Perception versus reality: A comprehensive examination of brand quality dynamics, market signaling, and performance interfaces

Quality is described as one of the key forces leading to long-term success of products. Given continuous changes in technology and market forces, firms find themselves under increasing pressure to attain quality competencies. This dissertation contributes to the understanding of the quality phenomenon, its drivers, and outcomes in the marketing literature by focusing on the two frequently addressed dimensions of quality: objective and perceived quality. It is posited that in general consumer's perception of quality does not match the objective quality of a product. Yet, the dynamics of the relationship between two types of quality still remain enigmatic for both researchers and managers. Three studies in this dissertation provide a comprehensive examination of the relationship between perceived and objective quality of brands from the firm's and consumer's standpoints.;The first study adopts signaling theory and investigates the drivers of the perceived quality of brands using aggregate level, archival data from the U.S. automobile industry. The main objectives are to examine the dynamic relationship between objective and perceived quality and to analyze the interaction effects between marketing-mix signals and objective quality; and between similar and dissimilar type marketing-mix signals on perceived quality.;The second study adopts the information asymmetry and signaling theory to examine the drivers and performance implications of the quality perception gap. The primary objectives of this study are to provide a new approach in understanding how changes in perceived versus objective quality affect the brand performance and how the marketing strategy of a brand influences the discrepancy between two types of quality. The aggregate-level data of the first study are used to test the hypothesized relationships.;The third study adopts cue diagnosticity and utilization frameworks to examine the effects of marketing cues and third party quality ratings on the consumer's perception of quality. The key objectives are to examine how the valence of a marketing cue strengthens the diagnosticity of other cues in quality evaluations and to investigate how quality ratings interact with marketing cues to influence perceived quality. A series of lab experiments are conducted to obtain primary data for the analyses.;This dissertation has specific contributions to the marketing literature. Substantially, it provides a new approach in understanding the antecedents and consequences of quality phenomenon. It conducts a longitudinal investigation of signaling theory with a comprehensive set of marketing-mix signals. It empirically examines the competing theoretical conjectures on the interaction between quality information and marketing-mix signals on perceived quality. Methodologically, it conducts econometric estimation on real industry data and statistical analyses on primary experimental data. Managerially, it provides implications for investment in a portfolio of signals and the alignment of marketing and quality strategy of brands.