Consumer’s Local-Global Identity and Price-Quality Association

Previous literature documents multiple factors that influence consumers’ price-quality associations (PQA)—their tendency to use price as an indicator of perceived quality, including prior knowledge (Monroe 2003), product information (Kardes et al. 2004), and cultural background (Lalwani and Shavitt 2013). However, no research has examined the effect of local-global identity on PQA. Extending prior research, we investigate the role of local-global identity in influencing PQA. Individuals whose local identity is salient (‘locals’) are faithful and respectful of local traditions, and identify with local community, whereas those with a salient global identity (‘globals’) favor globalization, and view the world as a “global village” (Ng and Batra 2017). We expect that locals and globals differ in perceived quality difference among brands in the marketplace which, in turn, affects PQA. Suppose the comparison objects are two alarm clocks. When global identity is high (vs. low), individuals focus on standardization and see things as homogeneous and similar to each other, leading to lower perceived quality differences between the alarm clocks. Further, if the brands are perceived as similar in quality, consumers less likely use any cues (e.g., price) to distinguish between them, thereby reducing PQA. Specifically, perceived similarity between themselves and others helps globals iron out the differences across people and drives them to focus not on specific attributes, but rather on “a general way of making sense of the world” (Oyserman 2009, p. 256).