An Investigation Into Price, Quality and Value, and Their Effects on Sales and Profits

This thesis will focus on the study of promoting price, quality, and value and the effect they have on sales and profits. Research reveals that promotion of products with price alone has varied short and long-term effects. Most managers and marketers are only concerned with the short-term effect price promotion has on increasing sales. Long-term effects of pricing should be considered because of t heir possible harmful effect on sales and profits. Marketers and managers need to better understand how price promotion affects consumers and their buying habits. The purpose of this present study is to investigate how companies have become more interested in increased sales volume with the use of price promotions at the expense o f profits. Specifically, it is hypothesized that marketers need to evaluate consumer\u27s individual buying behavior in terms of pricing and the perception of quality to increase sales and profits. It is important for a marketer to relate both price and quality in the promotion of the product. Product\u27s sales will increase if the product\u27s promotional activities emphasize quality received for the price paid. Results from data analysis reveals that the sales from different products (durable and nondurable ) react differently to the promotion of price or quality. Their is not enough evidence to conclude that the higher the price paid for a product the higher the quality received, and the lower the price paid for a product the lower the quality received. Research does show that this tends to be more true for nondurable goods rather than durable goods

Vodafone case study : loyalty and satisfaction in Vodafone : the quadruple play case

The focus of this thesis is to study in detail customer loyalty and satisfaction within Vodafone, more precisely regarding Vodafone’s quadruple play strategy, with focus on the new Vodafone tariff plan – Vodafone Red (including TV, internet and fixed voice). Vodafone is a British telecommunications company founded in 1982, with a significant presence in Europe, Middle East, Africa, Asia-Pacific and United States. In Portugal, the Group is inserted in what can be considered as one of the most aggressive markets of the country. It is a reference in the National telecommunications field and a leader in brand image, customer satisfaction and innovation. A world of ever changing technologies and of growing competition dictates deep changes in the telecommunications sector, particularly with the emergence of new capabilities and innovative services by telecom operators, as the case of 2Play, 3Play, 4play bundles. As a response to the new challenges, Vodafone, originally known as a mobile telecommunication operator is ultimately moving into adjacent areas to mobile such as television and Internet. The tariff plan Red came mainly as a response to the quadruple play trend and will be the focus of analysis of this study. The methodology of this case study entailed the collection of primary data (mainly from company reports, ANACOM reports, information from websites) and secondary data collection (in-depth interview and survey). The dissertation is divided into five main parts: the Literature Review (that is the theoretical support for the whole case study including an overview of the telecommunication industry and fundamental concepts for customer management) ;the Case study (that focuses on explaining what is happening in Vodafone, based on the information provided by the in-depth interview with Maria João Silva and information available online, mainly from ANACOM) ; the Market Research (performed in the Portuguese context, which contains the analysis on the questionnaire), the Conclusions( that include the answer to the key research questions, recommendations, suggestions for future research and an epilogue) and, at last the Teaching Notes.O objetivo deste trabalho é estudar em pormenor a lealdade e satisfação dos clientes da Vodafone, mais precisamente em relação à estratégia de quadruple play da Vodafone, focando-se no novo plano tarifário Vodafone - Vodafone Red (incluindo TV, internet e voz fixa). A Vodafone é uma empresa multinacional de telecomunicações britânica fundada em 1982, estando presente na Europa, Médio Oriente, África, Ásia-Pacífico e nos Estados Unidos. Em Portugal, o grupo está inserido num daqueles que se considera um dos mercados mais agressivos do país. O Grupo Vodafone, é uma referência no sector das telecomunicações nacional e um líder de imagem de marca, satisfação do cliente e inovação . Um mundo de constantes mudanças tecnológicas e de crescente concorrência, dita profundas mudanças no setor das telecomunicações, especialmente com o surgimento de novos recursos e serviços inovadores por parte dos seus operadores, como é o caso dos pacotes de 2Play , 3Play , 4Play. Como resposta aos novos desafios, a Vodafone, originalmente conhecida como um operador de telecomunicações móveis, encontra-se ultimamente a mover-se em áreas adjacentes ao móvel, como a televisão e a Internet . O tarifário Red veio principalmente como resposta à tendência quadruple play e será o foco de análise deste estudo . A metodologia deste estudo de caso implicou a recolha de dados primários (principalmente a partir de relatórios da empresa, relatórios da ANACOM , informações presentes em websites ) e a recolha de dados secundários (uma entrevista com Maria João Silva e um questionário) A dissertação está dividida em cinco partes principais: a revisão de literatura (que é o suporte teórico para todo o estudo de caso , incluindo uma visão geral da indústria de telecomunicações e conceitos fundamentais para a gestão de clientes ); o estudo de caso (que se concentra em explicar o que está a acontecer na Vodafone com base nas informações fornecidas pela entrevista com Maria João Silva e informações disponíveis on-line, principalmente da ANACOM); a pesquisa de mercado (realizada no contexto de Portugal, que contém a análise do questionário), as conclusões ( que incluem as respostas às questões “chave” da investigação, recomendações, sugestões para futuras pesquisas e o epílogo )e, por último, as notas pedagógicas

Bundling and Joint Marketing by Rival Firms

We study joint marketing by firms who price discriminate between consumers who patronize only one firm (single purchasers) and those who purchase from both (bundle purchasers). Firms either set the price of the bundle and then compete along side the bundle; or they determine a rebate that is applied to joint purchasers and then set prices. Even though the pricing structure in the joint marketing scheme is determined noncooperatively, the commitment to the joint marketing agreement allows firms to leverage their stand-alone prices—leading to higher profits and lower consumer surplus in either case, compared to both uniform pricing and independent price discrimination without a joint marketing agreement. Nevertheless the two schemes differ dramatically, in that rebates increase joint purchasing, whereas bundle pricing diminishes bundle purchases

Essays on Sales Promotion and Consumer Decision Making Process

Sales promotion is a common tool used by retailers. However, even though it is commonly used in marketplace, sometimes it cannot achieve the results as retailers expect. Thus, the specific process of consumer decision making and factors that influence the effect of promotions on consumer behavior need further research. This thesis is composed of a literature review of sales promotions, consumers response to a specific sales promotion (Minimum Purchase Requirement deal), and consumers’ decision-making process when using different symbols to shop. The first chapter presents an integrative review to summarize past empirical or theoretical literature to provide a comprehensive understanding of consumers’ and marketers’ response towards monetary and non-monetary sales promotion. The second chapter examines how the consumer’s regulatory focus influences their shopping behavior when they choose to use Minimum Purchase Requirement deals. The third chapter focuses on the interaction effect between symbol usage and personality traits on consumer’s consideration set in online shopping. The relationship among the three chapters is that the first chapter reviews the existing research about sales promotion, and the second chapter focuses on a specific type of sales promotion and examines the effect of consumers’ goal pursuit strategy (regulatory focus) on purchasing behavior when using the deal. Even though the third chapter focuses on external triggered decision-making cues (symbol usage), psychological factors (personality traits) and decision-making process (consideration set) in shopping rather than sales promotions, it follows the same thread of research in consumer decision making process and factors influencing consumer behavior. The thesis aims to contribute to the literature of sales promotion, regulatory focus, priming effect of symbol usage and consumer decision making and behavior. The findings have important implications for marketing practitioners and retailers

The Prohibition of the Proposed Springer-ProSiebenSat.1-Merger: How much Economics in German Merger Control?

We review the Bundeskartellamt (Federal Cartel Office Germany) decision on the proposed merger between Springer and ProSiebenSat.1 from an economic point of view. In doing so, it is not our goal to analyse whether the controversial decision by the Bundeskartellamt has been correct or flawed from a legal point of view. Instead, we analyse whether the economic reasoning in the decision document reflects state-of-the-art economic theory on conglomerate mergers. Regarding such types of mergers, anticompetitive effects either do not occur regularly or are more often than not overcompensated by efficiency gains, so that a standard welfare perspective demands reluctance concerning antitrust interventions. This is particularly true if two-sided markets, like media markets, are involved. However, anticompetitive conglomerate mergers are not impossible, in particular in neighbouring markets where there is some relationship between the products of the merging companies. In line with the more-economic approach in European merger control, a particular thorough line of argumentation, backed with particularly convincing economic evidence, is necessary to justify a prohibition of a conglomerate merger from an economic point of view. Against this background, we do not find the reasoning of the Bundeskartellamt entirely convincing and sufficiently strong to justify a prohibition of the proposed combination from an economic perspective. The reasons are that (i) the Bundeskartellamt fails to continuously consider consumer and customer welfare as the relevant standards, (ii) positive efficiency and welfare effects of cross-media strategies are neglected, (iii) in contrast, the competition agency sometimes appears to view profitability of post-merger strategy options to be per se anticompetitive (efficiency offence), (iv) the incontestability of the relevant markets is not sufficiently substantiated, (v) inconsistencies occur regarding the symmetry of the TV advertising market duopoly versus the unique role of the BILD-Zeitung and (vi) the employment of modern economic instruments appears to be underdeveloped. Thus, we conclude that the Bundeskartellamt has not embraced the European more-economic approach in the analysed decision. However, one can discuss whether economic effects are overcompensated in this case by concerns about a reduction in diversity of opinion and threats to free speech. Similar to the Bundeskartellamt, we do not consider these concerns in our analysis.merger control, media markets, more-economic approach, conglomerate mergers, cross-promotion