There are numerous multiple-cue studies of the impact of price and/or other cues on perceived quality. However, there is virtually no reported empirical evidence that identifies the impact of comparative advertising on perceived quality. This paper reports the results of an experiment that examined the impact of type of advertisement (i.e., direct-comparative and non-comparative), price, and source credibility on perceived quality of a new brand. Results suggest that a direct-comparative advertisement has a more positive effect on perceived quality of a new brand than a non-comparative advertisement. In addition, an interaction effect of price and source credibility on perceived quality was found.
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