Impact of Price, Quality and Promotion on Loyalty and Willingness

Abstract

By Ayesha Saeed

The purpose of this research is to identify the importance of the independent variables including Perceived price fairness, Visual elements of promotion, and Quality perception on the consumer’s loyalty towards a specific brand and to better understand consumer psyche while choosing a specific clothing brand. We will be studying the separate impact of each of the independent variables mentioned above on the dependent variable that is Willingness to pay, and then we would study the impact of each independent variable with the mediator, that is Brand loyalty. To what extent do visual elements of promotion impact the consumer’s mind and their ability to pay the premium price. On the other hand, some consumers always prefer quality products, and based on these features their loyal to the brand is determined which directly impacts their willingness to pay. We want to understand the relationship among these variables and how they affect purchase decisions with reference to the clothing industry. For this purpose, a sample of 500 women is selected and a convenient sampling technique will be used to analyze the results. SPSS and PLS software will be used to test the survey results. Our chosen sample will include college and university students, working women, and young housewives. It’s the younger generation who is in need of such trendy clothes that provide them both style and quality at a price they readily afford and because of this reason we have chosen women in late teens up until 45 and we are mainly targeting the upper-middle class.

Keywords: Visual elements of advertisement, Brand Loyalty, Willingness to pay, Perceived Price fairness, Quality perception.

 

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 Acknowledgments

Firstly, we would like to express our gratitude towards our advisor Ma’am Beenish Arshad for guiding and supervising our project. She has been our mentor throughout the project, providing us with her valuable and constructive suggestions during the development planning of this research project. Her useful critiques and patience have really helped us. We would also like to express appreciation towards our director Mr. Hamid Hassan and the Fast School of Management faculty for providing us with the best resources within the university premises that helped us get all the necessary information and data required for our research. . We would also like to thank various people for their contribution in this project Mr. Shahid Malik for his valuable opinion and professional guidance during our first FYP presentation. Lastly, we would like to thank our parents and friends for their constant support and encouragement throughout this study.

List of Acronyms

1.    INTRODUCTION

 

The fashion industry in Pakistan is expanding and progressing at a very fast pace. There has been a sharp rise in women's fashion brands. This is mainly due to increasing awareness among women about the availability of stitched branded clothes that are not only trendy but also highly qualified.

In present times, price, quality, and visual elements of promotion are rendered crucial in every product or service being offered in the market. In light of the current environmental dynamics, every business is aiming towards having the highest market share. These elements help it gain a competitive edge and become an industry leader. Consumers are primarily concerned about these elements which then constructs their buying decisions. Customers perceive prices as fair by comparing them with competitor’s pricing and costs (Xia & Cox, 2004). Moreover, a price is perceived to be fair by the customers if it falls below in comparison to their expectations. (Andrés‐Martínez & Gómez‐Borja., 2013). Based on the brand name or image, consumers perceived the product’s price and quality. Products having higher prices and good brand image are perceived as of good quality whereas products having low prices and not having a good brand name are being perceived as of low quality. Visual elements of promotion, whether they are visual or verbal greatly impact consumer’s minds and buying decisions. Color is a vital role to lure the customer towards the brand, so it would be helpful for companies to use colors according to their brand image and slogans. (Bakara, Desa, & Mustafa, 2015).  The focus of this research is also on the visual parts which include images, inspirational text or color, graphics, fonts, and repetition, etc. these things make up the brand image and consumers will be automatically attracted towards that specific brand. At the end of our research, we will be able to find the relation between variables including visual elements of promotion, perceived price fairness, and quality perception with their impact on willingness to pay while brand loyalty puts a mediating impact. The clothing brands of Pakistan play a significant role not only in the local markets but also in international markets. Pakistan is a successful growing economy and has worldwide recognition because of its textile industry that produces export quality textiles. The clothing industry contributes to 8% GDP and employs about 40% labor. Almost every clothing brand is trying to be unique and provide product offerings that stand out and increase a consumer’s willingness to pay premium prices. The factors that are the most crucial in identifying the band image are awareness and the consumer preference for the brand. (Saeed, Lodhi, & Mukhtar., 2013). When it comes to the women’s clothing industry, they are very conscious about the brand they are wearing as well as the price they are paying. People associate themselves with brands they think add value for them and represent their group norms, values, and beliefs (Khan, Misra, & Singh, 2013).  Understanding the female psyche is not an easy task since you cannot determine the factors that lead them to quit purchasing from one specific brand. According to another research, customers go after those brands that not only provide them good quality products but also satisfy their attitudes, behaviors, and values. (Hoewe & Hatemi., 2016). In this era, research on these variables has become imperative as women’s clothing plays a major role in society. Regardless of the price, if brands have good quality, using successful and effective visual elements for advertisement, and having a reputable image in the market, they can charge premium prices and claim brand loyalty. If the company initially invested in building its brand loyalty through advertising and providing upright quality they will enjoy high-profit margins.

Numerous manufacturers, retailers, marketers, and businessmen have considered quality as a way to differentiate their products from competitors (Swinker & Hines, 2006). In this research, the type of quality women's clothing brands are providing and how consumers are perceiving it is the question to be taken under assessment. Previous researches on quality are conducted based on qualitative data and within the industrial context rather than focusing on how consumers build the perception of clothing quality and its impact on their willingness to actually purchase the product. While deciding to pay the price for a certain clothing brand, willingness to pay is what actually determines that decision and therefore it is considered as one of the strongest measures of brand loyalty (Casidy & Wymer, 2016).

So the foremost goal of this research is to measure the separate and combined effect of “Visual elements”, “Perceived price” and “Quality perception” on “Willingness to pay” with the mediating role of “Brand loyalty” 

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