Investigating Penetration Pricing Strategy in the UK Fashion Industry

This project investigates the role of penetration pricing strategies in enhancing customer satisfaction within the UK fashion industry, focusing on H&M as a case study. It explores the concept and importance of penetration pricing, its benefits for companies like H&M, and the underlying academic theories. The research aims to understand how penetration pricing can attract customers, increase brand loyalty, and improve market share. Ethical considerations are addressed, including data collection methods involving employee surveys. The study utilizes academic literature and empirical analysis to provide insights into effective pricing strategies and their impact on consumer behavior in the competitive fashion market. Desklib offers a range of resources, including past papers and solved assignments, to support students in similar research endeavors.

Identifying a Research Question for the
Dissertation/Project
WORKSHEET FOR RESEARCH
DISSERTATION PLAN
This template is to assist you in preparing your Research Dissertation Plan. Your research Plan is the
foundation of your dissertation. Please bring the sheet with you to the research tutorials to
demonstrate your progress – this is a record of your work-in-progress
Student’s Name Supervisor
Student’s Number Date Allocated
*2 What are the possible
sources of your research
question?
These may include academic
subjects you have studied,
your (business related)
personal experience, your
future career intentions.
Above all the topic should
arouse and engage your
interest.
Penetration Pricing is defined is defined as the marketing strategy
which is used by organisation in order to attract customers
towards a new product and service by offering lower price at
initial level. In addition to this, the lower price assist a service or
product to penetrate the market as well as attract large number of
customers as compare to its competitors.
One of the main reason to conduct the study is to identify the role
of penetration pricing strategy in increasing satisfaction among
customers towards the UK fashion industry. Along with this, it
assists in gaining knowledge regarding significance of penetration
pricing and how it helps in satisfying customers as well.
Moreover, it assists various stakeholders that is organisation,
researcher and so on. In relation to investigator, it helps in
improving and learning skills such as time management, research
skills, data analysis, data interpretation and many more.
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*3 What is your proposed
research question?
This states the business
problem – add a comment –
what is the anticipated benefit
that may result from
investigating the problem
Research question:
 What is the concept of penetration pricing as a type of
marketing strategy?
 What are the importance of penetration pricing strategy in
increasing customer’s satisfaction towards H&M?
 What are the benefits that would be gained by H&M by
using penetration pricing strategy?
*4 How has the problem
arisen?
Provide the contextual
background to the problem –
Summary of organization and
summary of the problem
Penetration pricing strategy is defined as such strategy which are
used by the organisation in order to attract new customers by
offering low price. With the help of lowering the price market
competition can be managed and at the same time desired
customers can be attracted. In addition to attracting customer the
role of penetration pricing is to keep customers and acquire their
loyalty.
For conducting the current report H&M is taken which is one of
the prominent fashion retailer. H&M is a Swedish multinational
clothing company headquartered in Stockholm. The company is
focused into fast fashion clothing for men, women and kids so
that the company is well maintaining their market presence. The
company is facing issue of not having diversified customer due to
their pricing strategy. The company is using premium pricing
strategy by which company is targetting to a segment of
customers. The present study will assist in analysing the role of
penetration pricing to the organisation in terms of attracting
customers.
*2 *3 *4 with contrbution from Jan Green (2013) Senior Lecture Glyndwr University Wrexham
What are the aims of
the research study?
One research aim which
will be reflected in
the title of your
dissertation
Title:
“To identify the role of penetration pricing strategy in increasing
satisfaction among customers towards the UK fashion industry “.
Research Aim: To identify the role of penetration pricing strategy in
increasing satisfaction among customers towards the UK fashion
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industry: A study on H&M
Research question:
 What is the concept of penetration pricing as a type of
marketing strategy?
 What are the importance of penetration pricing strategy in
increasing customer’s satisfaction towards H&M?
 What are the benefits that would be gained by H&M by using
penetration pricing strategy?
Quantitative Study
What are the objectives
of your research study?
What do you plan to do
during your research?
For quantitative research
list up to up to three
objectives
the fourth objective is to
recommend a course of
action
(For quantitative research)
The objectives of the study are :
 To develop basic understanding about the penetration pricing as
a type of marketing strategy
 To determine the importance of penetration pricing strategy in
increasing customer’s satisfaction towards H&M
 To examine the benefits that would be gained by H&M by
using penetration pricing strategy
 To recommend the effective pricing strategy to H&M for
attracting large number of customers.
What is the main
academic theme of
your proposal?
Include an academic
definition of the key
terms, supported by
academic literature cited
using the Harvard
referencing system
To develop basic understanding about the penetration pricing as a
type of marketing strategy
According to Grace Baldwin, the penetration pricing strategy is
adopted by the business organisation when they launch a new product
in the market and the similar products are already existing in the
market. It is very important for the organisation to make a unique
strategy in order to attract customer and stand out of the similar
products been available in the market. The main aim of the penetration
pricing strategy is to introduce customers to the products at a low risk.,
gather the interest of the consumers towards the product, and also to
build brand loyalty. This is the easy way of attracting consumers
towards the new product at a low price where the product is been
offered at a discounted price upon its initial offering. This is the
strategy beneficial for H&M where the company can have a great way
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to influence products price perception right from the beginning. The
company also also build the brand image in which the customer will
show their interest and will able to know about the product. It is very
important for the organisation to develop the product in such a way
that they can have a wide market share.
To determine the importance of penetration pricing strategy in
increasing customer’s satisfaction towards H&M
According to Will Kenton, The importance of penetration
pricing strategy is important for the organisation in order to attract
customer and satisfy their needs and wants it is very important for the
company at the initial offering in the market in order to keep their
prices low and attract customers. This also helps in increasing
customer satisfaction because if the product is clunked at beginning the
customer expects the prices are kept low in order to use the product
and the customer can try the product for the further use. As the
company is trying of launch the new product which is already existing
in market and it is not easy to market the same product. The
importance of penetration pricing strategy in such situation is very
essential in order to attract customers. In context of H&M the the
company needs to satisfy its customer by attracting them with the
different pricing strategy. The brand also need to bring the product in
the awareness of the customers. Customer satisfaction is directly
proportional to the pricing strategy of the company and this need to be
maintained by the company in order to attract customers.
To examine the benefits that would be gained by H&M by
using penetration pricing strategy
According to the Taylor Wells, there are various advantages
which can be adopted by the H&M in order to attract customer by
using the penetration pricing strategy as this will help in targetting the
wide range of customers. This will also help the business organisation
in increasing brand loyalty. The company will also be able to switch
the customers from its competitors by keeping the low pricing at the
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beginning in order to develop interest of customers. This is important
and beneficial for the organisation for generating significant demand in
the market of the product which the customer will be willing to
purchase it. This will also help in generating higher revenue and the
company is able to grab the large range of customers. In context of
H&M the company is able to target the large audiences and the
penetration pricing strategy is beneficial it is able to gain the large
amount of profits and able to generate higher revenue.
What
Academic
theory
underpins
the research
question?
According to Nair, (2019) Penetration pricing strategy helps in increasing the
market share and also enhances the sales volume of company. By adopting
penetration pricing strategy, organisation can attract maximum number of buyers
to new product by offering the at low price at initial level. Penetration strategy
helps in migrating customer from competitors and also it helps in generating
high sales quantity. This strategy also increases inventory turnover rate due to
which company can make their employees happy and fulfil their need and
expectation in effective and efficient manner. Thus, penetration pricing strategy
helps in attracting customer by delivering them product at low price.
According to Patrick Campbell, (2020) penetration pricing strategy is a
constructive tactic which helps in attracting large base of consumes through
offering new offerings at relatively lower prices in the initial phase. This
significantly helps in enhancing productivity of the company through inducing
maximum customer engagement and it is a effective technique to grab attention
of individuals to drive competitiveness (Complete Guide to Penetration Pricing
Strategy, 2020).
There are numerous benefits this strategy offers to the company as it increase
awareness and familiarity of a product among consumers. In initial stage of a
product development, it is highly constructive in supporting customer
engagement in consumption of new product. Through getting consumers to test
the product, it is a important strategy which promote them towards increasing
their interests in the product (What is Penetration Pricing? Advantages and
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Disadvantages for Brands, 2019).
Evidence
underpinning
Objective 1
One sentence explaining what the evidence says in relation to objective 1:
Penetration pricing strategy is helpful for the organisation in terms of providing
them edge to attain customers and deal with their needs and demands.
Evidence
underpinning
Objective 2
One sentence explaining what the evidence says in relation to objective 2:
The importance of penetration pricing strategy is that to acquire diversified
customers and to target all group of customers
Evidence
underpinning
Objective 3
One sentence explaining what the evidence says in relation to objective 3:
By using penetration pricing strategy this would be helpful for the organisation
to gain loyal customers so that competitive edge can be attained.
List the
academic
journal
articles
Use the full
Harvard
referencing
system
REFERENCES
Books & Journal
Nair, G. K., 2019. Dynamics of pricing and non-pricing strategies, revenue
management performance and competitive advantage in hotel
industry. International journal of hospitality management, 82, pp.287-
297.
Hu, B., Hu, M. and Zhu, H., 2022. Surge pricing and two-sided temporal
responses in ride hailing. Manufacturing & Service Operations
Management, 24(1), pp.91-10
Online
Complete Guide to Penetration Pricing Strategy, 2020. [Online]. Available
through: <https://www.profitwell.com/recur/all/penetration-pricing>
What is Penetration Pricing? Advantages and Disadvantages for Brands, 2019.
[Online]. Available through: https://blog.wiser.com/what-is-penetration-
pricing/
penetration pricing<2021> [online] available through
https://www.omniaretail.com/blog/what-is-penetration-pricing
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what is penetration pricing <2020>[online] available through
https://corporatefinanceinstitute.com/resources/knowledge/strategy/penetration-
pricing/
Ethical considerations
This is essential for the researcher that to use different ethical aspects in the research so that to
avoid any harm. There are various ethical principle such as informed consent, confidentiality
and anonymity. These are the principle which is related with minimising interruptions within
research.
Ethical
Approval:
Explain how
you will
obtain written
authorization
to collect
research data
For the process of data collection within the current research, 30 employees of
H&M are taken and using random sampling these respondents are selected. The
major reason of including employee in the research is that they have in-depth
knowledge in relation to decisions of their organisation so that in effective
manner overall research can be exerted.
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