UOG Dissertation: Pricing Effect on Sales & Revenue in Korean Fashion

This literature review examines the effect of pricing strategies on sales and revenue within the Korean fashion industry, drawing upon theories of psychological and micro-economic pricing. It explores how internal factors like brand positioning, product quality, and profitability, as well as ext...Read More

Running head: DISSERTATION
The Effect of Pricing on the sales and revenue of Fashion Industry in Korea
Name of the Student:
Name of the University:
Author’s Note:

2DISSERTATION
Theories of pricing
Psychological pricing
Psychological pricing theory focuses on the price that allows the customers to show a
positive emotional reaction towards the product price (Jegadeesh et al. 2017). However, odd
price value attracts the customers towards an organization. According to this theory, an
organization needs to set a pricing strategy that will enable them to attract the customers.
However, the lower pricing is helpful to gain the customer attention. In order to gain a position
in the competitive economy the lower pricing strategy will be helpful. In the recent years the
fashion industry in Korea does not follow a good pricing strategy; as a result their revenue
becomes hampered. Hence, by following the psychological pricing theory the fashion industry of
Korea will be able to understand the importance of setting a good pricing strategy, which will
enable them to attract the customers towards their product.
Micro-economic pricing theory
Price is either demand based, competition based or cost based. Among the various
theories of pricing macro-economic theory of pricing highlights the way through which the price
of a product is set based on the market demand (Barillas and Shanken 2018). According to this
model the price of a product is established based on the balance of demand and supply. The
demand curve of this theory shows that consumers want to maximize their utility and to give
their budget. Application of this theory helps Korean fashion industry to set their price based on
the current demand. However, the fashion will be able to understand the way or the factor based
on which they can set their pricing strategy. This theory helps this fashion industry to make a

3DISSERTATION
Pricing decision
External FactorsInternal Factors
Brand positioning
Product Quality
Demand of the
product
Goodwill of the brand
Profit
balance between the supply of and demand of the current market. In order to maximize the
revenue application of this theory is effective as it focuses on the production of quantity goods.
Conceptual Framework

4DISSERTATION
Figure 1: Conceptual Framework
(Source: Author)
Questions
Q1. How far do you agree that brand positioning affects the pricing decision-making?
Q2. What is the current brand positioning of Korean fashion industry?
Q3. How far do you agree that poor brand positing hampers the pricing decision-making?
Q4. How far do you agree that profit affects the current pricing strategy of the fashion
industry?
Q5. How far do you agree that low profitability increases the price of the fashion product?
Q6. How far do you agree that high profitability allows the organization to give discount in
the pricing?
Q7. How far do you agree that market demand plays an important role in developing
pricing decision?
Q8. What is the current market demand in Korean fashion industry?
Q9. How far do you agree that high market demand influences to take low pricing
strategy?
Q10. How far do you agree that the product quality is important to consider while setting
pricing strategy?
Q11. How far do you agree that good product quality allows the fashion organization to set
high price?

5DISSERTATION
Q12. In what extent product quality affect the pricing strategy?
Q13.How far do you agree that brand reputation is responsible to set pricing strategy?
Q14. How far do you agree that popular fashion brand influences the customers to
purchase product at high price?
Q15. How far do you agree that poor brand recognition affect the premium pricing
strategy in fashion industry?

6DISSERTATION
References
Barillas, F. and Shanken, J., 2018. Comparing asset pricing models. The Journal of Finance,
73(2), pp.715-754.
Jegadeesh, N., Noh, J., Pukthuanthong, K., Roll, R. and Wang, J.L., 2017. Empirical tests of
asset pricing models with individual assets: Resolving the errors-in-variables bias in risk
premium estimation.