How advertising expenditures affect consumers’ perceptions of quality: A psychology-based assessment of brand-, category-, and country-level moderators

Koushyar Rajavi, Donald R. Lehmann, Kevin Lane Keller, and Alireza Golmohammadi

Although some studies have found the effect of advertising expenditures on perceived quality to be positive and significant, others have shown that, under certain circumstances, advertising expenditures do not impact perceived quality.
Rajavi et al

Management Slant

  • Although advertising expenditures, in and of themselves, have potential signaling value and can positively shape perceptions about the quality of the brand in that way, various moderating factors strengthen or weaken that relationship.
  • There is a stronger relationship between the advertising expenditures and perceptions of quality for brands that consumers own (or have used in the past), when economic conditions are more favorable, in categories where consumers are not highly involved, and in categories where new products are frequently introduced.
  • That relationship is weaker for high-equity brands and for brands that experience high volatility in...

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