INVESTIGATING THE IMPACT OF PRICE AS A

POSITIONING FACTOR IN THE UK SUPERMARKET

INDUSTRY: FOCUS ON TESCO
Table of Contents Table of Contents
Chapter 1. Introduction..............................................................................................................1
1.1 Working Title....................................................................................................................1
1.2 Introduction......................................................................................................................1
1.3 Statement of the Problem.................................................................................................2
1.4 Reearch !b"ecti#e.........................................................................................................2
1.$ Reearch %uetion..........................................................................................................3
1.& '(pothei........................................................................................................................3
1.) *iertation !utline.........................................................................................................3
Chapter 2. Reearch +ethodolog(.............................................................................................4
2.1 Introduction......................................................................................................................4
2.2 The Reearch Philooph(.................................................................................................4
2.2.1 !ntolog(....................................................................................................................4
2.2.2 ,pitemolog(.............................................................................................................$
2.2.3 Poition on Philooph(..............................................................................................&
2.3 Reearch -pproach...........................................................................................................)
2.3.1 *eduction..................................................................................................................)
2.3.2 Induction....................................................................................................................
2.3.3 Combined -pproach...................................................................................................
2.4 Reearch *eign.............................................................................................................../
2.$ Reearch Strateg(............................................................................................................./
2.$.1 0rounded Theor(....................................................................................................../
2.$.2 ,thnograph(............................................................................................................11
2.$.3 Cae Stud(...............................................................................................................11
2.& *ata Collection Techni2ue............................................................................................11
2.&.1 Sampling and Population........................................................................................11
2.&.2 3ocu 0roup Inter#ie4..........................................................................................13
2.&.3 %uetionnaire.........................................................................................................13
2.) Scope and 5imitation....................................................................................................13
2.. 0aining -cce and Reearch ,thic.............................................................................14
2./ Concluion......................................................................................................................1$
Chapter 3. 5iterature Re#ie4...................................................................................................1&
3.1 Introduction....................................................................................................................1&
3.2 Price Image *imenion................................................................................................1&
3.3 Price6%ualit( 5ink..........................................................................................................1.
3.4 Price a a +arket Cue....................................................................................................1/
3.$ ,go6in#ol#ement and Price............................................................................................21
3.& Price and Retail Patronage.............................................................................................22
3.) Price Premium and 7rand ,2uit(.................................................................................22
3.. Role of Price in Strategic Poitioning............................................................................23
3./ ,8pectation Theor( in Conumer 7eha#iour.................................................................2&
3.11 'enr( -ael +odel.....................................................................................................2.
Chapter 4. *icuion and -nal(i.........................................................................................31
4.1 Introduction....................................................................................................................31
4.2 %ualitati#e Reearch Report and -nal(i.....................................................................31
4.3 %uantitati#e Reearch Report and -nal(i...................................................................34
4.4 *icuion on the 3inding............................................................................................42
4.4.1 I price a differentiator in the upermarket indutr(9.............................................42
4.4.2 I the lo4 end price poition #iable for retailer9...................................................43
4.4.3 The '(pothei........................................................................................................44
4.$ Concluion......................................................................................................................44
Chapter $. Concluion............................................................................................................4&
Reference................................................................................................................................4/
-ppendi8 1: %uetionnaire Summar(......................................................................................$4
-ppendi8 2: Planning and ,ffort Sheet..................................................................................&2
Chapter 1. Introduction
1.1 Introdut!on
+an( upermarket in the ;< are poitioned at the lo4er end of the price pectrum. 3or
intance= Teco= -S*-= 5idl= and -ldi are all poitioned a lo4 priced retailer 4ith mall
difference in the price bet4een their product of imilar nature. 'o4e#er= the primar(
problem 4ith being poitioned a a dicount retailer i that the percei#ed 2ualit( of the
product reduce among conumer. 3or intance= it ha been tated that although price deal
and lo4 price at retail outlet generate ignificant amount of traffic to the tore= the lo4
price often offet the perception of the cutomer unfa#ourabl( to4ard the 2ualit( of the
product >S4ani ? @oo= 2111A. The in6tore brand of the upermarket >uch a Teco or
-S*-A are uuall( the lo4er priced alternati#e to the BbrandedC product= 4hich are alo
a#ailable in the tore. 'o4e#er= the primar( difference in conumer perception to4ard thee
product i that the brand #alue or the brand image ma( not be a much of an influence on the
purchae deciion a the B#alue6for6mone(C apect of the product. In other 4ord=
conumer generall( look to thee brand a a BubtituteC for a branded product >S4ani ?
@oo= 2111A.
Recentl(= it 4a een that companie uch a -ldi and 5idl ha#e recei#ed good feedback from
cutomer 4ith repect to cutomer atifaction. While the ur#e( report claim that the
atifaction le#el reflected e#en the 2ualit( of the product and the er#ice encounter in the
tore= it ma( be aumed that the atifaction of the cutomer ma( ha#e been partl(
influenced b( the lo4 price at thee tore. The economic do4nturn in the ;nited <ingdom
ma( be a factor that ma( be influencing conumer to feel atified 4ith lo4er priced
product. *uring the economic do4nturn= it i generall( a practice that mot companie
reduce their price in order to increae demand for the product. Thi 4a e#en follo4ed b(
companie uch a Teco and e#en the up6market retailer D Waitroe >Pierc( et al.= 2111A.
'o4e#er= although thee companie lo4ered their price= the( 4ere not met 4ith the ame
feedback from the cutomer. In fact= e#en +ark ? Spencer= 4hich i kno4n for it 2ualit(
product= 4a rated belo4 -ldi and 5idl in term of cutomer atifaction >The Independent=
2111A. In other 4ord= it i poible that price became a ma"or differentiator onl( during the
economic do4nturn and price ma( not remain a differentiator bet4een companie 4hen the
econom( pick up again. Pricing i certainl( a ke( component in a marketing trateg( of an
1
organiation. Pricing can alo pro#ide organiation 4ith a competiti#e ad#antage >0re4al et
al.= 2111A. 'o4e#er= pricing ma( not be the primar( factor on 4hich conumer bae their
purchae deciion.
1." St#t$%$nt o& t'$ Pro()$%
Teco i currentl( the market leader in the retail indutr( >and ha been ince 1//$A= ince the
launch of the Teco Clubcard. It ha been claimed that Teco ha created cutomer lo(alt( b(
introducing the Clubcard >Turner ? Wilon= 211&A. 'o4e#er= it i poible that the Clubcard
doe not necearil( create lo(alt(E rather= it help the compan( to undertand and predict
cutomer beha#iour= and to an e8tent= influence cutomer beha#iour through #ariou price
deal and offer. It ha been etablihed that cutomer lo(alt( can certainl( impro#e the
probabilit( that an organiationF profit 4ill increae ><otler ? -rmtrong= 2111A. In the
cae of Teco= Blo(alt(C ha not actuall( been created although the compan( ha etablihed a
4a( of predicting and influencing conumer beha#iour >to an e8tentA through the lo(alt( card.
Since cutomer atifaction i one of the ke( ingredient that contribute to cutomer lo(alt(= it
can be aid that at the moment= Waitroe= -ldi= and 5idl are at a better poition to create
cutomer lo(alt(= for 4hate#er reaon.
Cutomer generall( do not differentiate the companie baed on the price the( offer= rather=
the( differentiate the product baed on the percei#ed 2ualit(. The problem i that companie
uch a Teco= +orrion= and -S*- ha#e imilar price tructure= and a uch= pricing ma(
not be the point of difference for the conumer. TecoF poitioning on the bai of BpriceC
>Be#er( little helpCA ma( not help the compan( to gain a ignificant ad#antage o#er the
competitor= although it ma( contribute to maintaining thi ad#antage.
1.* R$+$#r' O(,$t!-$+
7aed on the aumption that pricing i not the factor b( 4hich conumer differentiate
companie= the follo4ing reearch ob"ecti#e ha#e been compoed:
To anal(e the e8tent to 4hich pricing i a differentiating factor >a een b( the
cutomerA that influence conumer bu(ing beha#iour in the upermarket indutr(
To identif( 4hether price poitioning >a een b( the cutomerA i a #iable option for
upermarket
2
1.. R$+$#r' /u$+t!on+
The reearch 2uetion that ha#e been propoed for thi tud( are a follo4:
1. To 4hat e8tent i price a differentiator in the upermarket indutr(9
2. I a lo4 end poition #iable for a retailer9
1.0 H12ot'$+!+
Price i not the ke( differentiating factor that influence conumer bu(ing beha#iour.
1.3 D!++$rt#t!on Out)!n$
The diertation ha been di#ided into fi#e chapter D introduction= reearch methodolog(=
literature re#ie4= dicuion and anal(i= and concluion and recommendation. The firt
chapter D introduction D et the background for the reearch and alo et up the reearch
2uetion for the tud(. The econd chapter D reearch methodolog( D anal(e the #ariou
method that are a#ailable to the reearcher "utification ha#e been pro#ided for the method
that ha#e been choen. The third chapter D literature re#ie4 D i concerned 4ith the re#ie4 of
the rele#ant literature and pro#ide a guiding frame4ork for the tud(. The fourth chapter D
dicuion and anal(i D pro#ide the dicuion and anal(i of the primar( data that ha
been collected= in light of the literature re#ie4= the reearch 2uetion= and the h(pothei.
The lat chapter D concluion and recommendation D pro#ide detailed concluion for the
diertation= pro#ide recommendation= and alo highlight the area for further tud( along
4ith the cope and limitation of the tud(.
3
4
Chapter 2. Reearch +ethodolog(
".1 Introdut!on
Thi chapter i concerned 4ith the anal(i of the reearch method that ha#e been choen for
thi tud(. The reearch methodolog( i an important part of the diertation becaue it
pro#ide a foundation to undertand the data and the interpretation thereof >Saunder et al.=
211)A. The method that ha#e been e#aluated in thi chapter are the one that ha#e been
choen and the one that could ha#e been choen for the tud(. The chapter alo outline the
limitation and the cope of the tud(. Reearch ethic ha#e alo been addreed in thi
chapter.
"." T'$ R$+$#r' P'!)o+o2'1
The reearch philooph( i important to a tud( becaue it help an undertanding of the
poition from 4hich the reearch ha been conducted. It ma( eem that the reearch
philooph( ma( not be an integral part of the reearch methodolog(= ho4e#er it i certainl(
important to undertand the reearch philooph( that ha been adopted b( the reearcher
becaue of the impact that it ha on the entire tud( >Saunder et al.= 211)A. There are three
main t(pe of reearch philoophie that are adopted b( reearcher. Thee are D
epitemolog(= ontolog(= and a8iolog(. 7ut thee three tream of reearch philoophie= there
are e#eral poition that reearcher can adopt. 'o4e#er= in management reearch= it i een
that the mot commonl( ued reearch philooph( or reearch poition are thoe of
epitemolog( and ontolog( >Saunder et al.= 211/A.
".".1 Onto)o41
BOntology is concerned with the nature of realityC >Saunder et al.= 211/= p.111A. !ntolog( i
concerned 4ith the nature of realit( in the ene that it deal 4ith the nature of entitie uch
a organiation or other ocial entitie. 3or intance= although the management of an
organiation i not a real entit(= it can be aid that the management e8it Bin reality external
to social actorsC >Saunder et al.= 211/= p.111A and a uch i an entit( that can be reearched.
Thee ocial actor ma( be the emplo(ee= manager= or cutomer of the compan( or
organiation. There are t4o main poition that a reearch can adopt in ontolog(. Thee are
ob"ecti#im and ub"ecti#im >0reener= 211.E 3iher= 2111A. -n ob"ecti#it 4ould perhap
conider that the policie of the management ma( not be influenced b( the manager 4ho run
$
the management. !n the other hand a ub"ecti#e lit 4ould perhap conider that the
management of an organiation can change according to the managerF attitude and belief.
In other 4ord= in ub"ecti#im= important i gi#en to the ocial actor and their influence on
the ocial phenomena >Saunder et al.= 211/A.
"."." E2!+t$%o)o41
,pitemolog( i perhap the reearch philooph( that i mot ued in management reearch. It
i primaril( concerned 4ith 4hat can be contituted a acceptable kno4ledge in a gi#en field
of reearch >Saunder et al.= 211/A. 3or ome reearcher= it i important that the data
collected hould conit of the opinion and the feeling of the repondent 4hile other
reearcher ma( feel that it i more important to obtain data that can be repreented purel( in
tatitical form. Thee are the t4o main poition in epitemolog( 4hich are poiti#im and
interpreti#im >Saunder et al.= 211)A. The reearcher 4ho conider that data hould be
de#oid of peronal feeling aume a poition of poiti#im and the reearcher 4ho
conider that data hould be more emotional and contain the feeling of the repondent
aume the poition of interpreti#im >Saunder et al.= 211/A.
Positivism
Poiti#im i a reearch philooph( that i e8teni#el( ued in cientific reearch a 4ell a in
management reearch. The reaon a to 4h( poiti#im i popular in cientific reearch and
management reearch i becaue the poition of poiti#im enable reearcher to gather data
that can be repreented in the tatitical form and i free from bia. Poiti#im i ued in
reearche 4here a theor( or a h(pothei ha to be teted. In thi conte8t= the primar( goal of
emplo(ing poiti#im i to perhap obtain finding or data that can be highl( generaliable.
!ne of the 2ualitie that ha#e to be inured in a poiti#it tud( i that data hould be
detached from an( emotional attachment and the reearcher hould not be attached to the
participant of the tud( in an( 4a( >Saunder et al.= 211/E 3iher= 2111A. -lthough it i
certainl( poible for a tud( to contain thee characteritic= it i 2uite difficult under normal
circumtance. In other 4ord= it ma( not be poible for a reearcher to become totall(
detached from the phenomena that i being tudied. If the reearcher i not free from bia=
then it 4ould certainl( affect the #alidit( and reliabilit( of the tud(. The main aumption of
poiti#im i that Bthe researcher is independent of and neither affects nor is affected by the
subject of the researchC >Remen(i et al= 1//. p.33 cited in Saunder et al= 211/= p.114A.
&
Interpretivism
Interpreti#im i another reearch poition that tem from epitemolog(. Thi i another
reearch poition that i 4idel( ued in management reearch. The reaon a to 4h(
interpreti#im i popular i becaue it allo4 the reearcher to collect 2ualitati#e data from
the repondent. In other 4ord= it deal 4ith the emotion and feeling of the repondent.
The primar( aim of interpreti#it tudie i to be able to undertand a gi#en ocial phenomena
rather than to formulate a theor(. In contrat to poiti#im= interpreti#im dra4 highl( on the
emotion and feeling of the repondent 4hich allo4 the reearcher to gather a large 2uantit(
of 2ualitati#e information. -n aumption of interpreti#im i that each indi#idual ma(
interact 4ith the ocial phenomena in a different 4a( and a uch i important for the
reearch to undertand the interpretation of each indi#idual. Thi re2uire the reearcher
together 2ualitati#e information from the repondent >Saunder et al.= 211)E 0reener= 211.A.
In interpreti#im= it i poible for the reearcher to gain an in6depth undertanding of the
reearch phenomena that i occurring. Interpreti#im i uuall( ued 4hen there 4a little
kno4ledge about the phenomena that i occurring and 4hen there are not man( prior tudie
conducted in the area of reearch. !ne of the dra4back of interpreti#im i that it i poible
that reearcher bia ma( e8it in the tud( a the reearch become in#ol#ed 4ith the
participant and the phenomenon that i being in#etigated. In that 4a(= it i poible that an
interpreti#it tud( ma( be limited and reliabilit( and #alidit( if reearcher bia e8it in the
tud( >Saunder et al.= 211)E 0ill ? Gohnon= 2112A.
".".* Po+!t!on on P'!)o+o2'1
The reearch philooph( that ha been adopted for thi tud( i that of an interpreti#it
reearch philooph(. The reaon for chooing interpreti#im a the reearch poition i
becaue the tud( and the reearch 2uetion demand that 2ualitati#e information hould be
obtained 4ith regard to conumer beha#iour and their perception on the price a a
differentiator in the retail indutr(. Cone2uentl(= the data that ha to be collected from the
conumer i 2ualitati#e in the chair and deal 4ith the emotion and feeling of the
conumer. - uch= the interpreti#it philooph( i 4ell6uited for the tud(. -dditionall(=
although the tud( aim to undertand 4hether price i reall( a differentiating factor in the
retail indutr(= the tud( i primaril( focued on a ingle organiation D Teco. - uch= the
tud( 4ill be ub"ecti#e in nature. In other 4ord= the interpretation of the conumer about
price in the retail ector ma( be focued on addreing Teco rather than the entire retail
)
indutr(. Therefore= the reearch poition of interpreti#im i more uited for thi tud( than
an( other reearch poition.
".* R$+$#r' A22ro#'
The reearch approach i another important apect of the reearch methodolog(. It i a
reearch approach that determine 4hether the aim of the reearch i to formulate a theor( or
to tet a theor(. The reearch approach i dependent on ho4 much prior kno4ledge i kno4n
about the gi#en field of tud(. In other 4ord= if there i e8teni#e literature in a gi#en field of
tud(= then it ma( be poible to tet the theorie. !r= if there i not much literature in a gi#en
field of tud(= then it ma( be poible to formulate a theor( from the tud( >0ill ? Gohnon=
2112A. There are t4o reearch approach i that are a#ailable to reearcher 4hile conducting a
tud(. Thee are D induction and deduction. In ome intance= it i alo poible that a mi8ed
approach ma( be elected for a tud( >Saunder et al.= 211/A.
".*.1 D$dut!on
*eduction i an approach 4hich i primaril( concerned 4ith deducing theorie. In other
4ord= it i concerned 4ith teting or BdeductingC theorie. The proce of deduction i 2uite
rigorou 4ith e#eral tet being conducted to tet the data that i collected. The deducti#e
approach i ued to tet h(pothee or theorie baed on the e#idence that i collected from
the primar( data. The important fact about deduction i that the data i generall( teted in
#ariou etting >3iher= 2111A. Since deduction i concerned 4ith teting h(pothei or
theor(= it i 2uite imilar to the poiti#it approach in that it can produce cientific like
generaliation >Saunder et al.= 211/A. The tet that are conducted to deduction are ued to
either pro#e or dipro#e the h(pothei or theor( >5ancater= 211$A. Thi approach ma( be
more ueful in the cientific en2uir(= ho4e#er= i alo ued 4idel( in buine are
management reearch >5ancater= 211$E 0ill ? Gohnon= 2112A. 3or deduction= the main t(pe
of data that i re2uired i 2uantitati#e data 4hich can help the reearcher to etablih trend or
pattern that can be ued to tet the theor(. Similar to poiti#im= deduction i alo de#oid of
an( peronal feeling or emotion. In other 4ord= the data that i collected i= in mot cae=
numerical >Tharenou et al.= 211)A. 'o4e#er= deduction i not #er( appropriate for the tud(
becaue the tud( re2uire the reearcher to collect 2ualitati#e information from the
repondent. - uch= deduction ha not been ued for the tud(.
.
".*." Indut!on
Induction i another approach that i a#ailable to reearcher. In contrat to deduction=
induction i concerned 4ith building theor( from ne4 fact that are collected from the
primar( data. In mot cae= there i no h(pothei or theor( to be teted in induction. The
baic aumption in induction i that the reearcher hould be able to undertand the ocial
phenomena in the 4a( in 4hich the ocial actor 4ould percei#e it. - uch= it re2uire the
reearcher to collect a lot of 2ualitati#e data from the repondent >Saunder et al.= 211/A. The
benefit of the inducti#e approach i that through thi approach reearcher are able to
undertand and empathie 4ith the repondent could take part in the tud(. -dditionall(=
4herea deduction ha trict and rigid method= induction i 2uite fle8ible= to accommodate
the emotion and feeling of the participant >Saunder et al.= 211)A. Induction alo help
reearcher to gain an in6depth undertanding of the ocial phenomena and that i being
tudied. Thi i 2uite imilar to interpreti#im 4here the reearcher aim to collect 2ualitati#e
data from the repondent in order to gain an in6depth undertanding of the phenomenon
>3iher= 2111E Saunder et al.= 211/A. Cone2uentl(= the main data that i re2uired for an
inducti#e tud( i 2ualitati#e data 4hich deal 4ith emotion and feeling of the repondent
rather than number and tatitic. -ccording to 0ill ? Gohnon >2112A= it ha been tated that
the inducti#e approach can e8plain 4h( thing happen the 4a( the( do.
".*.* Co%(!n$d A22ro#'
The combined approach i another approach that i a#ailable to reearcher. - confirmed
from the title= the combined approach i a combination of both induction and deduction. Thi
approach i ued b( reearcher becaue it ma( be difficult to adopt an approach of either
pure induction or pure deduction >Saunder et al.= 211)A. Combined approach alo help in
#alidating the reult that are obtained. 3or intance= data that i collected through
2uantitati#e method can be #alidated b( data that i collected through 2ualitati#e method. In
other 4ord= a combined approach ma( facilitate the triangulation of data 4hich impro#e the
reliabilit( and #alidit( of the tud( >Saunder et al.= 211/A.
In thi tud(= although the primar( t(pe of data that i re2uired i 2ualitati#e data= it i
propoed that the #alidit( and reliabilit( of the data can be impro#ed b( collecting
2uantitati#e data a 4ell. In that conte8t= it ha been deemed that a combined approach 4ill
be preferable for the tud( a it can allo4 the collection of both 2uantitati#e a 4ell a
2ualitati#e data. -dditionall(= ince the tud( ha h(pothei= the 2uantitati#e data 4ill be
/
able to tet the h(pothei. 'o4e#er= one of the primar( limitation that ma( be encountered
during the tud( i D time. It ma( take more time and effort to collect data from both
2ualitati#e and 2uantitati#e method and anal(e them >Saunder et al.= 211/A.
".. R$+$#r' D$+!4n
The reearch deign e8plain 4hat t(pe of reearch i being conducted. There are primaril(
three t(pe of reearch deign in management reearch. Thee are 6 e8plorator(= decripti#e=
and e8planator( reearch deign. ,8plorator( reearch deign i ued 4hen there i not much
information about a gi#en phenomenon. Thi t(pe of reearch deign i ued e8teni#el( in
order to pro#ide ne4 information about ne4 phenomena. In other 4ord= the e8plorator(
reearch deign i uitable primar( onl( for une8plored phenomena >Saunder et al.= 211/A.
-n e8planator( reearch deign= on the other hand= eek to e8plain 4h( a gi#en phenomenon
i occurring. In other= an e8planator( reearch deign eek to e8plain and anal(e 4h( thing
are happening the 4a( the( are. In impler term= it can be aid that the e8planator( reearch
deign eek to e8plain the relationhip bet4een the #ariable that are being tudied. The third
t(pe of reearch deign i the decripti#e reearch deign 4hich i not generall( ued in
management reearch. The reaon a to 4h( decripti#e reearch deign i not ued becaue it
onl( pro#ide a decription of the e#ent that are occurring rather than pro#iding an anal(i
of 4h( or ho4 the( are occurring >Saunder et al.= 211/E Tharenou et al.= 211)A.
".0 R$+$#r' Str#t$41
The reearch trateg( for a tud( i highl( dependent on the reearch 2uetion and the
reearch topic. The reaon for thi i that the reearch trateg( hould be able to an4er the
reearch 2uetion in the bet poible manner. Thi i 4h( chooing the right reearch
trateg( i #er( important becaue it enable the reearcher to obtain the right an4er for the
reearch 2uetion. It i certainl( true that one reearch trateg( ma( not be uperior or
inferior to another reearch trateg(. 'o4e#er= it i poible that a reearch reume be more
uitable for a tud( than another trateg( >Saunder et al.= 211/A. In thi cae= the reearch
trategie that eemed to be appropriate for the tud( 4ere grounded theor( trateg(=
ethnograph(= and the cae tud( reearch trateg(.
".0.1 Ground$d T'$or1
The grounded theor( trateg( i one of the reearch trategie that are firml( rooted in
induction. The reaon a to 4h( the grounded theor( trateg( ma( be uitable for thi tud( i
11
becaue it i embedded in induction and i conitent 4ith the interpreti#it poition of
reearch philooph(. The ad#antage of uing a grounded theor( trateg( i that it enable the
reearcher to build theor( 4hile conducting the reearch at the ame time. 'o4e#er= to add
update monetar( trateg(= it i important that little or no kno4ledge been kno4n in the gi#en
field of tud(. In thi cae= it i een that ince there i ample amount of literature regarding
pricing and conumer beha#iour= the grounded theor( trateg( 4a not elected for the tud(.
-ll the dra4back of the trateg( i that it ma( not be poible to conduct a thorough anal(i
of the literature 4ith that firt gaining a feel of the ub"ect that i being in#etigated >Saunder
et al.= 211/A.
".0." Et'no4r#2'1
,thnograph( i another reearch trateg( that i rooted in induction. In ethnograph(= the
reearch intend to anal(e and e8plain or interpret the ocial 4orld in the 4a( that the ocial
actor ma( interpret it >3iher= 2111E Saunder et al.= 211/A. ,thnograph( i #er( ueful in
conducting reearch a it occur. -dditionall(= ethnograph( 4ill be able to pro#ide a rich
inight into a gi#en phenomenon that i occurring. !ne of the dra4back of uing
ethnograph( i that it can be #er( time conuming and ma( re2uire that the reearcher i
completel( immered in the phenomenon that i being in#etigated. -ccording to Saunder et
al >211/= p.14/A the reearcher hould be completel( immered in the Bocial 4orld being
reearched a completel( a poibleC. In thi cae= ince the reearch i a part6time tudent
and ma( not find the time re2uired to become deepl( in#ol#ed in the reearch= the trateg( of
ethnograph( 4a not choen for the tud(. In other 4ord= ince the time allotted for the
diertation i limited= it ma( not be poible for the reearcher to complete the reearch on
time 4ith thi trateg(. !ther4ie= ethnograph( ma( ha#e been able to pro#ide an in6depth
anal(i of conumer beha#iour 4ith repect to pricing trateg( and price a a differentiator in
the retail ector >Saunder et al.= 211)E Saunder et al.= 211/E 3iher= 2111A.
".0.* C#+$ Stud1
The research strategy that has been chosen for the study is a case study research strategy.
The reaon a to 4h( a cae tud( reearch trateg( ha been choen i becaue the tud( i
primaril( concerned 4ith a ingle organiation and ma( re2uire in6depth anal(i of the
reearch phenomenon. The cae tud( reearch trateg( i one of the trategie that can be
ued for both interpreti#it a 4ell a poiti#it tud(. The ad#antage of a cae tud( i that it
can be ued effecti#el( to in#etigate the phenomenon in it real life conte8t. -dditionall(= the
11
cae tud( reearch trateg( 4ill be able to pro#ide rich inight into the phenomena that i
being in#etigated. In mot cae= it i een that the cae tud( reearch trateg( i ued for
either an e8plorator( or e8planator( reearch deign. The dra4back of uing the cae tud(
reearch #alue i that if the cae i not rich enough= then it ma( not be poible for the
reearch to pro#ide conclui#e reult. It ha alo been tated that multiple cae ma( be ued
in order to impro#e the #alidit( and reliabilit( of the tud(. In thi cae= ho4e#er= o4ing to
the limited time= a ingle cae 4a choen. -n ad#antage of uing a cae tud( reearch
trateg( i that it ad#ocate the ue of t4o or more data collection method in order to
impro#e the #alidit( of the data that i collected. Some of the tool that can be ued for the
collection of data uing the cae tud( reearch trateg( are inter#ie4= 2uetionnaire= and
ober#ation >Saunder et al.= 211/A. The ue of t4o or more data collection method
facilitate the triangulation 4hich impro#e the #alidit( and reliabilit( of the data. In other
4ord= it help the reearcher to determine 4hether the data are telling a 4hat the( eem to
be telling u. ;ing the cae tud( reearch trateg( and uing t4o method of data collection=
it 4ill be poible to #alidate the reult that are obtained through either method. -dditionall(=
the cae tud( reearch trateg( 4ill be able to pro#ide an in6depth inight into the
phenomenon D conumer perception on price a a differentiating factor in the upermarket
indutr(.
".3 D#t# Co))$t!on T$'n!5u$+
In order to undertake a reearch= primar( data ha to be collected from a ample in the
population= or the entire population= if poible. In thi cae= the population for the tud( i
the conumer bae of Teco in the 5ondon area. Since it i not poible to collect data from all
the conumer of Teco in 5ondon= ampling i necear(. Thi i becaue it ma( not be
poible to collect data from the entire population that ha been choen for the tud(.
-dditionall(= the reearcher ma( not ha#e acce to collect data from the entire population.
Since there are t4o t(pe of data that 4ill be collected for the tud(= t4o t(pe of ampling
techni2ue ha#e been ued in the collection of data.
".3.1 S#%2)!n4 #nd Po2u)#t!on
Hon6probabilit( ampling i a techni2ue that emphaie on the ample not being
repreentati#e. Thi t(pe of ampling techni2ue i t(picall( ued to collect 2ualitati#e data
4here repreentati#ene of the ample i not #er( important. Cone2uentl(= in thi cae= the
12
non6probabilit( ampling method ha been ued to collect 2ualitati#e data through inter#ie4
and 2uantitati#e data through 2uetionnaire.
Qualitative Data
The ampling method that 4a choen to collect 2ualitati#e data 4a con#enience ampling
and the ample from the colleague= friend= and famil( member of the reearcher.
Convenience sampling involves selecting haphazardly those cases that are easiest to
obtain for your sample >Saunder et al.= 211/= p.241A. The reearcher ackno4ledge that
the ample ma( be ub"ect to bia in the ene that the ample ha been elected from the
ac2uaintance of the reearcher. -dditionall(= thee participant 4ere handpicked b( the
reearcher and a uch= it ma( be poible that the bia ma( e8it in the tud( to an e8tent
>Saunder et al.= 211/A. 'o4e#er= care ha been taken to enure that thee participant 4ere
choen a randoml( a poible in order to eliminate bia from the ample. The re2uirement
for the participant 4a that the( hould ha#e been regular cutomer of Teco and the(
hould ha#e alo been familiar 4ith dicount retailer uch a -ldi and 5idl. - total of 1$
cae 4ere elected through for the tud(. Thee 1$ indi#idual 4ere then inter#ie4ed in
group >e8plained laterA.
Quantitative data
-lthough it ma( ha#e been better if probabilit( ampling 4a ued to collect 2uantitati#e
data= probabilit( ampling 4a not conidered becaue the reearcher did not ha#e acce to
ample frame in order to ue probabilit( ampling. - tated before= the population for the
tud( 4a the conumer bae of Teco in 5ondon. The propoed ample iIe for the
2uantitati#e tud( 4a about .1 to 111 cae. It 4a poible to contact about 111 participant
and in#ite them for the tud(. 'o4e#er= onl( $) peron reponded to the 2uetionnaire. The
primar( purpoe of collecting 2uantitati#e data 4a to be able to triangulate the data that i
collected from the focu group inter#ie4.
If probabilit( ampling 4a ued= the recommended ample iIe for a population of more
than 111=111 cutomer 4ould ha#e been 3.4 4ith a margin of error of $J >Saunder et al.=
211/A= and it 4a etimated that it 4ould not be poible to collect data from 3.4 cutomer=
enuring that repreentati#ene 4a maintained= a there 4a no 4a( to obtain an actual
ample frame of the cutomer of Teco. ,#en 4ith repone rate of 41J for the probabilit(
ample= the number of indi#idual that had to be contacted 4a ./2 >3$)K111L41A.
13
".3." Fou+ Grou2 Int$r-!$6+
Since the tud( i e8plorator(= it re2uired that in6depth data hould be collected for the tud(
>3iher= 2111A. - uch= emi6tructured inter#ie4 4ere ued in the a the tool to collect
2ualitati#e data. Semi6tructured inter#ie4 alo pro#ide the opportunit( for the reearcher to
adapt or change the 2uetion a per the repone that are recei#ed >Saunder et al.= 211/A.
Thee emi tructured inter#ie4 4ere adminitered in focu group. The focu group
inter#ie4 lated about 21 minute each= 4ith $ member participating in each focu group
inter#ie4. In other 4ord= a total of three inter#ie4 4ere conducted in 4hich fi#e member
participated in each focu group inter#ie4.
".3.* /u$+t!onn#!r$+
The intrument that 4ere ued to collect 2uantitati#e data 4ere 2uetionnaire. Thee
2uetionnaire 4ere formulated on the bai of the literature re#ie4 and the reearch
ob"ecti#e= o a to be able to pro#ide inightful an4er to the reearch. The 2uetionnaire
4ere deigned on a 4ebite D Sur#e( 0iImo. The reaon for chooing 2uetionnaire 4a that
2uetionnaire 4ould be able to collect a lot of 2uantitati#e data in a #er( hort period of time
>Saunder et al.= 211/E <othari= 2114E 5ancater= 211$A. -dditionall(= 2uetionnaire bae on
the internet are more con#enient for both the reearcher a 4ell a the repondent.
-lthough 2uetionnaire are t(picall( ued in 2uantitati#e reearch= the( ha#e been ued in
thi tud( to be able to triangulate the outcome from the focu group inter#ie4 >Saunder et
al.= 211/A. The 2uetion in the 2uetionnaire 4ere baed on likert cale 4hich 4ould be
ea( for the repondent to an4er and 4ould alo pro#ide the reearcher 4ith an inight into
their perception. The link to the 2uetionnaire 4a pro#ided to the contact of the reearcher
through 3acebook and through e6mail. - total of &$ repone 4ere recei#ed out of 4hich $)
and repone 4ere completed. The other eight repone 4ere not complete and a uch the(
could not be ued for the anal(i.
".7 So2$ #nd 8!%!t#t!on+
Through thi tud(= it i poible to undertand the impact that price ha on conumer 4ith
repect to the retail indutr( in the ;nited <ingdom. In other 4ord= thi tud( ha been able
to hed ome light into undertanding 4hether conumer in the retail ector ee price a the
differentiating factor bet4een companie. 'o4e#er= there are certain limitation that ha#e
been ackno4ledged in the tud(.
14
!ne of the primar( limitation of the tud( i that it i concerned 4ith a ingle organiation
and the ample iIe that ha been elected for the tud( i 2uite mall. -dditionall(= the
ample ha been choen from the friend= colleague= and relati#e of the reearcher limiting
the cope of the reearch e#en further. In other 4ord= it i poible that all the conumer
4ho took part in the tud( ma( ha#e imilar opinion and idea about the pricing trategie
and price a a different hipping factor in the retail ector. -lo= i poible that the tud( ma(
not be generaliable. Thi i again becaue of the mall ample iIe and the fact that the
people 4ho ha#e taken part in the tud( are friend= relati#e= or colleague of the reearcher.
With regard to the #alidit( and reliabilit( of the tud(= it can be aid that the tud( i reliable
and #alid to an e8tent becaue if the ame method are ued in a different etting= it ma( be
able to pro#ide conitent reult and the #alidit( of the tud( ha been teted b( uing t4o or
more t(pe of data collection method. In other 4ord= although the tud( ma( not be
generaliable= it i certainl( reliable and #alid to an e8tent.
".9 G#!n!n4 A$++ #nd R$+$#r' Et'!+
It ha been tated that man( tudent reearcher fail to ackno4ledge that acce to primar(
data i #er( important in conducting a reearch >Saunder et al.= 211/A. The reaon for thi i
that if there i no acce to primar( data= then it ma( not be 4orth the time and effort that ha
been pent on deigning the literature re#ie4 and the reearch 2uetion. -lo= if there i no
acce to primar( data= then it ma( not be poible to continue the tud( further. In thi cae=
acce to primar( information or primar( data 4a poible becaue the population conited
of the friend and ac2uaintance of the reearcher.
Reearch ethic are BmoralC that the reearcher hould bear in mind 4hile undertaking the
reearch. In regard to management reearch= it can be aid that reearch ethic refer to
acceptable method or beha#iour of the reearcher. In thi reearch= it 4a enured that the
right of the participant 4ere not #iolated in an( 4a(. The participant 4ere not coerced into
taking part in the tud( and the( 4ere told about the nature and the purpoe of the tud(
before taking part in the tud(. -dditionall(= the( 4ere gi#en the option to 4ithdra4 from the
tud( at an( time a per their deire. If the( decided to 4ithdra4 from the tud(= their data
4ould not be ued in the anal(i. The peronal information or data 4a collected from the
participant during the focu group inter#ie4 or through the 2uetionnaire. Cone2uentl(=
confidentialit( of the participant 4a maintained b( doing thi. -dditionall(= the reearcher
1$
refrained from tampering 4ith the data in order to uit the h(pothei or the deired outcome
of the reearcher >Saunder et al.= 211)A.
".: Con)u+!on
;pon anal(ing the #ariou reearch method and tool that 4ere a#ailable to the reearch= it
4a deemed that the reearch philooph( of interpreti#im 4ould be the mot appropriate
poition for the tud(. In conitenc( 4ith the reearch philooph( of interpreti#it= the
reearch deign that 4a choen 4a e8planator(. The reearch approach that 4a choen 4a
a combined approach a the combined approach 4ould be able to impro#e the #alidit( and
reliabilit( of the tud(. - cae tud( trateg( 4a choen for the tud( ince it deal primaril(
4ith a ingle organiation. Primar( data 4a collected from focu group inter#ie4 and
2uetionnaire. The anal(i and the dicuion on the inter#ie4 and the 2uetionnaire i
pro#ided in the 4
th
chapter.
1&
1)
Chapter 3. 5iterature Re#ie4
*.1 Introdut!on
Thi chapter i concerned 4ith identif(ing the rele#ant literature 4ith regard to pricing and
pricing trategie a a poitioning factor in the perception of the conumer and a marketing
conte8t. Thi chapter i important for the diertation becaue it pro#ide the conceptual
frame4ork and alo re#ie4 e8iting literature on the topic. Thi chapter help the reearcher
in gaining an inight into pricing trategie and the poitioning element of price. -dditionall(=
thi chapter ma( alo be able to identif( the gap in the literature.
Companie= in poitioning themel#e on the bai of price tend to think that the price of the
product ha a mai#e influence on conumer beha#iour. While it ma( be true to an e8tent= it
i een that hopper do not necearil( al4a( influence the deciion of the conumer. 3or
intance= during the recent receion lo4er price ma( ha#e made an impact on bu(erF
deciion >Pierc( et al.= 2111A. 'o4e#er= 4ith repect to branded product= it ma( be poible
that the brand image or the 2ualit( of the product take precedence o#er the intent to
purchae >S4ani ? @oo= 2111A. It i een that the price of the product i more likel( to be an
aeor of the 2ualit( of the product rather than a a mean to differentiate the compan(
><otler ? -rmtrong= 2111A.
With repect to the in#ol#ement le#el of the conumer= it i een that a greater le#el of
in#ol#ement in the product 4ould decreae price eniti#it( in the conumer >5amb et al.=
2111A. Thi i becaue 4hen the conumerF in#ol#ement i high= the number of factor that
4ould go into conideration i more than the number of factor that 4ould be conidered for a
lo4 in#ol#ement product >-hmed et al.= 2114A. 3or intance= if a conumer lo#e peanut
butter >taking the cae of the retail indutr(A it i poible that the conumer ma( be le
eniti#e to the price of the product and ma( concentrate more on the 2ualit( of the product.
In other 4ord= higher in#ol#ement 4ith the product reduce price eniti#it( among
conumer >Solomon et al.= 211&A.
*." Pr!$ I%#4$ D!%$n+!on+
+ot retail organiation compete on the bai of price. Price competition i #er( important
for retail organiation. ,#idence ha been gained from empirical tudie that price i
certainl( one of the mot important factor in chooing a food retailer. Price perception on
1.
the other hand form the baic part of the retailerF image >Meilke= 211&E Mielke= 2111A. The
importance of price in the food retailing indutr( i alo noted from the de#elopment that are
een in the retail indutr(. Thi i epeciall( true 4ith repect to ,urope 4herein i een that
the retail indutr( i being in#aded b( dicount retailer acro the continent >Colla= 2113A.
!n mot occaion= the general perception i that cutomer find dicount retailer to be more
affordable than the traditional retail tore >+orchett et al.= 211&AE ho4e#er= traditional
retailer are tr(ing to compete 4ith the dicount retailer b( introducing tore brand at
budget price >+oreau= 211&E +oreau= 211)A. In thee cenario= it i important for the retail
organiation to be able to ae their price image. The reaon a to 4h( the price image i
important i becaue the price image 4ill help the organiation to identif( i there are an(
dicrepancie bet4een the actual price and the deired price poition of the organiation in
the perception of the cutomer. The aement of the price image of the organiation ma(
alo be intrumental in monitoring an( change in the pricing trategie >Hagle et al.= 2111A.
In addition to meauring the price image of a retail tore= it i alo important for the
organiation to undertand that price image and price atifaction are multidimenional in
the ene that organiation hould undertand 4hich dimenional ma( be mot important to
the conumer >Meilke= 211&E +atIler et al.= 211&A. 3or intance= companie uch a Waitroe
and Teco ma( be benefited b( placing more importance on the price le#el image 4hile
companie uch a -ldi or 5idl ma( be benefited better b( gi#ing importance to the #alue for
mone( image. Price le#el image refer to the perception of the conumer about the price=
ignoring the difference in 2ualit( of the product. The difference bet4een price le#el and
#alue for mone( i that in the price le#el image= conumer are concerned 4ith their
perception about the compan( D 4hether it i cheap or e8peni#eE and #alue for mone(= a
can be inferred concern the perception of the cutomer 4ith regard to 4hat the( can get in
return for the mone( pent >Mielke= 2111A.
Price image ha been defined a Bbu(er attitude to4ard price on aortment le#elC >Mielke=
2111= p.)$1A. Similarl(= it i een that in the pat= man( of the reearcher conidered that
price image 4a a one6dimenional concept categoriing into either price le#el image or
#alue for mone( >lo4 priceA. 'o4e#er= more recent reearch concerning price image ha
re#ealed that price image i a multi6dimenional concept. - per thi definition= price image
ha e#eral dimenion a percei#ed b( the conumer 4ith regard to the retail organiation
and it pricing trategie >Meilke= 211&A.
1/
There are man( tream in literature that can help undertand the concept of price image
dimenion. 'o4e#er= there are four dominant tream in literature concerning price image
dimenion and their antecedent and cone2uence. The firt tream i concerned 4ith the
impact that #ariou product and product group ha#e on the o#erall retailerF price image.
Thi i eentiall( concerned 4ith the price le#el of the tore. The econd tream i concerned
4ith the acti#itie that are performed b( retailer 4hen price are et for their product. Thee
t4o tream are related to the price image dimenion a the( pro#ide an inight into the
antecedent of the price image of the tore. The third tream i concerned 4ith the
perception regarding the #alue6for6mone( concept or the fairne of price. The fourth and
final tream of reearch conceptualie price perception a multidimenional #ariable
>Meilke= 211&E +atIler et al.= 211&A.
*.* Pr!$;/u#)!t1 8!n<
Conumer ue #ariou cue in e#aluating the 2ualit( of product and er#ice in the
marketplace. Thee cue are important to the conumer a the conumer i to make an o#erall
informed deciion about the product or er#ice that i being offered. !ften= conumer are
ub"ect to large #olume of information 4hich the( ma( ha#e to proce before making an
informed deciion about a product. 3or intance= the true 2ualit( of a product i rarel(
meaured b( the conumerE rather= the conumer ha to make a deciion about the productF
2ualit( baed on other marketing cue uch a the countr( of origin or the brand name of the
product ><arde et al.= 2114A. Reearch ha it that marketer are in#ariabl( pro#ided 4ith
incenti#e to pro#ide cutomer onl( 4ith a ubet of the necear( information about the
product and their attribute. Cone2uentl(= conumer ma( not ha#e acce to full
information regarding a product or a er#ice and ma( ha#e to rel( on the other a#ailable
information in order to make informed deciion about the apect that are miing to ae
the o#erall offer >Suri ? +onroe= 2113A. In other 4ord= conumer ma( make "udgment
about the product baed on the price.
Scito#k( >1/44A 4a the firt one to e8amine the link bet4een price and 2ualit(= uggeting
that price of the product can er#e a more than one cue in the conumer deciion making
procee. -ccording to the neo6claical economic thinking= it can be aid that a higher price
of the product ma( inhibit conumer from purchaing the product. 'o4e#er= on the other
hand= it i alo een that conumer ma( be moti#ated to bu( product of higher price=
percei#ing that higher priced product are of higher 2ualit( >Scito#k(= 1/44A. Sube2uent
21
tudie ha#e been able to e8amine the link bet4een price and 2ualit( to a greater e8tent
4hereb( it 4a een that the price 2ualit( link i not onl( influenced b( the price of the
product but that the inferred 2ualit( ma( differ acro categorie of product. 3or intance=
conumer ma( ue price a a 2ualit( indicator to a high e8tent for ome categorie of
product 4herea for other categorie= the( ma( make #er( little or no ue of price a a
2ualit( indicator. It ha alo been een that benefit of the price62ualit( eem to increae 4hen
the product categorie mature. 3or intance= 4hen ne4 product are introduced into the
market and become 4idel( accepted in the market= then the conumer are better able to
utilie the price62ualit( cue ince the( ha#e kno4ledge of the product >,telami= 211.A.
It ha been tated that conumer reearcher make an aement of the e8tent to 4hich the
price62ualit( link i ued b( conumer b( directl( aking them ho4 much and ho4 often the
ue the price62ualit( link for deciion regarding the 2ualit( of the product. Thee tudie
ha#e ho4n that the price62ualit( link #arie according to categorie and according to the
attribute of the product. 'o4e#er= the primar( finding that ha been een acro thee
tudie i that product that are price at higher le#el are percei#ed to be of higher 2ualit(
and higher performance although thee product ma( in fact be of the ame 2ualit( and
performance a product that are priced at lo4er le#el >Shi# ? -rile(= 211$A. It i alo een
that the price62ualit( link ma( #ar( from cutomer to cutomer. In effect= 4here a one
cutomer ma( find that the price of the product i certainl( indicati#e of the 2ualit( and the
performance of the product= another cutomer ma( not be influenced b( the price of the
product >,telami= 211.A.
*.. Pr!$ #+ # M#r<$t Cu$
ar!et cues are broadly defined as extrinsic attributes present in the retail environment that
consumers commonly use in evaluating purchasing decisions >+oore ? Carpenter= 211.=
p.34)A. +arket cue e8it to implif( the deciion making proce for the conumer in the
market 4hich i marked b( comple8itie due to a large number of brand and product in the
retail format. Some of the commonl( ued market cue are factor uch a price= 2ualit(=
brand= countr( of origin= and other #ariable that are related to the tore 4hich can lead to a
number of outcome including perception of the 2ualit(= perception of the hopping #alue=
and alo e#aluation of tore >7abin et al.= 2113E +i(aIaki et al.= 211$E Gin ? Stern2uit=
2114A.
21
The primar( marketing cue that i ued b( almot e#er( conumer i the price of the product
4hich i a central market cue in mot purchaing ituation. Cone2uentl(= price ha become
the focu for e#eral tudie 4hich ha#e conidered the impact of price cue= the percei#ed
2ualit( of the product= #alue perception and alo the tore image >+oore ? Carpenter=
211.A. It ha been demontrated from reearch that the conumerF perception of the price can
influence the purchae intention other poiti#el( or negati#el( depending on the conumerF
perception. In the poiti#e ene= price ma( repreent pretige= 2ualit( or e#en tatu. In that
conte8t= it can be een from the literature that there are t4o main concept that ha#e emerged
4ith regard to price a a marketing cue D priceL2ualit( chema and priceLpretige eniti#it(
>+oore ? Carpenter= 211.A. The priceL2ualit( chema ugget that conumer tend to think
that higher price indicate higher 2ualit( and on the other hand priceLpretige eniti#it(
ugget that conumer tend to think that higher price mean more pretige for them.
Therefore= it can be tated that conumer 4ho ha#e a poiti#e perception 4ith regard to price
ma( tend to fa#our higher price >+i(aIaki et al.= 211$A.
In it negati#e role= price ma( be percei#ed a a pure economic acrifice for the product that
i purchaed. Cone2uentl(= conumer 4ho percei#e price in it negati#e ene ma( prefer
lo4er price and ma( alo repond poiti#el( to ale promotion. In the negati#e conte8t= it
i een that there are a number of concept that can help e8plain price a a market cue. Some
of thee concept are D ale pronene= price concioune= and #alue concioune. B"rice
consciousness is defined as the degree to which consumers focus exclusively upon paying low
pricesC >+oore ? Carpenter= 211.= p.34.A. Sale pronene on the other hand i the tendenc(
of the conumer to repond poiti#el( in the e#ent that a retailer offer product at a lo4er
price than the retail price. Nalue concioune i the tendenc( of the conumer to be
concerned about 4hether the product i 4orth the price that ha been paid for it. In all thee
cae= the conumer are generall( looking for the lo4et poible price for the product.
There are additional concept that ha#e been identified 4ith regard to price in it negati#e
ene D coupon pronene and price ma#enim >7abin et al.= 2113A. Conumer 4ith price
ma#enim are uuall( happ( to hare the kno4ledge of the lo4 price to other conumer and
the conumer 4ho ha#e coupon pronene are more likel( to make purchae if the( are
gi#en coupon in the purchaing ituation >+oore ? Carpenter= 211.A.
22
*.0 E4o;!n-o)-$%$nt #nd Pr!$
#go$involvement is defined as a long$term% cross$situational perception of service relevance
based on the strength of the service&s relationship to central needs and values >SancheI6
3ranco ? +artin6Nelicia= 2111= p.1/)A. Thee central need and #alue ma( not be changed
e#en upon the preure of ituational timuli. The more in#ol#ed a uer 4ith a product or a
er#ice= the more likel( it i that ego6in#ol#ement 4ill come into the picture >Ho#ak et al.=
2113A. The concept of ego6in#ol#ement ha been deri#ed from ociolog( >S4oboda et al.=
211/A. 'o4e#er= it ha certainl( been etablihed that the le#el of in#ol#ement 4ith a product
or a er#ice determine the e8tent to 4hich the conumer 4ill e8hibit a comple8 cogniti#e
beha#iour 4ith repect to the purchaing deciion >7ian ? +outinho= 2111A. There are three
tream of thought 4ith repect to ego6in#ol#ement literature 6
The salience stimulus approach' in thi approach= in#ol#ement of a conumer in the
product or er#ice i due to the timulu that i recei#ed b( the indi#idual. In thi
approach= the indi#idualF >conumerFA moti#e and #alue are not gi#en much
importanceE rather it i the timulu that create the in#ol#ement in the conumer. Thi
could relate to the characteritic of the product or ome other e8ternal timuli >S4oboda
et al.= 211/A. 3or intance= a conumer ma( become highl( in#ol#ed 4ith a product uch
a a digital camera baed on it feature.
The enduring product approach' thi approach ugget that the in#ol#ement of the
conumer i baed on the e#olution of the timulu due to the nature of the moti#e and
#alue of the indi#idual. In other 4ord= the timuli are de#eloped a a reult of the
inherent nature of the indi#idual to perhap B4antC or BneedC the product or er#ice
>S4oboda et al.= 211/A.
The attention(processing approach' under thi approach= in#ol#ement ha been
characteried a a tate in 4hich the indi#idual de#elop moti#ation or interet in a
product if the timulu i rele#ant to the need and 4ant of the indi#idual. Thi approach
ugget that the indi#idual react to a timulu 4hen there i 4illingne for the
indi#idual to react to the timulu >S4oboda et al.= 211/A. 3or intance= conumer 4ho
tend to be priceLpretige eniti#e ma( 4ant to purchae a 5oui Nuitton handbag 4hen
the( chance upon one >Pierc( et al.= 2111A.
*ra4ing from the earlier dicuion= it can be aid that 4ith repect to ego6in#ol#ement=
price6pretige eniti#it( come into the picture 4here the conumer i more likel( to be
in#ol#ed in product that are of a higher price. 'o4e#er= thi BhigherC price ma( be relati#e=
23
in the ene that the #alue of the BhigherC price ma( #ar( from conumer to conumer >7abin
et al.= 2113A.
*.3 Pr!$ #nd R$t#!) P#tron#4$
Reearcher ha#e been e8amining the effect of the price on conumerF choice of tore format
baed on the #ariou concept uch a price a a pure economic cot= price cue= patronage
moti#e= and alo tore image= conumer #alue= and ale promotion= a mentioned in earlier
ection >+oore ? Carpenter= 211&E ,telami= 211.E +oore ? Carpenter= 211.E @a#a= 2113A.
In other 4ord= price ha an influence on all thee element 4hich are attribute of the retail
tore. 'o4e#er= the focu in thi ection i on the impact price ha on retail patronage.
There i certainl( a relationhip bet4een price and the patronage of a cutomer. In effect= it
can be aid that conumer tend to make a price6tore choice. Price 4a found to be a ma"or
factor that affected the conumerF grocer( tore format choice. +ore recentl(= it ha alo
been een that price ha an ad#ere impact on determining retail tore patronage. In other
4ord= conumer ma( ha#e a tendenc( to be dra4n to retail tore baed on the pricing
trateg( >Seider et al.= 2111A. 'o4e#er= it ha alo been een that price ma( be le
influential than the in6tore promotion 4ith repect to a grocer( retailer format >3o8 et al.=
2114A. He#erthele= price certainl( ha a poiti#e influence on the tore choice and patronage
>@a#a= 2113A. The apect of price that influence conumer poiti#el( 4ith repect to
patronage among dicount retailer and #alue department tore i price concioune. !n
the other hand= pretige eniti#it( influence patronage negati#el( 4ith repect to thi format
of tore. Thi mean that 4hile conumer 4ho are conciou of price are more likel( to
e8pre patronage to a dicount retailer= a conumer 4ho i conciou of pretige and tatu
ma( not e8pre patronage to a dicount retailer >+oore ? Carpenter= 211&A.
*.7 Pr!$ Pr$%!u%+ #nd =r#nd E5u!t1
!ne of the bet meaure of brand e2uit( i price premium. 7rand e2uit( i a
multidimenional concept 4hich ugget that conumer are 4illing to pa( a premium price
for the brand baed on the dimenional the brand. The dimenion that do not ha#e an impact
on the 4illingne of conumer to pa( premium er#ice cannot be conidered a an indicator
of brand e2uit(. Some of the other dimenion that ha#e been ued to meaure brand e2uit(
are meaure uch a cutomer lo(alt(= purchae intention= or e#en cutomer atifaction
>-nelmon et al.= 211)A. It ha been another approach to meaure brand e2uit( 4hich i b(
ummariing the trength of each dimenion to calculate the a#erage brand e2uit(. In mot
24
cae= it i een that factor uch a lo(alt( and cutomer atifaction along 4ith price
premium are ued a the dimenion to meaure brand e2uit( >-nelmon et al.= 211)A.
"rice premium is defined as the sum consumers are willing to pay for a brand% compared to
other relevant brands% and can be either negative or positive >-nelmon et al.= 211)=
p.414A. Conumer price and price premium do not necearil( correlate 4ith each other. -
uch= conumer price ma( not be ued to effecti#el( meaure brand e2uit( ince the( do not
correlate 4ith price premium. Price premium on the other hand i relati#el( table in the
long period and i able to meaure the health of the brand baed on the #ariation in the price
premium and alo correlate 4ith global dimenion of brand e2uit( >de Chernaton( ?
+cdonald= 2113A.
It ha alo been e#idenced through reearch that price premium i able to e8plain conumer
choice of brand at both the indi#idual le#el a 4ell a at the market le#el. The reaon a to
4h( price premium are important for conumer i becaue price premium pro#ide
conumer 4ith a logical and rational 4a( to meaure and compare brand 4ithin the retail
indutr( >de Chernaton( ? +cdonald= 2113A. 'o4e#er= it ma( be illogical for conumer to
compare brand or product from different clae. 3or intance= it ma( be perfectl( logical
for conumer to compare brand uch a Teco and Waitroe 4hich ha#e imilar product
offering and are both premium priced retailer >-nelmon et al.= 211)A. It ha to be noted
that brand e2uit( i a relati#e concept 4hich make ene onl( if brand are compared 4ith
rele#ant competitor >de Chernaton( ? +cdonald= 2113A.
*.9 Ro)$ o& Pr!$ !n Str#t$4! Po+!t!on!n4
The economic do4nturn of recent time >211) to 2111A ha in a ene preured companie to
rethink their pricing trategie= a the pending po4er of the conumer 4a reduced= in order
to impro#e or maintain their ale #olume. - uch= companie ha#e been een to reort to
trategic pricing in order to etablih a poition for themel#e in the market >Pierc( et al.=
2111A. Strategic poitioning on the bai of price i able to build a defence againt
competitor and find a uitable poition for the compan( 4here competition eem to be
4eaker >Porter= 211.A. The economic receion ha had an immene effect on the competiti#e
poitioning trategie of companie. The reaon a to 4h( companie ha#e had to repoition
themel#e on the bai of price i becaue of the changing e8pectation of the cutomer
during the economic do4nturn. !rganiation are faced 4ith a choice a to 4hether price 4ill
pla( an acti#e role in their poitioning 4hether price 4ill pla( a pai#e role in the
2$
poitioning trateg(. -n acti#e pricing trateg( mean that price become the main focu of
the marketing trateg( 4hereb( it i highl( ad#ertie and #iible in all the promotional
effort. - pai#e pricing trateg( mean that non price dimenion gain more importance in
the promotion and ad#ertiement. 3our t(pe of pricing trategie ha#e been identified b(
Pierc( et al >2111A= 4hich ha#e been dicued belo4. The follo4ing figure repreent the
alternati#e of pricing trateg( that are a#ailable to organiation.
Source: Piercy et al (2010, p.43
!i"#$active price strate"y
In thi approach= the pricing trateg( eentiall( ugget to the bu(er that the brand i a
premium brand and that it offer uperior #alue to the conumer. The trateg( ma( not be
ued continuoul(= ho4e#er it i een that the trateg( i primaril( ued b( high end brand
that product in categorie uch a high6end fahion apparel and acceorie or high end
be#erage. The trateg( 4ork 4ell for high6end categor( of product becaue a dicued
earlier the price pretige link conider the picture 4here conumer are eniti#e about the
pretige and tatu that i aociated 4ith the brand baed on the price >+oore ? Carpenter=
211.E +i(aIaki et al.= 211$A. The trateg( ma( alo offer companie protection from
competition= epeciall( if the product are differentiated to a high degree. 3or intance= the
5oui Nuitton handbag are a claic e8ample of a high end brand that ha been ucceful at
2&
maintaining a high6acti#e price trateg(. 'o4e#er= it ma( be difficult for brand to con#ince
conumer of the #alue offered during receion >Pierc( et al.= 2111A. I
!i"#$passive price strate"y
In thi approach= although the price of the product i a relati#el( high= the focu marketing
effort i not on the priceE rather the focu i on non6price feature of the product uch a the
2ualit( of the functionalit(. It i een that companie that ue trateg( are often een to
emphaie on the functionalit(= feature= performance= and the 2ualit( of the product. -n
e8ample of the high6pai#e price trateg( i that of the e8peni#e S4i 4atche. -lthough
thee 4atche are relati#el( highl( priced= the ad#ertiing and promotion campaign
regarding thee 4atche generall( focu on the functionalit( and performance of the 4atche
rather than on the price >Pierc( et al.= 2111A. In the retail indutr(= it can be aid that Waitroe
i a retailer that adopt the high6pai#e price trateg( 4hereb( the compan( focue on the
2ualit( of the product rather than the price of the product.
%o&$active price strate"y
Thi i one of the mot ued pricing trategie among the dicount retailer. 3or intance=
companie uch a 5idl and -ldi pecificall( emphaie that their product are priced much
lo4er than the product of other retailer uch a Teco or -S*-. Thi pricing trateg( i
motl( ucceful 4hen ma"orit( of the conumer are price6conciou >,telami= 211.E
+oore ? Carpenter= 211.A. -dditionall(= during an economic do4nturn= the preading
trateg( eem to 4ork out better for organiation a conumer ha#e le pending po4er
and ma( turn to companie that offer lo4er price= a 4a the cae 4ith 5idl and -ldi 2uite
recentl( >The Independent= 2111A. Thi i an attracti#e option for an organiation 4hen it ha
acce to upplier that ma( ignificantl( lo4er the o#erall cot of the buine. 'o4e#er=
the dra4back of the option i that conumer 4ho e8hibit the price6pretige beha#iour ma( be
influenced negati#el( 4ith repect to their purchae intention >Meilke= 211&A.
%o&$passive price strate"y
Thi trateg( i mot uitable for mall producer 4ho ma( ha#e relati#el( lo4er cot than
their competitor. In mot cae= thee brand are not #er( familiar to the bu(er and a uch=
thee companie minimie their rik b( not emphaiing the lo4 price 4hich could be
e2uated 4ith lo4 2ualit( b( man( cutomer. - uch= the price image of the tore of the
2)
compan( ma( not uffer becaue the compan( doe not emphaie on the lo4 price >Hagle et
al.= 2111A.
*.: E>2$t#t!on T'$or1 !n Con+u%$r =$'#-!our
In the retail ector= a 4ith the er#ice indutr(= the e8pectation of the cutomer about the
product and er#ice determine the e8tent to 4hich the( are atified 4ith the product and
er#ice. Cone2uentl(= it can be tated that e8pectation are an important apect of conumer
beha#iour >Toncar et al.= 2111A. It ha been uggeted that the price6percei#ed 2ualit(
perception of the cutomer doe not actuall( e8itE rather= the perception of the price a a
2ualit( indication i baed on the a#ailabilit( of the #ariou conumer beha#iour cue. In
other 4ord= it i poible that cutomer are influenced to a greater degree b( the price of the
product a a 2ualit( indicator= onl( if the( are a4are of the pre#ailing price in the indutr(
>Meithaml= 1/..A. 'o4e#er= it ha alo been een that conumer are influenced b( the
promie that are made b( retailer in connection 4ith the 2ualit( and the performance of the
product= 4hich in turn influence the conumerF e8pectation. Cone2uentl(= conumer
ha#e higher e8pectation from product that are priced higher and ma( ha#e lo4 2ualit(
e8pectation from product that are lo4 priced. He#erthele= the e8pectation of the
conumer are influenced to a high degree b( their a4arene of the price of imilar product
>Toncar et al.= 2111A. The e8pectation of the conumer influence the pre6purchae deciion
of the conumer. It ha been een that the general tendenc( of conumer i to e8pect
companie that charge premium price to be located in an upcale area and to ha#e product
that are of high 2ualit(. 7aed on the e8pectation= if the conumer think that the compan(
ha deli#ered er#ice that are e8ceptionalE then the conumer 4ould tend to think that the
price i reaonable or that the price i not too high= and #ice6#era >!h= 2113E Meithaml et al.=
211&A.
There i a difference bet4een price e8pectation and er#ice e8pectation. Wherea price
e8pectation refer to the e8pectation of the product 4ith reference to the price= er#ice
e8pectation i the e8pectation of the er#ice= baed on #ariou marketLconumer cue >Toncar
et al.= 2111A. Price e8pectation= actual price= and price are alo 2uite different from each
other. While price i the generic term= actual price and the price e8pectation of conumer
are actual t(pe of price. The price e8pectation are often baed on the reference price. The
reference price i uuall( baed on the conumerF kno4ledge about the product in a pecific
categor( or baed on conte8tual price >5o4e ? -lpert= 2111E Hagle ? 'ogan= 211&A. It ha
2.
alo been uggeted that the conumerF perception of the #alue of the product i alo baed
on the p(chological makeup of the conumer >Toncar et al.= 2111A. 'o4e#er= it i to be noted
that the underl(ing factor that lead to price e8pectation ma( not al4a( be een in
conumer and that the pat e8perience ma( alo pla( a role in influencing the internal
reference price >Toncar et al.= 2111A. -ccording to 7ridge et al >1//$= p.$A= Bcustomer
expectations regarding price may influence a purchase decision% even put a price limit on
what the mar!eter can charge)C In other 4ord= the cutomer ma( not be 4illing to pa( more
than the e8pected price on mot occaion >7ridge et al.= 1//$A.
The Ione of tolerance i another concept that 4ill be able to help undertand the e8pectation
theor( further. -lthough the Ione of tolerance i more applicable to the er#ice indutr(= it
can be applied to the retail ector a 4ell= a the retail ector i concerned 4ith pro#iding
er#ice to the cutomer >@ap ? S4eene(= 211)A. The Ione of tolerance i eentiall( the
range of le#el of er#ice 4hich 4ill fall under the e8pectation of the cutomer. 3or
intance= for the price that the cutomer are pa(ing at Teco= the( 4ould perhap e8pect that
the compan( hould pro#ide proper car parking facilitie and alo good 2ualit( product
accompanied 4ith good cutomer er#ice.
The e8pected price or price e8pectation= a mentioned earlier= i the e8pected price that the
conumer think he or he 4ill ha#e to pa( for the product or er#ice. Price e8pectation ha
been defined a BO the cutomerF e8pected le#el of price for a brand on a gi#en purchae
occaionC >Toncar et al.= 2111= p.2/)A. !n the other hand= the actual price i the amount that
the conumer 4ill ha#e to pa( for the product or er#ice at purchae point. When the e8pected
price i compared to the actual price= the conumer realie either a gain or a lo in the
tranaction. The general premie i that if the conumer e8perience a BgainC at the purchae
point >if the e8pected price i more than the actual priceA then the e8pected er#ice or 2ualit(
of the product decline= meaning that the cutomer 4ill be atified e#en if the 2ualit( of the
product i not a high a initiall( e8pected. 'o4e#er= if a BloC occur= the contrar( become
true >Meithaml et al.= 211&A. 3or intance= if a cutomer goe to a retaurant and e8pect an
e8peni#e meal but the actual cot of the meal turn out to be lo4er than the e8pected cot=
then the cutomer ma( be 4illing to o#erlook an( dra4back in the 2ualit( of the meal or
perhap e#en the er#ice offered. If= ho4e#er= the actual price turn out to be higher= then the
cutomer ma( e8pect that the er#ice and the 2ualit( of the meal hould be of a higher
tandard >Toncar et al.= 2111A.
2/
*.1? H$nr1 A++#$) Mod$)
'omple( )uyin" )e#aviour: Cutomer 4ho e8hibit thi beha#iour are generall( highl(
in#ol#ed 4ith the purchae of the product or er#ice= making the purchaing beha#iour
2uite comple8 a the difference bet4een the brand ma( be ignificantl( high. 3or e8ample=
a cutomer 4ho 4ant to purchae a refrigerator 4ould like to kno4 the meaning of
defroting= door lock= digital temperature control etc. Thi i epeciall( true 4hen the le#el of
in#ol#ement in the product i relati#el( high. It ma( be aid that high in#ol#ement product
are the one that t(picall( cot more >-hmed et al.= 2114A. 3or intance= in the cae of Teco=
ince it i a bigger brand than companie uch a -ldi or 5idl= it i poible that conumer
4ould prefer to hop at Teco if the( are purchaing product that cot more >uch a
electronic item or home applianceA ince thee item 4ould be high in#ol#ement item and
the difference bet4een the brand become ignificant ><ulkarni ? Nih4anath= 211.A.
T(pe of bu(ing deciion beha#iour: 'enr( -ael +odel
><ulkarni ? Nih4anath= 211.= p.)$A
*ariety See+in" ,uyin" ,e#aviour: 4hen there are ignificant difference bet4een the
brand and the product are lo4 in#ol#ement product= conumer 4ill eek #ariet( and the
product. 3or intance= in the cae of product uch a peanut butter or bread= the difference
bet4een the product i relati#el( lo4 and the in#ol#ement of the product i alo relati#el(
lo4 and a a cone2uence= conumer ma( purchae different t(pe of thee product
depending on the conte8t of influence. 3or e8ample= a cutomer ma( chooe to bu( 4hite
bread once and ma( chooe to bu( bro4n bread on the ne8t #iit. Thi doe not necearil(
mean that one product i uperior to the other product ><ulkarni ? Nih4anath= 211.A. In
31
other 4ord= conumer e8hibit #ariet( eeking bu(ing beha#iour in thee ituation. It i alo
to be noted that the price of the product ma( be 2uite imilar a 4ell >Hagle et al.= 2111A.
Dissonance -educin" ,uyin" ,e#aviour: thi beha#iour i caued 4hen the le#el of
in#ol#ement product i high but there are no ignificant difference in the brand all the
product. The reaon a to 4h( the le#el of enrolment i high in thee cae i becaue the
cot of the product ma( be relati#el( high and there ma( alo be technical pecification that
ma( differ from brand to brand or product to product ><ulkarni ? Nih4anath= 211.A. 3or
intance= if a conumer purchae a peronal computer manufactured b( *ell 4ith certain
pecification= he or he i likel( to e8hibit pot purchae dionance in thinking that perhap
a peronal computer that 4a manufactured b( 'P= 4ith imilar pecification ma( be better.
-nother e8ample of thi beha#iour i een in the e8ample of broadband er#ice D for
intance= a conumer ma( ubcribe to Nirgin broadband er#ice= but ma( later feel that
another broadband er#ice pro#ider ma( ha#e been more preferable. The problem 4ith thi
beha#iour i that it i poible that conumer 4ill 4itch companie 2uite eail( >Hagle et
al.= 2111A.
!a)itual ,uyin" ,e#aviour: the lo4 in#ol#ement bet4een the brand and a fe4 difference
bet4een the brand lead to habitual bu(ing beha#iour. 3or intance= people ma( be
accutomed to hopping at Teco becaue product are eail( a#ailable to them and the( ma(
not be much difference bet4een the product of Teco and the product that are a#ailable that
other retail tore. Cone2uentl(= it become a habit for conumer to hop at a particular
retail outlet ><ulkarni ? Nih4anath= 211.A.
31
32
Chapter 4. *icuion and -nal(i
..1 Introdut!on
Thi chapter preent the finding from the primar( reearch and alo preent the dicuion
and anal(i a 4ell. The primar( data 4a collected from the cutomer of Teco uing
online 2uetionnaire and focu group inter#ie4. - mentioned in the reearch methodolog(=
the 2uetion that 4ere ued in the 2uetionnaire and the focu group inter#ie4 4ere
tructured to be able to pro#ide the right an4er to the reearch 2uetion. The chapter ha
been di#ided into t4o main ection D 1A reearch report and anal(i and 2A dicuion on the
finding in light of the reearch ob"ecti#e.
.." /u#)!t#t!-$ R$+$#r' R$2ort #nd An#)1+!+
The main reaon a to 4h( focu group inter#ie4 4ere ued for thi tud( 4a to be able to
obtain 2ualitati#e information. %ualitati#e information 4a deemed to be important for the
tud( becaue the tud( i concerned 4ith the perception of conumer 4ith repect to price
a a differentiating factor bet4een companie. - total of three focu group inter#ie4 4ere
conducted 4ith each focu group inter#ie4 in#ol#ing fi#e cutomer of Teco. The 2uetion
that 4ere aked during the focu group inter#ie4 4ere related to the price perception of
conumer 4ith regard to Teco and 4hether or not price 4a a ke( influential factor that
contributed to conumer bu(ing beha#iour. The anal(i and interpretation of the focu group
inter#ie4 ha been di#ided into fi#e primar( 2uetion that 4ere aked during the
inter#ie4.
Question 1: .#at ma+es you s#op at /esco0 Is 1price2 a main 3actor t#at leads you to s#op
at /esco0 .#y or &#y not0
The purpoe of thi 2uetion 4a to undertand 4h( conumer preferred to hop at Teco.
-lo= the repone to thi 2uetion 4ould be able to pro#ide an inight into 4hether price
4a a determining factor that contributed to conumer bu(ing beha#iour in the retail ector.
!ne of the repone that echoed acro all three focu group inter#ie4 4a that it 4a #er(
con#enient to hop at Teco becaue the( had a 4ide #ariet( of product and that the
compan( 4a done to charge reaonable price. - repone from one of the repondent in the
focu group inter#ie4 4a
33
* go to Tesco because it is close to my house and * can find all the products that *
need on a daily basis) The prices at Tesco are also +uite reasonable) * mean% *
would not thin! twice about the cost of products at Tesco% because * thin! that they
are reasonable anyway
-nother repone 4a that:
Tesco&s own products may not be as good in +uality as the products of ,aitrose
or -.% but for the price they charge% the +uality is +uite reasonable) oreover%
there are products from various brands available at Tesco
The other repone from the focu group inter#ie4 alo uggeted that conumer generall(
prefer to hop at Teco becaue it i 2uite con#enient for them becaue the( can find all ort
of product and that the price of the 2ualit( i reaonable a 4ell.
With regard to the econd part of the 2uetion 4hich i 4here the price i the main factor that
lead conumer to hop at Teco= it 4a een that although price 4ill certainl( important to
the conumer= con#enience and eae of hopping 4ere gi#en more preference for thee
conumer. 3or intance= one repone 4a that
/eah price does have an influence on where * prefer to shop) * am also aware
that companies li!e 0ldi or 1idl may have products that are less expensive than
Tesco) 2ut * prefer to shop at Tesco because it is convenient * can do all my
shopping there
In other 4ord= the primar( reaon a to 4h( people eem to hop at Teco i becaue the
price i reaonable= the 2ualit( i reaonable= there are #arietie of product to chooe from=
and it i highl( con#enient for them.
Question 2: I3 you could access )ot# /esco and 4ldi &#ic# store &ould you pre3er, and
&#y0
The purpoe of thi 2uetion 4a to undertand 4hether the brand name of a retail tore
pla(ed an important role in the bu(ing beha#iour of conumer. -dditionall(= thi 2uetion
4ill alo be able to pro#ide an inight into conumerF perception about dicount retail tore.
3rom the repone to the 2uetion= it 4a apparent that the brand name did not matter much
to the conumer 4ho 4ere inter#ie4ed. In other 4ord= if conumer had e2ual acce to
Teco and -ldi= the( ma( hop at both thee place alternati#el(= or until the( find out 4hich
tore 4ork the bet for them. The fact that -ldi i a dicount retailer doe not eem to attract
34
conumer to hop at -ldi. Thi indicate that conumer ma( not actuall( be eniti#e to
price. !ne of the repone of a conumer in the inter#ie4 4a
* do not thin! that there is much difference in the products of Tesco or 0ldi) 0lso%
the price difference is very small which means that whether * shop at Tesco or
0ldi and may not really save an amount that is significant) .o it doesn3t matter
where * shop as long as it is convenient for me and as long as * can purchase all
the products that * need
What thi indicate i that the price of the product i reall( not an iue for the conumer in
the retail indutr(. Rather= con#enience or acce to the tore ma( be more important.
-dditionall(= from the repone= it 4a not apparent 4hether the brand name of a retail tore
reall( pla(ed an important part in influencing conumer bu(ing beha#iour. 'o4e#er= "udging
from the repone that 4ere recei#ed in the three inter#ie4= it can perhap be aid that
conumer 4ould prefer to hop at Teco if the( had e2ual acce to both thee tore becaue
the( felt that Teco had a 4ider range of product that 4ere a#ailable= making it eaier for
conumer to hop there. -nother intereting factor that 4a dico#ered in the repone 4a
that Teco and other big retailer had good option for car parking 4herea dicount retailer
uch a 5idl and -ldi did not ha#e man( option for parking a#ailable= and ometime did not
e#en ha#e car6park facilit(.
Question 3: !o& muc# &ould you &ant to )e a)le to save )e3ore you t#in+ a)out s#oppin"
at a discount retailer suc# as 4ldi or %idl0
The importance of thi 2uetion tem from the fact that if conumer are price eniti#e or if
the( thought that price 4a a different hipping factor= then the( 4ould certainl( be
influenced b( the pricing trategie of retailer. Thi 2uetion 4ould be able to pro#ide an
inight into the e8tent to 4hich conumer are price eniti#e. The aumption behind thi
2uetion 4a that if the repone uggeted that conumer 4ould hop at a dicount retailer
if the( could a#e e#en up to P$= then it can be aid that the price eniti#e= and if the aid that
the( 4ould 4ant to be able to a#e at leat up to P2$ or P31 before the( think about hopping
at the dicount retailer= then the( ma( not actuall( be price eniti#e.
The repone to thi 2uetion indicated that conumer 4ere 4illing to hop at dicount
retailer uch a -ldi if the( 4ere able to a#e an(thing more than 21J to 31J of their total
pending. Conidering that the a#erage pending of a peron per #iit at Teco i about P2$=
3$
the actual amount that people 4ould like to a#e on an a#erage i about P$ to P) per #iit
before the( conider going to a dicount retailer. 3or intance= one of the repone 4a that
*f * really have to choose a discount retailer such as 0ldi over Tesco% * would li!e
to save at least 456 of my expense) * generally spend about 789 per visit to Tesco%
and if * can save at least 75 to 7:9 for the effort of going to 0ldi% then * may shop
at 0ldi% if not% it may not be worth the effort of going to 0ldi or 1idl for that
matter
-nother repone 4a that:
* spend at least about 7:99 on groceries every month) "er visit * may spend
about 749 or 745) *f * am not able to save at least 75 per visit to 1idl% then * really
don&t see the necessity to go all the way to 1idl when Tesco is much more
accessible and convenient
3rom the repone= it i e#ident that conumer are certainl( not highl( eniti#e to price
becaue the( are 4illing to pa( e8tra "ut for the con#enience and for the a#ailabilit( of
product at Teco. In other 4ord= although companie uch a -ldi and 5idl are poitioned a
dicount retailer= it ma( not actuall( influence conumerF deciion to make purchae at
thee tore.
Question 4: I3 you #ad e5ual access to /esco and .aitrose, &#ic# retailer &ould you
c#oose and &#y0
Thi 2uetion 4a aked to the repondent in order to #erif( the repone that recei#ed to the
pre#iou 2uetion. The reaon i becaue it can be aid that Teco i to Waitroe a -ldi or
5idl are to Teco. +eaning that Waitroe i more e8peni#e than Teco and Teco i more
e8peni#e than -ldi or 5idl. 'o4e#er= 4ith repect to Teco and Waitroe= the price
difference i 2uite noticeable and conumer tend to think that although Waitroe i a better
brand= it ma( be more economical to hop at Teco. The repone clearl( indicated that
barring a fe4 conumer= the other 4ould not be 4illing to hop at Waitroe that eail(. !n
the other hand= conumer uggeted that if the( 4ere gi#en a choice bet4een Teco= -da= or
Sainbur(Q= the( 4ould certainl( 4itch bet4een thee companie are regular bai becaue
the( thought that the price charged b( thee companie are 2uite imilar. In other 4ord=
4hat can be aid from the repone i that although conumer ma( not be highl( price
eniti#eE the( are certainl( keen to get the bet #alue for the amount that the( pa(.
3&
Question 6: !o& does t#e price o3 t#e products in3luence your purc#ase intentions0 Does
t#e 5uality or )rand name #ave "reater in3luence t#an price0
The reaon a to 4h( thi 2uetion 4a aked 4a to undertand for certain 4hether the brand
name and the 2ualit( had a greater influence in a conumer bu(ing beha#iour than the price
of the product. 3rom the repone= it 4a een that the price of the product mut not reall(
an influential factor that affected conumerF beha#iour. The reaon for thi 4a that the
conumer did not reall( eeing huge price difference bet4een the product of Teco and the
product of other dicount retailer. In other 4ord= it appear that the brand name and the
2ualit( of the product ma( ha#e a bigger influence on the conumer than the price= due to
the fact that there are not man( difference bet4een the product and the price a 4ell.
-ccording to the 'enr( -ael model= it can be aid that conumer ma( be e8hibiting more
of a habitual bu(ing beha#iour and the( ma( not reall( be putting an( effort in anal(ing
4hich retailer i more economical.
..* /u#nt!t#t!-$ R$+$#r' R$2ort #nd An#)1+!+
(See 4ppendi( 1: Questionnaire Summary
The reaon a to 4h( 2uetionnaire 4ere ued in the tud( 4a to be able to pro#ide 4anted
information for the tud(. The 2uetionnaire 4ould be able to triangulate the reult that
ha#e been obtained from the focu group inter#ie4. The 2uetionnaire 4ill alo be able to
#alidate the repone that ha#e been recei#ed in the focu group inter#ie4. - it ha been
mentioned earlier= a total of $) completed repone 4ere recei#ed from the contact of the
reearcher 4ho are alo cutomer of Teco. Thee include colleague= clamate= and
friend of the reearcher.
The firt fe4 2uetion 4ere aimed at undertanding the general demographic of the
conumer 4ho reponded to the 2uetionnaire. 3rom the repone to thi 2uetion= it can
be een that out of the $) repone= 33 repondent are female and that 24 repondent are
male. Thi doe not necearil( mean that Teco ha more female cutomer than male
cutomer. 'o4e#er= it doe indicate that female cutomer 4ere more 4illing to take part in
the tud( than the male counterpart.
The ne8t 2uetion 4a intended to find out the age group of the repondent 4ho an4ered
the 2uetionnaire. The reaon a to 4h( thi 4a deemed to be important for the tud( 4a
becaue if repondent 4ere from different age group= then it i poible that the finding
from the 2uetionnaire ma( not be biaed. In other 4ord= if it i een that the number of
3)
repondent but in one age categor( i higher= then it i poible that the repone of the
conumer ma( be biaed in fa#our of thi age categor(. 3rom the repone to thi 2uetion=
it i een that the repone are almot e#enl( pread out acro the #ariou age group 4ith
conumer under the age of 1. being the highet number of repondent. Interetingl(= it i
een that there are no repondent o#er the age of &1 4hich ma( be a limitation to the tud(
becaue Teco certainl( ha conumer 4ho are aged about &1 a 4ell. In other 4ord= the
fact that there are no repondent o#er the age of &1 indicate that the reearcher ma( not
ha#e contact that belong to thi age group. He#erthele= the reult ma( till be
repreentati#e from the fact that the repondent are di#ided almot e2uall( among the other
age group.
The ne8t 2uetion 4a aimed at undertanding the educational le#el of the repondent. -
ha been tated pre#ioul(= if the repondent belong to onl( a ingle categor(= then it ma( be
poible that the repone ma( be biaed in fa#our of that categor(. 3rom the repone= it i
een that the highet number of repondent ha#e onl( completed high chool or #ocational
training. The importance of undertanding the educational 2ualification of the repondent i
that it i poible that people of different educational 2ualification ma( ha#e different
preference 4ith repect to brand and price of the product. Since the repone 4ere fairl(
4ell ditributed among the categorie= it ma( be aid that the finding from the 2uetionnaire
ma( be repreentati#e to an e8tent. In other 4ord= thee finding ma( be generalied to an
e8tent.
Do you s#op re"ularly at /esco0
While the pre#iou 2uetion 4ere aimed at undertanding the demographic of the
repondent= thi 2uetion 4a aimed at undertanding 4hether thee conumer 4ere regular
conumer of Teco. 3rom the repone= it i een that 4$J of the conumer o that the(
4ere regular cutomer at Teco 4hile $4J of the repondent indicated that the( 4ere not
regular cutomer at Teco. The fact that $4J of the cutomer indicated that the( 4ere not
regular cutomer at Teco doe not mean that the( are not conumer of Teco. Thi onl(
mean that the( ma( not hop at Teco regularl( although the( ma( hop at Teco once in a
4hile. The opinion of both thee group of people i important for the tud( becaue 4hile
the regular hopper ma( be able to pro#ide an undertanding a to 4h( the( hop at Teco
regularl( the conumer 4ere not regular ma( be able to pro#ide an undertanding a to 4h(
the( hop at other tore rather than at Teco.
3.
!o& li+ely are you to recommend /esco to a 3riend or 'o$&or+er0
The ne8t 2uetion 4a aimed at undertanding the perception that conumer had to4ard
Teco. - it ha been mentioned in the literature re#ie4= if the conumer are influenced b(
the brand name and ego to a greater e8tent= the( ma( be likel( to be le eniti#e to price.
-dditionall(= if the conumer eem to be highl( in#ol#ed 4ith the compan(= the( ma( alo
be le eniti#e to price. 3rom the repone to thi 2uetion= it 4a een that about 33J of
the repondent had poiti#e feeling of the compan(. In other 4ord= 33J of the repondent
4ould recommend Teco to their peer. The ma"orit( of the repondent >$1JA indicated that
the( 4ere indifferent about recommending the compan( to their peer. 1&J of the
repondent eemed to ha#e bad e8perience at Teco and indicated that the( 4ould not
recommend Teco to other. What thi implie i that the 1&J of the repondent ma( be
highl( eniti#e to price at Teco and ma( alo be critical of the 2ualit( and other apect of
the compan(. !n the other hand= the 33J of the repondent ma( be le eniti#e to price
and ma( alo be influenced b( the brand name of the compan(.
'ompared to t#e competitors do you 3eel /esco7s products are priced t#e same,
less e(pensive, or more e(pensive0
Thi 2uetion 4a aimed at undertanding the price perception of conumer about the
product of Teco. Since the primar( ob"ecti#e of thi tud( i to undertand 4hether price
are primar( different hooting factor in the retail indutr(= the repone to thi 2uetion ma(
be able to pro#ide an inight into thi apect. 3rom the repone= it i een that ma"orit( of
the repondent >33JA eemed to think that the price of the product at Teco 4ere about the
ame a the price of the product of the competitor. 3rom the focu group inter#ie4= it 4a
etablihed that mot of the cutomer thought that the competitor of Teco 4ere companie
uch a Sainbur(Q= -da= and +orrion. In other 4ord= from the repone= it i een that
conumer tend to think that there i not much difference bet4een the price of the product
in thee tore. 'o4e#er= 2.J of the repondent eemed to think that the price of the
product at Teco 4ere le e8peni#e than the price of the product in other retail tore.
Interetingl(= it i all een that about 1&J of the repondent thought that the product 4ere
more e8peni#e at Teco. The 23J of the repondent 4ho indicated that the( had no idea
4hether the product 4ere more e8peni#e or le e8peni#e 4ere found to belong to the age
3/
group of Bunder 1.C and the age group of B1. to 24C. Thi perhap indicated that conumer
under the age of 24 4ill perhap le eniti#e to price and ma( not actuall( pa( attention to
the price of the product in #ariou tore.
'ompared to discount stores suc# as %idl and 4ldi, &#at you t#in+ a)out t#e
prices o3 /esco7s products0
Well the pre#iou 2uetion 4a aimed at undertanding the perception of the conumer about
the price of the product of Teco compared 4ith the competitor of Teco uch a -da=
Sainbur(Q and +orrion= thi 2uetion 4a directl( aimed at undertanding the perception
of conumer about the price of dicount retailer >uch a -ldi and 5idlA compared 4ith
Teco. It ha been een from the literature that the price of the product can be an indicator of
the percei#ed 2ualit( of the product and it i alo one of the mot important factor that
inference conumer in chooing a retail tore. The price perception of a retail tore form a
part of the brand image of the retail tore. It i all een that the actual 2ualit( of the product
i not actuall( meaured b( the conumer= rather other factor uch a price= and the brand
image are ued in determining the percei#ed 2ualit( of the product of the compan(. In that
repect= the repone to thi 2uetion pro#ide an inight into the perception of conumer
4ith repect to dicount retailer and Teco. 3rom the repone= it i een that mot of the
conumer think that the price of the product at Teco are more e8peni#e than the dicount
retailer. 'o4e#er= it i alo een that about 31J of the conumer think that the product of
Teco are le e8peni#e than the product of dicount retailer. What thi indicate i that
thee conumer ma( not be a4are of the actual price of the product at dicount retailer
uch a -ldi and 5idl. There are certainl( a fe4 product that ma( be more e8peni#e at thee
dicount retailer than TecoE ho4e#er= mot of the product are certainl( le e8peni#e in
realit(. It i alo een that about 1&J of the conumer think that the price of the product are
about the ame. The general idea that i obtained from the repone to thi 2uetion i that
the conumer ma( not be entirel( a4are about the actual price that are being charged b( the
dicount retailer and premium brand uch a Teco= Sainbur(Q= or +orrion.
Do you 3eel t#at /esco7s prices are merited )y t#e products8services0
The purpoe of thi 2uetion i to be able to undertand the price 2ualit( perception of
conumer to4ard the product of Teco. - ha been een in the literature re#ie4= price i
certainl( an indicator of the percei#ed 2ualit( of the product of the compan(. 3rom the
repone to thi 2uetion= it i een that mot of the repondent >41JA eemed to think that
41
the price of the product i too high for the product at Teco= indicating that the percei#ed
2ualit( of the product of Teco i relati#el( lo4. -bout 2.J of the repondent eemed to
think that the 2ualit( of the product 4a relati#el( high and that the price 4a too lo4 4hile
32J of the repondent eemed to think that the price of the product 4a about right. 0oing
b( the ma"orit( repone= it i een that conumerF perception about the product of Teco i
that the percei#ed 2ualit( ma( be relati#el( lo4 becaue the( eem to think that the price i
too high for the product. In other 4ord= it ma( be poible that thee conumer ma( be price
eniti#e and that price ma( be the main apect that influence their bu(ing beha#iour.
I pre3er 5uality products at reasona)le prices
Thi 2uetion 4a another 2uetion that 4a aimed at undertanding the price62ualit(
perception of the cutomer to identif( 4hether price 4a more influential in their bu(ing
beha#iour or 2ualit( 4a more influential in the bu(ing beha#iour. 3rom the repone= it i
een that about 21J of the repondent eemed to ugget that the( 4ould prefer 2ualit(
product at reaonable price= indicating that 2ualit( i perhap more important for them.
-nother 23J of the repondent alo uggeted that 2ualit( i an important factor that
influence their bu(ing beha#iour. -bout 1)J of the repondent did not eem to be
influenced b( the 2ualit( or the price of the product= indicating that the( 4ere open to
purchae product of their con#enience. -nother 1)J uggeted that price 4ould be more
important for them 4ith repect to their bu(ing beha#iour and 23J of the repondent
indicated that 2ualit( 4ould not be a important a price. The repone indicate that mot of
the conumer 4ould be eniti#e to price= indicating that if the price of the product 4a
increaed= the( ma( not purchae the ame product.
I pre3er lo&er prices to 5uality
Thi 2uetion 4a inerted in order to check the repone that 4ere recei#ed for the pre#iou
2uetion. In other 4ord= thi 2uetion 4ould be able to #alidate the repone that 4ere
recei#ed for the pre#iou 2uetion. 3rom the repone to the 2uetion= it 4a een that an
almot e#en number of cutomer eemed to be influenced b( 2ualit( >4$JA and price >43JA.
In other 4ord= the repone indicate that 4hile the ma"orit( of the conumer 4ould be
influenced b( the 2ualit( of the product= and almot e#en number of conumer 4ould be
influenced b( the price of the product. Thi #alidate the repone that 4ere recei#ed for the
pre#iou 2uetion 4here it 4a alo een that an almot e#en number of conumer 4ere
influenced b( the price of the product and the 2ualit( of the product. In other 4ord=
41
conumer ma( not be entirel( dri#en b( lo4 priceE rather the( ma( alo be dri#en b( the
2ualit( of the product. The implication here i that conumer ma( be dri#en to Teco
becaue the percei#ed 2ualit( of the product ma( be higher than the percei#ed 2ualit( of the
product at dicount retailer uch a -ldi or 5idl. -dditionall(= conumer ma( alo be gi#en
to Teco becaue of the perception that the price of the product of Teco are cheaper than
the price of the product of the competitor uch a -da= Sainbur(Q= or +orrion.
I pre3er s#oppin" at /esco rat#er t#an at discount retailers suc# as 4ldi or %idl
The intention of thi 2uetion 4a to find out the perception of conumer 4ith regard to
hopping at dicount retail tore. 3)J of the repondent aid that the( 4ould prefer
hopping at Teco and another 3)J of the repondent indicated that the( 4ere not ure
4hether the( 4ould pick Teco or dicount retailer= although it indicated that the( 4ould
probabl( pick Teco. !nl( 2&J of the repondent eemed to ugget that the( 4ould prefer
hopping at dicount retailer= indicating that the( ma( be price eniti#e. 3rom the
repone= it i e#ident that ma"orit( of the conumer 4ould rather hop at retail tore that
ha#e a better brand than at dicount retailer. -gain= the purpoe of thi 2uetion 4a to be
able to undertand the e8tent to 4hich conumer 4ould be eniti#e to price. The repone
certainl( indicate that mot of the conumer are not eniti#e to price.
I pre3er s#oppin" at /esco )ecause t#e price is reasona)le, 5uality is
reasona)le, varieties o3 products to c#oose 3rom, it is convenient
In order to check the repone of the pre#iou 2uetion= thi 2uetion 4a made #iible onl(
to the conumer 4ho choe either B(eC or Bma(beC to the pre#iou 2uetion= to further
undertand 4h( the( 4ould prefer hopping at Teco rather than at dicount retail tore. The
repone to thi 2uetion 4ere elected from the repone that 4ere recei#ed to the focu
group inter#ie4. Thi 2uetion 4a not marked a a re2uired 2uetion in order for the
2uetionnaire to be completed. Cone2uentl(= out of the 42 repondent 4ho marked either
B(eC or Bma(beC to the pre#iou 2uetion onl( 2/ repondent choe to an4er thi 2uetion.
3rom the repone= it i een that a ma"orit( of the conumer of that hopping at Teco 4a
preferable becaue of price of the product i reaonable. Thi doe not necearil( mean that
the price of the product i lo4E rather it could mean that the price i reaonable for the 2ualit(
of the product at Teco. -nother an4er that gained ignificant number of repone i that it
4a con#enient to hop at Teco for #ariou reaon uch a parking and pro8imit( to home.
In other 4ord= it i poible that thee conumer are a4are that the retailer uch a -ldi and
42
5idl charge lo4er price for the product than Teco= ho4e#er= o4ing to con#enience and
reaonable price= conumer pick Teco o#er the dicount retailer.
I &ould s#op at a discount retailer suc# as 4ldi or %idl i3 I can save at least a
certain amount
The purpoe of thi 2uetion 4a to undertand ho4 much conumer 4ould be 4illing to
pend before the think about the amount that could be a#ed b( pending at dicount retailer.
3rom the repone and focu group= it 4a e#ident that mot people hop at Teco for
grocerie or dail( neceitie. In other 4ord= conumer do not pend huge amount at Teco
all the time. Conidering thi= it i een that about 23J of the conumer 4ould prefer to hop
at -ldi or 5idl the( could at leat a#e up to P11= 2$J of the repondent 4ould prefer to
hop at the dicount retailer if the( could at leat a#e up to P21= another 2.J uggeted that
the( 4ould go to dicount retailer the( could a#e up to P31 and another 2$J of the
repondent uggeted that the( could a#e at leat up to P31= the( 4ould chooe to go to
dicount retailer. In other 4ord= in the perception of the conumer= it can be aid that the
da( not conider that the( can a#e at leat the minimum amount that 4ould compel them to
hop at the dicount retailer. Since thee conumer generall( pend more at Teco= it can be
aid that the( do not percei#e that the( can a#e much e#en if the( hop at the dicount
retailer b( acrificing their con#enience.
/#e aspect o3 a retailer t#at in3luences my decision to s#op t#ere is9
Thi 4a another 2uetion that 4a poed to #alidate the reult of the other 2uetion in
regard to 4hether BpriceC 4a a determining factor that pla(ed a part in the bu(ing beha#iour
of the conumer. 3rom the repone= it i een that a ma"orit( >&$JA of the repondent
eemed to indicate that Breaonable priceC i one of the apect of a retailer that 4ould
certainl( influence them to hop there. Reaonable price= a mentioned earlier= doe not
necearil( mean that the price ha#e to be lo4. In other 4ord= it indicate that conumer
are 4illing to pa( a BreaonableC price a long a the 2ualit( of the product i good. &1J of
the repondent uggeted that 2ualit( of the product i another important factor that i
conidered b( them before the( go to a retail tore. -bout $1J of the repondent uggeted
that con#enience i alo important and about 4.J of the repondent uggeted that the brand
name i important to them. 3rom thee repone= it ma( be aid that the conumer eem to
think that lo4er price indicate that the 2ualit( of the product ma( be lo4er. In other 4ord=
43
the( eem to think that dicount retailer ma( not ha#e high 2ualit( or good 2ualit( product
a their price are lo4er than the more upmarket retailer uch a Teco or -da.
:or #i"# involvement products (products t#at "enerally cost more, I pre3er
)i""er )rands suc# as /esco rat#er t#an at discount retailers (suc# as 4ldi
Thi tatement 4a preented to the repondent to be able to meaure the e8tent to 4hich
brand e2uit( come into the picture 4ith repect to the retail indutr(. 7rand e2uit(= a
dicued in the literature i concerned 4ith the percei#ed #alue of the brand in the e(e of
the conumer. If a brand ha greater #alue= then conumer 4ould be 4illing to pend more
on that brand. -dditionall(= concept uch a brand e2uit( become e#en more important 4hen
the product are high in#ol#ement product >product that cot moreA. 3rom the repone to
the tatement= it 4a een that 4hile 42J of the repondent uggeted that the( 4ould prefer
bigger brand 4hen the le#el of in#ol#ement i high= 3$J of the repondent uggeted that
the( 4ould not be influenced b( the brand name= 4ith repect to retail purchae. -nother
23J of the repondent did not think that the in#ol#ement of the product 4ould influence
their deciion about the brand. In other 4ord= from the repone= it i een that although a
ma"orit( of the repondent 4ould prefer bigger brand name 4hen it come to high
in#ol#ement product= there are alo man( conumer 4ho 4ould perhap e8hibit a
Bdionance reducing bu(ing beha#iourC.
I3 I can save money on retail spendin", I &ill "o to stores suc# as 4ldi
Thi 2uetion 4a aimed at undertanding the price eniti#ene of the conumer. ,arlier=
the conumer e8preed ho4 much the( 4ould 4ant to a#e before the( 4ould hop at a
dicount retailer uch a -ldi. Thi tatement build on that tatement= in the ene that if
cutomer could a#e the amount that the( 4ould 4ant to a#e= 4ould the( reall( 4itch to a
dicount retailer in fa#our of Teco9 3rom the repone= it i een that $4J of the
repondent uggeted that the( 4ould certainl( be influenced to hop at a dicount retailer
uch a -ldi= if the( 4ould be able to a#e the minimum amount that the( 4ould 4ant to a#e
>for acrificing their con#enience= etc.A. 'o4e#er= interetingl(= it i alo een that 4&J of the
repondent 4ould not be 4illing to hop at a dicount retailer e#en if the( 4ere able to a#e
the minimum amount that the( 4ould 4ant to a#e >a pecified in the earlier tatementA. Thi
i an indication that mot of the conumer are not reall( price eniti#e= rather= the( look for
other amenitie uch a con#enience= percei#ed 2ualit(= and reaonable price.
44
Price #as little or no in3luence on my perception o3 t#e 5uality o3 t#e products
The price62ualit( perception link i one of the mot important element in determining
4hether BpriceC can be a differentiating factor in the retail ector. 3rom the repone to thi
tatement= it i een that a ma"orit( of the repondent >3$JA eemed to ugget that the price
of the product 4ould not influence their perception of the 2ualit( of the product either
poiti#el( or negati#el(. -nother 33J of the repondent uggeted that the price of the
product >in the retail ectorA 4ill ha#e no influence on the percei#ed 2ualit( of the product.
!nl( 32J of the repondent eemed to think that price of the product 4ould certainl(
influence their percei#ed 2ualit( of the product. In other 4ord= a ma"orit( of the conumer
4ould not form 2ualit( perception baed on the price of the product= 4herea about 32J of
the conumer 4ould be influenced b( the price of the product. In other 4ord= if a compan(
i poitioned along the line of price= it ma( not reall( affect the percei#ed 2ualit( of the
compan(= ho4e#er= from repone to the earlier tatement= it i een that 2ualit(= and a
bigger brand name ma( influence conumer to a greater e8tent.
... D!+u++!on on t'$ F!nd!n4+
The h(pothei for the tud( i: 1Price is not t#e +ey di33erentiatin" 3actor t#at in3luences
consumer )uyin" )e#aviour2. In order to tet the h(pothei= t4o reearch 2uetion 4ere
ued. The dicuion on the finding and interpretation ha been di#ided according to thee
reearch 2uetion and a concluion ha been pro#ided in the conte8t of the h(pothei.
....1 I+ 2r!$ # d!@$r$nt!#tor !n t'$ +u2$r%#r<$t !ndu+tr1A
The interpretation and anal(i of the 2uetionnaire and inter#ie4 re#eal that price ma(
not be a primar( differentiator in the upermarket indutr( in ;<. It i certainl( true that
price i one of the main element that contribute to conumerF bu(ing beha#iour >+oreau=
211&c= 211)E +orchett et al.= 211&A. It ha been een from literature that conumer certainl(
ackno4ledge that dicount retailer or budget6price tore are cheaper than the traditional
retailer uch a Teco or Sainbur(F. 5o4 price had an ad#ere impact on the conumer
during the recent receion. In other 4ord= it 4a een that lo4er price and budget retailer
had a greater rate of ucce during the receion o4ing to the lo4er pending po4er of the
conumer >Pierc( et al.= 2111A. Price alo become an important factor in the retail indutr(
becaue it add to the percei#ed 2ualit( of the product or er#ice. In mot cae= the actual
2ualit( or the productF true 2ualit( i not meaured b( the conumerE rather conumer
percei#e the 2ualit( of the product baed on the brand name and the pricing trateg( of the
4$
compan( ><arde et al.= 2114A. !ne of the main determinant of the percei#ed 2ualit( of the
product a the price62ualit( link 4hich affect conumerF deciion procee. Traditionall(= it
i een that higher price are indicati#e of higher le#el of 2ualit( and lo4 price are indicated
of lo4 2ualit( product >Hagle et al.= 2111A. It can alo be aid that price i the amount of
mone( that conumer ha#e to acrifice in e8change for the product and er#ice that the
compan( offer to them. In thi regard= it i poible that conumer ma( opt for the optimum
#alue that the( can recei#e for the price that the( acrifice to4ard the product or the
er#ice >7ruck et al.= 2111E Meithaml= 1/..A.
3rom the anal(i and interpretation of the inter#ie4 and 2uetionnaire= it 4a een that
although conumer ma( be influenced b( the price of the product to e8tend= it i certainl(
not the primar( factor that differentiate companie for them. Price ma( become more
important for the conumer 4hen the amount of a#ing for the amount of difference
bet4een the price of the product i relati#el( high. In other cae= in the retail indutr(= it
ma( be aid that apect uch a con#enience= 2ualit(= and cutomer er#ice become more
important for the conumer. - it ha been tated b( the cutomer= the( 4ould 4ant to be
able to a#e at leat 21J to 31J of their cot before conidering hopping at dicount
retailer uch a -ldi or 5idl. Wherea= the( ma( not gi#e a econd thought to hopping at
Teco or Sainbur(F e#en though the( are 2uite a4are that the price ma( be higher. Thi i
certainl( e#idence that in the perception of the conumer= price not the factor that
differentiate companie from each other in the retail ector although companie make
poition themel#e along the line of price.
...." I+ t'$ )o6 $nd 2r!$ 2o+!t!on -!#()$ &or r$t#!)$r+A
Poitioning on the lo4 end of the price pectrum i perhap ad#antageou to an organiation
4hen conumer are a4are of the lo4 price that are charged b( the compan( and 4hen the
econom( i perhap not doing o 4ell. In other cae= from the literature and from the
anal(i= it i een that conumer ma( not pa( ufficient amount of attention to price in order
to make price poitioning a #iable choice for retailer. -dditionall(= the lo4 end price
poition for retailer 4ill onl( ucceed if conumer are highl( price eniti#e. T(picall(=
although e#er( conumer ma( 4ant to pa( the lo4et amount of mone( for a product or
er#ice= he or he i alo influenced b( other #ariable or attribute of the product uch a
2ualit( or brand name ><otler ? -rmtrong= 2111A. It i alo poible that the lo4 end price
poitioning ma( be important for retailer a it can impro#e cutomer lo(alt(. 'o4e#er= it ha
4&
alo been etablihed that in6tore promotion and other kind of promotion are certainl(
more influential than the lo4 price poitioning of an organiation >+oore ? Carpenter= 211&A.
-nother apect that ma( influence conumer bu(ing beha#iour 4ith repect to lo4 end price
poitioning i the trength of the brand image or brand e2uit(. The importance of brand e2uit(
tem fact that if a brand image i trong enough= then conumer 4ill be 4illing to pa( price
premium for the product. -dditionall(= if the brand image influence conumer in their
bu(ing deciion= then it i poible that the( ma( not be 4illing to acrifice their elf6image
for the ake of lo4er price at dicount retailer >Hagle et al.= 2111A.
3rom the anal(i and interpretation of the 2uetioner and focu grouping becaue= it 4a
een that conumer prefer con#enience= a#ailabilit( of product= and good cutomer er#ice
to lo4er price or dicount retail tore. In other 4ord= the lo46end price poitioning ma(
onl( be ucceful for a retailer if the retailer i able to pro#ide conumer 4ith all thee
apect in the conte8t of the ;nited <ingdom. It ha alo been een from the anal(i that if a
compan( i poitioned at the lo4er end of the price pectrum= then it i poible that
conumer 4ill be influenced to think that the 2ualit( of the product i lo4 a 4ell. Thi
mean that unle the compan( i able to etablih a trong brand image or brand name for
itelf= then the lo4 end price poitioning trateg( ma( not be entirel( ucceful for the
compan(.
....* T'$ H12ot'$+!+
The h(pothei for the tud( i: 1Price is not t#e +ey di33erentiatin" 3actor t#at in3luences
consumer )uyin" )e#aviour2. 3rom the anal(i and the dicuion= it i e#ident that the
h(pothei ha been teted to be poiti#e. In other 4ord= it ha been etablihed from the
inter#ie4 and the 2uetionnaire and the dicuion on thee ource in the conte8t of the
literature re#ie4 that Bprice i not the ke( differentiator factor that influence conumer
bu(ing beha#iourC. In other 4ord= although price ma( influence conumer bu(ing beha#iour
to an e8tent= it i certainl( not the main factor that influence conumer 4ith repect to the
retail ector.
..0 Con)u+!on
3rom the dicuion and anal(i= it i e#ident that price ma( not be a ke( determinant factor
in cutomer bu(ing beha#iour but in the retail indutr( in the ;nited <ingdom. In the conte8t
of the ob"ecti#e of the tud(= it can be aid that in the perception of the conumer= price ma(
not be a ke( factor in differentiating companie. -lo= in the perception of the conumer=
4)
price poitioning ma( not be a #er( #iable poition for companie in the retail indutr(
becaue price doe not influence conumer a much a companie 4ould 4ant price to
influence them. *etailed concluion and recommendation are pro#ided in the ne8t chapter.
4.
4/
Chapter $. Concluion
Thi chapter pro#ide the concluion for the tud( and emphaie on 4hether the reearch
ob"ecti#e 4ere achie#ed in the tud( and 4hether the h(pothei 4a pro#en to be true or
fale. The h(pothei for the tud( i price is not the key differentiating factor that
influences consumer buying behaviour. 3rom the literature= it 4a een that man(
companie ue price to trategicall( poition themel#e and that price i an important cue in
the conumer deciion making proce. 3rom the dicuion and anal(i= it became clear that
although price pla(ed an important role in the deciion making proce of the conumer of
Teco= it 4a not the factor that differentiated the compan( from other companie. 3or
intance= although it i a 4ell6kno4n fact that companie uch a -ldi and 5idl are dicount
retailer= thi fact 4a not the apect that differentiated Teco from them. 3or the conumer
of Teco= it 4a een that apect uch a con#enience and a#ailabilit( of product a 4ell a
good cutomer er#ice 4ere more important than price.
Interetingl(= it can alo be aid= from the anal(i= that if companie uch a -ldi and 5idl
focu on deli#ering on thee other dimenion uch a con#enience and cutomer er#iceE it
ma( be poible that cutomer ma( defect from Teco to thee retailer. The main reaon a
to 4h( price ma( not be a primar( differentiating factor in the retail ector in the ;< i
perhap due to the fact that the difference in price i not high enough to 4orr( the conumer.
- uggeted from the literature re#ie4= conumer are certainl( 4illing to pa( the price
premium for the product at Teco. It i alo intereting to ee that the price62ualit(
perception doe not eem to influence conumer in the retail ector. 3or intance= it i een
that conumer are not all price conciou and not all conumer percei#e that a lo4er price i
indicati#e of lo4er 2ualit(. Cone2uentl(= the deciion of the conumer are not baed on
price aloneE rather= the( are baed on #ariou dimenion of the retail tore of 4hich
con#enience and acce eemed to be the primar( factor. It i certainl( poible that 4hen
the price i ignificantl( higher or lo4er= then it ma( become a ke( factor in the conumer
bu(ing beha#iour. 'o4e#er= under normal circumtance= in the retail indutr( in the ;<= it
can be inferred that price i certainl( not the ke( factor that differentiate retailer= from the
perception of the conumer. In other 4ord= it can be aid that the h(pothei ha been teted
to be poiti#e for the tud(.
In line 4ith the h(pothei= the firt ob"ecti#e of the tud( ha alo been an4ered D To
anal(e the e8tent to 4hich pricing i a differentiating factor >a een b( the cutomerA that
$1
influence conumer bu(ing beha#iour in the upermarket indutr(. Specificall(= in an4er to
thi reearch ob"ecti#e it can be aid that price i not a differentiating factor in the
upermarket indutr(. - mentioned earlier= the ob#iou reaon for thi i that there i not
much difference in the priing trateg( o a to caue the conumer to make comple8
deciion a to the tore choice. In mot cae= it ma( not e#en be poible for conumer to
a#e more than P$ per #iit to a dicount retailer a oppoed to a #iit to Teco. *uring the
receion= thi ma( ha#e been attracti#e to the conumer= 4hich perhap e8plain 4h( the
number of ale increaed at -ldi and 5idl during the receion. 'o4e#er= 4hen the econom(
pick up again= thi meagre difference ma( not matter to a #at ma"orit( of the conumer. -
uch= thi price difference doe not make a difference to the conumer. Rather= con#enience
apect uch a car parking facilitie= #arietie of product= and a high le#el of cutomer
er#ice are gi#en more importance 4ith repect to the retail indutr(.
The econd ob"ecti#e of the tud( i concerned 4ith 4hether a lo4 end pricing poition i
#iable for a retailer >a een b( the conumerA. 3rom the dicuion and anal(i= it ha been
een that the lo4 end ma( be #iable= if the retailer i able to atif( the need of the
conumer atifactoril(. -dditionall(= if the compan( i poitioned at the lo4 end of the price
pectrum= unle the compan( offer er#ice that e8ceed the e8pectation of the conumer=
the percei#ed 2ualit( and the performance of the product and er#ice 4ill be lo4. In other
4ord= if a compan( purue a trateg( of a lo46acti#e price trateg(= then it mut be able to
deli#er and e8ceed the e8pectation of the conumer in order to ucceed 4ith thi trateg(.
,le= it i poible that 4ith a lo46pai#e price trateg(= a compan( ma( ucceed. 'o4e#er=
in the retail indutr(= it ma( not be poible for a compan( to adopt a lo46pai#e price
trateg( a the brand name 4ill certainl( gain popularit( a a retailer. 3rom the finding and
the dicuion= it can be een that conumer 4ould not be attracted to a compan( that i
poitioned at the lo4er end of the price pectrum if the compan( i not able meet the
e8pectation of the conumer. - uch= it can be aid that the lo4 end price poitioning ma(
not be #iable for an organiation in the retail ector. 'o4e#er= it i poible that a trateg( of
lo4 price ma( ucceed if the compan( place due importance on the factor that are
important to the conumer uch a con#enience and eae of acce.
Scope, %imitation, and 4reas 3or :urt#er -esearc#
Through thi tud(= it ha been poible to undertand the impact that price on conumer
4ith repect to the retail indutr( in the ;nited <ingdom. In other 4ord= thi tud( ha been
$1
able to hed ome light into undertanding 4hether conumer in the retail ector ee price a
the differentiating factor bet4een companie. 'o4e#er= there are certain limitation that ha#e
been ackno4ledged in the tud(.
!ne of the primar( limitation of the tud( i that it i concerned 4ith a ingle organiation
and the ample iIe that ha been elected for the tud( i 2uite mall. -dditionall(= the
ample ha been choen from the friend= colleague= and relati#e of the reearcher limiting
the cope of the reearch e#en further. In other 4ord= it i poible that all the conumer
4ho took part in the tud( ma( ha#e imilar opinion and idea about the pricing trategie
and price a a different hipping factor in the retail ector. -lo= i poible that the tud( ma(
not be generaliable. Thi i again becaue of the mall ample iIe and the fact that the
people 4ho ha#e taken part in the tud( are friend= relati#e= or colleague of the reearcher.
Through thi tud( it ha been poible to identif( that price i not the ke( differentiating
factor in the retail indutr( >a een b( the conumerA. 'o4e#er= the data for thi tud( ha
been collected from conumer of a ingle organiation. In order to further #alidate the
finding and to make generaliation= it ma( be necear( for the reearch to be conducted on
a more generalied le#el D at the entire indutr( le#el.
$2
$3
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-ppendi8 1: %uetionnaire Summar(
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-ppendi8 2: Planning and ,ffort Sheet
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