Price Quality Tradeoff: An Integrative Review of Theory and its Implication for Marketing Practice

You get what you pay for' is a traditional saying meaning that a higher quality goes with a higher price and vice – versa. For the consumers, intent upon a purchase, there is thus a likely tradeoff between perceived quality and price of the product. When are the consumers more likely to judge quality of a product from its price and for what kind of products? What are the contextual and situational factors that intervene in this tradeoff? What kinds of consumers are more likely to consider price as a cue for product quality? And finally, what are the implications of such a process for marketing strategy? All these questions are sought to be answered in this paper by an integrative review of research and theory. Also segmentation of consumers into price-seeking and price-conscious segments and the relevant marketing strategies appropriate for each sub-group within these broad segments are enquired into, within the background of contemporary Indian marketing scene.