EFFECTS OF PRICE ADVERTISEMENTS ON PERCEIVED QUALITY AND PURCHASE INTENTIONS

Within a communication framework, Adaptation Level Theory could help explain the cognitive process that consumers use to develop perceived-quality. The theory provided the framework for an advertising experiment that examined the effects of established brand prices in a rival advertisement, new brand prices and source credibility on perceived-quality of the new brand. The participants in the experiment were 120 college juniors and seniors. Results suggest that when the credibility of the source communicating the new brand price was high, established brand prices have an effect on perceived quality of the new brand. Conversely, when the source communicating the new brand price is low, established brand prices have little impact on perceived-quality of the new brand. These results occured even when the price of the new brand had no effect on perceived-quality. Results also suggest an interaction from the new brand price, the established brand price, and source credibility on purchase intentions toward the new brand. © 1991.