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Allied Academies International Conference.Academy of Marketing Studies.Proceedings, 7 (1), 19-24. Retrieved from
Prices of new durable goods are largely determined by manufacturers who control the supply and influence the demand for their products. A brand has value to a manufacturer by increasing the demand for the products within the brand. Prices for used goods, however, are primarily determined by the market. In this paper the influence of brand on the price of used goods is examined. Specifically, a 'brand halo' effect is proposed, in which perceptions of a brand's overall attributes affect pricing beyond the effect of the specific qualities of a particular product within the brand. This 'brand halo' effect is then explored in the used car market. It is found that used car prices are affected by both the reliability of a particular car model and the reliability associated with a brand overall. A brand plays various roles to the consumers, including being a signal of quality and attribute levels, and establishing trust (Keller, 1998). The brand thus can help stimulate the demand for the branded product. Trying to capitalize on the established brands and avoid the expense of launching new ones, manufacturers often introduce brand extensions, that is different products under the same brand name. Consumers' evaluation of the different brand attitudes could be conditioned by their overall impression regarding the brand (Del Rio, Vazquez & Iglesias, 2001). Such influence of the overall impression of the brand name is part to what is known as consumer-based brand equity (Keller, 1998). The halo effect can be combined with the notion of consumer-based brand equity to form a 'brand halo' effect. In the case of a 'brand halo', an individual would evaluate a good based on the level of some attribute generally associated with the brand. This evaluation would supplement or replace the evaluation based on the actual level of the attribute present in the specific model being evaluated. Randle D, Robert P, and William C. (2014). Beyond “halo”: the identification and implications of differential brand effects across global markets", Journal of Consumer Marketing, Vol. 31 Iss: 2, pp.133 144. Retrieved from It is widely accepted among marketing managers and researchers that brands act as a “shorthand device or means of simplification for their [consumers'] product decisions. One way in which brands may play such a role is through a “halo” effect, where the brand name has a consistent impact on a variety of consumer evaluations, even those not directly associated with the brand's positioning or promise of benefits. “Halo” is a theoretically and empirically robust factor that impacts many different types of consumer evaluations. Indeed, recent research demonstrates the impact of halo effects on factors such as global product quality and corporate social responsibility, brand-image associations, brand extensions, and country of origin effects.

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