Perceived Advertising Expense and Expected Product ...

Money Talks: Perceived Advertising Expense and Expected Product Quality AMNA KIRMANI PETER WRIGHT* Does the perceived expense of a new product's advertising campaign influence expectations about the product's quaiity? This articie conceptualizes the process by vtrhich perceived advertising expense acts as a cue to quaiity. Results from six expen'ments indicate that under some conditions, knowledge of cost-related campaign elements can evoke advertising expense inferences that influence quality predictions, and these inferences may be spontaneous.

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he perceived expense of a new product's advertising campaign can influence consumers' expectations about the product's quality. In judging product quality, consumers use intrinsic cues—information about quality-related product features—as well as extrinsic cues, such as price or brand name (Olson 1977). We explore the notion that perceived advertising expense operates as an extrinsic quality cue under some conditions. The process by which perceived advertising expense affects quality expectations involves two information processing activities. A consumer must first encode information that conveys perceived advertising expense directly or by association; this belief about advertising expense must, in turn, evoke a tentative product quality association or inference. These activities may involve conscious reasoning or, like other familiar cognitive activities, may have become automatized over time. The impact of perceived advertising expense should be strongest when other cues are unavailable, cursorily processed, ambiguous, or irrelevant (Olson 1977; ZeithamI 1988). Its impact should be weakest when people deeply process relevant information about a new product's features. Basic questions that arise regarding the process by which perceived advertising expense influences quality expectations concern why and when people might use perceived expense as a cue to a new product's quality. We identify several possible explanations:

(1) perceived advertising expense is an indicator of an underlying variable called perceived marketing effort, which is a clue to the marketer's confidence in product quality; (2) consumers simply perceive a correlation between advertising expense and quality in some markets; and (3) perceived advertising expense is a sign ofa firm's financial strength, probable social acceptance, or some other factor that defines quality in some markets. A further issue is whether meaningful information about advertising expense is available to consumers. Beliefs about advertising expense may develop from explicit statements in advertising content; from nonadvertising sources, such as press announcements or sales presentations; or from personal observation of an advertising campaign's media and production elements. This article focuses on when and why perceived advertising expense influences quality expectations once it has caught consumers' attention. Although we discuss the availability of information on expense to consumers, its empirical exploration is left for future research.

PERCEIVED ADVERTISING EXPENSE AND EXPECTED PRODUCT QUALITY Perceived Advertising Expense, Marketing Effort, and Marketers' Motivations We propose that perceived advertising expense is an indication of an underlying variable called perceived advertising effort, which people typically interpret as a sign of a marketer's confidence in a new product's success. When people believe success is a function of product quality, high effort becomes a credible signal that managers believe the product offers distinctive quality. A high display of effort (e.g.,

* Amna Kirmani is Assistant Professor of Marketing, Fuqua School of Business, Duke University, Durham, NC 27706. Peter Wright is Professor of Marketing, Graduate School of Business, Stanford University, Stanford, CA 94305. This research was supported by grants from the Marketing Science Institute and the Stanford Graduate School of Business. The authors wish to thank Jim Bettman, Julie Edell, Kevin Lane Keller, John Payne, Rick Staelin, and three anonymous JCR reviewers for their suggestions. 344

© JOURNAL OF CONSUMER RESEARCH • Vol. 16 • December 1989

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"putting your money where your mouth is") encourages people to expect a high quality product. Perceived effort is judged in terms of the marketer's investment of such scarce resources as money, managerial time and thought, travel time, and so on. Spending more than other brands in the product category or spending large amounts relative to the company's available resources would be considered effortful. "Mortgaging the company's future" on a new product introduction represents more effort than a "drop in the bucket." Advertising effort is one cue to overall marketing effort. Other cues may be the effort invested in training salespeople to promote the new product, the trouble to which salespeople go to make a presentation, or the effort invested to create a distribution system for the new product. Although the general concept of marketing effort is discussed by some economists (e.g., Klein and Lefiler 1981), it has not been discussed as a psychological mediator of response to persuasion campaigns by social psychologists or communication theorists. Perceived effort is, however, an important variable in several attribution theory scenarios, which depict cause-and-effect reasoning related to what we are proposing. For instance, according to self-perception theory (Bem 1972), people interpret the effort they expend on a task as a sign of their true attitude toward that task; thus, they reason that "if I invested a lot of effort, the task must have had high expected value to me." In a different context, Weiner's (1986) research indicates that perceived effort is a prominent factor in people's interpretations of someone else's success or failure on a task (high effort promotes success; low effort undermines it). Moreover, effort is seen as a factor that people control internally and vary situationally. We suggest that people naturally make an attribution in marketing contexts consistent with the attributions cited. People may think that "if a marketer invests great effort in presenting a new product, it is because s/he believes strongly that it is a high quality product with extraordinary sales potential." We propose that this is most people's default attribution. However, as with other causal attributions, this default attribution is undermined if there is a salient reason to discount it (Kelley 1973). These undermining reasons define conditional boundaries on the relationship between perceived advertising expense and expected product quality. We identify four types of possible undermines: desperation, immunity, no pain, and basic premise. The desperation undermine occurs when the amount of expenditure seems excessive or more than reasonably warranted to convey product benefits. Excessiveness may lead to an impression of desperation rather than confidence as the company's underlying motivation. Either the overall campaign or a specific

expenditure tactic, such as heavy ad repetition, may seem excessive. The immunity undermine occurs when the consumer realizes that the marketer's payoff remains high even if the advertised product's benefits are overstated. Such a situation exists when consumers believe that judging a new product's quality before purchase is difficult and that the advertiser is interested only in getting initial trial, not repeat purchase (e.g., a fly-by-night company with no reputational stake or a product with low word-of-mouth; Nelson 1974). A third type of undermine, no pain, is the belief that although expenditures may be high, they involve little risk. For instance, they may represent only a small portion of the overall budget. Finally, the basic premise undermine occurs when a consumer receives information, that directly casts doubt on the basic premise of the default attribution in the situation at hand, i.e., the premise that marketers invest heavily in advertising new products they believe will produce extraordinary long-term sales (Nelson 1974). The basic premise undermine occurs if a consumer learns (1) that in the current case the advertiser at issue did not decide advertising expenditures based on the product's long-term sales potential, or (2) that in the industry at issue there is no relationship between perceived advertising expense and new product quality.

Perceived Correlation Effort is a plausible explanation of why perceived advertising expense influences quality expectations, but it is not the only one. It could be that consumers have merely observed that for some products, high advertising expense is associated with better quality in the marketplace. Economists' analyses indicate that such markets might exist (Milgrom and Roberts 1986; Nelson 1974), although whether and when they do is unclear (Archibald, Haulman, and Moody 1983; Phillips, Chang, and Buzzell 1983; Tellis and Fornell 1988). Even if an actual correlation does not exist, information processing biases might favor the perception of such a correlation. Atypically expensive campaigns remain memorable and, on average, create higher pre-trial quality expectations than modest campaigns, via direct communication effects. Trial can reinforce this preconception or provide no added quality insights (Hoch and Deighton 1989). In such cases, the opportunity is ripe for a positive expensequality association to occur. Further, post-purchase selective perception tendencies (Ehrlich et al. 1957) may favor such a belief. If, after buying a product (typically, one thought to be high in quality), ads for it become salient, that could heighten the sense of a high frequency, multimedia campaign, leading over time to a positive expense-quality association.

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Inferences About Market-Specific Quality Factors In some markets, high perceived advertising expense may directly imply a product attribute relevant to consumers' quality judgments. It may imply financial strength, which is an important quality determinant in markets where after-sale services and innovations are vital and industry shakeouts occur. It may imply that the product will have rapid social acceptance, which can be a positive or a negative quality ingredient in particular product markets.

Summary Three explanations for a relationship between perceived advertising expense and expected quality have been identified: (1) general attributional logic about marketers' motives and resource allocation decisions, (2) market-specific environmental perceptions, and (3) market-specific, quality-related attributes. The first of these is the most interesting possibility and the one we pursue most directly in this research.

AVAILABILITY OF INFORMATION ABOUT CAMPAIGN EXPENSE In discussing how consumers might encounter information about advertising expenditures, our goal is to point out how beliefs about advertising expense may arise, not to argue that such beliefs always arise or are accessed. Consumers can learn about a campaign's media and production elements through direct observation of the advertising campaign, through ad content that mentions elements, or through news stories and product announcements. Knowledge of campaign elements may evoke an expense association; alternatively, ad content or news stories may explicitly mention a campaign element's expense or a campaign's overall expense. Advertisers may mention campaign elements in ad texts or press releases for reasons such as cuing or attention getting (Edell and Keller 1989). For example, ads in one medium may cite upcoming or prior ads in a different medium that are part of the same campaign. Product announcements directed at consumers for publicity (Eliashberg and Robertson 1988) may mention a distinctive element of an introductory campaign, such as sponsorship ofa TV special, to create interest. News stories may draw attention to expensive campaigns, such as Apple's Super Bowl ad introducing the Macintosh computer. Consumers can also directly observe a campaign's expense-related production elements (e.g., use ofa celebrity versus an unknown actor or homemaker, a large cast, special effects) or its expense-related media elements (e.g., TV versus magazine; a TV special versus a regular TV show; an atypically long, multipage

THE JOURNAL OF CONSUMER RESEARCH

magazine insert). People are adept at noting and recalling event frequencies, such as how many ads they have seen for a product (Hasher and Zacks 1984; Wallace and Hasher 1987). All consumers will not, of course, recognize the expense associated with every campaign element that catches their attention. Whether consumers have access in memory to such associations is a basic question for initial research. That people harbor expense associations seems plausible. One needs little sophistication to appreciate what makes advertising campaigns expensive, i.e., it costs more to talk longer and more often to more people, to produce more versions, to use costly equipment or personnel, and so on. People need know nothing about precise costs to know if a campaign seems atypically expensive. This rough judgment might be based on only one salient element (e.g., an eight-page ad is perceived as atypically long and presumed atypically expensive) or on several elements. Direct exposure to and observation ofa campaign's elements may, of course, stimulate reactions other than expense associations. For one thing, exposure to campaign elements can directly affect message processing. For example, longer (more expensive) texts or repeated (more expensive) transmissions may increase attention to or elaboration of the message claims about product attributes. If so, these message processing effects may interfere with the generation of expense associations or make message claims about product attributes more salient as a quality cue, reducing the impact of advertising expense per se. Moreover, campaign elements may evoke other types of associations that interfere with expense associations or whose effects on expected quality are confounded with those derived from beliefs about expense. For example, a celebrity may evoke strong emotional reactions related to his or her personality or thoughts about the intended target audience for the product. These confounding inferences must be considered in conducting research on perceived advertise ing expense effects.

RESEARCH STRATEGY In six experiments, we studied whether people who learn about an ad campaign's elements or expense from external sources let that influence their product quality expectations. In the first four experiments, we examined whether knowledge of campaign elements influences quality expectations and advertising expense perceptions. No previous evidence on this basic issue existed. In the last two experiments, we sought insight on the underlying process by examining whether undermines eliminated the key attribution. We did not examine the situation in which people develop beliefs about campaign elements from observing a campaign's elements over time. We separated the issue of how beliefs about advertising expense develop from that of how perceived expense affects

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quality expectations. If we find that perceived advertising expense does indeed affect perceived quality, the first issue becomes relevant.

EXPERIMENTS 1 AND 2 In Experiments 1 and 2 (El, E2), subjects read ads that described a new product's attributes, read a description of the upcoming ad campaign's media elements (El) or production elements (E2), then predicted the product's quality and reported quality-related thoughts. A priori, it was plausible that only the product attributes would affect perceived quality. Seven campaign elements were varied in a cross-subject design. We had no hypotheses about which elements serve as quality cues. The seven elements had only one apparent similarity—they were all expense related. If just one or two elements affected quality expectations, this might be due to associations other than perceived advertising expense. If several did, however, the parsimonious explanation would be that perceived expense was a mediator.

Methodology Subjects. The subjects were 285 women, ages 1865, representing 15 percent of the clerical and administrative staff at an organization engaged in educational, health care, recreational, housing, and research services. More than half were college graduates. Sequence of Events. Each subject was randomly assigned to both an El treatment and an E2 treatment. The cross-subject manipulations were accomplished by varying the campaign descriptions in the subjects' materials. The stimulus ads were embedded in a large set of ads. A subject read five ads, of which the third and fifth were ads for a new jogging shoe. Then she read a brief description of the upcoming jogging shoe campaign's media elements. Then she rated product quality and wrote quality-related thoughts (El). About 25 minutes later, after reading other ads, she read two ads for a new sunscreen product and a description of the campaign's ad production elements, then rated quality and wrote quality-related thoughts (E2). El and E2 each lasted only a few minutes. The Stimulus Ads. The stimulus ads were modifications of actual magazine ads. Headline and text were 75-110 words long and used concrete language to describe product features: in El, the shoe's contoured collar, insole, shock-absorber pads, durability, and style; in E2, the sunscreen's exclusive ingredient that enabled a faster tan. The brands were fictitious. The Descriptions of Campaign Elements. In E1, the three media elements manipulated were vehicle, frequency, and length. The four vehicle levels were:

"on TV specials like the Super Bowl and the Academy Awards show"; "on TV shows like 'The Bill Cosby Show,' 'Dynasty,' 'Cheers,' and 'Miami Vice' "; "on TV shows like 'Mr. Belvedere,' 'Airwolf,' 'The Equalizer,' and 'Punky Brewster' "; and "in magazines like Family Circle, People, Newsweek, and TV Guide" (two high cost and two lower cost vehicles). The two frequency levels were: "shown many times—most people who watch those shows (read those magazines) will see a Panda ad 10-15 times during the threemonth campaign" versus "shown only a few times— most people who watch those shows (read those magazines) will see a Panda ad once during the threemonth campaign." The two length levels were: "60second TV ads (typical TV ads are 30 seconds)" or "two-page magazine ads" versus "30-second TV ads (typical TV ads are 30 seconds)" or "half-page magazine ads." In E2, four production elements were varied: staging, spokesperson, cast size, and pool size. Staging levels were: "filmed at an exotic European location; special laser visual effects are used" versus "filmed at a TV studio; no special visual effects are used." The spokespeople were: "a TV or movie star like Linda Evans or Sally Field" versus "a female homemaker/ worker." The cast sizes were: "two TV or movie stars (female homemaker/workers) and a cast of 70 people" versus "one TV or movie star (one female homemaker/worker)." The pool sizes were: "uses 10 different ads" versus "uses one ad." Dependent Measures. The quality rating ("From what the ads said and what you know about the ad campaign, please rate the likely quality of .") was made on a six-point scale ("extremely low" to "extremely high"). The thought verbalization measure asked, "What aspects of the ad campaign or the advertising message influenced your impression of the product's likely quality?"

Results To analyze how media elements affected quality ratings (E1), we ran 2 X 2 X 2 ANOVAs, with the vehicle factor collapsed into two levels ("large audience" versus "smaller audience"). To examine mediators, we used as covariates "cost thoughts" (explicitly cited campaign expense/effort) and "feature thoughts" (cited features/benefits from the ads). Judges coded these thoughts as positive or negative quality cues, achieving high interjudge reliability. Using feature thoughts as a covariate, the three main effects were significant: vehicle (A^LOW = 4.04, ^HIGH = 4.31; /;(1,251) = 7.5, p < 0.01); length (^LOW = 4.10, ûiGH = 4.25; /='(1,251) = 4.1, p < 0.05); frequency (^Low = 4.31, XHIGH = 4.04; F( 1,251) = 5.2, p < 0.05). The vehicle and length effects showed that more costly campaigns were associated with higher quality ratings; the frequency effect showed the oppo-


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site. The triple interaction was also significant (/=•( 1,251) = 5.7, p < 0.05), indicating that subjects predicted higher than average quality only if more than one element implied that. The treatments explained 7 percent of the variance in quality ratings. Next, we reran the ANOVA substituting cost thoughts as the covariate. If cost-related thinking mediated the treatment effects and the measure of cost thoughts was valid, effects significant in the first ANOVA could weaken (Baron and Kenney 1986; Wright 1980). The length and interaction effects became insignificant, suggesting that cost thinking causally mediated those effects. The other effects may not have weakened because they were not caused by cost-related thinking or because the verbalizations were incomplete. To analyze production effects (E2), 2 X 2 X 2 X 2 ANOVAs were run. Here, an added covariate, product category attitude, was used. This was a two-level variable coded from verbalizations. With feature thoughts (and category attitude) as qovariates, the spokesperson effect (A'LOW = 3.63, A'HIGH = 3.85; F{ 1,260) = 5.9, p < 0.05) and the staging by cast interaction (F( 1,260) = 4.2, p < 0.05) were significant. A celebrity spokesperson or the combination of elaborate staging and a large cast caused high quality expectations. The treatments explained 6 percent of the variance in quality ratings. The ANOVA was repeated substituting cost thoughts as the covariate. The spokesperson effect disappeared, consistent with the hypothesis that cost associations were a causal mediator.

Discussion The procedure made intrinsic quality cues and campaign elements salient, but did not guarantee a perceived advertising expense/quality inference. Concrete information on product benefits was first made salient, and the cost of campaign elements was not revealed. If subjects did not access cost associations or use those as quality cues, the quality ratings would have reflected only the product features, yielding no treatment effects. The quality measure may have drawn attention to the campaign elements. If so, and the El measure's wording increased attention to the campaign elements as cues, the E2 data should reflect this. However, they did not; the proportion of thoughts about campaign elements or costs remained constant, and the El data gave clearer evidence of inferences based on advertising expense. Nevertheless, these caveats argue for prudent interpretations. Six of the seven campaign elements influenced expected quality, suggesting that salient elements can affect quality perceptions. The analyses using the cost thoughts suggested that those thoughts could have acted as causal mediators. Whether similar effects occur under different conditions of cue sa^ lience is a topic for future research.

Explaining the effects of campaign elements in terms of perceived advertising expense is more plausible and parsimonious than evoking non-expense mediators, and the order of stimuli ruled out messageprocessing effects. Moreover, the treatment effects occurred even with feature thoughts as a covariate.

EXPERIMENTS 3 AND 4 In El and E2, cost perceptions were not measured to avoid making them salient. In Experiments 3 and 4 (E3 and E4), we returned to the same subjects to measure their perceptions of campaign element costs. No prior evidence on awareness of costs existed, and parallel effects on quality expectations and perceived costs would lend support to the role of perceived expense as a mediator.

Methodology E3 and E4 were conducted by mail three to four weeks after El and E2. Subjects read a media element scenario from El, reported its perceived cost (E3), then read a production scenario from E2 and reported its perceived cost (E4). The measure was worded: "We know you aren't an expert on advertising. But, in your opinion, will the campaign described be more or less costly to the manufacturer than other campaigns that introduce new sports clothing or equipment?" (". . . will the TV ad described be more or less costly to make than other TV ads for cosmetic products or suncare products?"). Ratings were made on a seven-point scale ("much lower than average" to "much higher than average"), or subjects checked "I have no idea at all about this."

Results About 85 percent of the 205 respondents reported advertising expense perceptions for media elements in E3. The vehicle effect (.YLOW = 4.33, XHIGH = 6.0; = 61.1^/7 < 0.001) and frequency effect ( L o = 4.98; XH.GH = 5.48; F{\,\61) = \\.\, p < 0.001) were significant, explaining 30 percent of the variance in cost perceptions. These effects were also significant in El, consistent with a mediating role for perceived advertising expense. People thought that large-audience vehicles cost more and implied higher quality. They thought high frequency cost more but implied lower quality, suggesting that high frequency seemed excessive and evoked a desperation undermine. In E4, 96 percent of the subjects reported advertising expense perceptions for ad production elements. There were thre^ significant main effects: staging (XLOW = 4.43, XHIGH =_6.O9; /=-(!,182) = 79.5, p < 0.001), spokesperson (XLOW = 4.55, Xnxcn = 5^96; F(l,182)_= 58.8, p < 0.001), and cast size (XLOW = 5.03, XH.GH = 5.63; F ( 1,182) = 5.2, /7 < 0.05). Elab-

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orate staging, a celebrity spokesperson, and a large cast seemed more costly. There were also four interaction effects: staging by spokesperson (F(l,182) = 18.1, ;? < 0.001); staging by cast size (F(l,182) = 9.5, p < 0.01); staging by cast size by spokesperson (/=•( 1,182) = 8.0, p < 0.01); staging by cast size by pool size (E{\,\i2) = 5.7, p < 0.05). The treatments explained 53 percent of the variance in cost perceptions. The three production elements that influenced expected quality in E2 caused parallel effects on cost perceptions. Although some cost perception effects were not paralleled in the quality data, this may simply mean that subjects did not access or use all available cost perceptions in predicting product quality. The specific patterns of the interaction effects were not of central concern.

Discussion E3 and E4 provide some evidence that subjects can distinguish between expensive and less expensive campaign elements. Some of the effects paralleled the effects on quality from El and E2. One issue is whether the wording of the campaign scenarios may have seemed suggestive; e.g., long ads were distinguished by the phrase "typical TV ads are 30 seconds;" low frequency was characterized by "only" one exposure; and the phrase "no special effects are used" represented simple staging. However, despite the wording, there was no effect of length on perceived costs, and three factors (vehicle, spokesperson, cast size) that had no questionable wording did have effects. Thus, while some results may have been somewhat dependent on wording, others were not.

EXPERIMENT 5 El and E3 showed that subjects believed numerous ad transmissions to be more costly than a single one, but they associated numerous transmissions with a lower quality product. This suggested that the desperation undermine was operating; i.e., that higher campaign expenses may sometimes be perceived as excessive, signalling a lack of managerial faith in the product's actual merits. In Experiment 5 (E5), we examined this effect more directly. Actual cost information was embedded in a news story. The hypothesis was that quality ratings would rise steadily as overall campaign outlays moved from below average (for the category) to average to above average, then decrease once the outlay became exorbitant.

Methodology Subjects were an independent sample of 214 women from the same population as the previous experiments. They received a questionnaire in which was embedded a magazine article that described the introduction ofa new athletic shoe. The 160-word ar-

ticle provided a number of possible intrinsic and extrinsic quality cues in addition to information about the introductory advertising campaign. The article described the shoe's construction and appearance; said it would be priced competitively with its three major competitors, made by Nike, Reebok, and New Balance; and stated that it would be available in sports shops and department stores. It also described some elements of the advertising campaign (media, ad length, copy) and gave the campaign's expense as a dollar figure. The information about campaign expense was varied experimentally; the other information was constant for all subjects. In a cross-subject design, advertising costs were varied at four levels ($2 million, $ 10 million, $20 million, $40 million). To provide a context, the article stated that "Reebok, Nike, and New Balance spend an average of about $ 10 million on each new product advertising campaign." Therefore, the $2 million condition represented low costs; the $ 10 million condition, average costs; the $20 million condition, high costs; and the $40 million condition, very high (possibly excessive) costs. After reading the article, subjects were asked to indicate the likely quality of the shoe discussed in the article, on a nine-point scale with endpoints "much higher than average" and "much lower than average."

Results and Discussion ANOVA revealed a significant main effect_of cost on qualify (A'TWO = 5.39, ^TEN = 5.67, ^TWENTY = 6.16, XFORTY = 5.71; F(3,210) = 3.59, p = 0.015). The quadratic trend was significant {F = 3.83, p < 0.05), indicating an inverted-U relationship between costs and perceived quality. Cost explained 6 percent of the variance in quality ratings. Compared to ratings in the high cost condition, quality ratings were significantly lower in the low cost condition {p < 0.001) and marginally lower in the very high cost condition (/? < 0.10). The data are consistent with the hypothesis that a desperation undermine effect occurred. Hence, perception that advertising costs were atypically high, but not so high as to seem excessive, was associated with an inference of a higher quality product. In this experiment, cost information was presented explicitly and was referenced to other companies' spending practices. However, cost information was embedded amid numerous other quality indicators that were equally easy to use. As before, it is impossible to compare the cost cue's relative salience here to that in other environments. Making costs salient should not, however, have guaranteed that costs would be used as a quality cue, nor that the relationship would show the predicted desperation undermine effect. Finally, in E5, advertising costs—not campaign elements—were the manipulated stimulus. Hence, the


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effects on quality expectations could not be ascribed to noti-cost associatiotis to campaign elements.

EXPERIMENT 6 Earlier, we identified several different types of undermines that may affect people's attributions about advertising expenditures and product quality. El and E5 provided some evidence that a desperation undermine effect had occurred due to the perceived excessiveness of expenditures. In Experiment 6 (E6), we sought to test the proposed process more directly, by determining whether the undermines eliminated the "high advertising expense implies high expected quality" effect. We compared the quality expectations of three groups of subjects: (I) those who knew otily about a new product's costly ad campaign, (2) those who knew about the campaign and had a possible undermine made salient to them, and (3) those who knew about the campaign and had a key belief about the default attribution affirmed. If our attributional process model is valid, the undermine group (Group 2) should report lower quality expectations than the default attribution group (Group 1). This is one method of testing for mediators. Moreover, the key belief affirmed group (Group 3) should report quality expectations that are identical to those of the default attribution group. Such priming is one method for testing spontaneous inferences (Bassili and Smith 1986).

Methodology Subjects were 127 women from the same population as in EI-E5. They read a magazine ad announcing a new line of take-home refrigerated entrees, then predicted that product's likely quality. The ad first described the product's taste, ingredients, preparation time and method, and price range. The last paragraph told consumers about the upcoming advertising campaign, as follows: "To tell you more about Five Chefs entrees, we've filmed a dozeti TV ads in cities all over America. We'll be showing you these ads all during the summer and fall, on many of your favorite TV shows. And we're running special 10-page ads in a number of popular magazines. Watch for our ads! Five Chefs Take-Home Refrigerated Entrees—Coming This Summer!" Television advertising for such products is rare, so the campaign's costs should seem atypical. Subjects were randomly assigned to an undermine treatment, an affirm treatment, or a control treatment. The treatment manipulations were achieved by varying what subjects read before they read the Five Chefs ad. Undermine Treatment. Subjects in the undermine treatment read one of three messages before reading the ad. All three took the form of news stories.

These messages were meant to undermine the default attribution that the costly Five Chefs campaign implied strong managerial confidence in the new product's quality. They made salient the types of information we've described as a no pain undermine and a basic premise undermine. One news story, headlined "No Link Between Advertising Spending and New Product Quality," reported a study by University of Chicago professors who had examined 200 new product introductions over three years. It reported the finding that there was no relationship between the amount spent on introductory advertising and a product's perceived quality as rated by consumers who eventually bought the product. It quoted one researcher as saying that company managers seem to invest in advertising based on company policies rather than on a product's quality. The other two news stories were product announcements of the type companies provide tiews media. Both began the same way. The headline said, "What's New? Refrigerated Dinner Entrees from American Household Products." The article reported the company's announcement of Five Chefs; described the type of entrees and how they are produced, packaged, and distributed; and quoted a company executive as saying, "This summer, as always, we're introducing a number of different new products." One undermine message continued the quotation as follows: "The higher the typical advertising budgets in a product category, the more we feel we have to spend on advertising one of our new brands. That's what determines how much we'll spend to advertise Five Chefs." Another undermine message continued the quotation differently: "The higher our confidence in a new product's quality and consumer appeal, the more we back it with advertising. The Five Chefs campaign is getting about 4 percent of our total advertising budget for new products this summer." The Affirm Treatment. Subjects in the affirm treatment read one of two news stories, similar to those in the undermine treatment, which affirmed the default attribution. One of these, headlined "Link Between Advertising Spending and New Product Quality," mimicked the news story about the Chicago professors' study, but changed the reported finding. The other was identical to the undermine message that announced the Five Chefs products except for the final quotation; this version said, "The higher our confidence in a new product's quality and consumer appeal, the more we back it with advertising. The Five Chefs campaign is getting the lion's share of our total advertising budget for new products this summer— about 70 percent of it, in fact." The Control Treatment. Subjects in the control treatment either (1) read no news article before reading the Five Chefs ad or (2) read only the first part of the article announcing the Five Chefs product, ex-


eluding the content that comprised the undermine or affirm manipulations. Dependent Measures. After reading the stimulus ad, subjects rated the product's expected quality (QUALITY) on a seven-point scale ("much lower quality/much higher quality"). The question was, "Compared to other packaged and frozen dinner products, what do you guess is the likely quality of the Five Chefs entrees?" On the next page, perceptions of managerial confidence (CONFIDENCE) were measured on a four-point scale from "extremely confident" to "not at all confident" by asking, "Does the company behind Five Chefs seem confident about the product's quality and appeal?" On the third page, two measures of perceived advertising effort were taken. One question (COST) asked, "How expensive does the ad campaign for Five Chefs seem, compared to other campaigns for packaged or frozen dinners?" (seven-point scale, "much more expensive/much less expensive"). The second (EXCESS) asked, "Does the Five Chefs campaign seem overly extravagant, i.e., spending more on advertising than seems reasonable for a new packaged or frozen dinner product?" (yes/ no). On the fourth page, beliefs about the link between advertising spending and product quality (BELIEF) were measured. Subjects were asked to check one of the following statements: "I believe that companies typically spend more to advertise new products they think will have high quality and high consumer appeal"; "I believe the above statement is true only under certain conditions or for certain types of products"; "I don't think there's any connection between how much companies spend to advertise new products and what they think about the product's quality and its consumer appeal"; and "I think companies typically spend more to advertise new products they think will have low quality and low consumer appeal."

Results Manipulation Checks. Subjects in one undermine and one affirm treatment read news stories meant to influence general beliefs about the relationship between perceived advertising expense and new product quality (the BELIEF measure). Subjects in the matching control treatment read no news story before reading the stimulus_ad. The BELIEF ratings in the control treatment {X = 2.77) were higher (p < 0.10) than those in the undermine treatment {X = 2.16), as intended. TheÊLIEF ratings in the control and affirm treatment {X= 3.06) were not significantly different; subjects who were told nothing about the key belief held it as strongly as those given information validating that belief. Subjects in the other undermine and affirm treatments read news stories about the company per se, which were related to beliefs about management's

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confidence in the product's quality (CONFIDENCE). The news story in the matching control treatment contained no information pertinent to that belief. As intended, theÔNFIDENCE ratings in the control treatment {X = 3.67) were significantly highe£ (p < 0.05) than those in the undermine treatments {X = 3.04). The control treatment was not significantly different from the affirm treatment (X = 3.61). Subjects who were told nothing about the company's motivation in allocating resources made the same attribution as those who saw information indicating that high confidence in the new product's quality motivated company spending. In summary, each of the undermine treatments had the intended undermining effect on beliefs hypothesized as key mediators. The affirm treatments had no effect, suggesting that target beliefs were naturally activated even in the absence of any primings. Quality Expectations. According to our theorizing, there should be a positive relationship between COST and QUALITY ratings in the affirm and control conditions, but this relationship should weaken or disappear in the undermine condition. Further, in all conditions there should be a negative relationship between EXCESS ratings and QUALITY ratings, and a positive relationship between CONFIDENCE and QUALITY. These relationships were tested in the following regression model: QUALITY = po + /31 COST + /SzCOST X AFFIRM + jSjCOST X CONTROL + /34EXCESS + jSjCONFIDENCE + e In this model, the base is the undermine condition; AFFIRM = 1 if subjects were in the affirm condition, 0 otherwise; CONTROL = 1 if subjects were in the control condition, 0 otherwise; and EXCESS = 1 if subjects thought the advertising campaign was overly extravagant, 0 otherwise. Thus, /3| indicates the relationship between COST and QUALITY in the undermine treatment; P2 is the difference in the cost-quality relationship between the affirm treatment and the undermine treatment; and p^ is the difference in the cost-quality relationship between the control and undermine treatments. The Table shows the results. The regression was significant (F(5,1O8) = 6.98, p < 0.001), with an adjusted R^ of 0.21. The variables explained one-fifth of the variance in quality ratings. As hypothesized, ^1 was not significant, ^2 arid ^3 were significant, and the difference between 182 and 183 was not significant. That is, subjects' perceptions of campaign expense were positively, and equally, related to their quality expectations in both the control treatment and the affirm treatment, but exposure to the undermine messages destroyed that relationship. Further, as hypothesized, 184 was significant and negative; be-


352 TABLE REGRESSION RESULTS (EXPERIMENT 6) Variable

Coefficient

Standard error

Intercept COST COST X AFFIRM COST X CONTROL EXCESS CONFIDENCE

3.511 .106 .066° .090° -.515" .351"

.072 .035 .037 .184 .120

ity expectations. It seems likely that people often do spontaneously develop quality expectations upon learning about a new product, even when not prompted by a question, but our results do not indicate how often that occurs. In E6, the relationship between perceived advertising expense and expected quality occurred when campaign elements were revealed in an ad's text. Since the campaign elements were constant across conditions, the observed effects could not have been due to noncost-related associations to those elements.

GENERAL DISCUSSION These results provide a basis for future research on lief that the Five Chefs advertising expense was excessive undermined product quality expectations. Finally, as hypothesized, ^5 was significant and positive; belief that the advertiser had high confidence in the product's quality bolstered quality expectations. This pattern of results is consistent with the proposed model of the quality inference process. A less sensitive analysis, which ignored subjects' individualized COST perceptions, was also performed. The mean QUALITY ratings in the three treatments were compared. These were significantly lower in the undermine tj;eatment {Xu = 4.56) than in the control treatment {Xc = 5.2_8; t = 3.59, df= S9,p< 0.001) or affirm treatment {X^ = 5.05; t = 2.64, df = 89, p