Economic theory confirmed by empirical work states that customers' value perceptions result from their perceptions of overall quality and price competitiveness (Gale & Buzzell, 1987; Gale, 1994; Chang & Wildt, 1994). While several researchers (Morritt, 1999; Rust, Zeithaml & Lemon, 2000) have proposed extending the basic model to include constructs such as customer satisfaction and brand image, the theoretical roles of these additional constructs have not been clearly defined.
This research examined the effect of brand image on customers' post-purchase perceptions of overall quality. Other research suggested that prior to purchase, customers use brand image as an "extrinsic cue" or pre-purchase surrogate for quality (Zeithaml, 1988, p. 6; Rust, Zeithaml & Lemon, 2000). This suggested two possibilities: first, when measured post-purchase, the construct of brand image might be redundant with the construct of overall quality; second, brand image might be related to overall quality via assimilation-contrast theory, inasmuch as brand image embodies customers' quality expectations (Oliver, 1997).
Data from telephone surveys of purchase decision-makers for business telecommunications services captured their perceptions of value, price, overall quality and its attributes, and their images of various brands. The survey captured brand-image ratings for the vendor that a business actually used in 342 cases. Analyses were performed with and without multivariate outliers.
Exploratory Factor Analysis indicated a one-factor solution, suggesting the possibility that brand image and overall quality were redundant. Redundancy Analyses performed using Partial Least Squares (PLS), however, indicated that the constructs were not redundant. The closeness of the results to the criterion for redundancy (Chin, 1998), combined with the fact that the criterion itself is not a formal statistical test led to a Confirmatory Factor Analyses (CFA). A two-factor model better fit the data, supporting the PLS results. These two factors, however, were highly correlated.
Hierarchical regression revealed that brand image had a small, statistically significant effect on overall quality above and beyond the performance-based quality attributes. Accordingly, the post-purchase impact of brand image is that of an assimilation agent, which "pulls" post-purchase performance evaluations in the direction of the expectations embodied in the brand image.
