Discuss about the Project Proposal For Pricing strategies.
Pricing strategies are often used by companies for the purpose of selling their products or services at desired prices in the market. The prices are decided for the purpose of maximizing the profitability in comparison to the overall market (Timothy, 2010). In addition, it is often used as a defense in the existing market from the new entrants, to enhance the market share within the market as well as for the purpose of entering in a new market (Woodruff, 2018). The companies are required to consider various factors which include prices offered by the competitors, costs incurred on production as well as distribution, brand positioning of the products among the customers and identifying the demographics of potential buyers (Woodruff, 2018).
On the other hand, brand loyalty is the demonstration between the brand and the customers as well as internal commitment for repurchasing the preferred products or services in future in spite of getting influenced by the situations as well as potential marketing efforts to switch the behaviors of the customers (Chaudhari & Holbrook, 2001). Brand loyalty adds value to the brand equity which is also one of the major asset categories. Moreover, the marketing cost of the product is also affected by brand loyalty (Sullivan, 2018).
Various research studies have been conducted previously in order to study the influence of factors such as usage rates, inventory carrying costs and the majority of loyal customers on promotional strategies which are used by the competing brands (Amine, 2011). The findings of the research studies revealed that the degree of customer loyalty is considered as a significant contributing factor of the customer response towards price promotions due to which, pricing strategies are used by majority of competing brands to the brand loyalties (Montgomery, 2011; Brown, 2008). It indicates that brand loyalty influences the competing brands as well as their pricing strategies for selling their products or services in the market (Raju, Srinivasan, & Lal, 2009).
The purpose of this research is to identify the influence of brand loyalty upon the pricing strategies used by iPhone companies in Australia so that pricing strategies can be adopted taking into consideration the brand loyalty.
The organization of this research is as follows: The Introduction forms Section I of the research proposal which is followed by the Problem Statement, Research Objectives, Justification of the proposed proposal and the expected outcomes. Section II comprises of Conceptual Framework, Research Hypothesis as well as Methodology. Finally, Section III comprises of Organization of the Study, Gantt chart and the Budget required for the completion of research.
Research Objectives/ Questions
From the point of view of marketing of products, brand loyalty is observed as a behavioral construct which relates to the purchase and repurchases behaviors of the customers and it is due to it, that customers possess high intention to continue using a brand in future (Dick & Basu, 2006). It can be stated that brand loyalty is the process of perception as customers tend to buy similar product because of their perception towards the product as superior among all the other options available in the market. That is why, brand loyalty is considered as an indicator used by majority of companies to predict the brand performance outcomes as well as it also helps the companies in promoting certain products or services by identifying the best strategies of pricing through the outcomes (Grabowski & Vernon, 2012). However, brand loyalty has been studies extensively from the point of view of business; the association between brand loyalty and pricing strategies has not been extensively taken into consideration. The decisions regarding pricing promotion strategies must be carefully taken into consideration by the companies in order to achieve higher profits as well as market share (Aaker, 2002). Due to this reason, it has become imperative to identify the extent of influence of brand loyalty over pricing strategies being planned by iPhone companies in Australia so that effective strategies could be applied keeping in mind the brand loyalty from the point of view of customers.
The overall aim of this research proposal is to study the influence of brand loyalty on pricing strategies of iPhone particularly in Australia. More specifically, the major objectives of this research are;
- To determine the current price changes of iPhone to identify its impact on the number of sales of iPhone in Australia
- To explore and identify the major factors influencing the behaviors of consumers regarding iPhone purchasing in Australia
- To understand the pros and cons of pricing on the basis of brand loyalty
- To develop the strategies for Apple company to increase the market share of iPhone in Australia
The achievement of these objectives will provide the information related to the extent of influence of brand loyalty over pricing strategies to be planned by the iPhone company in Australia.
To study the impact of brand loyalty upon pricing strategies of iPhone Company is essential as it will provide the company to plan strategically for the pricing of iPhones in the country on the basis of customers’ preferences to purchase and repurchase (Homburg, Koschate, & Hoyer, 2004). The creation of brand loyalty is considered as beneficial for companies from several aspects. Brand loyalty modifies the inclination of loyal customers and they tend to purchase and repurchase similar brand products as well as their mouth publicity enhances the sale of the products as other customers also believe it to be worth purchasing. In this way, brand loyalty emphasizes the customers to purchase the products how much costly it is and it increases the revenue generation of the company as well (Dwivedi, Merrilees, Miller, & Herington, 2012). On the basis of this, companies can select most preferred pricing strategies for its product in the relevant market. There are various pricing strategies being utilized by majority of companies in the present scenario which include premium pricing, penetration, economy, price skimming, psychological as well as bundle pricing, considering various points in mind.
Justification of Project
The research will consider extensive literature review along with the feedback of customers and managers of the iPhone company to achieve the purpose. Possible benefits of conducting this research will be;
- The relationship between the brand loyalty and pricing strategy will be clearly understood.
- It will help in taking decisions related to the pricing strategies to be selected for increasing the sale as well as for the purpose of generating revenue in the market.
- The marketing department of the iPhone company can make use of the strategies being exhibited in the research for the purpose of pricing the products in Australia.
- The results of the research will provide the succeeding strategies to be applied by the company for the purpose of increasing the revenue taking into consideration, the pros and cons of pricing on the basis of brand loyalty(Dauch & Intravisit, 2016).
The research is expected to provide below mentioned outcomes by the completion of the research;
- It provides a better understanding about the impact of brand loyalty upon the pricing strategies of a product that will enable the iPhone company to adopt best suitable pricing strategy considering brand loyalty in mind.
- It will emphasize on developing excellent brand loyalty so as to attain overall benefit which will include increase in sale, revenue generation, customer loyalty along with brand image and reputation.
- It will provide an analytical framework for the identification of possible impact of brand loyalty upon the pricing strategies which will ultimately help the companies to develop and analyze the strategies in order to enhance the sale of iPhones in Australia.
Thus, the completion of the research will prove to be beneficial for the purpose of gaining in-depth knowledge regarding the relationship of brand loyalty and pricing strategies as well as for the iPhone company to develop effective pricing strategies to enter in the Australian market with a boom and to generate higher revenue. In addition, the research will prove to be beneficial for the other companies to be considered while expanding their business at global level.
The pricing strategies are the methods and procedures that are used by the organizations in order to set the prices of the products or the services in order to attain the predetermined objectives. The prices of the products and the services are set by the organizations by considering the cost of production, pricing objective, relative prices of competitors, distribution cost and selling cost. Pricing strategy is developed by the organization in order to attract the customers and establish the competitive advantage in the marketplace. An effective pricing strategy is able to identify the price that includes the cost of production and is also able to make product competitive one in the marketplaceInvalid source specified..
The brand loyalty is considered as an important factor in order to look for the response of the consumer towards the company and its product. Brand loyalty is the commitment of the consumer to re-buy a product or service in future from an organization by influencing from the marketing efforts of the organizationInvalid source specified.. The decision of the consumers to buy the product from an organization continually defines the commitment of the customers towards the brand. The brand loyalty includes the commitment of the consumers related to repurchase of the brand and repeated buying of service or the product. The brand and the customer relationship can be developed on the basis of the value proposition. The loyalty of the consumer can be due to the service or the product provided by the organization at a fair price or the products or the services are reliable and beneficial. The higher brand royalty is the result of delivering the high consumer value (Timothy, 2010).
The pricing strategies of the organizations influence the choices of the consumers. The customers who considers price of the service or the products and relates it to the quality of the product or service are attracted towards the high price products. The high price products represent the good quality from the perception of the customers. The competitive price plays an important role in building brand loyalty. Mainly, the organizations reduce the prices of the products or the services in order to attract the customers and provide them quality product at low price in comparison to the other organizations. The quality product or services helps in establishing the brand loyalty and the customers re-purchase the products from the organization. The pricing strategy is developed by the organizations which help in establishing the brand loyalty through offering good quality of products and services to the customers. High price products are also able to attract the customers and it increases the trust of the customers towards the brand.
Expected Research Output/Outcome
The hypothesis of the research is:
H1: The impact of the brand loyalty upon the pricing strategy of iPhone is positive.
H0: The impact of the brand loyalty upon the pricing strategy of iPhone is not positive.
The research methodology will include the research design, research technique, data collection methods, target population, sample size, the information regarding the sampling techniques, data analysis tools along with data presentation tools. The procedures involved in the research methodology will assist in gaining effective knowledge to conduct the research study as well as to effectively analyze the aims and objectives of the research study (Rajasekar, Philominathan, & Chinnathambi, 2013). The research will include the mixed approach and will include primary as well as secondary methods for the purpose of data collection.
- Literature Review- It will include the in-depth analysis of relevant literature along with the information available in various sources which might be journal articles, reports, and other online material relevant to the research subject. The knowledge and information related to the terms being used in the research such as brand loyalty, brand equity, behavioral economics and such others, will be gained through the relevant literature available in textbooks and online. In addition, the research studies conducted by various proficient researchers will assist in conducting the research effectively. The thematic content analysis of all the material will provide the understanding about the subject of research and assist in analyzing the influence of brand loyalty upon the pricing strategies to be adopted by the iPhone company in order to enhance its sale in Australia(Bourgonje, 2015).
- Data collection methods- The target population for the purpose of conducting surveys on will be the customers using mobile gadgets and iPhones in Australia. Nowadays, almost the entire population is tech savvy and all are aware about the best available mobiles and companies and what they consider while purchasing mobiles. That is why the samples will be collected from the target population on random sampling basis and the sample size will be 100 customers for conducting survey. For the interview purpose, 2 to 3 managers from the company will be selected on the basis of convenient sampling method. The reason behind selection of managers for interview is to gain knowledge regarding the current pricing strategies being utilized by the company for the purpose of increasing their sale and what kind of pricing strategies are being planned by the company to establish business in Australia. The information collected through the surveys and interviews will be scrutinized to provide an idea about the type of relationship existing between brand loyalties and pricing strategies as well as if the strategy is working and practical. To achieve the purpose, questionnaires will be provided to the selected customers, agencies and Apple stores through online or face to face to be filled by them through which, their opinion regarding their purchasing tendencies will be examined. The survey respondents will be required to provide the response on five-point Likert scale wherein, ‘1’ refers to the strongly agree and ‘5’ refers to strongly disagree. The interview questions will be open-ended and the respondents will be free to respond as per their convenience.
- Data Analysis methods-The data and information collected from literature reviews, surveys and interviews will be scrutinized thoroughly using mixed methods i.e. qualitative as well as quantitative data analysis techniques. For the qualitative analysis methods, non-numerical data will be obtained by the interview of the managers of the company as well as literature reviews to gain better understanding about the research subject. To conduct qualitative analysis, Pearson’s correlation will be taken into consideration in order to ascertain the degree of relationship between the variables. On the other hand, quantitative analysis will utilize the excel sheets, pie-charts and figures, for which, regression analysis will be selected. In addition, hypothesis testing will also be taken into consideration.
Thus, the research will take into consideration, all these methodologies in order to reach at an accurate result for which the research is being conducted. Through, the in-depth analysis of the relevant literatures as well as the responses received through surveys and interviews, the data will be organized properly which will then be undertaken for the purpose of further analysis and presented properly.
The organization of the study is as follows;
- Chapter One will be the Research Proposal as outlined in this assignment.
- Chapter Two will be related to the study of impact of brand loyalty upon the pricing strategies to be planned by the iPhone in order to extend its business in Australia.
- Chapter Three will include the details of methodology used in the research i.e. literature review, data collection and analysis methods, research approach, target population, sampling techniques and sample size for conducting the research on.
- Chapter Four will report the Findings and Analysis of the proposed research.
- Chapter Five will summarize the important findings and discuss their implications to be utilized by the marketing department of the company for the purpose of increasing the revenue generation in Australia.
The following table shows the timeline for the overall research project to be accomplished within the below mentioned duration;
Identification of research area & formulation of research strategy, design, and research questions/objectives
Final Report Submission
For the purpose of conducting the research, there will be requirement of sufficient amount of finance so that the research could be completed in an effective manner. The overall budget for the proposed research completion is estimated to be around $5000 in order to complete the research appropriately within the given timeframe i.e. till 31st October’18 as mentioned in the Gantt chart.
The reasons and justification for the proposed budget is here as follows;
- For the purpose of gaining knowledge literature review will include textbooks, journal articles, reports and other relevant online available material which will cost around $2000.
- The overall process of data collection involves surveys conducted over customers and interviews with the managers of the company which will include preparation of questionnaires, printing costs, posting or mailing costs, and travelling costs. The entire procedure will cost around $2000.
- In addition, to collect the information related to price statistics, data, and to obtain statistical data from other competitors, some of the budget will be required which should be around $1000.
Summarizing the overall project budget;
Estimated amount to be spent
Total Estimated Budget
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