Customer Perception and Competitive Quality Strategy

The objective of this paper is to determine the optimum level of quality a firm should choose in a product/service, given the customers' perceptions of quality and the reference standard in a competitive market. Our work on this quality selection problem differs from those of past researchers i...

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Main Authors: Ali, Abdul, SESHADRI, Sudhi
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Language:English
Published: Institutional Knowledge at Singapore Management University 1993
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Online Access:https://ink.library.smu.edu.sg/lkcsb_research/1102
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Institution: Singapore Management University
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spelling sg-smu-ink.lkcsb_research-21012010-09-23T06:24:04Z Customer Perception and Competitive Quality Strategy Ali, Abdul SESHADRI, Sudhi The objective of this paper is to determine the optimum level of quality a firm should choose in a product/service, given the customers' perceptions of quality and the reference standard in a competitive market. Our work on this quality selection problem differs from those of past researchers in that we model explicitly customer's perceptions and the reference standard. We develop a game-theoretic model to obtain insights into the firms' quality selection problem. The model results suggest that the market differentially provides rewards or penalties to firms depending upon customers' perceptions as well as other market and product-specific parameters. We contrast our findings for an oligopolist with that for a monopolist and observe that although an oligopolist often provides a better quality product, he does not do so always; especially when perceptions are sufficiently weak and the reference standard is endogenous. 1993-01-01T08:00:00Z text https://ink.library.smu.edu.sg/lkcsb_research/1102 info:doi/10.1002/mde.4090140304 Research Collection Lee Kong Chian School Of Business eng Institutional Knowledge at Singapore Management University Marketing
institution Singapore Management University
building SMU Libraries
continent Asia
country Singapore
Singapore
content_provider SMU Libraries
collection InK@SMU
language English
topic Marketing
spellingShingle Marketing
Ali, Abdul
SESHADRI, Sudhi
Customer Perception and Competitive Quality Strategy
description The objective of this paper is to determine the optimum level of quality a firm should choose in a product/service, given the customers' perceptions of quality and the reference standard in a competitive market. Our work on this quality selection problem differs from those of past researchers in that we model explicitly customer's perceptions and the reference standard. We develop a game-theoretic model to obtain insights into the firms' quality selection problem. The model results suggest that the market differentially provides rewards or penalties to firms depending upon customers' perceptions as well as other market and product-specific parameters. We contrast our findings for an oligopolist with that for a monopolist and observe that although an oligopolist often provides a better quality product, he does not do so always; especially when perceptions are sufficiently weak and the reference standard is endogenous.
format text
author Ali, Abdul
SESHADRI, Sudhi
author_facet Ali, Abdul
SESHADRI, Sudhi
author_sort Ali, Abdul
title Customer Perception and Competitive Quality Strategy
title_short Customer Perception and Competitive Quality Strategy
title_full Customer Perception and Competitive Quality Strategy
title_fullStr Customer Perception and Competitive Quality Strategy
title_full_unstemmed Customer Perception and Competitive Quality Strategy
title_sort customer perception and competitive quality strategy
publisher Institutional Knowledge at Singapore Management University
publishDate 1993
url https://ink.library.smu.edu.sg/lkcsb_research/1102
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