Analysis of Pricing Strategies' Effect on Sales in Korean Fashion

This paper investigates the impact of pricing strategies on sales and revenue within the Korean fashion industry. It begins by introducing the dynamic nature of the fashion industry and highlights the research problem of Korean fashion companies struggling to gain global popularity. The research objectives include analyzing pricing strategies using the marketing mix, understanding related concepts and theories, determining the role of pricing in the success of the Korean fashion industry, proposing ways to utilize effective pricing strategies, and analyzing the impact of these strategies on sales and revenue. The research employs both quantitative and qualitative methods, including literature review, interviews, and statistical analysis using tools like cross-tabulation and Pearson’s Chi-Square test, to evaluate the relationship between pricing strategies and the financial performance of Korean fashion brands. The paper concludes with recommendations for companies to improve their pricing strategies for long-term growth and success.

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Running head: RESEARCH PAPER
RESEARCH PAPER
Name of the Student
Name of the University
Author Note

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Executive Summary
The Fashion Industry can be stated to be highly dynamic in nature. With respect to this, it can be
mentioned that there are various companies lying in the Korean Fashion industry which are quite
popular in Korea but have considerably failed to ensure that, they become equally popular in
other parts of the world. Hence, with respect to this, it can be mentioned that the primary aim of
the paper is to highlight whether the pricing of the Fashion Industry in Korea has an impact on
the overall sales and revenue of the organization at large. Hence, in order to fulfill this research
objective and to analyze whether the different pricing strategies can be effectively used in the
different companies, the paper will follow a structured format. The paper begins with an
Introduction which will then be followed by the chapter on the Literature Review. The third
chapter is the Research Methodology which lays down the basis of the research. This has been
followed by the Findings and Analysis, whereby using the Cross tab tool and the Pearson’s Chi
Test. Conclusions and recommendations based on the research will also be provided which will
help in the long term achievement of the Research questions and the Research objectives.

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Table of Contents
1. Introduction..................................................................................................................................5
1.1 Background of the research...................................................................................................5
1.2 Research problem..............................................................................................................6
1.3. Research Objectives..............................................................................................................7
1.4 Research question.............................................................................................................7
1.5 Research hypothesis..........................................................................................................8
1.6 Summary...........................................................................................................................9
2. Literature Review........................................................................................................................9
2.1 Introduction to the LR...........................................................................................................9
2.2. Marketing mix strategy.........................................................................................................9
2.3 Fashion marketing...............................................................................................................12
2.4 Pricing..................................................................................................................................12
2.4.1 Internal factors affecting the decision of price.................................................................14
2.4.2 External factors affecting the decision of pricing.............................................................14
2.5 Perception of customers regarding price and value.............................................................15
2.6. Relationship between price and demand............................................................................16
2.7. Price elasticity of demand...................................................................................................17
2.8. Limitations of the literature................................................................................................17
3. Research methodology...............................................................................................................17

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3.1 Research philosophy............................................................................................................17
3.2 Research approach...............................................................................................................18
3.3 Research design...................................................................................................................18
3.4 Data collection and Analysis...............................................................................................19
3.5 Sampling..............................................................................................................................22
3.6 Reliability and Validity........................................................................................................22
3.7 Ethical consideration...........................................................................................................22
4. Findings and Analysis................................................................................................................23
4.1 Qualitative Analysis: The Interview with three eminent personalities................................23
4.2 Quantitative Analysis...........................................................................................................25
4.2.1 Purchase of fashion wear..............................................................................................26
4.2.2 Influences on the purchasing decision..............................................................................28
4.2.3 Purchasing in stores versus purchasing online.............................................................30
4.2.4 Korean Fashion.............................................................................................................32
4.3 Cross Tab Analysis..............................................................................................................34
4.3.1 Association between purchasing decision and pricing as a factor................................34
4.3.2 Association between purchasing decision and budget..................................................35
4.3.3 Association between factors affecting purchase decision and monthly shopping spend
...............................................................................................................................................36
5. Conclusion.................................................................................................................................38

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6. Recommendations......................................................................................................................40
7. Limitations and Future Scope....................................................................................................41
8. References..................................................................................................................................42
9. Appendix....................................................................................................................................46
Interviews..................................................................................................................................46
Questionnaire.............................................................................................................................48
Cross tab Statistics.....................................................................................................................58

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1. Introduction
The pricing of a product can be considered to be of extreme importance in deciding the
fate of the product in any industry. This is because, the pricing of a product goes a long way in
deciding upon the different perceptions which a customer generally possesses about the
particular product and also acts as a representative of the product`s quality. In addition to this,
the pricing of a product is also a determinant of the different costs as incurred in the product. The
pricing of exclusive products is generally taken to be very high and in this aspect it can be
mentioned that the fashion industry is one of the most crucial industries which are required to be
analyzed in terms of the different decisions as made in the industry and the different purchases as
made by the different customers at large.
1.1 Background of the research
The Fashion industry can be stated to be one of the most innovative and imperative
businesses as present. Since the year, 1990, the industry has grown considerably and there have
been various countries which have emerged as the suitable fashion centers or points around the
globe. Korea can be stated to be one such country which has been making considerable trends
around the globe and has come up with considerable fashion trends which have become very
popular worldwide. The luxury brands in the fashion industry have become fairly popular and
with respect to this, it can be stated that the demands of the different consumers has been
increasing and with respect to this, it can be mentioned that, the different customers now wish to
purchase expensive clothing lines and invest generally in designer brands because of the
different political, economic and socio –cultural changes as present around the globe.

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The fashion industry has gone under a considerable change not only because of the socio
cultural trends which are existent or the changing choices of the people but for the different
economic reasons as well. The purchasing power of the different people in the developed
countries as well as the developing countries like Korea, India, China, Indonesia and other
Pacific countries has increased and hence, the number of people who are willing to purchase
these fashionable products have also increased.
According to Zarley and Yan (2013), the market place also forms an essential aspect and
its value is greatly determined by the different customers. Xu, Wang and Ouyang (2013) states
that, the value of a product can be a resultant of the product between the demand as made by the
different customers and the supply of the products as made by the different brands which are
present and the manner in which they tend to present their products in the different commercials.
Hence, in light of the given discussion, it can be stated that the primary aim of the research is to
analyze the different ways in which the different brands can set their pricing strategy adequately
so as to ensure that they are being able to gain the maximum response from the different
customers. In addition to this, the research aims to find out the impact of the pricing strategies on
the sales and revenue of the different brands as present in the Korean Fashion Industry. This will
be done by making use of various quantitative as well as quantitative research methods and the
review of literature as based on the same.
1.2 Research problem
The particular research problem as present in the particular paper is to understand and
review the impact on the organizations in case they are unable to follow the adequate pricing
strategies. In addition to this, the aim is also to understand the importance of the different pricing
strategies under the marketing principles. This will be centered on the fashion industry in Korea.

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1.3. Research Objectives
The different research aims as well as the objectives of undergoing the particular study
can be stated to be as follows:
1. To analyze and identify as well as understand the different pricing strategies as present by
making use of the strategies of marketing mix.
2. To overview the concepts and theories which are related to the pricing strategies which
are generally applied within the different firms at large in order to gain the right kind of
audience.
3. The third objective is to understand the manner in which the pricing strategy has a key
role to play in the determination of the success of the fashion industry especially with
reference to the Korean industry.
4. Lastly, the research paper also seeks to propose certain ways in which the fashion
industry will be able to make use of adequate pricing strategies in order to develop the
particular industry of fashion.
5. Lastly, the paper will also aim to analyze the impact of the different strategies on the
revenue and sales as made on the Korean Fashion Industry.
1.4 Research question
The research questions which will be analyzed in the particular study can be stated to be
as follows:
1 What would be the impact on the fashion industry in case the different pricing strategies
will be applied?

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2 How can the different marketing principles be used by the different organizations as
present in the fashion industry to set the right prices of their products and ensure and
effective distribution strategy by making use of the distribution channels as well.
3 How a suitable pricing strategy does has an impact on enhancement of the different
features of the product and help the firm to perform well and gain the attention of the
different customers.
4 What are the recommendations which are given to the different companies to ensure the
long development of the fashion industry?
1.5 Research hypothesis
A research hypothesis can be described as one whereby the research objective or the
question needs to be verified statistically or analytically in order to allow a verification or a
falsification. If the hypothesis can be verified or approved then, it means that the research has
showed that there does exist an evidence in support of the hypothesis and hence, further research
can be built upon the same.
Hence, the main research objective of the paper is to examine whether the different
pricing strategies have an impact on the sales and revenue of the Korean Fashion Industry.
Independent variable (x): Pricing strategies
Dependent variable (y): Sales and revenue in the fashion industry
Null Hypothesis (Ho): The pricing strategies do not have any impact on the sales and revenue in
the Korean fashion industry.
Alternative Hypothesis (H1): The pricing strategies have a strong impact on the sales and
revenue in the Korean fashion industry.

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1.6 Summary
Hence, the introduction of the paper sets the background of the research and lays down
the different aspects of the paper. The format of the paper has been provided along with the
research objectives and the research questions. In addition to this, the research problem and the
research hypothesis has also been highlighted.
2. Literature Review
2.1 Introduction to the LR
In order to gain an understanding of the Korean fashion industry and the different pricing
strategies which can be applied in an organization with respect to the marketing mix strategies, it
can be mentioned that it is crucial to gain an understanding of the different aspects of the pricing
strategies which exist in a firm and also to gain an understanding of the fashion marketing. After
this has been done, an understanding of the relationship between the pricing of the different
products and the sales and revenue of the fashion products in the Korean Fashion industry will
also be gained. In addition to this, the limitations of the review of literature along with the
analysis of the previous studies will also be done under the same.
2.2. Marketing mix strategy
According to Shen et al. (2013), marketing can be described as an action which can be
taken by the business in order to sell the products of the company or the services to the different
customers and also assists in making a particular contribution to the turnover of the firm. Hence,
it becomes considerably important for the business to understand the right kind of marketing mix
strategy which needs to be applied in the business in order to engage in the sales growth of the
firm and in order to ensure that the business is successfully able to gain a competitive positioning
in the market. The correct marketing mix of the organization comprises of the different

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components like Product, pricing and the distribution strategy which goes a long way in ensuring
the overall success of the firm at large. Each of these particular factors have their own variables
and hence, need to be defined correctly within the realm of the firm in order to ensure that the
right kind of products can be designed for the overall success of the firm at large. The firm is
required to ensure that the product which is being sold to the different customers, comprises of
certain features that speak out to the target market and it must be built upon so that the customers
can become more loyal to the firm. According to Perry and Towers (2013), the most crucial
aspect of the marketing mix strategy is the pricing strategy of the firm which needs to be defined
adequately and plays a key role in building the image of the brand in the eyes of the customer.
The pricing of a product which is decided under the marketing mix strategy also goes a long way
in deciding the brand image of the firm and the brand loyalty.
The decision of the pricing of a product can be considered to be very difficult and needs
to take into consideration a large number of factors which will then ensure that all the aspects of
the cost are all covered and that, the industrial forces are also taken into consideration. In
addition to this, the pricing strategy of the firm also needs to take into consideration the different
industrial forces as well which will then ensure that the business is successfully able to perform
well and that whether the company will be offering any discounts to the customers in order to
build their loyalty or not (Corbellini and Saviolo 2014). In addition to this, the marketing mix
comprises of the distribution aspects as well and tends to assist the business in determining the
manner in which the business is supposed to set a system which will assist it to sell the products
directly to the different consumers or does the firm want to involve a large number of middlemen
in the system which shall then enable the firm to increase its cost but form a larger chain of
consumers at the same time (Perry and Towers 2013). The costs and the pricing have to be

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adjusted adequately in order to align the marketing mix of the firm accordingly and to manage
the distribution costs of the firm as well. After the three crucial aspects of the pricing of the
product, the place and the product is decided upon then, the promotion aspect of product needs to
be designed because it tends to make use of these components and decide upon its presentation to
the designated target market. According to Caro and Martínez-de-Albéniz (2015), these aspects
of the marketing mix need to be reviewed upon considerably as they have a long term impact on
the sales and revenue of the firm at large.
Out of this, the pricing of the firm is the most critical aspect of the firm and if the
customers are provided with adequate benefits they will be able to capture a bigger share of the
market. In the fashion industry, the price of a product, helps the firms in ensuring that they are
successfully able to achieve their goals within the realm of the firm. In addition to this, the
decision making which has to be made in regard to the price of the product needs to be
coordinated with the particular design of the product and the manner in which the product will be
distributed amongst the different members who are the particular target market. According to
Choi (2016), when correct decisions in regard to the pricing are made by the different firms in
the fashion industry then the competitive advantage can be achieved and the promotional
decisions can also be taken adequately. Caro and Martínez-de-Albéniz (2015) states that a
majority of the fashion companies as present make use of various resellers and other such agents
to support their product sales and enhance the revenues of the firm, however, these efforts very
often result in the increase of the price of the product and ultimately have an impact on the
market share of the firm.
This is the reason a majority of the firms, take the pricing decision in the first place so
that they are successfully able to use the other components of the marketing mix in the correct