It is discussed that since customers are more of quality sensitive, they look for various mechanisms that signal product quality. Four such important quality signaling mechanisms are considered as price, advertising frequency, advertising content and use experience. Customers are observed to be cautious and try to judge the quality of the product using one or more of these mechanisms. However, it is argued that though studies have been done on price-quality by various researchers, this relationship is category specific. In this paper, a dynamic model is proposed in an environment where there is uncertainty about brand attributes and both price and advertising signal brand quality. The model parameters are estimated using Nielsen Scanner data collected on ketchup being sold in different brands. The results are discussed. (36 refs.)
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