durables. This may mean that reliance on a high price for apparel as a nondurable item would not be a guarantee of high quality. A third study done by Geistfeld in 1982 compared price data and quality ranking from Consumer Reports and Consumers' Research Magazine with data collected from numerous stores located in 1mm) midwestern market areas. Again, the Spearman coefficient was used to analyze the degree of relationship between the magazine's data and actual market data. The findings suggest that the general relationship between price and quality is low and that the price-quality relationships will vary not only from one publication to another but also between market areas and store types. The preceding literature has shown that there is no one reliable method for consumers to ascertain quality. Instead the buyer must compare a multitude of intrinsic and extrinsic cues and then using previously attained experience or knowledge obtained via search methods, make a decision as 29 price-quality relationships for consumer products. Conclusions were reached by analyzing information in Consumer Reports and Consumer Research Magazine product testing reports and their resulting quality ratings. The main objective of Sproles' (1977) investigation was to "conduct a general assessment of objective price-quality relationships as defined in price and product quality ratings which are currently available to consumers in published literature" (p. 65). He used the monthly product testing results amui quality ratings ix: Consumer Reports magazine for a three year period. A total of 135 products were studied. By using the Spearman rank correlation method, coefficients were calculated using the ordinal ratings of brand quality and ordinal ranking of manufacturer list prices from high to low. The mean prices and range of prices were also found. The results of these tests indicated that 51 per cent of the products studied had a positive price-quality relationship. That left 35 per cent with no price-quality relationship and 14 per cent with a negative relationship (Sproles, 1977). It was evident that the price-quality relationships could vary drastically for competing brands within product groupings. Riesz in 1978 carried out an investigation of the price-quality relationship also using data from (Consumer Reports for a 15 year period using 10,162 brands of 685 products. Using the manufacturer's list price and the 3O appliances. Three of the brands were well known and three were fictitious. Product features and prices were listed next to the six brands. The subjects chose three recently purchased appliances to rate and indicated the six brands in the order in which they would be willing to buy. The rating of the product was used as a measure of perceived quality. Venkataraman noted that a price—quality relationship existed as ‘manifested through the~ consumers' willingness to ‘buy, with the aggregate of respondents at all income levels preferring a medium priced item. Brand names appeared to be more important than price. However, once the brand name hierarchy was established, price was then used to make a buying decision. The high priced appliance was used as a reference point or standard price for discerning perceived value. In relation to the price of the product chosen to buy by each individual, Venkataraman suggested that "Setting a high price (x123 brand may enhance its image, but it may also priee it out of the market for substantial groups of consumers" (1981, EL 51). As suggested :hi the Obermiller and Wheatley study, the consumers seemed to be using trade-off techniques in balancing price level with perceived quality to arrive at a good value judgement. Price was shown to be an important determinant of choice when income level was a consideration. The following three studies conducted by Sproles, Riesz and Geistfeld were objective analyses of actual 31 noticed country of origin cues less than shoppers at other store types, an indication that they trusted and relied on that store to provide them with a good value, thus reducing risk (Dickerson, 1982). This reliance (Hi the retailers to provide a fair price for the quality was also found by Brown and Fisk (1965) and Shapiro (1973). In May of 1983, the Gallup Organization conducted a poll for Newsweek magazine interviewing 915 adults by telephone to discover public opinion on foreign trade. The survey showed that protectionism was strong and that Buy American feelings were increasing. However, some Americans would choose to buy cheaper imports as domestic prices increased. The differences dn cost of imported and domestic prices were thought to be due to high U.S. wages and foreign dumping of goods (Arena, 1983). A majority of 55 per cent favored increasing taxes on imports to protect American jobs in threatened industries, with 36 per cent opposed to raising taxes on imports because it could raise consumer prices and 9 per cent had no opinion. Comparing 1973 figures with 1983 (fll inclination to tnur foreign goods, 34 per cent compared to 53 per cent were less inclined, 5 per cent compared to 12 per cent were more inclined, 60 per cent compared to 34 per cent did not give it much thought and 1 per cent both years gave no answer. When asked if they would buy an imported product only whenever a comparable American product was unavailable; 40 per cent answered very 32 true, 27 per cent replied somewhat true, 31 per cent said not true and 2 per cent didn't know. Specifically for clothing, 75 per cent felt that American made products were the best, 18 per cent considered imported clothing as good or better and 7 per cent didn't know (Arena, 1983). In November/December, 1983 the Gallup Organization conducted a nationwide survey for APPAREL magazine in which consumers strongly indicated that they preferred sweaters made in the U.S. over imported sweaters. A majority of 62 per cent preferred domesticalLy made sweaters, 13 per cent preferred imports and 31 per cent indicated that it did not matter where it was manufactured (Apparel, 1984). These findings suggest .a mm.e wm.a am.s ma.e 33.8 mm x o x m mv.e wa.e 55.5 mm.a 55.5 ma.e «3.3: «m x o m¢.& an.& 33.8 mm.e ma.e me.su mm x m 33.5 mm.s mm.s ma.e we.& 0 x m 55.3 55.3 ma.s m&.&| cmowuoem wsm ss.a 45.3 Ha.a camauo mm.a ma.a omaummua mm.a wofium munflnm “mmHQMHwo> MOM mpcmHOHmwmoo coapmHowuoo >.a manna covauoam asm an :Hmflwo an mmflpmwnm Hv.3 33.3 33.3 33.3 m3.3 H3.3| 4m x o ne.3 33.3 33.3 33.3 Hm.3 33.3 mm x m 33.3 33.3 33.3 mm.3 NH.3 o x m 33.3 33.3 H3.3 v3.3: cmofiumsm wsm 33.3 m3.3 43.3 chmfluo 3m.3 mH.3 mmaummua 3H.3 mofium mumumozm unmannewm> mom whamHOmemou coflpmamuwoo 3.v magma ’-- .,.. “MA ' 61 Testing the Hypotheses Overall Quality and'Price Differences Consumers' perceptions of quality and price differences based (N1 a. manipulation. of the three information cues: country of origin, store image and the Buy American campaign materials, were analyzed by analysis of variance (ANOVA). There were no significant differences found for the quality variable for either the shirts (n: the sweaters. However, there were significant differences :hi price estimates for both the shirts at the .01 level and the sweaters at the .001 level of significance (Tables 4.9 and 4.10). Although the subjects did rum: perceive significant differences in 'quality, they did expect different price levels. The :mean overall quality and price ratings for the individual shirts and sweaters are presented in Table 4.11. The quality rating was on a scale of 100 (highest) to 1 (lowest). The garments are designated as: #1 HD - the high prestige, domestic garment, #2 LI — the low prestige, imported garment, #3 LD - the low prestige, domestic garment and #4 HI - the high prestige, imported garment. 62 Table 4.9 Overall Perceived Quality and Price: Shirts Sum of Degrees of Mean Squares Freedom Square F Quality Explained 2,071.10 3 690.37 0.49 Residual 257,896.27 184 1401.61 Total 259,967.32 187 Price Explained 2,436.90 3 812.30 4.02** Residual 38,554.47 191 201.86 Total 40,991.38 194 ** p<.0l Table 4.10 Overall Perceived Quality and Price: Sweaters Sum of Degrees of Mean Squares Freedom Square F Quality Explained 5,940.79 3 1,980.26 1.15 Residual 313,964.03 183 1,715.65 Total 319,904.82 186 Price Explained 4,682.96 3 1,560.99 6.76** Residual 44,540.50 193 230.78 Total 49,223.46 196 ** p<.0l 63 Table 4.11 Mean Overall Quality and Price Ratings #1 HD #2 LI #3 LD #4 HI Shirt Mean Quality 66.89 62.90 62.73 64.09 Mean Price $22.09 $18.06 $18.17 $21.05 Sweater Mean Quality 57.60 50.83 50.88 55.37 Mean Price $22.44 $16.81 $17.24 $21.17 Quality 1 = lowest, 100 = highest Price 1 = lowest, 100 = highest A Tukey post hoc multiple comparison was conducted to analyze the significant differences found on shirt and sweater price estimates, The variable combinations, the means for the price estimates and the results of the Tukey analysis are presented in Tables 4.12 and 4.13. The means are ordered by size with the vertical lines indicating means which are significantly different. The overlapping lines show that the means cannot be distinguished as being significantly different from other means. Country of Origin The consumers' perceptions of quality and price differences resulting from the manipulation of the country of origin cue were analyzed using analysis of variance. In comparing the shirts and sweaters labeled as domestic with 64 Table 4.12 Country of Origin and Store Image, Mean Response and Tukey Multiple Comparisons for Price: Shirts (N = 194) Tukey Groups Variable Groups Mean 1 2 3 4 High Prestige, Domestic 22.09 High Prestige, Imported 21.05 Low Prestige, Domestic 18.17 Low Prestige, Imported 18.06 T s(D) = 3.96 Table 4.13 Country of Origin and Store Image, Mean Response and Tukey Multiple Comparisons for Price: Sweaters (N = 196) Tukey Groups Variable Groups Mean 1 2 3 4 High Prestige, Domestic 22.44 High Prestige, Imported 21.17 Low Prestige, Domestic 17.24 Low Prestige, Imported 16.81 T S(D) = 4.24 65 those labeled as imported, there were no significant differences in quality found between them. Nor were there any significant differences in price estimates for those shirts and sweaters labeled domestic versus those labeled imported (Tables 4414 anui 4.15 ). This indicates that the subjects were not influenced by the manipulation of the country of origin cue. Table 4.14 Perceived Quality and Price as a Function of Country of Origin (Domestic vs. Imported): Shirts Sum of Degrees of Mean Squares Freedom Square F Quality Explained 160.95 1 160.95 0.27 Residual 109,699.21 186 598.78 Total 109,860.16 187 Price Explained 31.93 1 31.93 0.40 Residual 15,445.84 193 80.03 Total 15,477.77 194 66 Table 4.15 Perceived Quality and Price as a Function of Country of Origin (Domestic vs. Imported): Sweaters Sum of Degrees of Mean Squares Freedom Square F Quality Explained 91.52 1 91.52 0.13 Residual 133,667.21 195 685.47 Total 133,758.72 196 Price Explained 71.08 1 71.08 0.78 Residual 38,554.47 196 91.13 Total 40,991.38 197 Table 4.16 contains the mean quality and price ratings for the domestic versus the dmported shirts and sweaters. The domestic shirts were rated 1.3 points higher in quality in price than the and $.57 higher imported shirts. 'The domestic sweaters were rated .99 points higher in quality and $.85 higher in price than the imported sweaters. Table 4.16 Mean Domestic vs. Imported Quality and Price Ratings Domestic Imported Shirt Mean Quality 64.80 63.50 Mean Price $20.13 $19.56 Sweater Mean Quality 54.09 53.10 Mean Price $19.84 $18.99 67 Store Image The manipulation of the store status cue resulted in significant price differences ix) both shirts (p<.001) and sweaters (p<.00l). The difference in quality perception was significant for the sweaters at the .05 level but was not significant for the shirts (Tables 4.17 and 4.18). The store prestige cue was the only cue manipulated that resulted in a significant difference in quality perception. Thus the store prestige information cue significantly influenced the subjects to perceive a difference in price for both the shirts auui the sweaters and 23 significant difference in quality for the sweaters. Table 4.19 contains the mean quality and price ratings for the high prestige store versus the low prestige store garments. The subjects rated the shirt with the high ' prestige store label 2.66 points higher in quality and the sweater with the high prestige store label 5.46 points higher in quality than the low prestige store garments. The high prestige store labeled shirt was priced $3.45 over the low prestige store shirt. The sweater with the high prestige store label was priced $4.79 above the low prestige store sweater. 68 Table 4.17 Perceived Quality and Price as a Function of Store Prestige (High Prestige vs. Low Prestige): Shirts Sum of Degrees of Mean Squares Freedom Square F Quality Explained 667.56 1 667.56 1.094 Residual 113,459.10 186 609.99 Total 114,126.66 187 Price Explained 1,165.38 1 1,165.38 12.95*** Residual 17,372.55 193 90.01 Total 18,537.93 194 ***p<.00l Table 4.18 Perceived Quality and Price as a Function of Store Prestige (High Prestige vs. Low Prestige): Sweaters Sum of Degrees of Mean Squares Freedom Square F Quality Explained 2,803.68 1 2,803.68 3.73* Residual 139,843.05 186 751.84 Total 142,646.72 187 Price Explained 71.08 1 2,252.69 22.89*** Residual 19,291.12 196 98.42 Total 21,543.82 197 ***p<.00l w". - “- ~ ~u~n.an~—_.——... -“ a A... . u.--v ...-..A...,....... —..~- ,« 69 Table 4.19 Mean Quality and Price Ratings as a Function of Store Prestige: High Prestige vs. Low Prestige Domestic Imported Shirt Mean Quality 65.48 62.82 Mean Price $21.57 $18.12 Sweater Mean Quality 56.33 50.87 Mean Price $21.81 $17.02 Within Store Type Comparisons Quality and price differences between domestic and imported garments were tested. within the store types by analysis of variance. These findings will be used to test Hypotheses 1 and 2. H For the garments with an information cue for a high prestige retailer, consumers' perceptions of quality and price will be the same for domestic versus imported apparel. The results shown in Tables 4.20 and 4.21 show that there are no significant differences for the high prestige stores' quality or price ratings between the domestic or imported garments. Therefore, the consumers' perception of quality and price are similar for domestic as compared to imported apparel. 70 Table 4.20 Perceived Quality and_Price Between Domestic and Imported Apparel as a Function of the High Prestige Store Cue: Shirts Sum of Degrees of Mean Squares Freedom Square F Quality Explained 808.25 1 808.25 1.11 Residual 139,957.29 192 728.94 Total 140,765.55 193 Price Explained 102.88 1 102.88 .85 Residual 23,374.68 192 121.74 Total 23,477.56 193 Table 4.21 Perceived Quality and Price Between Domestic and Imported Apparel as a Function of the High Prestige Store Cue: Sweaters Sum of Degrees of Mean Squares Freedom Square F Quality Explained 693.33 1 693.33 0.75 Residual 177,848.81 193 921.50 Total 178,542.14 194 Price Explained 158.93 1 158.93 1.10 Residual 28,263.22 196 144.20 Total 28,422.14 197 71 Shirts: Hl Failed to Reject Sweaters: Hl Failed to Reject H For garments with an information cue for a low prestige retailer, consumers' perceptions of price but not quality will differ for domestic versus imported apparel. The results of the analysis of variance shown in Tables 4.22 and 4.23 indicated that for both the shirts and the sweaters, there were no significant differences in either price or quality of apparel in the low prestige store garments. Therefore, the consumers perceived quality to be the same but also perceived no differences in the prices between domestic: and imported. apparel refuting the first \ part of Hypothesis 2. Shirts: H2 Rejected Sweaters: H2 Rejected Buy American Cue Manipulation The consumers' perceptions of quality and price differences resulting from the manipulation of the Buy American campaign materials were analyzed using analysis of variance. These findings will be used to test Hypotheses 3 and 4. H3 For garments with the Buy American information cue, 72 Table 4.22 Perceived Quality and Price Between Domestic and Imported Apparel as a Function of the Low Prestige Store Cue: Sum of Degrees of Mean Squares Freedom Square F Quality Explained 76.27 1 76.27 0.10 Residual 140,798.69 192 733.33 Total 140,874.96 193 Price Explained .75 1 .75 0.01 Residual 15,116.99 192 78.73 Total 15,117.94 193 Table 4.23 Perceived Quality and Price Between Domestic and Imported Apparel as a Function of the Low Prestige Store Cue: Sweaters Sum of Degrees of Mean Squares Freedom Square F Quality Explained .58 1 .58 0.00 Residual 180,816.66 193 936.87 Total 180,817.24 194 Price Explained 17.74 1 17.74 0.20 Residual 17,808.74 196 90.86 Total 17,826.48 197 73 there will be significant differences in perceptions of quality for domestic versus imported garments. Reviewing Tables 4.26 and 4.27, for those garments with the Buy American information cue present, there are no significant differences in quality perception for either the shirt or sweater samples. The consumers perceived quality to be the same in both the domestic and imported garments even when the Buy American materials were present. Shirt: H3 Rejected Sweater: H3 Rejected H For garments with the Buy American information cue, there will be no significant differences in estimated price between domestic versus imported garments. Again reviewing Tables 4.26 and 4.27, for those garments with the lug! American information, there are IN) significant differences in price for either the shirt or sweater samples. Consumers did not differentiate price for the domestic versus the imported garments when the Buy American campaign materials were present. Shirt: H4 Failed to Reject Sweater: H4 Failed to Reject In order t1) test Hypothesis 5, ea Chi Square test was run on the shirt and the sweater data to analyze the effect of the absence or presence of the Buy American campaign 74 Table 4.24 Perceived Quality and Price with No Buy American Cue (Domestic vs. Imported): Shirts Sum of Degrees of Mean Squares Freedom Square F Quality Explained 60.54 1 60.54 0.01 Residual 1,079,834.71 199 5,426.30 Total 1,079,895.22 200 Price Explained 87.45 1 87.45 0.17 Residual 105,259.32 199 528.94 Total 105,346.78 200 Table 4.25 Perceived Quality and Price with No Buy American Cue (Domestic vs. Imported): Sweaters Sum of Degrees of Mean Squares Freedom Square F Quality Explained 1,065.62 1 1,065.62 0.23 Residual 921,707.54 199 4,631.70 Total 922,813.17 200 Price Explained 308.72 1 308.72 0.59 Residual 104,893.35 199 527.10 Total 105,202.07 200 —<-M— .-...__ .fl-. 1 . MM ..___. ,_..__....._ _—_ 75 Table 4.26 Perceived Quality and Price with the Buy American Cue (Domestic vs. Imported): Shirts Sum of Degrees of Mean Squares Freedom Square F Quality Explained 510.27 1 510.27 0.09 Residual 1,054,174.01 189 5,577.64 Total 1,054,684.27 190 Price Explained 255.55 1 255.55 0.46 Residual 105,359.99 189 557.46 Total 105,615.53 190 Table 4.27 Perceived Quality and Price with the Buy American Cue (Domestic vs. Imported): Sweaters Sum of Degrees of Mean Squares Freedom Square F Quality Explained 366.20 1 366.20 0.09 Residual 796,128.78 189 4,212.32 Total 796,494.98 190 Price Explained 357.93 1 357.93 0.65 Residual 104,587.84 189 553.38 Total 104,945.77 190 76 materials on the subjects' selection (n5 one garment. The figures for the shirt and sweater are given in Tables 4.28 and 4.29. H5 When the Buy American information cue is present, consumers will select domestic garments over imported garments. The Chi Square result for the shirt data did not prove to be significant. Using descriptive analysis for the shirts, the visible Buy American cue increased the frequency of choice of both the high prestige and low prestige, domestic shirts and decreased the frequency of choice of the high prestige and low prestige imported shirts. The sweater data was significant at time p<.05 level. However, the figures show that the presencee of the iBuy American campaign materials actually reversed the effect hypothesised for the sweaters because when the campaign materials were visible, the subjects chose a greater percentage of imported sweaters over domestic sweaters. In both the high and low prestige stores, the visible Buy American materials resulted in the consumers choosing slightly fewer domestic sweaters than imported. The visible Buy American materials resulted in an increase in the consumers' choice of the high prestige store's imported sweater but a decrease in choice of the low prestige Store's imported sweater. 77 Table 4.28 Chi Square Results of Shirt Choice by the Buy American Cue Manipulation #1 HD #2 LI #3 LD #4 HI No. % No. % No. % No. % Shirts (N = 188) No Buy American 19 40.4 32 58.2 25 48.1 23 67.6 Buy American 28 59.6 23 41.8 27 51.9 11 32.4 Totals 47 25.0 55 29.3 52 27.7 34 18.1 Chi Square = 6.996 DF = 3 Significance = .07 #1 HD = High Prestige, Domestic #2 LI = Low Prestige, Imported #3 LD = Low Prestige, Domestic #4 HI = High Prestige, Imported Table 4.29 Chi Square Results of Sweater Choice by the Buy American Cue Manipulation #1 HD #2 LI #3 LD #4 HI No. % No. % No. % No. % Sweaters (N = 185) No Buy American 33 58.9 29 61.7 17 51.5 17 34.7 Buy American 23 41.1 18 38.3 16 48.5 32 65.3 Total 56 30.3 47 25.4 33 17.8 49 26.5 Chi Square = 8.730 DF = 3 Significance = .03* *p<.05 78 Shirts: H5 Rejected Sweaters: H5 Rejected Multiple analysis of variance was employed to test Hypothesis 6. The significant MANOVA results are presented in Tables 4.30, 4.31, 4.32 and 4.33. The remaining results are in Tables A.l3, A.l4, A.15 and A.l6 in Appendix A. fin H6 For garments with an information cue for the Buy American campaign, there will be no significant differences in consumers' perceptions of quality and price based on the manipulation of country of origin, store prestige and Buy American cues compared to those garments without the Buy American information cues. The Buy American information cue affected both shirt and sweater quality and price when based on the manipulation of the store prestige information cue. The store prestige cue was significant at the p<.05 level for shirt quality and at the p<.00l level for shirt price and sweater quality and price (Tables 4.30, 4.31, 4.32 and 4.33). Significant differences in quality and price ratings were found when those garments with the Buy American campaign materials were compared 11) those garments without the visible Buy American cues. These differences were due to the manipulation of the store prestige cue which had significant influence on the consumers' perception of quality and price estimates. Table 4.30 79 Multiple Analysis of Variance for Shirt Quality Sum of Degrees of Mean Source Squares Freedom Square F Prestige 1,936.95 1 1,936.95 5.31* Error 279,949.73 768 364.52 * p<.05 Table 4.31 Multiple Analysis of Variance for Shirt Price Sum of Degrees of Mean Source Squares Freedom Square F Prestige 2,342.39 1 2,342.39 46.94*** Error 38,326.54 768 49.90 *** p<.001 80 Table 4.32 Multiple Analysis of Variance for Sweater Quality Sum of Degrees of Mean Source Squares Freedom Square F Prestige 6,686.51 1 6,686.51 14.25*** Error 365,647.45 779 469.38 *** p<.001 Table 4.33 Multiple Analysis of Variance for Sweater Price Sum of Degrees of Mean Source Squares Freedom Square F Prestige 4,505.39 1 4,505.39 79.01*** Error 44,480.74 780 57.03 *** p<.00l 81 Shirt: H6 Rejected Sweater: H6 Rejected The combined means for Buy American by prestige by origin for the shirts and sweaters on both quality and price are in tables 4.34 anui 4.35. The comparisons suggest that the Buy American campaign materials are more effective in influencing the consumers' perception of quality and estimation of retail. price to the benefit of domestic apparel and to the detriment of imported apparel when used in conjunction with the low prestige store cue. Table 4.34 Combined Quality Means for Buy American by Prestige by Origin SHIRTS . . Buy American No Buy American Prestige High Low High Low Imported 66.03 63.26 63.91 64.05 Domestic 68.88 64.17 66.83 61.47 SWEATERS . . Buy American No Buy American Prestige High Low High Low Imported 56.55 51.51 56.49 52.87 Domestic 57.67 52.03 61.78 52.77 82 Table 4.35 Combined Price Means for Buy American by Prestige by Origin SHIRTS Buy American No Buy American Prestige High Low High Low Imported $20.88 $18.08 $21.28 $18.08 Domestic $22:31 $19.08 $21.93 $17.32 SWEATERS . Buy American No Buy American Prestige High Low High Low Imported $21.49 $16.77 $20.86 $16.85 Domestic $22.52 $17.69 $22.37 $16.80 ‘/ Summary of Statistical Findings The country of origin cue had no influence on either quality perception or price estimates, thus questioning the previously cited observation by Bilkey and Nes (1982) that this cue] is important in quality perception. The store image cues did influence a significant difference in sweater quality and shirt and sweater price estimates. Store prestige was the best one term predictor of price for both shirts and sweaters and quality for the sweaters. Although previous researchers found that subjects tended ‘UD equate high prices with high quality, the high prices which this study's subjects assigned to the high prestige store labeled 83 garments were run: parallel vfiifli significant differences in their overall quality perception in the garments. The Buy American cue did INN: bring about £3 significant preference for American made garments over imported garments although it was the best one term predictor of shirt quality. 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"mufizm «>03 00m 050 coflpgomfi Sm €53 mpcmfimm Mom mm coflumsamt/m “5.30m “Ewe mflmofiommm Umsfiucoo mmé magma. CHAPTER V DISCUSSION Stepwise regression analyses were conducted to determine which of the three independent variables (country of origin, store image or Buy American campaign cues) were significant in predicting quality and price for shirts and sweaters. For the shirts on quality rating, the Buy American cue was the best one term predictor. Considering that the subjects tended to choose the low prestige (estimated low price), domestic or imported shirts most often of the four selections, the visible Buy American cue may have influenced them to perceive higher quality in the domestic shirt as evidenced by their choices in Table 4.26. Just as many previous researchers (Obermiller and Wheatley, 1984; Gardner, 1970; Wheatley, Chiu and Goldman, 1981) found that price was used to make a decision when there were no discernable quality differences, perhaps the presence of the Buy' American cue influenced tflua subjects' decision about shirt quality between the two low prestige store shirts. These findings suggest that for a low prestige store, having the Buy American campaign materials present may influence the consumer to select the domestic over the imported product. However, the influence seems to be 86 87 product specific since the Buy American cue was important only in predicting shirt quality. This may also indicate that the Buy American campaign would be most effective in influencing consumers who shop at low prestige retailers. For sweater quality and both shirt and sweater price, store prestige was the best one term predictor. This is not surprising in view of all the previous research cited where consumers associated high store prestige with high quality and high prices and vice versa for low prestige stores. Brown and Fisk (1965) and Dickerson (1982) also noted that consumers rely on a store's image to ensure them of receiving a fair price and good quality. The finding that of the three information cues, store prestige is the best predictor of price has implications that consumers expect to pay a predetermined amount for an item depending on the store's prestige level. That amount may be accepted and paid at a specific store even if items of equal quality are available elsewhere at a lower or higher price. Under these circumstances the consumer may be relying on the store's level of prestige for an inferred quality guarantee. An inferred quality guarantee was implied when Dickerson (1982) noted that department store customers had an inherent trust in that store to provide them with quality merchandise rather than personally ascertaining this quality themselves. Although stepwise regression results for all three of 88 the independent variables and their interactions were significant at the p<.05 level or better, they did not account for much of the variance since the R square was extremely’ low ranging from .01 to .09. 'Therefore, these variables can only be considered a fraction of the many factors influencing the cnnsumers' decisions about quality and estimated price of the garments. .- In examining the correlation coefficients for all variables, the results for shirt and sweater quality and price showed that there were low to moderate positive correlations between price and quality and between store prestige and price. These findings reinforce those of previous research about the importance of the relationships between price and quality and between store image (private brands) and price (Stafford and Enis, 1960; Gardner, 1970; Andrews and Valenzi,l97l; Syzbillo and Jacoby, 1972; Shapiro, 1973; Monroe, 1973; Wheatley and Chiu, 1977; Wheatley, Chiu and Gbldman, 1981; and Venkataraman, 1981). As expected, the correlations became more highly related in a positive direction in the combined variables. The consumers' overall perceptions of quality and price with the manipulation of the three information cues were analyzed by analysis of variance. There were no significant differences found for either shirts or sweaters on quality perception. The price estimate differences were significant for both the shirts (p<.0l) and sweaters (p<.00l). Since the 89 quality factor was controlled by using identical garments, it was logical that the available information cues were not able to influence a substantial number of the subjects to perceive a significant difference in quality. However, price is subjective and can be manipulated more easily. From their previous shopping experience, consumers may be able to detect differences or similarities in quality and also they expect approximate price levels for different types of retailers. The influence of country of origin information on perceptions of quality and price estimates was tested by analysis of variance. No significant differences were found for quality or price in either shirts or sweaters. This has implications for both domestic and foreign manufacturers since the consumers rate their products as equal in quality and price. The equal quality rating is ominous for the domestic manufacturer VflK) has higher production costs and must therefore pass on these costs to the retailer and consumer to maintain profit margins. The domestic manufacturer justifies higher prices 1x3 the consumers by assuring them that their quality is better than that of foreign imports. However, these subjects do not perceive a difference in price in the within store type comparisons between domestic and foreign produced garments, eliminating the price advantage of buying imports. The consumer may be becoming aware that retailers are taking higher mark-ups on 90 foreign goods bringing them in line with the prices of domestic goods. The consumers' choices may then be determined by preferences in style, color, texture or any factor other than quality or price. Store prestige influence on quality and price perceptions was investigated using analysis of variance. Between the high and low prestige stores there were significant differences in price for both shirts and sweaters and in quality for sweaters. The significant difference in quality between sweaters labeled as high or low prestige is an exceptional finding since store prestige was the only manipulated information cue powerful enough to influence the consumers' perception of sweater quality. This may mean that a high and a low prestige store can carry the same grade of quality in certain products but the consumers will perceive a difference because of the stores' images. Furthermore, this explains the price differences estimated by time subjects and justifies the prices charged by different types of retailers. High prestige stores are able to take higher mark-ups than low prestige stores on identical goods. This practice apparently is expected and accepted In] the consumers in this study who chose the high prestige, domestic or imported (higher estimated price) sweater over tflma low prestige, domestic or imported (lower 91 estimated price) sweater which they rated as being equal in quality in the overall analysis. Perhaps these consumers rely on the high prestige store's reputation as an inferred guarantee of quality and a fair price and are willing to pay a higher price to avoid the social-psychological risk they may perceive in shopping at a low prestige store. Within store type comparisons were made using analysis of variance to determine if consumers perceived a difference in quality and price between the domestic and imported garments carried by each store. There were no significant differences found for either price or quality between the domestic or imported goods in either the high prestige or low prestige stores. In conducting the analysis of variance for the Buy American (nus manipulation, significant differences did run: occur in quality perception or in price estimates for either the shirts or sweaters. The Buy American campaign materials were ineffective in changing consumers' attitudes positively toward domestic apparel in this situation. However, descriptive analysis of 11MB Chi Square tests carrhai out on the data did show that the presence of Buy American campaign materials increased the frequency of choice of both the high and low prestige retailers' domestic shirts while reducing selection of hnported shirts. The results were significantly reversed for the sweaters. When 92 the Buy American cue was present, subjects selected the imported sweaters over the domestic sweaters. The presence of the Buy American cue decreased the frequency of choice of the imported sweater from a low prestige store. The results for the majority of the statistical tests were the same for both the shirt and the sweater samples. The few discrepanciesvfound may possibly be attributed to the reasoning that the female subjects were more personally involved in rating and selecting a woman's sweater than a man's shirt and therefore tended to rate the sweater somewhat differently than the shirt. In the Chi Square tables in Appendix A, the subjects selected the high prestige, domestic sweater and the low prestige, imported shirt most often. The women were perhaps responding to a higher social—psychological risk in selecting a woman's sweater and therefore chose the high prestige store's private brands as a guarantee of satisfaction and a good value. The lack of personal involvement in selecting a man's shirt resulted in the subjects' frequent selection of the lowest estimated price, low prestige store's shirts. CHAPTER VI SUMMARY AND RECOMMENDATIONS The purpose of this study was to investigate consumers' perceptions of quality and estimation of retail price by 'manipulating the information cues of country of origin, store image and the Buy American campaign. The research objectives for this study’ included: (1) to determine if consumers perceive quality differences as a result of product origin, store prestige or the absence or presence of Buy American campaign materials; (2) to determine if consumers perceive price differences as a result of product origin, store prestige or the absence or presence of Buy American campaign materials; and (3) to determine if the presence of Buy American campaign materials influence consumers to select domestic versus imported apparel. A questionnaire was developed to collect information and record the subjects' responses to the experimental manipulation of information. cues during the study. The study was carried out in two shopping malls located in a midwestern college town and state capital. The random sample was obtained by asking every third woman over age 16 if she would be willing to participate in a consumer research study concerning quality and retail pricing of 93 in... 94 clothing. A total of 395 subjects participated in the study in which they rated four identical shirts or four identical sweaters on perceived quality and estimated retail price as influenced by the information cues for: domestic or foreign country of origin, high prestige store image or low prestige store image, and the presence of Buy American campaign materials or no Buy American campaign materials. They were also asked to select one garment based on their quality and price estimates. Stepwise regression analysis was used to determine of the three independent variables which was the best one through best seven term predictors of quality and price, their order of importance and significance. All three variables and their interactions were significant at the p<.05 or better level. However, their low R square (.01 to .09) indicates that these variables did not explain much of the variance. Correlation coefficients showed low ix) moderate positive correlations between price and quality and between store pmestige enui price. Combined variables resulted in high positive correlations. The major focus of this study was to investigate the impact and influence of domestic versus imported information cues on consumers' perceptions of quality and retail price estimates and selection of one garment based on their 95 ratings. It was found that the country of cmigin cue had little effect on the consumers' judgement of quality and price. However, the store image cue of either high or low prestige, had highly significant effects primarily on estimation of price differences and selection of a high prestige store's domestic (n: imported sweater and a low prestige store's, domestic (n: imported shirt. The store image cue proved to be the strongest of the three cues and was apparently used more often by the consumers in making their decisions. The Buy American campaign cue had no effect on perception of quality or estimation of price differences. It appears to have influenced more consumers to select domestic shirts over imported and imported sweaters over domestic. Thee Buy [American information cue influence 'was investigated using multiple analysis of variance. The only instance where the Buy American cue effect was significant was within the manipulation of the store prestige cue. The combined means results suggest that the Buy American campaign materials would be more effective in positively influencing consumers' attitudes about the quality and price of domestic apparel in a low prestige store (Tables 4.32 and 4.33). Analyses of variances were employed to fulfill the first two objectives to determine if the consumers perceived a difference in quality or price as a result of the 96 manipulation of the information cues. It was determined that in the mean overall quality and price ratings, there ‘were IN) significant differences i1) perceived quality for shirts or sweaters but there were significant differences in estimated price for both the shirts and sweaters. A Chi Square test fulfilled the third objective by revealing that the ‘presence (Hf Buy' American campaign materials did not significantly influence consumers to select domestic apparel over imported apparel. This exploratory study paves the way for further research in the area of consumers' perceptions of quality and estimated retail price using the information cues of country of origin, store prestige and Buy American campaign materials. Replication of the study would show if any progress has been made by the effort of the Buy American program to influence consumers' attitudes and buying behavior in favor of American made apparel. The inclusion of male subjects in a similar study should be considered. A final recommendation would be to carry out the study in a non—college town to obtain a sample more representative of the average population. Further exploration of consumers' attitudes toward and the effects of country of product origin and Buy American campaign efforts is needed since the controversy of restricting imports and promoting domestic goods will have a strong impact on our national and world economy. Domestic g. 97 manufacturers, retailers and consumers all have financial concerns pending on the outcome of future developments on these issues. APPENDICES APPENDIX A APPENDIX A Table A.1 Chi Square Results for Shirt Choice by Age Shirts #1 HD #2 LI #3 LD #4 HI Totals Age No. % No. % No. % No. % No. % 16-20 9 20.5 7 13.0 5 10.0 7 21.2 28 15.5 21-30 .9 20.5 25 46.3 19 38.0 17 51.5 70 38.7 31-40 8 18.2 9 16.7 9 18.0 4 12.1 30 16.6 41-50 10 22.7 7 13.0 10 20.0 2 6.1 29 16.0 61-+ 3 6.8 1 1.9 3 6.0 3 9.1 10 5.5 Totals 44 24.3 54 29.8 50 27.6 33 18.2 181 Chi Square = 18.910 DF = 15 Table A.2 Chi Square Results for Sweater Choice by Age Sweater #1 HD #2 LI #3 LD #4 HI Totals Age No. % No. % No. % No. % No. % 16-20 5 9.1 6 12.8 7 21.9 7 15.6 25 14.0 21-30 17 30.9 24 51.1 14 43.8 18 40.0 73 40.8 31-40 15 27.3 8 17.0 5 15.6 8 17.8 36 20.1 41-50 9 16.4 6 12.8 4 12.5 4 8.9 23 12.8 51-60 2 3.6 1 2.1 2 6.3 4 8.9 9 5.0 Totals 55 30.7 47 26.3 32 17.9 45 25.1 179 Chi Square = 16.019 DF = 15 98 99 Table A.3 Chi Square Results for Shirt Choice by Education Shirt #1 HD #2 LI #3 LD #4 HI Totals Education No. % No. % No. % No. % No. % 2 yrs. H.S. 4 8.5 -- -—- 1 1.9 3 8.8 8 4.3 Completed H.S. 16 34.0 17 31.5 15 28.8 6 17.6 54 28.9 2 yrs. College 12 25.5 16 29.6 15 28.8 10 29.4 53 28.3 Completed College 8 17.0 10 18.5 10 19.2 8 23.5 36 19.3 Some Grad Work 2 4.3 7 13.0 5 9.6 4 11.8 18 9.6 Completed Grad 5 10.6 4 7.4 6 11.5 3 8.8 18 9.6 Totals 47 25.1 54 28.9 52 27.8 34 18.2 187 Chi Square = 12.022 DF = 15 Table A.4 Chi Square Results for Sweater Choice by Education Sweater #1 HD #2 LI #3 LD #4 HI Totals Education No. % No. % No. % No. % No. % 2 yrs. H.S. 1 1.8 1 2.1 1 3.0 l 2.1 4 2.2 Completed H.S. 16 29.1 10 20.8 5 15.2 12 25.5 43 23.5 2 yrs. College 12 21.8 18 37.5 16 48.5 12 25.5 58 31.7 Completed College 13 23.6 10 20.8 6 18.2 7 14.9 36 19.7 Some Grad Work 7 12.7 5 10.4 4 12.1 11 23.4 27 14.8 Completed Grad 6 10.9 4 8.3 1 3 0 4 8.5 15 8 2 Totals 55 30.1 48 26.2 33 18.0 47 25.7 183 Chi Square = 13.719 DF = 15 100 Table A.5 Chi Square Results for Shirt Choice by Occupation Shirt #1 HD #2 LI #3 LD #4 HI Totals Occupation No. % No. % No. % No. % No. % Professional/ 7 14.9 7 13.0 14 27.5 3 8.8 31 16.7 Technical Manager/ 4 8.5 3 5.6 5 9.8 5 14.7 17 9.1 Administrator Sales 2 4.3 5 9.3 4 7.8 l 2.9 12 6.5 Clerical 6 12.8 6 11.1 5 9 8 l 2 9 18 9.7 Craftsperson -— --— -- --- -- --- —- --- -- --- Machine Operator 1 2.1 l 1.9 -- --- -- --- 2 1.1 Non-farm Labor -- --- -- —-- -— --- —- --- -- -—- Service Worker 1 2.1 3 5.6 -- --- -- --- 4 2.2 Farm Owner 1 2.1 ----- —- --- -- --- 1 0.5 Student 14 29.8 20 37.0 12 23.5 11 32.4 57 30.6 Retired 3 6.4 -- --- 1 2.0 3 8.8 7 3.8 Unemployed 2 4.3 3 5.6 4 7.8 3 8.8 12 6.5 Other 6 12.8 6 11.1 6 11.8 7 20.6 25 13.4 Totals 47 25.3 54 29.0 51 27.4 34 18.3 186 Chi Square = 30.438 DF 30 101 Table A.6 Chi Square Results for Sweater Choice by Occupation Sweater #1 HD #2 LI #3 LD #4 HI Totals Occupation No. % No. % No. % No. % No. % Professional/ 15 27.3 13 27.7 6 18.2 14 29.2 48 26.2 Technical Manager/ 6 10.9 -- --- 3 9.1 6 12.5 15 8.2 Administrator Sales 2 3.6 4 8.5 1 3.0 3 6.3 10 5.5 Clerical 6 10.9 2 4.3 —- --- 3 6.3 11 6.0 Craftsperson -- --- -- --— -- --- -- --- -— --- Machine Operator -- --- -- --- -— --- 2 4.2 2 1.1 Non-farm Labor -- --- 1 2.1 -- --- -- -—- 1 0.5 Service Worker —— --- 4 8.5 3 9.1 2 4.2 9 4.9 Farm Owner 1 1.8 -- --- -- --- -- --- 1 0.5 Student 10 18.2 15 31.9 15 45. 12 25.0 52 28.4 Retired 5 9.1 1 2.1 1 3.0 2 4.2 9 4.9 Unemployed 3 5.5 1 2.1 2 6.1 -- --- 6 3.3 Other 7 12.7 6 12.8 2 6.1 4 8.3 19 10.4 Totals 55 30.1 47 25.7 33 18.0 48 26.2 183 Chi Square = 41.931 DF 33 Table A.7 Chi Square Results for Shirt Choice by Income 102 Shirt #1 HD #2 LI #3 LD #4 HI Totals Income No. % No. % No. % No. % No. % Under $10,000 6 12.8 10 18.9 6 12.2 5 15.2 27 14.8 10,001-20,000 6 12.8 13 24.5 8 16.3 13 39.4 40 22.0 20,001-30,000 3 6.4 7 13.2 8 16.3 2 6.1 20 11.0 30,001-40,000 11 23.4 7 13.2 9 18.4 6 18.2 33 18.1 40,001-50,000 8 17.0 7 13.2 8 16.3 2 6.1 25 13.7 50,061‘60’000 5 1096 5 904 5 10.2 1 3.0 16 8.8 60,001 and up 8 17.0 4 7.5 5 10.2 4 12.1 21 11.5 Totals 47 25.8 53 29.1 49 26.9 33 18.1 182 Chi Square = 18.395 DF 18 Table A.8 Chi Square Results for Sweater Choice by Income Sweater #1 HD #2 LI #3 LD #4 HI Totals Income No. % No. % No. % No. % No. % Under $10,000 6 11.3 7 15.6 7 21.2 6 12.8 26 14.6 10,001-20,000 11 20.8 8 17.8 7 21.2 8 17.0 34 19.1 20,001-30,000 6 11.3 8 17.8 3 9.1 9 19.1 26 14.6 30,001-40,000 13 24.5 6 13.3 5 15.2 8 17.0 32 18.0 40,001-50,000 4 7.5 5 11.1 5 15.2 3 6.4 17 9.6 50,001-60,000 5 9.4 6 13.3 4 12.1 6 12.8 21 11.8 60,001 and up 8 15.1 5 11.1 2 6.1 7 14.9 22 12.4 Totals 53 29.8 45 25.3 33 18.5 47 26.4 178 Chi Square = 9.218 DF 18 103 Table A.9 Chi Square Results for Shirt Choice by Dependents Shirt #1 HD #2 LI #3 LD #4 HI Totals Dependents No. % No. % No. % No. % No. % One Person 6 12.0 16 32.0 16 32.0 12 24.0 50 26.6 Two People 12 25.5 12 25.5 15 31.9 8 17.0 47 25.0 Three People 9 29.0 10 32.3 7 22.6 5 16.1 31 16.5 Four People 14 36.8 9 23.7 9 23.7 6 15.8 38 20.2 Five People 3 23.1 6 46.2 3 23.1 1 7.7 13 6.9 Six or More 3 33.3 2 22.2 2 22.2 2 22.2 9 4.8 Totals 47 25.0 55 29.3 52 27.7 34 18.1 188 Chi Square = 11.643 DF = 15 Table A.10 Chi Square Results for Sweater Choice by Dependents Shirt #1 HD #2 LI #3 LD #4 HI Totals Dependents No. % No. % No. % No. % No. % One Person 21 36.8 11 19.3 10 17.5 15 26.3 57 30.6 Two People 14 28.6 16 32.7 8 16.3 11 22.4 49 26.3 Three People 6 17.6 9 26.5 10 29.4 9 26.5 34 18.3 Four People 10 40.0 7 28.0 4 16.0 4 16.0 25 13.4 Five People 4 26.7 4 26.7 1 6.7 6 40.0 15 8.1 Six OI MOre 1 16.7 1 16.7 -- -" 4 66.7 6 3.2 Totals 56 30.1 48 25.8 33 17.7 49 26.3 186 Chi Square = 16.832 DF = 15 104 Table A.ll Chi Square Results for Shirt Choice by Race Shirt #1 HD #2 LI #3 LD #4 HI Totals Race No. % No. % No. % No. % No. % Black 4 8.5 5 9.3 2 3.9 2 5.9 13 7.0 White 42 89.4 46 85.2 48 94.1 32 94.1 168 90.3 Totals 47 25.3 54 29.0 51 27.4 34 18.3 186 Table A.12 Chi Square Results for Sweater Choice by Race Sweater #1 HD #2 LI #3 LD #4 HI Totals Race No. % No. % No. % No. % No. % Black 8 14.8 5 10.6 -- --— 3 6.1 16 8.7 White 42 77.8 41 87.2 32 97.0 43 87.8 158 86.3 Other 4 7.4 1 2.1 1 3.0 3 6.1 9 4.9 Totals 54 29.5 47 25.7 33 18.0 49 26.8 183 105 Table A.13 Multiple Analysis of Variance for Shirt Quality Sum of Degrees of Mean Source Squares Freedom Square F Buy American 447.85 1 447.85 1.23 Prestige 1,936.95 1 1,936.95 5.31* Origin 194.00 1 194.00 0.53 BA x P 62.38 1 62.38. 0.17 BA x 0 142.18 1 142.18 0.39 P x 0 690.50 1 690.50 1.89 BA x P x 0 153.85 1 153.85 0.42 Error 279,949.73 768 364.52 * p<.05 Table A.14 Multiple Analysis of Variance for Shirt Price Sum of Degrees of Mean Source Squares Freedom Square F Buy American 36.87 1 36.87 0.74 Prestige 2,342.39 1 2,342.39 46.94*** Origin 60.78 1 60.78 1.22 BA x P 38.80 1 38.80 0.78 BA x O 77.44 1 77.44 1.55 P x O 42.88 1 42.88 0.86 BA x P x O 11.71 1 11.71 0.24 Error 38,326.54 768 49.90 *** p<.00l 106 Table A.15 Multiple Analysis of Variance for Sweater Quality Sum of Degrees of Mean Source Squares Freedom Square F Buy American 455.91 1 455.91 0.97 Prestige 6,686.51 1 6,686.51 14.25*** Origin 585.63 1 585.63 1.25 BA x P 45.62 1 45.62 0.10 BA x 0 154.62 1 154.62 0.33 P x 0 458.08 1 458.08 0.98 BA x P x 0 283.17 1 283.17 0.60 Error 365,647.45 779 469.38 *** p<.001 Table A.l6 Multiple Analysis of Variance for Sweater Price Sum of Degrees of Mean Source Squares Freedom Square F Buy American 31.14 1 31.14 0.55 Prestige 4,505.39 1 4,505.39 79.01*** Origin 142.15 1 142.15 2.49 BA x P 0.01 l 0.01 0.00 BA x O 3.01 1 3.01 0.05 P x O 35.41 1 35.01 0.62 BA x P x O 25.59 1 25.60 0.45 Error 44,480.74 780 57.03 *** p<.00l APPENDIX B Figure B.1 1234 1342 1423 1243 1432 1324 Random APPENDIX B 2134 2341 2314 2431 2413 2143 107 Number Order 3124 3214 3142 3412 3241 3421 4123 4213 4132 4312 4231 4321 108 umfim umfim umhm 03E umfim umfim 03E umHE 8m n E 8088.” 8.8m 8m u E QHHQHGOHnmeSO :3 n E moosooum opmm / 3% u E ogoflummso \\ 8m n E 388$ 8.8m :m n E meMQCOHpmmso 3% n E muosponm oumm :3 n E ougoapmmso smflmmo Hmucmfiuomxm m.m oHsmfim 2}. n E 050 gang mum oz 84 u E 050 EOHHQSN mom E: u E w# Got/Hm muoumozm as n E 050 8632 mom as u E 050 smoflg mom oz Ammm u E magnom Amm n E 050 amoflumca mom oz 84 u E 050 Gmoflumca mom 83 u E mu; woo muHEm as n E 96 Egg mom :3 n E 050 Egg mom oz STUDY QUESTIONNAIRE ()()()()I) 12 3 4 5 Please indicate your level of agreement/disagreement with the following statements. Disagree Agree Strongly Strongly 1. I buy U.S. made clothes 1 2 3 4 5 6 7 (6) because it helps the economy. F.) To me. buying a product from 1 2 3 4 5 6 7 (7) a particular store is more important than the price I have to pay. 3. Hhen I buy clothing from a discount 1 2 3 4 5 6 7 (8) store, it is not important to me if it is made in countries such as Taiwan, Korea or Hong Kong. 4. I think that high class stores sell 1 2 3 4 5 6 7 (9) the same quality clothing for a higher price than discount stores. 5. I am proud to wear clothes 1 2 3 4 5 6 7 (10) that are made in the U.S. because I believe they are “Crafted with pride". 6. I prefer to buy clothing gifts at a 1 2 3 4 5 6 7 (11) high class store. 7. American made clothing can compete 1 2 3 4 5 6 7 (12) with clothing products made anywhere in the world. 8. 1 would be willing to pay a higher 1 2 3 4 5 6 7 (13) price for an American-made product, just to support our economy. 9. I am more thrifty than extravagant 1 2 3 4 5 6 7 (14) when I buy American-made clothing. 10. I feel that my own experience 1 2 3 4 S 6 7 (15) allows me to be an excellent judge of quality clothing. 11. The reason that U.S. firms can not 1 2 3 4 5 6 7 (16) compete with other countries is that other countries take advantage of their workers by paying a very low wage. 1()9 12. When I get a shopping bag from a 1 2 3 4 S 6 7 (17) high class store. I save the bag and use it for carrying things. 13. I really believe that you get what 1 2 3 4 5 6 7 (18) you pay for. 14. Compared to clothing made in the 1 2 3 4 5 6 7 (19) U.S.. I find it difficult to estimate if imported clothing will fit. 15. when I buy clothing from a high 1 2 3 4 5 6 7 (20) class store it is not important to me if it is made in countries such as Taiwan. Korea or Hong Kong. 16. 1 am more of a quality seeker 1 2 3 4 5 6 7 (21) than a bargain‘hunter, therefore I try to buy American-made clothing. Please check the correct response for the following questions. TRUE FALSE DO NOT KNOH Hhen we import more apparel goods into the United States than we export. it is good for our national economy. (22) Apparel products from countries such as Korea, Taiwan and Hong Kong cost less than similar products made in the United States. (23) It helps the U.S. economy if I buy apparel goods that are made here. (24) The United States apparel manufacturing industry and labor unions have funded an advertising campaign to convince consumers that they should buy American made apparel. (25) when the dollar is strong, our country has a flood of imports. (25) The American textile-apparel industry is one of the most protected (from imports) in the United States. (27) By buying imported apparel products. I will be contributing to unemployment in this country. (28) 11.0 Please evaluate the four sweater products and the four shirts before answering the following questions. On a scale of 1 to 100. with 100 being the highest quality possible, how would you evaluate the following products and what do you estimate their retail price to be? SWEATERS Quality Price l=lowest lOOshighest Sweater 1 3 . (29-36) Sweater 2 S . (37-44) Sweater 3 3 . (45-52; Sweater 4 S . (53-60 If you were going to buy one of these sweaters. which sweater would you buy based on your duality and price estimates. (Please check one) Sweater 1 Sweater 2 Sweater 3 Sweater 4 (61) SHIRTS Quality Price 1=lowest 100=highest Shirt 1 S . (62-69 Shirt 2 3 . (70-77 Shirt 3 S . 2/6-13) Shirt 4 S . 2/14-21) If you were going to buy one of these shirts, which shirt would you buy based on your quality and price estimates. (Please check one) Shirt 1 Shirt 2 Shirt 3 Shirt 4 (2/22) Hhat is your age? (2/23-24) Hhat is the highest level of education you have achieved? (2/25) _Some elementary school (1) :Completed elementary school (2) —2 years of high school (3) _Completed high school (4) _2 years of college (5) :Completed college (6) —Some graduate work (Master' 5 or Professional degree) (7) :Completed graduate program (8) 11.1 Your occupation? Manager or Adninistrator, except farm (2) Sales (3) Clerical (4) Farm owner (9) Student (10) Retired (11) Craftsperson (5) Unemployed (12) Machine operator (6) Other ( Non-farm laborer (7) (Please specify Family income from all sources? Under $10,000 (1) $60,001 to $70,000 (7) $10,001 to $20.000 (2) $70,001 to $80,000 (8) $20,001 to $30,000 (3) $80,001 to $90,000 (9) $30,001 to $40,000 (4) $90,001 to $100,000 (10) $40,001 to $50,000 (5) $100,001 to $110,000 (11) $50,001 to $60,000 (6) $110,001 and over (12) How many people are financially dependent on the income stated above(including yourself and spouse)? people Your sex? Male (1) Female (2) Your race? Black (1) Asian or Pacific Islander (5) white (2) Middle Eastern (6) Hispanic (3) Other (7) American Indian (4) (Please specify) Have you ever worked in retailing? Yes No Have you ever worked in apparel manufacturing? Yes No How patriotic do you feel you are? Unpatriotic Very Patriotic 1 2 3 4 5 6 7 Please list the three stores where you purchase the majority of your clothing. 1. Professional or Technical (1) Service worker (8) 2. 3. Please list three stores where you would never buy clothing. 2: 3. 11.2 (2/26-27) (2/28-29) (2/30) (2/31) (2/32) (2/33) (2/34) (2/35) (2/37-39) (2/40-42) (2/43-45) (2/46—48) (2/49-51) (2/52-54) L I ST OF REFERENCES LIST OF REFERENCES Andrews, I.R., and Valenzi, E.R. (1971). Combining price, brand, and store cues to form an impression of product quality. Proceedings, 79th Annual Convention American Psychological Association, 649-650. Arena, J.M. (1983). A Rising Tide of Protectionism. Newsweek, 101(May 30), 26-33. Bauer, R.A. (1960). 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