How Does Consumers’ Local or Global Identity Influence Price-Perceived Quality Associations? The Role of Perceived Quality Variance

Abstract

Globalization has substantially influenced the world economy. However, managers have a limited understanding of how local–global identity influences consumers’ price perceptions and behavior. In this research, the authors propose that consumers’ local (vs. global) identity leads to a greater tendency to make price–perceived quality (PPQ) associations. Perceived quality variance among comparison brands is a key mechanism underlying these effects. Two field studies (Studies 1 and 7), seven experiments (Studies 2–6, 9, and 10), and a systematic review of secondary data (Study 8) provide converging and robust evidence for the effect of local–global identity on PPQ. Consistent with the perceived quality variance account, when quality differences among the brands are made salient, PPQ associations of consumers high in global (but not local) identity significantly increase, compared with baseline conditions. However, when perceived quality similarities are made salient, PPQ associations of consumers high in local (but not global) identity significantly decrease. Product type and distribution of customer ratings represent natural boundaries for the relationship between local–global identity and PPQ. The authors conclude with the implications for managers’ targeting endeavors. We also provide specific tools that marketers can use in ads and point-of-purchase materials to encourage or discourage consumers in making PPQ associations.