How valuable is a well-crafted design and name brand?: Recognition and willingness to pay

How valuable is a well-crafted design and name brand?: Recognition andwillingness to pay

TORE KRISTENSEN1, GORM GABRIELSEN2 and JUDITH LYNNE ZAICHKOWSKY1,3*1Department of Marketing, Copenhagen Business School, Frederiksberg C, Copenhagen Denmark2Department of Statistics, Copenhagen Business School, Frederiksberg C, Copenhagen Denmark3Simon Fraser University, Canada

ABSTRACT

Preferences for similarly designed consumer products, evaluated blind and branded and also with and without prices, were tested in aconsumer setting. The consumer’s perceptual experience led to preference of the well-crafted high-priced option. This preference wasenhanced by priming consumers with background information about the brand, perhaps causing the subjects to guess which choice was thewell-known brand before evaluation. Preferences for that choice increased again when brand names were visible during evaluation. Whenactual prices were added to the evaluations, preferences for the well-known brand were very robust to high prices, indicating the strength ofthe brand name. Using the least preferred option and the lowest price as an anchor, the consumers’ price threshold to pay for the preferreddesign and the brand name was computed. Attempts to explain and predict individual differences of choices using measures of inherentdesign acumen, prior experience, and purchasing behavior were largely unsuccessful.Copyright © 2011 John Wiley & Sons, Ltd.

INTRODUCTION

Research on design in marketing is heavily represented by theinvestigation of successful or innovative designs for newproduct development (e.g., Luo et al., 2008). Besides newproduct research, there is growing interest to investigate thevalue of design in everyday products to understand howvarying designs and priming of information increase preference(Chitturi et al., 2008; Hagtvedt and Patrick, 2008; and Orth andMalkewitz, 2008). However, consumers oftentimes confrontchoices with very similar designs and need to make a choicebased on other attributes, such as brand name, price, or otherinformation attached to the object. It is a very common practicefor magazines or newspapers to compare the original brandeddesign object, which is usually high priced, with cheapersubstitutions available in the marketplace (e.g., Styleathome.com or Look for Less; see Appendix A for an example).

The branding literature suggests that the perceived brandimages, which reflect the intended values of a company,dominate the quality and value of goods under that brand name(Keller, 1993, Aaker, 1995). The design literature emphasizesthe object itself and states that preferences are based on gooddesign (Heskett, 2001). However, a well-known brand namemay increase the value of a good design to the consumer.Recent research on aesthetic versus standard packaging forfrequently purchased products found that some people arewilling to pay more and choose unknown brands when thepackage has a strong aesthetic appeal (Reimann et al., 2010).Therefore, it is clear that in addition to well-known brandnames, aesthetics represents value to customers.

Design and craftsmanship represent costs to the manu-facturer that must be recouped so the company can stay in

business. Premium prices cover the costs of design work,materials, craftsmanship, advertising, creating the brandname, and the quality of the product that the manufacturerwants associated with its brand name. Many times productdesigns are copied by other manufacturers, and they may notbuild up their own brand name, but their business model is tocreate similar designs, but of a lower quality, to make a profit(Midler, 2009). The question we wish to investigate ishow consumers make choices among very similar lookingbut different choices, within a product category, with andwithout the information of brand name and price.

One of the gaps in this literature is the understanding of theconsumer’s ability to identify a well-crafted and well-designedobject without knowing the brand name. But additionally, whatis the optimal high price that a well-known brand with a gooddesign can ask for and, at the same time, the consumerwill wantto pay? Or in other words, what is the relationship between theprice that a consumer is willing to pay and the perceived object,including quality design, craftsmanship, and brand name?There are likely individual differences in the perception anduse of design, brand names, and price to make choices. Theresearch method should try to capture these individualdifferences in preference and choice.

SELECTED LITERATURE REVIEW

MarketingIn marketing, design is frequently a strategic tool used todifferentiate the company’s product (Kotler and Rath, 1984).For example, Apple computer’s sleek design over theircompetitors is a main attraction to consumers. Despite somedifferentiation within product categories, design is treatedwith some ambiguity, as it is executed and operational underboth marketing and branding. Design, according to market-ing, completes the product styling and graphic elements ofbranding and is an add-on to the four P’s, typically as an

*Correspondence to: Judy Zaichkowsky, Department of Marketing,Copenhagen Business School, Solbjerg Plads 3, DK 2000 Frederiksberg C,Denmark.E-mail: [email protected]

Copyright © 2011 John Wiley & Sons, Ltd.

Journal of Consumer Behaviour, J. Consumer Behav. 11: 44–55 (2012)Published online 25 November 2011 in Wiley Online Library (wileyonlinelibrary.com) DOI: 10.1002/cb.368

implementation of the visual aspects of marketing strategy.State-of-the-art marketing theory suggests a bigger role fordesign to the extent that design supports the cocreation ofvalue (Vargo and Lusch, 2004). Implicit in this view is thatmarketing is the stimulus–response dimension, where themarketer stimulates the potential customer by communicat-ing new options through design.

The process also goes the other way, as consumers activelyscan the environment for new options. Kotler and Rath (1984)suggest that design must deal with value creation through theexistent and prospective user needs and engage in user-centered explorations through marketing, engineering, and,sometimes, ergonomics and social science (Leonard andRayport, 1997). As a result of this process, design becomes anelement of “embodiment” and becomes part of the person(Clark, 1997). Research on design and aesthetics finds thatconsumers generally have a gestalt-like aesthetic response tothe design principles of unity and proportions. Furthermore,consumers are not consciously aware of the design principlesor their reaction to them, yet their preferences and choices ofproducts are definitely influenced by the design of the objects(Veryzer, 1995, 1999; Veryzer and Hutchinson, 1998).

DesignContrary to marketing, design provides a new foundation forunderstanding the choice of products. According to Heskett(2001, p. 7), “design can be defined as the human capacity toshape and make our environment in ways, without precedent innature, that serves our needs and gives meaning to our lives.”This means that according to a design point of view, the object,seen in its context, is the foundation of value. Branding andstorytelling are “supported ethos” and add to the value of theproduct. Design is not merely an add-on to a product; it is theproduct. This point of viewmeans that functionality is integratedwith the meaning of the product. Therefore, our researchparadigmmust accommodate this integration and emphasize thechoice situation. Design contradicts the basic brand perspectivewhich is held by many marketing experts, because they assumethat the brand is the basic foundation. According to the designview, design can be identified as both a dimension of consumercompetencies and quality of the product. We refer to these asdesign acumen and quality/workmanship, respectively.

Design acumenDesign acumen is located not only in the mind of designers butalso in that of consumers, who possess the capacity torecognize good design. People high in design acumen makequicker sensory connections and exhibit more sophisticatedpreferences regarding the design of things than those with littledesign acumen (Csikszentmihalyi and Robinson, 1990). Thisdesign acumen may be acquired in different ways. Forexample, one may inherently perceive good design, or onemay have extensive training and experience in design. It is amatter of a person’s ability to judge the nature and quality of thework through salient ratios, symmetry, balance, perceptualgrouping, the use of strong metaphorical cues, and contrast.Bloch (1995) and Bloch et al. (2003) find strong individualdifferences in the consumer’s concern for product appearanceor design through a scale to measure the centrality of visual

product aesthetics (CVPA). Therefore, there may be individualdifferences in the attraction and identification of design closelytied to one’s CVPA. Consumers who score highly on inherentdesign acumen would rely on the actual design of a product toform their preferences, while those scoring low on designaptitude might rely on external cues such as brand name ordesigner labels rather than the actual design of the product.

Quality/CraftsmanshipQuality or craftsmanship is broadly defined, but in somecases, it may be objectively or quantitatively measured interms of amount or level of various attributes. Besides thenotion of objective quality, perceived quality is much morelikely to be relevant, as there is a higher level of abstractionthat is due to an individual’s assessment based on his or herown values and experience (e.g., Zeithamal, 1988). Inlooking at Ziethamal’s model of the links between price andattributes to perceived quality, brand names are not explicitlyincluded. It is clear from the literature that brand names mustbe explicitly included, as they are a main universal signal topurchase (Dawar and Parker, 1994).

The quality or craftsmanship of an object is perceived in asituational context. First, the whole object is experienced, andthen the perceiver may focus on one or more product attributes.The perceived quality is intellectual, emotional, and practical atthe same time, although a focus on one aspect at some expenseof other dimensions is possible (Johnson, 2007). Visionperceives simple forms, such as the elementary horizontaland vertical or curved and straight elements of the objects (Arp,2008), as well as gestalt elements, like the prototypical form(Bloch, 1995). The perception of certain elements is dependenton what the perceiver expects or wants to see. Framing, such asplacing objects on top of a table, leads the person to see whatis there. The situation determines what elements will be seenand which elements the perceiver will find attractive or worthyof further inquiry (Gibson, 1986).

Brand nameThe amount of information available on the importance ofbrand name for evaluation and choice seems infinite andoverwhelming (for a review, see Hoeffler and Keller, 2003).Dawar and Parker (1994) found that brand name and pricewereuniversal indicators for product evaluation and choice in theproduct category of electronic equipment. Brand name mayalso override information concerning other important productattributes and may be the only cue used by consumers inchoice. Van Osselaer and Alba (2000) found that brand namecues may be so powerful that they could block the learning ofquality determining attributes.

Therefore, once a strong brand name is included into theevaluations of products, the evaluations may change. Thevisual elements of the product may become the background,and the brand name may now be the focus of the attention orthe foreground. The gestalt principle of figure ground is atwork where the eyes go to the brand name and the brandname and all its linked associations become the focal pointof the visual experience. Therefore, a strong brand namemay command so much attention from the consumer thatlittle evaluation is directed to other stimuli.

Design and brand name 45

Copyright © 2011 John Wiley & Sons, Ltd. J. Consumer Behav. 11: 44–55 (2012)

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Cognitive psychology researchConsumers acquire information from their experience withobjects. Gibson (1986) explained how the vision, acoustic, andtactile flows are used to enable the basic relations to objects inthe environment. Inferences are drawn from these “affordances,”sometimes with just sight and sometimes with the othersenses included. Adults use their senses to explore the qualitiesof an object, making connections with the knowledge ofwhat they already possess and their desired objects. They alsoassign value to the imaginary possession of a new object.

In aesthetics, an old debate concerns whether “beauty is inthe eye of the beholder,” or in the objects, or both (Reber et al.,2004). There seems to be overwhelming evidence that theinteraction (and even the fluent processing) explains the likingand evaluation of an object to a large degree. The fluency, bywhich we are able to make sense of and categorize an object(Leder et al., 2004), may happen very fast as a “bottom up”process. In the presence of an innovative object or work of art,this takes some time and requires drawing on pre-existingdeclarative knowledge in order to assess the value of the newobject. Often, this can lead to “disfluence” and, therefore, alower value, unless the explorations reveal some qualities thatthe consumer recognizes and appreciates for its particularform, other sensory impressions, or symbolic meaning. Theprocess may be disfluent because it requires more cognitivework, but on the other hand, this can be compensated by thefeeling of insight or ability (Kubovy, 1999).

In such an evaluation process, the conceptual system ofmeanings is activated, and “affordances” are identified(Gibson, 1986). The meanings are interpreted from thecombinations of qualities inherent in the object and how theconsumer envisions possession and future interaction, such asinwearing a new pair of shoes. Since the use of such products issimilar for many people, one could expect to find a similarity inthe evaluations. This does notmean that all people are expectedto agree on all aspects of quality, but it does mean that theyuse similar cues as tools for similar purposes. There is still roomfor differences, because none or very few objects are onlyfunctional in nature; they differ in nonfunctional ways such asparticulars of form, materials, and colors. Summing up, thevaluation of design thus becomes an issue where the objectis seen as an “affordance” (Gibson, 1986) or a “prompter”(Bullot, 2009). These words stand for qualities that our activevision is seeking out to identify useful, meaningful aspects forfurther scrutiny. The general assumption is that vision is anactive sense that constantly seeks new opportunities for theconsuming person (Arp, 2008).

Prior experience and framingPreferences within product categories develop over time withpurchasing experience, changes in income, knowledge, andmaturation. Therefore, people with more experience inpurchasing from a product category may in fact havecultivated certain tastes that apply to their choices (Johnsonand Lehmann, 1997). A person may learn what attributes tolook forwithin a product category and then assess the importantdeterminants of attractiveness. For example, in the productcategory of bed linen, people may learn over time that thethread count, ply, and type of cotton all combine to form a

different quality of tactile sensations. Any one of theseattributes alone may not signal a certain level of quality, butan experienced consumer might predict the combination ofattribute levels that will give the best sensation. Following fromthis, people who have purchased repeatedly from a productcategory might have different preferences than those whohave little or no prior purchases from that product category.

In a similar way, the framing of the situation may stronglyinfluence people’s experiences (Goffman, 1974); that is, theplace and staging of any experience determine what theconsumer perceives. For instance, seeing exactly the sameobjects in a shop in an expensive shoppingmall, an airport, or amodern art museum may influence the valuation of the object.The difference in the context may change the object from apragmatic one to an artistic statement meaning something verydifferent. Therefore, the valuation one puts on an object maydiffer. Thus, in an empirical investigation, the framing shouldbe the one that activates the shopping experience.

Price and willingness to payPrice plays two distinct roles in the consumer evaluation ofproduct alternatives. First, it is a measure of sacrifice, andsecond, it is an informational cue linked to many otherattributes in the consumer’s mind, which may be real orimagined (Volckner, 2008). Because of the informationalaspect of price, specifically the implied quality informationassociated with price, consumers do not always choose thelowest price option, even when the alternatives seem similar.Comparatively high prices within a product category canconvey the information of prominence and status (as luxurygoods) of the purchase to other people. Price–quality beliefsare the most important source of the informationalcomponent of price response, followed by the prestige valueof the product and, finally, by the hedonistic effects. Thesehedonistic effects are the most varied among individuals.

The price charged for an object is the main source ofprofit for the firm. Price charged far outweighs the relativeimpact of volume, as improvements in price are said to havethree to four times the effect on profitability as proportionateincreases in volume (Marn and Rosiello, 1992). Therefore, itis very important for firms to charge the maximum amountthe consumer is willing to pay for their goods. However,answering the question what is a consumer willing to pay isnot that easy (Han et al., 2001; Miller et al., 2011). Toacquire an object means also to sacrifice something else tomake this acquisition. Economic theory assumes this to be arational decision based on a well-defined utility curve andinformation about alternatives, such as how many hours towork or which other objects to sacrifice (Lancaster, 1966).Behaviorally, it is a more complicated issue (Wertenbroch,2002). First, people may have very limited knowledge aboutwhich price level is at stake to begin with (Garbarino andSlonim, 2003), and second, they need an anchor to set thestage for what the object is worth (Ariely et al., 2006).

However such anchors are seen to be arbitrary, even whenpeople are assumed to know the approximate price forvarious items belonging to a product category of, say,chocolates or golf clubs (Ariely et al., 2006). Sometimes,even the willingness to pay is reversed depending on which

46 T. Kristensen et al.


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is offered first: an option to receive a free gift or to pay for it.This effect is well known from Tom Sawyer, where Tommade the whitewashing of his aunt’s fence an attractiveactivity for which people were willing to pay, rather than thetedious work Tom initially personally perceived. People’sexperience also sets an anchor for their willingness to pay(Simonsohn and Loewenstein, 2006). A person coming froma high-priced area such as New York is systematicallywilling to pay a higher price for an identical house in theMidwest than a person coming from a low-priced city likeReno. One might therefore expect that the willingness to paydepends on how consumers categorize objects. For instance,a rice paper lamp may be both a trivial everyday productand a work of art, and perhaps the difference rests withinthe individual.

While there are many factors, such as product knowledge,that might interact with important cues like brand image (viabrand name) in influencing internal price estimates, theoverall effect of the better-known brands is perceived higherquality and price. It is said that the more knowledgeable youare about the product, the less you rely on brand and price torate or choose the product (Biswas and Sherrell, 1993).

SummaryFrom the literature, several factors are reviewed that mayinfluence people’s preference for choices within a productcategory. These may be as follows: (i) the situation as such;(ii) an inherent ability to recognize the qualities of an object;(iii) a person’s individual design acumen; (iv) priorexperience with the product category; (v) cues such as thebrand name and price, which may interfere with theevaluation of the object; and (vi) the framing of the brandname or related information. Each of these factors will becontrolled for or measured in assessing consumers’ evalua-tions and preferences among different choices with similardesigns within a product category.

HYPOTHESES

Theories of form and aesthetic impression in consumerresearch are represented by the theories of prototypical form(Bloch, 1995) and the theories of processing fluency (Lee andLabroo 2004, Reber et al., 2004). This theory predicts thatwhen it is easy to perceive the product, the liking increases.Bloch (1995) introduces several important characteristics ofproducts that influence the consumers’ evaluation. Among themajor ones are functionality, workmanship, and contextualcategorization. Functionality is the same across, for example,the shoes, but workmanship (quality) and categorization(brand) are varied. Differences in workmanship are detectedthrough the eye (vision), and differences in categorization areinferred from information or stored knowledge of theindividual. The term well-crafted concerns a set of attributesreflecting high-quality materials, few or no errors in themanufacturing process, forms (such as pleasing line), andtexture (Veryzer, 1995; Reber et al., 2004; Winkielman et al.,2006; and Bar and Neta, 2006). Therefore, each choice isdifferent, leading to the first hypothesis as follows:

H1: Priming information about positive brand attributesassociated with the well-known brand will increase thepreference for that object.

This hypothesis is deeper than it appears. According toHeskett (2001), there is first the perceived object. Then,branding serves the function of “supported ethos.” Brandinggives credibility and amplifies the inherent qualities of theobject. Brand names are shortcuts for a great amount ofcompany history, values, and equity built over time. However,consumersmay knowvery little about what the companywantsto stand for and have as their equity. Therefore, informationabout the values and the company behind the choicemay framethe decision and add credibility and evidence to the choice(Goffman, 1974; Tversky and Kahneman, 1981). For instance,when the choice is presented in a context of “high taste” or“design,” it may be evaluated differently than if the product waspresented in another context or just stood alone. In addition tothis contextual framing, when an evaluation is conducted as astep in a sequence, the evaluationmay be affected both bywhathas preceded it and bywhat is expected to come afterwards andreflected in the “contrast experience” (Elster and Loewenstein,1996). Therefore, we expect that when people are providedwith positive information about a choice, they will seek outto determine with which choice the positive informationis associated.

The second and third hypotheses deal with individualdifferences.

H2: People with high design acumen will prefer a well-crafted design to those with low design acumen.

Bloch et al. (2003) developed a scale to identify social andcultural reasons for differences in evaluations of design. Theitems are based both on familiarity and on other socioculturalreasons often associated with the position of taste (Bourdieu,1984; and Douglas 1996). There may be significant individualdifferences as some people are just inherently attuned to fineaesthetically appealing designs.

H3: People who score high on design acumen are lessprice sensitive than are people with low design acumen.

Those who value design should trade off low price toacquire attributes that represent quality and craftsmanship.Their focus is good design, and they are willing to sacrificeprice savings to obtain an object that coincides with theirvalue structure. Previous studies on the relationship of priceand CVPA have found a marginally significant relationshipbetween aesthetic quality and willingness to pay a higherprice for aesthetic goods, but not for low-aesthetics products(Bloch et al., 2003).

METHODOLOGY

Having emphasized that design implies an integral concep-tualization of functionality of solving problems and creationof meaning, the research design must reflect this. For thisreason, the conventional way of using simple categories ofsemantic scales is replaced by continuous nonnumerical



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scales, where the whole product (or gestalt) is compared withanother product. The main question asked is, “which do youprefer, this one or that one?” It is a choice, but the strength ofthe choice is also rated.

Three experimental data collections were used to test howpeople evaluate preferences: (i) Experiment 1—only sensoryinformation; (ii) Experiment 2—the origin or brand informa-tion added; and (iii) Experiment 3—only sensory information,but consumers are primed that one of the choices is a well-known brand whose mission is to provide a quality brand tothe marketplace. In each experiment, evaluations first tookplace without the price information attached to the choices.

The evaluations were then repeated within each study,adding the actual prices of each choice as a conjoint variable(rotated among the choices). In this way, the weight given toprice, within evaluations, could be estimated separately, andthemeasure of price as a categorical variable (price point) couldbe converted into a continuous variable due to the sliding scalemeasurement of preference. One should note that the sameidentifier (letter or real brand name) is always attached to thesame object. The same three different brands were used in eachexperiment. So the real ECCO shoe is always ECCO or Q. It isthe prices that rotate among the brands, giving nine com-pounded objects (three brands�three prices). We used ninepaired comparisons when prices were attached and three pairedcomparisons (three brands) when price was not attached.

StimuliThe product category used for these studies was men’s blackshoes. The shoes were purchased at various retail outlets, andthe prices of the shoes (including sales tax) were $33, $83, and$233, respectively. All shoes were basic black and had a basicstyle. They could be worn by men for both everyday andspecial occasions. The brand names assigned to the shoeswere the actual brand names on the boxes: the cheapest shoe($33) was named Ambition and coded S, the next was namedFilanto ($83) and coded R, and the well-known designerbrand was ECCO ($233) and was coded Q (see Figure 1). Allbrand-identifying marks on the shoes were taped over in theblind treatments (S, R, and Q).

ProcedureThe experiments were conducted in various shopping mallsin a large city. Computers were set up with a self-directeddata collection program, and the three pairs of shoes weredisplayed alongside the computer station, so the respondentscould easily view and touch or examine the shoes or evenwear them if they wished. Shoppers passing by were asked ifthey would take a few minutes to evaluate the shoes. Theirparticipation lasted less than 10min. The order of thecomputer presentation of the shoes for evaluation wasrandomized across subjects in each experiment.

The SampleThe respondents were a convenience sample, self-selectedrandomly, as they were attracted to the display stand in theshopping mall. Although the product category was men’sshoes, the inclusion of women in the sample was importantas research shows that there is a significant segment of men

whose choices are influenced by wives, girlfriends, andmothers or whose clothes are actually even purchased bythese women. The latest U.S. figures are that 60 per cent ofall money spent on men’s clothing is controlled by women(m2w.biz/fast_facts.php, accessed June 23, 2010).

Questionnaire contentBesides the shoe evaluations, data were collected from eachindividual on their aesthetic aptitude (Bloch et al., 2003). Thequestions used to measure the individual’s sensitivity to designwere as follows: (i) I enjoy seeing displays of products thathave superior designs; (ii) a product’s design is a source ofpleasure for me; (iii) I see things in a product’s design that otherpeople tend to pass over; (iv) I have the ability to imagine how aproductwillfit inwith the designs of other things I already own;and (v) when I see a product that has a really great design, I feela strong urge to buy it. All respondents were asked thefollowing: (i) the number of pairs of men’s shoes theypurchased in the past year, to represent prior experience, and(ii) how many different brands of shoes they could name torepresent brand awareness.

Experimental designData collection was done by showing two pictures of thepairs of shoes on the computer screen, side by side, and

Ambition S $33

Filanto R $83

ECCO Q $233

Figure 1. Shoes used in the experiments.



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asking the respondents to slide the computer cursor towardthe one they preferred. This indicator was on a continuous220-mm scale with no numbers, only right or left positions,labeled at the left anchor with “I prefer the left pair of shoesvery much” and at the right anchor with “I prefer the rightpair of shoes very much.” A new comparison appeared foreach judgment. The distance from the middle of the scale tothe preference was registered electronically in millimeters.This method eliminates the risk for numeric biases. Thepaired comparison is a better description of what actuallyhappens when we evaluate objects. There is no need toestimate a large number of attributes and affix values oneach. It is much easier to identify the objects as a whole andthen add brand names and prices, as these are the major cuesused in shopping decisions.

There was a training screen session of how to use thecursor scale by sliding the cursor one way or the otherdepending on the strength of one’s preference for a choice. Ifone pair of shoes was preferred only a little, then the cursorwas moved only slightly toward that pair. If one pair ofshoes was greatly preferred, then the cursor was moved far tothe right or left. The actual shoes were beside the computerwhile the respondents rated them on the computer screen.Each person made three comparisons without prices and ninewith price information.

The ModelThe corresponding values of the scores of subject p, withshoes i to the left and shoes j to the right, was denoted y(ij)p.It is assumed that the numerical score increases with thestrength of the preference for j over i, and the equal butopposite preferences (j over i, and i over j) correspond toequal but opposite scores. Thus, for subject p, y(ij)p, is theassessed preference of shoes j over shoes i, and y(ij)p is theassessed preference of shoes i over shoes j. If, for example, y(ij)p is positive, then j is preferred over i. If y(ij)p is negative,then i is preferred over j.

The underlying assumptions of the mathematical modelare that the y(ij)p values are independent random variablesand normally distributed with mean value E(y(ij)p)=aj – ai,i 6¼ j and i,j=1,2,3, and thereby, the model is estimated byordinary least squares. As only the difference of the a valuesis of interest, one can add the restriction that a values shouldsum to zero. When price is added to the evaluation of theshoes, another variable is added. The score of subject p withshoes i, with price k to the left, and shoes j, with price l to theright, was denoted as follows: y(ik)(jl)p. Again y(ik)(jl)pvalues are assumed independent random variables andnormally distributed with mean value E(y(ik)(jl)p)=(aj –ai) + (bl – bk), i 6¼ j; i,j=1, 2, 3 (shoes). l 6¼k; l,k=1, 2, 3(prices), where a1+a2+a3=0 and b1+b2+b3=0. This is themodel for the conjoint lay-out.

The equation for no preference among the shoes isa1=a2=a3 (= 0).

The equation of no preference among the prices isb1=b2=b3 (= 0).

As the equations are general linear models, they are testedwith F tests.

The model of attractivenessIn these experiments, the shoes are classified according to acomposite of two variables, (i) price and (ii) the actual shoes,over (i) unbranded; (ii) branded; and (iii) brand is primed.The overall attractiveness of the composite for eachindividual is constructed from the two variables (shoes andprices) such that if the object is fixed (shoes) and the priceincreases, the attractiveness of the object will decrease, andif the price decreases, the attractiveness of the shoes willincrease. That is, there is a trade-off between price and theattractiveness of the shoes.

Similarity, if the price is fixed and the design/quality ofthe shoes increases (the composite object), the attractivenessof the object should increase, and vice versa. This means thatthe attractiveness of an object can be modeled by theattractiveness of the aspects or the marginal attractiveness.The simplest way to model the attractiveness is by the sumof the marginal attractiveness, which is denoted as

Att price; shoeð Þ ¼ MarginalAtt priceð Þ þMarginalAtt shoeð Þ:

This formula shows how price and design quality cansubstitute for each other to give the same values of attractivenessof the composite object. Price is the adverse quality signalingthe sacrifice (willingness to pay) that one has to make to acquirethe shoes. If we know the marginal attractiveness for price andthe marginal attractiveness for design quality, we can use thisformula to see how design quality can be substituted for price.Conversely, we can think of this as a way to estimate the price ofsome “quality,” as this can be thought of as the substitution forprice. Therefore, the objective is to estimate the marginalattractiveness of the price of some “quality” and subsequentlyestimate the substituting price of “quality.”

RESULTS

Respondents’ profileA total of 109 consumers participated in the three differentdata collections (45, 30, and 34 subjects, respectively). Fortyper cent of the respondents were female, and 60 per centwere male. The number of men’s shoes they purchased overthe past year ranged from zero to six or more pairs, with anaverage of about three pairs. The number of brands arespondent could name ranged from zero to four. Thirty-eight per cent had an unaided recall of the ECCO brand.There was a significant and expected relationship betweennumber of pairs of shoes purchased and number of brandsrecalled ( p<0.01). Overall, subjects scored a 3.8 (based on afive-point scale) for design acumen.

Study 1: Evaluation without brand namesForty-four adult consumers (17 women and 27 men) ratedthe shoes labeled with the letters Q, R, and S. After theyrated the three pairs of shoes, without any information otherthan what they perceived when looking at the shoes, the



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respondents were asked to rate them again. This time, theydid it with the actual prices of each pair of shoes rotatedamong the pair of shoes.

With no price or contextual information, the Q shoes(âQ= 48.18) were preferred to the R pair (âR= –1.42), whichin turn were preferred strongly to the S pair (âS = �46.76)(F (2,130)=19.24; p<0.01). Therefore, without any price orbrand information, using only the information from thevisual and tactile senses,1 respondents did strongly prefer theQ (ECCO) shoes. When the shoes were evaluated withthe price information added to the evaluations, the scale“compressed,” and all three pairs of shoes became muchcloser in preference, but consumers were willing to pay morefor the Q shoes (âQ = 29.42 vs. âS = �9.42 vs. âR = �20.00,F(2,392)=4.2, p<0.001). The significant differences werebetween Q and R ( p<0.01) and between Q and S ( p<0.05).The difference between R and S was not significant; hence, itmay be inferred that the design/quality differences betweenthese two pairs of shoes could not be perceived to costsignificantly more than each other.

The preference weights for prices were as expected. Theprice of $33 scored 95.59; the $83 scored 43.55, and the highprice of $233 was very negatively evaluated at �139.13.After rating the shoes, the respondents were asked whetherthey would consider buying any of them. Thirty-eight percent said they would not consider it. Twenty-seven per centsaid they would buy Q, 18 per cent said they would buy R,and 18 per cent said they would buy S. They did not knowwhich price matched which pair of shoes, so they could notuse price for an identification cue for any quality factors ofthe shoes. At the end of the data collection, respondents weretold that one of the pairs was ECCO shoes, and they wereasked to guess which pair. Twenty-nine per cent guessed S,22 per cent guessed R, and 49 per cent correctly guessed Qas the ECCO shoes.

Overall, the respondents preferred the ECCO shoes whenrating the shoes without any identifying price or brandinformation, and half of the respondents correctly guessed Qas the ECCO shoe. The data on frequency of shoe purchaseand knowledge of brand names were a priori, thought to beassociated with correct identification of the ECCO brand.The data on previous shoe purchases were classified intothree categories: (i) those who had purchased none or onepair in the past year (24%); (ii) those who had purchased twoor three pairs (36%); and (iii) those who had purchased fouror more pairs (40%). There was no relationship betweenaccuracy of guess and number of shoes purchased in the pastyear (w2=0.29; df=2; not significant).

Respondents were also asked to name the brands of men’sshoes they knew: 18 per cent knew none, 31 per cent knewone, 24 per cent knew two brands, and 27 per cent couldname three or more brands. Forty-one per cent had an unaidedrecall of the ECCO brand. There was no relationship betweenaccuracy of guess and number or type of brands recalled(w2=4.4; df=3; not significant). Tests were also done to see if

there were differences between men and women on theaccuracy of their guess and prior knowledge of brands ornumber of pairs of shoes purchased; no differences were found.

This lack of relationship between purchasing, brandawareness, and brand identification might be due to theproduct category. Perhaps most basic black men’s shoes area type of “generic” good where there are several equallygood and acceptable brands. In addition, these types of shoesmay be bought for special occasions, such as weddings orother dress occasions.

Study 2: Evaluating choices with brand namesThirty new respondents (8 women and 22 men) participatedin Experiment 2. In this study, all brand identification wasvisible as ECCO, Filanto, and Ambition. The results showthat the “ECCO” (Q) was still preferred (79.02) over theother two pairs; Filanto scored �0.51, whereas Ambitionscored �78.51 (F(2,88)=10.18; p<0.001). The preferencefor the Filanto shoes stayed about the same, but thepreference for the ECCO shoes increased, and the preferencefor the Ambition shoes decreased when evaluating with thebrand names.

When the prices were added to the branded evaluation,ECCO shoes were evaluated at âQ = 86.22; Filanto,âR = �11.95; and Ambition, âS = �74.26 (F(2,266)=39.47;p<0.001), which is little variation from the unpriced eval-uation. So, adding price did not compress the evaluations, as itdid in the unbranded situation. Part-worths for price werecomputed, and the weights given were 106.24 for $33, 23.21for $83, and �129.45 for $233, very similar to Experiment 1.All paired comparisons were different at p<0.01. Whenasked if they would purchase any of the shoes, 14 (47%) saidthey would buy ECCO: one chose Ambition, four choseFilanto, and 11 said they would buy none of the shoes.

Study 3: Priming the brand ECCOIn the third study, 34 new respondents (19 women and 15men)evaluated the three pairs of shoes labeled onlyQ, R, and S. Thisgroup was given information central to the brand’s companyvision at the beginning of the experiment that one pair of shoes,but not which, is a pair of ECCO brand shoes whose

“company is driven by passionate people who are deeplycommitted to well being of their customers, as well asdesign technology and product functionality. They createa timeless product, while at the same time followingfashion trends. Their working style is also their lifestyle andtheir mission is to create comfortable footwear of a highquality which fits the foot and not the other way around.They are a well-known brand and sold around the world.”

So, the consumers were primed that one of the choiceswas a worldwide brand name, who respects their product andtheir customer. The very first question posed to therespondents was “Which pair are the ECCO shoes?” Theresponses were as follows: 53 per cent correctly identifiedthe ECCO shoes, 29 per cent incorrectly identified them asthe Ambition shoes, and 18 per cent thought they were theFilanto shoes. So, the identification of the ECCO shoes wasslightly better than chance.

1The respondents had the opportunity to try on the shoes. None of thesubjects actually tried on the shoes and walked in them, which is clearlysomething that one would do when buying shoes.



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The respondents then went through the same procedure asExperiment 1, rating the preference of the shoes labeled Q, R,and S, with and without the price factorial. Here, we see similarresults to those of Experiment 1 in terms of preference order ofthe shoes, but the preferences were more polarized under thepriming of a well-known brand name. The preference weightswhen the respondents were primed are as follows:âQ = 96.44;âR = �37.85; and âS = �58.59 (F(2,100)=12.64; p<0.001).When price was included, the values are very similar: âQ =89.12; âR = �36.23; and âS = �52.90; pair-wise, each wassignificantly different at p<0.01. Hence, adding the priceinformation did not significantly change the preference weightsfor any of the shoes. Overall, the results are close to those ofExperiment 2, where the options were evaluated branded (seeTable 1). The estimates for price were 93.78 for $33, 28.47 for$83, and �122.25 for $233. Finally, respondents were askedabout their buying intentions: 41 per cent said they would buynone, 12 per cent said they would buy S, 44 per cent said theywould buyQ (ECCO), and 3 per cent said theywould buyR. So,of those who would buy any of the shoes, the overwhelmingchoice was for the unbranded ECCO shoe, very similar to theresults of Experiment 2, which had the items branded.

Estimation of willingness to pay for the ECCO brandKnowing that the S shoe (Ambition), which was the cheapest,was least preferred and that the lowest price point was themost preferred, this information was used as the anchor to

determine the price point where the subjects shifted theirpreference to another shoe based on price. Or, in other words,what was the most a consumer was willing to pay to obtain themost preferred pair of shoes? Corrected for the price, theparameter estimates for the ECCO shoes unbranded as Q inExperiment 1 show that they are preferred over the S, the leastexpensive shoe (b=39.1, t=2.4, p<0.05). When the shoesare branded as ECCO, the preference strongly increases(b=159.6, t=8.0 p<0.001) and when the subjects are primedto the brand name; however, when the shoe is unbranded as Q,the preference is almost the same as that when it is branded(b=141.6, t=7.5 p<0.001).

The midpriced shoe R (Filanto) was not significantlypreferred over the cheapest shoe S (Ambition) in Experiment1, nor in Experiment 3. These were both unbrandedtreatments. This means that consumers were willing to pay$83 for both brands when unbranded. However, inExperiment 2, when the options were branded, subjectspreferred the Filanto brand to the Ambition brand (b=63.2,t=3.2 p<0.01). We cannot really say why, expect that maybethe name Filanto sounded Italian or more crafted, whileAmbition perhaps sounded inappropriate to prefer.

Using the parameter estimates and the base of the leastpreferred and lowest price shoes (S at $33), we can thencompute the optimal prices of the shoes for choice in eachexperiment. In Experiment 1, for the unbranded Q (ECCO)shoes, the inflection point for price was $67; in Experiment 2,

Table 1. Estimation of willingness to pay for the ECCO brand



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for the items branded as ECCO, the price increased to $173,and in Experiment 3, where the information was given aboutthe brand but the shoes were evaluated unbranded, theinflection point for price was $159. Therefore, the brand nameincreased the value of the shoes in the minds of the respondentsalmost three times, and it was increased slightly more thantwice when the respondents were only primedwith informationabout the brand.

CVPA scale and preference evaluation over thethree studiesIt was thought that there should be a great individual differencein choice and evaluation based on the respondents’ preferenceand appreciation for design. The computedCronbach reliabilityfor the five items on CVPA, over three different samples, was0.82. The CVPA data were then examined as a continuousvariable for each experiment. For Experiment 1, the CVPAwasnot related to any of the evaluations for the unbranded shoes orfor the prices. For Experiment 2, where all the choices werebranded, the CVPA scale was significantly related to thepreference for the ECCO shoes ( p<0.01) and for theevaluation of prices (p<0.05). That is, the higher the CVPAin Experiment 2, the more likely the subject was to prefer theECCO brand and be willing to pay a higher price to obtainthat brand. For Experiment 3, where the subjects wereprimed about the ECCO brand but the evaluations were blindto the actual brand name, the CVPA was not related tothe evaluation of the ECCO brand.

DISCUSSION AND CONCLUSIONS

The results show that consumers prefer an object that is wellcrafted with particular design details; they also show that awell-known brand name will greatly increase preference forthe object. The increase in preference from evaluating theECCO brand blind to branded, without prices attached, wasabout 80 per cent. Attaching prices to the evaluationincreased the preference by 200 per cent. This magnitudeof change is quite dramatic. The prices and their largedifferences appear to activate a closer look at the objects.Perhaps it is the presence of price information that makespeople look at the small differences.

What is also interesting is that the same 200 per centincrease was achieved by priming the choice with brandinformation but not telling the respondents to which choice theinformation belonged. This suggests that the mere suggestionof a brand name activates consumer’s design acumen. So,perhaps there are two activating systems for priming designattention: one is the presence of brand names, and itsassociations, and the other is the presence of prices. Thesetwo attributes stand as the most important for consumerdecisions (Dawar and Parker, 1994), and perhaps we haveprovided information on how these cues are interrelated andactivate attention.

Support for H1, which states that simply priming consumerswith positive brand information will increase the preference forthat object, perhaps indicates that consumers now interpret thedetails in a different way. This planting of positive information

onto the consumers’ mind creates an attraction of “high taste”and design to the evaluation process, which is almost as strongas attaching the brand name to the object (Goffman, 1974). Afourth experiment that has branded products plus priminginformationmight have increased preference evenmore if thereis an additive effect for positive information about the brand inaddition to the brand name attached to the object.

Individual differences for brand preference and pricesensitivity (H2 and H3), which center on the CVPA ofconsumers, were not well supported. Only when the choiceswere branded, as in Experiment 2, did those with higherscores on the CVPA prefer the well-crafted choice and becomewilling to pay more for it. It could be that the brand name wasneeded to prime the CVPA of the respondents. One should bereminded that when considering a category such as men’sblack shoes, the visual picture is not radically different; it is allin the details. That is, I prefer the ECCO brand; therefore, Imust have a higher sensibility towards design. Subjects wereasked to fill out the design scale after their rating of the shoes,and not before.

Another possibility for the lack of significant effects for theconcept of design acumen is perhaps that the measure used(CVPA) was not able to capture the concept through thequestions asked. The question of what exactly is the CVPAtapping into does not seem to be subtle design differences orperceived differences in quality craftsmanship. The usefulnessof the measure in this context seems questionable, as thehypotheses are well founded. Subjects who scored high ondesign acumen did not mainly choose the well-crafted choicewhen it was unbranded. Although there are no obviousreasons for these results, academic reasoning says that theremust be something wrong with the hypotheses, data, ormeasure. We are confident of the theory and the data, butperhaps we used the wrong measure.

Recent functional magnetic resonance imaging studieshave found that neural data predicts behavior twice as well aspeople’s stated intentions (Falk et al., 2011). In a study ofevaluations of three different advertising campaigns forantismoking, participants overwhelmingly predicted cam-paign B as the best. However, brain wave data suggestedthe most activity when they were exposed to campaign C.When the actual campaigns were introduced, C triggered thelargest behavioral response. So, in some situations, there maybe a disconnect between what people consciously say andwhat their brain activity seems to suggest. Perhaps design isone of these areas where we need more triangulation ofbehavior measures and brain activity data.

The present study is also a contribution to the measurementof the dollar value of brand names. When consumers wereasked to evaluate the objects without any branding, theirevaluations of the three choices were closer together comparedto the branded or primed for brand evaluations. Furthermore,the price inflection in the unbranded condition was about one-third the value of the branded or primed for brand condition.Therefore, it might be said that the brand name of ECCO triplesthe price value for the shoes in the consumer’s mind. Althoughpeople were not actually buying the shoes, there is evidencethat this methodology has merit and does reflect an actualwillingness to pay from consumers (Botelho and Pinto, 2002).



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MANAGERIAL IMPLICATIONS

The first implication is that a good design affords a higherprice. There was no exception from this rule. Consumersappeared to see the small details that make up the quality,and this was activated by the prices. The well-known brandname seemed to sponsor ethos to the objects, as supported bythe results from adding the brand name. However, there aretwo worries that managers have in regard to pricing. One isthat they set the prices too low, making the consumers feelthat because of the low price relative to all other options, theobject is below their threshold of quality acceptance. That is,they perceive a set of prices reasonable for the object, and ifthe price is too low, they may think that the option is a poorone. Or if the perception of the good is acceptable, they wouldhave actually paid more for the option; hence, money is lefton the table, so to speak. Their stock sells out and the objectcould have commanded a higher price from the consumer.

The other scenario is that they set prices too high and areleft with a high inventory, which needs to be sold at a heavydiscount in order to make room for new stock and seasonalstyles. While a strong brand allows you to command a higherprice for your product, one must be careful not to price it toohigh, so customers are not tempted to purchase cheaper, lesswell-known brands of a similar style. The key issue heremight be what the bottom anchor and quality that is availablefor a comparison point are. Consumers make decisions basedon the context of the other available alternatives on themarket. The actual retail price of the ECCO shoes was $233;hence, our prediction would be that this shoe would unlikelysell out if there were similar alternatives priced cheaperand that it would be a candidate for a sale item at the end ofthe season.

It is common for different brands to have different pricepoints with similar styles. Athletic shoes, for example, alwayscome in a range of prices, so that the consumers can choose ananchor for themselves. It does seem that the retailer or brandmanager must be careful not to supply a price point that is toolow. Our research shows that consumers were willing to paymore than twice the price for the lowest priced pair of shoes.The Ambition shoes, which regularly retailed for $33, mightbe easily accepted by consumers at twice that price, as thatwas the computed perceived value to the consumer. So, in theminds of the consumer, there may be a bottom threshold forprice for any product category, and paying too little willtrigger a perception of quality thought too low for con-sumption. There may be an optimal price gap betweensimilarly designed goods, so that customers can make thetrade-off between price and quality with some ease.

It is clear that brand managers should supply concreteinformation about the brand to their customers. Informationon brand history, development, values, and so on should notbe left to chance recollection. Supplying only the brandname leaves the customers to create their own brand story.Providing concrete valid information about the brand so theconsumer could form an evaluation had about the sameeffect as providing the brand name. Therefore, brands thatmight not be well known but are of high quality and are wellcrafted may be well served by providing desirable

information to consumers (Gabrielsen et al., 2010). Ofcourse, the framing of the choice situation, the quality of theobject at hand and its competitors, and the prestige of thecompetitors’ brand name all may need to be carefully lookedat, to gain some competitive advantage. For instance, theNovopen, a device for the injection of insulin, changed thecontext of usage from a medical treatment to an everydaytask, which enabled diabetics to undergo their medicaltreatment discretely.

RESEARCH IMPLICATIONS

The studies are valid in that they are conducted in situ andin situations where real consumers were conducting theirbusiness. With respect to the product category, subjects werelikely to pick up the shoes and examine them, but noneactually tried them on and walked around in them. The rangeof choices in this experiment, although real, was limited, andother results may be found in different contexts where all thebrands are well known, higher priced, and even well crafted.However, we feel confident that we have tested real anddifferently priced choices within a product category.Replications with other products might be needed to showthe robustness of the findings.

The links among design, craftsmanship, and brand namemay also need further analysis. Future research needs to lookat publicly consumed luxury goods versus privately con-sumed necessities. There are, no doubt, great individualdifferences in the desire for designer, depending upon thevisibility of the good. Social needs may override good designfor some segments of the market.

The design effects should be reinforced when supported bygood branding, labeling, or relevant concrete informationpertaining to the design. Market researchers can assistcompanies by using this information in their communicationstrategies to increase the familiarity of design throughexhibitions and informative ads, and by supporting strongdesign in general. Market researchers may also have a deeperunderstanding of consumers’ evaluations and price trade-offsfor design elements. They may use this information as a keyelement in creating demand for “originals,” as opposed toimitations, knock-offs, or retail brand copies.

The present research does have a few limitations thatcould be improved on in future studies. One variable we didnot measure was consumer’s involvement with the productcategory. Prior research has found that the more involvedpeople are with the product category, the less price-sensitivethey are because they are willing to trade off price to getother attributes (Zaichkowsky, 1988; Herrmann et al., 2004).Other individual difference variables are quality conscious-ness, brand loyalty, and price-conscious consumers. None ofthese were included in the present study. Income levels areindeed important for understanding price sensitivity, butthese were not measured adequately in this study. Ourmeasure for product knowledge was a proxy variable asmeasured by number of brands the consumer could recalland also their prior experience as number of pairs of shoesbought in the past year. These two variables are a common



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man’s measure of shoe “expertise.” Perhaps real expertiseinvolving knowledge of product attributes would haveyielded different results.

BIOGRAPHICAL NOTES

Tore Kristensen is a professor of strategic design at CopenhagenBusiness School. He has conducted many studies in strategic designand, more recently, in transformative consumer experiences. Inparticular, his interests concern design in a context of consumers’motivation and competencies, value and price issues, and branding.The relations between good design and economic performance arealso a major interest. His teachings touch on strategic design,communication psychology, and managing consumer experiencesand design.

Gorm Gabrielsen is a professor of mathematics and statistics atCopenhagen Business School. His research concerns the develop-ment of research designs in general and the development ofmethods for normal distribution and binary scales in particular. Inaddition, he has worked with other specialists and has developedstatistical methods in business, design, sensorics, forensic medicine,criminology, and psychiatry. Gorm Gabrielsen teaches statistics atseveral business studies at Copenhagen Business School.

Judith Lynne Zaichkowsky is a professor of marketing andcommunication at Copenhagen Business School. She received herPh.D. in marketing (minors in psychology and statistics) from theUniversity of California, Los Angeles, in 1984. Her work onconsumer involvement is recognized in the top articles in consumerbehavior and one of the most influential articles in the field ofadvertising. She received a Centenary Alumni award from theUniversity of Guelph in 2003 for outstanding contributions toresearch. She is the author of The Psychology behind TrademarkInfringement and Counterfeiting (2006). Judith Zaichkowsky willbe at Simon Fraser University, Canada in 2012, [email protected].

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How valuable is a well-crafted design and name brand?: Recognition and willingness to pay