Question

Elena recently purchased a pair of sunglasses because she liked their quality, styling, and price. Her friend Katie purchased an almost identical pair, except that Katie's sunglasses had the name "Armani" imprinted on the side. Elena probably based her purchase decision on ___________, whereas Katie apparently based her decision on ___________.

a) price; product quality
b) real product differences; perceived product image
c) perceived product image; product quality
d) product value; perceived product image
e) product design; product quality

Answer 1

Elena based her decision on product value, while Katie was influenced by the perceived product image of the 'Armani' brand. This highlights how brand image and advertising affect consumer choices, even when real product differences are minimal.

Step-by-step explanation:

Elena likely based her purchase decision on product value, appreciating the quality, styling, and price without the influence of a well-known brand name.

On the other hand, Katie seems to have based her decision on the perceived product image, as indicated by her preference for sunglasses with the 'Armani' brand imprint.

This demonstrates how intangible aspects such as brand reputation and advertising can play a significant role in shaping consumer preferences and driving product differentiation, sometimes overriding real product differences.

In cases where consumers face imperfect information, the price itself can often be misinterpreted as a signal of quality. This is commonly observed in various scenarios, such as when people assume that more expensive restaurants have better food or that higher-priced lawyers provide better services, despite not having expert knowledge on these matters.