Consumer choice, information product quality, and market implications

The paper concerns with the peculiarities of consumer choice in information product markets. This is a multidisciplinary study based on both information system research and microeconomic theory. An extension is introduced to the conventional general theory of consumer choice for explicitly taking into account the impact of information product quality on consumer behaviour. Multiple quality characteristics, considered against the price of product, are an essential reason for consumer choice of high tech product in general and information product in particular. We assume that consumers are able to aggregate their preferences of multiple product characteristics into a product preference order. On the supply side, the product quality characteristics incur costs. In the case of information product, those costs are the costs of the first copy, and marginal costs are near zero. All of the above constitute the distinctive characteristics of the competitive mechanism in the digital economy and in information product markets. A model, based on the game theory is used to consider two special cases. The first one deals with monopolistic competition for a share of the market with a limited number of customers. Conditions are derived for IT firm survival. The second one considers conditions at which a monopoly is able to successfully introduce a new version if its information product.

Growth and product quality of European eel (Anguilla anguilla) as affected by dietary protein and lipid sources

A 12-week feeding trial was undertaken to evaluate the effects of partial replacement of marine raw materials in the diet with soybean meal and beef tallow on growth and product quality of European eel (Anguilla anguilla ). Based on growth, feed efficiency and chemical composition, soybean meal was found to be an unsuitable ingredient for eel diets as a substitute for fishmeal (25% on a protein basis), probably because of the low digestibility of its carbohydrate content. However, beef tallow can be used to replace 50% of fish oil without reduction in growth, provided that digestible carbohydrates are present in the diet. No major effects of protein and lipid sources in the diet were found on fillet chemical composition. Sensory analysis revealed no significant differences between fish fed the control and the experimental diets, with the exception of salty taste which was significantly higher in fish fed combined soybean meal and beef tallow compared with fish fed the control diet.

The whole-body fatty acid balance method : examples of its potential for feed efficiency and product quality optimisation in fish and poultry

Dietary lipids and fatty acids are not only fundamental in determining animal performance, but also determine the eating qualities of animal products. Several methods have been used to quantify fatty acid metabolism but most involve expensive in vitro approaches that are not suitable for most laboratories. Furthermore, there is considerable variation between methods with regard to enzyme activity, which makes comparison of results between studies difficult. The recently developed whole-body fatty acid balance method (WBFABM) is a simple and reliable in vivo method for assessing fatty acid metabolism, including rates of liponeogenesis and de novo fatty acid production, β-oxidation of fatty acids and bioconversion (elongation and desaturation) of fatty acids to long-chain polyunsaturated fatty acids. Initially developed for implementation with a fish model, the WBFABM has proven to be a simple and effective method that can be used in any laboratory equipped with a gas chromatography unit. Since its development, it has been used in several farmed finfish feeding trials and in broiler chicken feeding trials. The WBFABM is currently used at research institutions worldwide and its use is increasing in popularity among animal scientists. With this method, it is possible to track the fate of individual dietary fatty acids within the body. The WBFABM could contribute significantly to information generated by animal feeding trials.

State-owned enterprises, competition and product quality

We consider a general oligopoly model with consumer surplus moderated quantity competition among state-owned enterprises (SOEs), where the SOEs employ workers who are members of the state-owned worker union and produce differentiated products. We show that increasing the number of SOEs would lead to an outcome in which these enterprises choose a lower level of product quality and this, in turn, results in welfare losses for the society, depending on the degree of substitutability. Our findings are consistent with the evidence from China and uncovers important linkages that exist between worker union, product quality and competition, and that have mostly been ignored in the industrial organisation, trade and development literature.

Quality testing and product rationing by input suppliers

Quality testing by suppliers has significant ramifications for downstream supply chain participants and retail consumers. This article focuses on such implications accounting for the fact that suppliers often enjoy discretion in quality testing and reporting. Under a discretionary testing and reporting environment, we show that a supplier can improve the market's perception of product quality by engaging in self-imposed production cuts. Production cuts dampen supplier incentives to engage in excessive quality testing, putting the supplier and the market on a more equal information footing. This reduces the market's need to skeptically discount product quality to protect itself. The improved market perception, then, reduces quality testing demand, introducing cost savings. The result that costly production cuts can improve quality perceptions indicates that the groundwork for influencing market perceptions may have to be laid upfront, even prior to acquiring private information, providing a contrast to routine signaling models.

The impact of consumer ethnocentrism and country of origin sub-components for high involvement products on young Chinese consumers' product assessments

Purpose – The purpose of this paper is to examine the effect of country of origin (COO) sub-components (i.e. design, assembly and parts), as well as the extent to which consumer ethnocentrism tendencies interact with these COO sub-components for young Chinese consumers with regards to product quality assessments and purchase intentions.

Design/methodology/approach – A 2?×?2?×?2 factorial experimental design was used to examine the effects of the three sub-components of COO with two levels of sourcing location – Home (China) and Foreign (Germany), for two high involvement products (an automobile and a digital camera). Chinese students in China represented the sample of 272 respondents. MANOVA was used to examine the direct effects and interactions of the three COO components, as well as ethnocentrism, measured using the CETSCALE.

Findings – It was found that the three COO sub-components did not influence young Chinese consumers’ evaluation of product quality or purchase intentions. In addition, consumers’ level of ethnocentrism also did not have a direct effect on perceived product quality or purchase intentions. There was only one statistically significant interaction effect between ethnocentrism and country of parts for one of the two products. As such, COO dimensions and young Chinese consumers’ ethnocentrism appears to have limited influence on their assessments of product quality or purchase intentions. This may occur because young Chinese consumers perceive that hybrid products are the norm for high involvement products in China as these products are all these consumers have experienced.

Originality/value – The findings of this research dispute the commonly held belief and evidence that sub-components of COO have an impact on the perceptions of product quality and purchase intentions. Young Chinese consumers may be different to consumers from western countries because they have been extensively exposed to hybrid products. Given the size and growth potential of China, young Chinese are an important, under-researched segment within the Chinese market.

Product evaluation and purchase intention : impact of country-of-origin and experience in living in a foreign country

This article presents the results of an experiment that compares the perceptions of product quality and purchase intentions of foreign versus home products by Chinese consumers who have had experience living in a western society compared to those living in China. The results indicate experience does affect purchase likelihood for home versus foreign products. Chinese, generally, find country of parts as the best cue in evaluating product quality and purchase intentions.

Dynamic advertising under vertical product differentiation

We investigate a dynamic advertising model where product quality is endogenous. In the differential game between single-product firms, there exists a parameter range where the low-quality firm uses a more efficient advertising technology and earns higher profits than the rival. Moreover, we show that equilibrium qualities are the same under duopoly, multiproduct monopoly, and social planning, the only distortion being concerned with the output levels.

Technology transfer, quality standards, and North–South trade

This paper examines the economic consequences of technology transfer through licensing in a North–South model of vertical product differentiation, based on a product-line pricing framework. With its limited technological expertise, the southern firm cannot export to the northern market without purchasing the northern firm's “clean” and low-cost technology. With North–South cost-asymmetry, we conclude that the transfer of technology through licensing promotes trade, product variety and improves global welfare. However, without government intervention, the private levels of product quality chosen by firms tend to be lower than the socially optimal levels. This finding helps to explain why developed countries often set quality standards for imported foreign products.

Ranking of fibre-reinforced composite plate surface finish quality by wavelet texture analysis

In the automotive and other industries, the visual appearance of external surfaces is a key factor in perceived product quality. Traditionally, the quality of an automotive surface finish has been judged by expert human auditors. A set of 17 fibre-reinforced composite plates was previously manufactured to have a range of surface finish qualities and these plates were ranked by three expert observers and also optically digitally imaged. Following validation of the previous rankings, the wavelet texture analysis (WTA) technique was applied to the digital photographs to derive an instrumental measure of surface finish quality based on the panel images. The rank correlation between the human expert surface finish quality ratings and those from the W TA image analysis process was found to be positive, large and statistically significant. This finding indicates that WTA could form the basis of an inexpensive and practical instrumental method for the ranking of fibre-reinforced composite surface finish quality.

Customer repurchase intention: a general structural equation model

This paper develops a general service sector model of repurchase intention from the consumer theory literature. A key contribution of the structural equation model is the incorporation of customer perceptions of equity and value and customer brand preference into an integrated repurchase intention analysis. The model describes the extent to which customer repurchase intention is influenced by seven important factors – service quality, equity and value, customer satisfaction, past loyalty, expected switching cost and brand preference. The general model is applied to customers of comprehensive car insurance and personal superannuation services. The analysis finds that although perceived quality does not directly affect customer satisfaction, it does so indirectly via customer equity and value perceptions. The study also finds that past purchase loyalty is not directly related to customer satisfaction or current brand preference and that brand preference is an intervening factor between customer satisfaction and repurchase intention. The main factor influencing brand preference was perceived value with customer satisfaction and expected switching cost having less influence.