1.1 Scope
Our main area of
exploration includes the clothing industry; this includes a wide range of
brands such as Khaadi, Sapphire, Limelight, Gul Ahmad, and Nishat Linen.
According to the recent statistics, these are the top most brands that upper middle-class women prefer to wear the most. Our main target market is women and we
want to study what goes on in the minds of these women while buying from these
brands. What are the factors that convince them to opt for these brands and pay
much higher prices for their products as compared to other relatively cheaper
brands? What are the reasons that persuade them to label a certain price as
‘Fair’?
Our geographic location
is only restricted to women within Pakistan, but within Pakistan, we will not be
restricted to a single city or area, our research would cover a rather wide
range of markets from nearly all areas of Pakistan to avoid any biases in our
research. But since the middle and upper-middle classes of Pakistan reside
mainly in Punjab and certain rich cities in Sindh such as Karachi and Hyderabad
so we will mainly look for these areas and the target market that would help us
get the most accurate results for our research.
There are several other
emerging brands that have found a gap in the clothing market and are providing
good, trendy clothing at reasonable prices. Some examples within the confines
of the Pakistani market include Ego, Zelburry, Ethnic and many others. These brands
might not have the best materials used in their products but the designs and
trends followed by them are as good as the leading brands mentioned above. But
does the excellent design not satisfy these women? What are the factors that
convince them to pay higher when they could easily enjoy the same exclusivity
while buying from other, rather inexpensive brands? Is it their Quality? Their
increased emphasis on branding and promotional efforts? Or is it because they
perceive their prices as fair for the quality and additional services they
enjoy from these leading brands?
While conducting our research we plan on targeting at least 450 women aged between 18 to 45. We will be collecting samples from young university-going girls and from female relatives and family members we can assemble, and which of these leading brands they prefer the most and why? What are the qualities and factors from these brands that they tend to enjoy the most? And in their opinion which one of these independent variables do they think has the greatest impact on their loyalty towards the brand and their willingness to pay more. In addition to this, all these women belong to the middle and upper-middle class which means that they either cannot afford or do not prefer exclusive brands like Sana Safinaz, Maria B, Baroque, Bareeze, and others. These women generally tend to stick to the brands that are included in our study mainly because they lie within their affordable range and offer a range of products that are not too flashy and tend to be very modest for women who need good styled affordable clothes for their College, Universities or workplaces. Although Khaadi and Sapphire do have their exclusive ranges for party dresses and formal clothes, their main focus still remains to target working women and college students, which is why they stick to it. But still, there is a lot of favoritism in women while choosing from these brands and we want to solve the biggest query as to why ‘this specific brand?
1.2 Purpose
The basic fundamental
purpose of our research is to establish a link between the three independent
variables Perceived price fairness, Quality, and Visual elements of promotion , and how the collective impact of these variables would affect the brand loyalty
of consumers and convince them to pay higher prices for certain brands. We want
to see the individual impact of these variables on a consumer’s brand loyalty
and willingness to pay. Which of these elements has the most dominating impact
on a customer’s buying intention and purchase behavior. Does a brand provide
good quality and affordable prices establish a good customer base? Or will it
also have to conduct extensive advertising to reach its target market? Because
without spreading awareness through repetitive advertising the consumers might
never know about the available product’s quality and prices or how those
products might bring value to them. So, to conclude all these variables are
equally as important to ensure a good customer base and repeated purchase by
the target market. So we want to study the individual and combined impact of
these variables on the consumer's brand loyalty and willingness to pay and how
our research on the clothing brands will help the clothing industry and
contribute towards better branding and advertising in the textile industry. The
constructs chosen in our research have been studied before with reference to
other industries and different variables but our research would be the first to
study the combined impact of these specific variables in the clothing brand
industry.
With reference to the
current era, where geographic isolation is no longer a constraint, where
products are being exchanged at international markets, customers have full
knowledge about the product and competition has become fiercer than ever. In
such changing environmental dynamics, other factors such as the “Quality
perception” and “Visual elements of promotion” play a vital role in
complementing and integrating with a product’s image and popularity. Keeping
the current circumstances in mind we want to edify the clothing industry about
how vital these three elements are shaping their product’s attractiveness and
convincing the customers to stay loyal to the brand and pay premium prices. The
significance of this research lies in proving how Perceived price fairness,
Quality perception and Visual elements of promotion need to be integrated and
enhanced to keep any clothing brand at the top. How they will improvise
customer satisfaction and persuade them to stay loyal towards that specific
brand. Our research highlights the elements that will convince consumers to pay
a premium price, hence increasing their “Willingness to pay”.
1.4 Problem Statement
This research study
aims to address the issue that concerns all business entities selling products
and services nationally and internationally. It explains how companies neglect
or carelessly mishandle the very crucial aspect of their products or services
which then leads to their downfall in the market. Prices should not just be set
with the sole purpose to offset the company’s profits to their costs. Other
factors other than price must also be taken under consideration. Customers will
perceive a price as fair as long as the set price seems justifiable in the eyes
of the customer. This justifying element can be added by making a product distinguishable
through its quality, promotion and customer’s loyalty are additional benefits
that make a specific brand unique in comparison to its competing brands.
In recent times, most designer brands are hell-bent on achieving low cost and high profits and are charging premium prices on their clothing ranges as well as compromising on quality to achieve low-cost leadership. Such brands need to understand that this will eventually lead to their demise. Quality and promotion must go side by side with a price. These elements should complement and integrate with each other. If premium prices are charged, quality must be high-class and promotions should represent exclusivity and if prices are lower, the cost for quality and promotion should also be moderate. Our research will help brands figure out where they lie and where they need to be to attain customer loyalty and enhance their willingness to pay.
1.5 Research Objectives
·
To analyze the impact of perceived price fairness on willingness to pay.
· To analyze the impact of quality perception on willingness to pay.
· To analyze the impact of visual elements of promotion on willingness to pay.
· To evaluate the mediating impact of brand loyalty in the relationship between perceived price fairness and willingness to pay.
· To evaluate the mediating impact of brand loyalty in the relationship between visual elements of promotion and willingness to pay.
· To evaluate the mediating impact of brand loyalty in the relationship between quality perception and willingness to pay.
1.6 Research Questions
Q.
What is the impact of perceived price fairness on willingness to pay?
Q.
What is the impact of quality perception on willingness to pay?
Q.
What is the impact of visual elements of promotion on willingness to pay?
Q.
What is the impact of brand loyalty in the relationship between perceived price
fairness and willing to pay?
Q.
What is the impact of brand loyalty in the relationship between visual elements of
promotion and willingness to pay?
Q.
What is the impact of brand loyalty in the relationship between quality perception
and willingness to pay?
Literary Review
Formerly, it was
perceived that a price was to be considered “fair” if it was low and “unfair”
if it was high. Predominantly, pricing was the most important factor for
determining whether a specific product was worth buying or not. Perceived price
fairness was the basis for business trading in the past without putting in any
consideration on other factors. In the 18th century, just before the
French revolution, there was a rising trend toward fashion and beauty all over
Europe. The royalty and nobility spent vast amounts of money on their clothing
and accessories. After the introduction and rising popularity of designer
brands of clothing in the 19th and 20th centuries such as
Chanel, Louis Vuitton, and Erte, the concept of fashion and latest trends became
common notions among people and was no longer restricted to the upper elite.
With this came the concept of “Quality Perception” and “Visual elements of
Promotion”. Perceived price fairness was no longer the only factor determining
a product’s popularity. Designers were spending huge loads of money to reach
the quota of exceptional quality by using the finest quality silk, leather,
jute, and other raw materials and hiring the finest craftsmen in all of Europe
to tailor-make the products. On the other hand, huge amounts were being spent on
advertising through celebrity endorsements and other exclusive forms of
advertising.
2.1 Perceived Price Fairness and Willingness
to Pay
Price is
the exercise followed by sellers in the market that what amount they are
charging in exchange for the goods and services. From the last decades, the price
has become the crucial variable in analyzing the quality of goods, especially
when it came to Pakistan’s women's clothing industry. The rate at which the
prices are perceived as fair is influenced by many factors. Different
researchers have different schools of thought regarding price fairness.
Fairness is inferred by different variables one of which stated that fairness
of pricing is the combination of the behaviors and intentions of consumers. As
everyone knows the difference between right and wrong and so likely about being
fair and unfair. Customers perceived prices as fair by comparing it with
competitor’s prices and estimation of the product’s cost. In this way, customers
involve their intentions and behaviors by making a comparison of prices,
estimating the cost, and then finalizing it as reasonable and fair
Willingness to pay
refers to the customer attitude towards a product that how much amount they are
ready to spend to buy a product/service. Willingness to pay is determined by
factors including the average income of the consumer, the economic condition of the
country, past experience with the brand, quality of product, trends in the
market, and lastly, the impact of advertising also attract customers to use the
product
The Women clothing industry
of Pakistan is growing rapidly with the continuously changing need and demands
of consumers. According to the recent Statista market forecast, the revenue of
this industry is expected to grow at the rate of 14.2% from the year 2020-2025.
Pakistan is known for
its textile industry and every brand here tries their best to offer the
products and services that make them unique and increase customer’s willingness
to pay but somehow price came in between. Price is the important factor in
modifying the willingness of customers and price is affected by different
factors which include awareness, CSR, quality, past experience, and social
image. Research shows that based on these factors, customers perceive the price
of a product as fair or not. All of these variables have a direct positive
impact on willingness to pay, which makes perceived price fairness have a
positive relationship with willingness to pay
H1: Perceived price fairness has
a direct positive impact on willingness to pay.
2.2 Perceived Price Fairness, Brand
Loyalty, and Willingness to Pay
Brand loyalty is
defined as the connection between the brand’s product and image with the
feeling of consumers
Economists believe that
premium pricing helps firms generate higher above-average profit margins. In
this context, when a specific clothing brand offers high-quality clothing it is
generally believed that such clothes lie under the category of having premium
prices. This concept then relates to a customer’s willingness to pay, that is
the maximum amount women are willing to pay for it, in order to enjoy the
benefits that it provides. Consumers are willing to pay more for their
preferred brands that is their emotional attachment or loyalty towards that
brand
It is argued that price
is not the sole factor that increases women’s willingness to pay. Buyers who
are familiar with a specific clothing brand have higher levels of loyalty
associated with it and this increases their intention to buy and willingness to
pay simultaneously. However on the other hand some argue that price is
considered as the most important determinant that affects purchase decisions.
It is an obvious fact that people cannot buy what they can’t afford. In today’s
competitive environment it is crucial for managers to understand the reasons that
influence women’s willingness to pay for one specific clothing brand as
compared to alternate brands. Willingness to pay apparently has great
importance in all business organizations within the clothing industry that
influences women’s ability to pay price premiums. WTP is a function of quality
and value that a clothing brand provides because premium prices are a
reflection of the high quality and value provided by that brand. Furthermore, WTP is
considered one of the strongest measures of brand loyalty
H2: Brand loyalty mediates the relationship between perceived price fairness and willingness to pay.
2.3 The Visual Element of Promotion, Brand Loyalty, and Willingness to Pay
Visual elements as the
name suggests are the elements that can be seen through the eyes of customers.
These elements can be seen in TV ads, print media ads, billboards, brochures, and flyers, etc. The main elements in visual advertising are images, colors,
fonts, humor, repetition, design, and logos. Firstly, images play an important
role in it whether in the form of the physical look of the character in the ad or in
the form of animated pictures. Human faces and pictures grab attention, as well as the animated images with different colors, attract the customers to see the
full ad. Companies hire celebrities because their image and physical appearance
help to create a positive image in the minds of customers. Secondly, color is
another major component in engaging consumers, so it would be helpful for companies
to use colors that are according to their brand image and slogans
Past researches show that consumers who are
loyal to the brand tend to buy from that brand. Thus applying this knowledge to
the women clothing industry, when women are loyal to the brand, their
experience with the brand may result in high willingness to pay the premium
prices and they tend to buy again and again from that specific brand
Visual elements, mainly
including colors, imagery, graphics, and logos help to create the image of the product in the consumer’s mind, and with a repetitive advertisement, this will lead to
consumer’s purchase intentions. Researchers have analyzed that showing
product-related information. During promotion molds the women's attitudes towards
the brand
Contribution of
imagery, colors, effective logos, and graphic designing shapes the consumer’s
attitudes toward the brand. Applying this model in the clothing industry,
researchers found out that women who are capable to process the product
information provided in the advertisement, combine it with their past
experience along with their positive attitude leads to make them loyal to the
brand. Women having negative past experiences, having negative attitudes towards
the brand did not have brand loyalty. In this way, different visual elements of
advertisement put the least impact in shaping their behavior. Women got attracted
when brands used different celebrities and attractive elements in their
advertisement, they tend to try the brand but did not get loyal to the brand
H3:
Brand loyalty mediates the relationship between visual elements of promotion
and willingness to pay.
2.4 Quality perception, brand
loyalty, and willingness to pay
Perceived quality is
the expression in customer’s mind about the quality of the product based on the
different factors. In the women’s clothing industry, quality is measured in terms
of brand image, previous experience with the brand, price, and quality of
fabric. Achieving the good perceived quality of the final product is not the a difficult task and can easily be achieved by extra investments in raw materials
but achieving the quality followed by efficient system induction, usage of
technology, time efficiency, eliminating wasted material with financial
limitations
Perceived quality has a
very positive impact on consumer purchase behavior and their willingness to
pay. A positive perception encourages strong brand loyalty which in turn
results in purchase intention. In general brand loyalty is determined through
the buyer's purchasing behavior, loyalty is the most crucial factor affecting purchases.
Moreover repeated purchase from the same clothing brand is an indication of
loyalty
It is believed that by
increasing the perceived product quality a clothing brand can create
differentiated clothing products for women that offer a unique selling proposition as compared to rival brands and this motivates consumers to pay
more. Efforts towards quality are believed will help build strong brands
through improved brand image and goodwill. A strong brand image will create a
positive direct impact on brand loyalty among women
H4: Brand loyalty mediates the
relationship between quality perception and willingness to pay.
2.5 Quality perception and
willingness to pay
Brand quality is
basically how women perceive a clothing product and their acknowledgment
towards it that directly affects their purchase decision. Studies have shown
that higher product quality is directly proportional to purchase intention because
good quality clothing prompts additional benefits that convince women to pay
premium prices. Quality has also been widely recognized as a customer’s
willingness to pay
Theoretically speaking,
willingness to pay is a result of a customer’s expectation before and after
trying out that specific clothing product. While surveying customers they were
asked whether a change in the quality of clothing changes their willingness to pay
or not but the answers varied because the customers did not have enough
knowledge about the quality changes
H5: Quality perception has the
positive impact on willingness to pay.
2.6 Visual elements of promotion and willingness to pay
Marketing
and advertising has become the essential tool for achieving customer’s
intentions and attract them to buy from the brand. Competition in the women's
clothing industry is increasing and every brand is in the race for having a
large customer base and shaping their behavior to pay the premium price. In
advertisements like print ads, TV ads, social media ads, and billboards, there
are visual and verbal elements that played a major role in designing these
ads. The combination of visual and verbal messages is prevalent in designing consumption behavior. Colors and graphics help to channel the product’s
information in a way that people automatically got attracted and willing to
purchase the product
Color is
another important element that formulates the buying behavior of consumers.
Different marker researchers found out that usage of colors put an impact on
consumers, make them remind of the brand and human reminds the visual elements
faster than verbal elements. Product’s color, packaging and design put a
direct impact on an individual’s buying behavior
H6: Visual elements
of promotion have a positive impact on willingness to pay.
3. RESEARCH METHODOLOGY
3.1 Design and Methodology
In this research, women
willing to pay a specific price depending upon the above-explained factors
are being addressed through the hypothesis testing method. This is the
cross-sectional study in which all the addressed variables will be tested at
once within the confines of the specific region, gender, age group, and targeted
brands. Then correlation analysis will be conducted in order to find the
relationship between the variables. This is the quantitative research in which the Convenience sampling technique will be used as it is a type of non-probability
sampling in which a sample is selected merely based on its convenience of
access
3.2 Sampling
In this quantitative
research, data will be collected specifically from females aged 18-45.
According to the brand that we are targeting, they have dresses that
satisfy the need of this age group. Moreover, the price range of these brands
is also similar specifically focusing the upper-middle class women. Women that
lie in this age bracket will include the university and college students,
housewives, and working women as they are most likely to wear trendy clothes.
The survey will be conducted among 500 women. This is a tentative size and
after removing the biased results, the final sample size will be shown in the next
part.
3.3 Data Collection
Surveys will be
conducted in the form of a questionnaire, which will include the reliable
questions picked from the authentic articles of previous researches. All of the
five variables items will be measured using the five-point Likert scale ranging
from “strongly disagree” as “1” and “strongly agree” as 5
4. BIBLIOGRAPHY
Andrés‐Martínez,
M. E., & Gómez‐Borja., M. Á. (2013).
A review of the price fairness perception concept. Academia Revista
Latinoamericana de Administración, 26(2), 318 - 342.
doi:10.1108/ARLA-06-2013-0067
Andrés‐Martínez, M. E., & Gómez‐Borja.,
M. Á. (2013). A review of the price fairness perception concept. Academia
Revista Latinoamericana de Administración, 26(2), 318 - 342.
doi:10.1108/ARLA-06-2013-0067
Anselmsson, J., Bondesson, N. V.,
& Johansson. (2014, April 14). Brand image and customers’ willingness to
pay a price premium for food brands. Journal of Product & Brand
Management, Vol. 23 No. 2,, 90 - 102.
doi:https://doi.org/10.1108/JPBM-10-2013-0414
Bakara, M. H., Desa, M. A., &
Mustafa, M. (2015, July 3). Attributes for Image Content That Attract
Consumers’ Attention to Advertisements. Procedia - Social and Behavioral
Sciences, 195, 309 – 314. doi:10.1016/j.sbspro.2015.06.349
Casidy, R., & Wymer, W.
(2016, September). A risk worth taking: Perceived risk as moderator of
satisfaction, loyalty, and willingness-to-pay premium price. Journal of
Retailing and Consumer Services, Volume 32, 189-197.
doi:https://doi.org/10.1016/j.jretconser.2016.06.014
Cham, T. H., Cheng, B. L., &
Ng., C. K. (2017, November 8). Factors Influencing Clothing Interest and
Purchase Intention: A Study of Generation Y consumers in Malaysia. The
International Review of Retail, Distribution and Consumer Research., 28(2),
174-189. doi:10.1080/09593969.2017.1397045
Chepchirchir, J., & Leting,
M. K. (2015). Effects of Brand Quality, Brand Prestige on Brand Purchase
Intention of Mobile Phone Brands: Empirical Assessment from Kenya. International
Journal of Management Science and Business Administration, 1(11), 7-14.
doi:10.18775/IJMSBA.1849-5664-5419.2014.111.1001
Childers, T. L. (1986). Memory
for the Visual and verbal components of print advertisements. Psychology
and Marketing , 3(3), 137-149. doi:10.1002/mar.4220030303
Demirgunes, B. K. (2015).
Relative Importance of Perceived Value, Satisfaction and Perceived Risk on
Willingness to Pay More. International Review of Management and Marketing,
211-220. Retrieved from
http://www.econjournals.com/index.php/irmm/article/view/1465
Diao, F., & Sundar, S. S.
(2004). Orienting Response and Memory for Web Advertisements: Exploring
Effects of Pop-Up Window and Animation. Communication research, 31(5),
537-567. doi:10.1177/0093650204267932
Dwivedia, A., & Nayeema, T.
(2018). Brand experience and consumers’ willingness-to-pay (WTP) a price
premium: Mediating role of brand credibility and perceived uniqueness. Journal
of Retailing and Consumer Services, Volume 44, 100-107.
doi:https://doi.org/10.1016/j.jretconser.2018.06.009
Falahat, M., Chuan, A. R., &
Rahman, T. A. (2018). BRAND LOYALTY AND DETERMINATES OF PERCEIVED QUALITY AND
WILLINGNESS TO ORDER. Academy of Strategic Management Journa, Volume 17,(ssue
4). Retrieved August 15, 2018, from
https://www.researchgate.net/publication/327034330_Brand_loyalty_and_determinates_of_perceived_quality_and_willingness_to_order
Farrokhi, F., & Hamidabad, A.
M. (2012, Apil 4). Rethinking Convenience Sampling: Defining Quality
Criteria. Theory and Practice in Language Studies, Volume 2, Number 4,
801-808. doi:doi:10.4304/tpls.2.4.647-656
Fullerton, S., & Dodge, H.
(1993). A reassessment of life style and benefits-based segmentation
strategies. Journal of Marketing Management, 2(2), 42–6.
Hoewe, J., & Hatemi., P. K.
(2016, July 13). Brand Loyalty Is Influenced by the Activation of Political
Orientations. Media Psychology, 20(3), 428-449.
doi:10.1080/15213269.2016.1202839
Khan, R., Misra, K., & Singh,
V. (2013). Ideology and Brand Consumption. Psychological Sciences, 24(3),
326–333. doi:10.1177/0956797612457379
Li, G., & Kambele., Z. (2012,
October). Luxury fashion brand consumers in China: Perceived value, fashion
lifestyle, and willingness to pay. Journal of Business Research, 65(10),
1516-1522. doi:10.1016/j.jbusres.2011.10.019
Lu, Z. Y., & Hsee, C. K.
(2019, January 3). Less willing to pay but more willing to buy: How the
elicitation method impacts the valuation of a promotion. Journal of
Behavioral Decision Making, 32(3), 334-345. doi:10.1002/bdm.2115
Maclnnis, D. J., & Jaworski,
B. J. (1989, October). Information Processing from Advertisements: Toward an
Integrative Framework. Journal of Marketing, 53(4), 1-23.
doi:10.1177/002224298905300401
Rossiter, J. R., & Percy, L.
(1978). Visual imaging ability as a mediator of advertising response. Advances
in Consumer Research, 5, 621-629.
Saad, M., Afzal, H. A., &
Sajid, H. (2017). Brand image and customers' willingness to pay a price
premium for female's stitched clothing. Pakistan Journal of Commerce and
Social Sciences, 11(3), 1027-1049. Retrieved from
https://www.econstor.eu/handle/10419/188327
Saeed, R., Lodhi, R. N., &
Mukhtar., A. M. (2013). Factors Affecting Consumer Purchase Decision in
Clothing Industry of Sahiwal, Pakistan. World Applied Sciences Journal,
844-849. doi:10.5829/idosi.wasj.2013.24.07.1339
Sehera, T., Arshad, M., Ellahi,
S., & Shahid, M. (2012, June 11). Impact of colors on advertisement and
packaging on buying behavior. Management Science Letters, 2085–2096.
doi:10.5267/j.msl.2012.06.011
statista. (2020). Retrieved from Statista Market Forecast:
https://www.statista.com/outlook/244/294/fashion/pakistan
Stylidis, K., Wickman, C., &
Söderberg, R. (2019, September 25). Perceived quality of products: a framework
and attributes ranking method. Journal of Engineering Design, 31(1),
37-67. doi:10.1080/09544828.2019.1669769
Swinker, M. E., & Hines, J.
D. (2006, March). Understanding consumers’ perception of clothing quality:a
multidimensional approach. International Journal of Consumer Studies,
218–223.
Whitehead, J. C. (2006).
Improving Willingness to Pay Estimates for Quality Improvements through Joint
Estimation with Quality Perceptions. Southern Economic Journal,
100-111. doi:https://doi.org/10.2307/20111876
Xia, L., & Cox, J. L. (2004,
October). The Price is Unfair! A Conceptual Framework of Price Fairness
Perceptions. Journal of Marketing, 68(4), 1-15.
doi:10.1509/jmkg.68.4.1.42733
Yu, U.-J., Cho, E., & Johnson,
K. K. (2017, April 19). Effects of brand familiarity and brand loyalty on
imagery elaboration in online apparel shopping. Journal of Global Fashion
Marketing, 8(3), 193-206 . doi:10.1080/20932685.2017.1284603