Competitive Analysis of Pricing and Quality Decisions in Industries with Strictly Complimentary Products- A Case of Samsung

Research ProposalBy[Your Official Name]

[Degree Title], [University], 20XX

[Name of program]

[Name of University][Last month of quarter you plan to graduate] 20XX

Table of ContentsIntroduction1Organizational Background1Research Aim2Research Objectives2Problem Statement2Research Questions3Rationale of the Study3Significance of the Study4Literature Review4Competitive Analysis4Competitive Analysis and Strategy Formulation5Competitive Analysis, Pricing and Quality6Research Methodology7Hypothesis and Variables7References9Appendices14Appendix A: Survey Questionnaire14

Pricing and Quality Decisions 18

Proposal Topic: Competitive Analysis of Pricing and Quality Decisions in Industries with Strictly Complimentary Products- A Case of Samsung

IntroductionToday the issue of making pricing and quality decisions is of great concern for the company. Pricing is the process of determining the benefits that a company receives in return for its products or services. Pricing is determined by many factors, such as manufacturing cost, brand, quality, marketplace, market condition and competition. In micro economics of price allocation theory, one of the key variables is pricing determines that the decision making principles of consumers. Amongst 4Ps price is the only revenue generating element. According to Mark (2012, p.12), pricing has traditionally been considered an important variable in marketing strategy. The purpose of pricing is to provide sufficient return on the investment, as it is the only income generating source. It has been researched that satisfying the consumers demand and maintaining the quality of the product are the two prime functions of the manufacturers. Giri, Chakraborty and Maiti (2015, p. 194) defined product quality as the fulfilment of customers expectation. Different expectations exist for different products. For instance, a product expectation for mechanical or electronic product may be safety, reliability, appearance and durability and for a food product may be taste, nutrition and hygienic. Those products which fail to meet consumers demand are termed as low quality products. Thus the product quality and pricing are the two factors which are equally important for the success of a product. In this competitive world, it is important for the companies to produce and formulate those business strategies which focus on product quality and pricing strategies and results in an overall performance of the particular company. For this purpose, the researcher plans to determine the role of pricing and quality decision while analysing the factors that affect the decision making of Samsung Corporation in the business process.

Organizational BackgroundSamsung is amongst the leading companies of electronic markets and was founded in 1939. The main focus of Samsung is on digital media and appliances, semiconductors, memory and system integration.Samsung is a business which produces diversified products with chips, displays and other technology. To promote its quality vision, Samsung introduced Pledge 2009 under the slogan Perfection in Quality beyond your Imagination, which shows that providing a quality product is their top most priority. Samsung Corporation developed and implemented a five point code of conduct which includes Customer centric, True to basics, Professionalism, Quality workmanship and Creating customers for life. Their strategy to satisfy the requirements for customers and retain them for life time in this competitive world is through quality accountability and prompt handling of customer demands.

Research AimThe aim of this research is to analyse the competitive position of pricing and quality decisions in industries with strictly complimentary product through the case study of Samsung Corporation in UK.

Research ObjectivesThe objectives of the proposed study includes To identify the factors that affect quality and pricing decision of complementary products To analyse the role of quality and pricing decision on sales of complementary products To study the role of quality and pricing decision in complementary products of Samsung Corp in UK To provide recommendation regarding ways to improve decision making process of Samsung Corp in relation to complementary products.

Problem StatementThe problem which will be addressed in this research is the role of pricing and quality decision in the case of complementary products. Pricing decisions are important for the company as it directly affects the purchasing behaviour of the consumers (Hollensen, 2015, p. 54). Quality factors are equally important, as all consumers are attracted to better quality products (Giri, Chakraborty&Maiti, 2015, p. 192), and whether the price is charged high or low, if the quality is not satisfactory then the product is likely to fail (Armstrong & Chen, 2009, p. 41). Therefore, price and quality are the areas of great concern, and it is important to see what price should be charged and what quality should be delivered in order to accomplish the goals of the company (Chiu, Choi & Li, 2009, 56). Pricing and quality decisions are even more crucial for the case of complementary goods, as the price of one product affects the demand and usage of the other (Giri, Chakraborty&Maiti, 2015, p. 3; Chiu, Choi & Li, 2009, 42, Hollensen, 2015, p. 54). Hence, the present study will examine and perform a competitive analysis of pricing and quality decisions inindustries with strictly complimentary products with specific analysis of the case of Samsung.

Research Questions1. What is the relationship between price and quality?2. What are the factors that affect quality and pricing decision of complementary products?3. What is the role of quality and pricing decision on complementary products?4. What is the role of quality and pricing decision in complementary products of Samsung Corp?5. What is the recommendation regarding ways to improve decision making process of Samsung corporation with reference to complementary products?

Rationale of the StudyThe main aim of the proposed research is to investigate the decisions carried forward by the industries based upon the pricing and quality of the strictly complimentary products. This research aspires to articulate the competitive analysis of the industries that deals in the complimentary products. The rationale behind proposing a comparative study is backed up by the aim to gather bilateral dimensions of the decision making process that revolves around two basic phenomenon which includes pricing and quality(Godey, 2012, p. 146).The decision making of pricing and quality in the industry with strictly complimentary products is an issue because of the emergence of highly saturated markets that ultimately leads the corporations towards the generation of bottle neck profits (Haucap and Klein, 2012, p. 521, Chioveanu, 2012, p. 23). This issue is considered as one of the most significant aspect of companys performance which needed to be highlighted. Therefore, this research aspires to identify the processes and procedures of decision making with regards to complimentary products. Pricing and quality decisions in industries with strictly complimentary products, is considered as the most significant issue of the present day world. This is because of the technological improvements and enhancements through which a particular commodity becomes obsolete (Godey, 2012, p. 146). Therefore, the out-dated technology results in deriving the prices of the goods, hence the current research will gather and examine the in depth details regarding the decision making process of consumers with regards to complementary products.

Significance of the StudyPricing decisions are very important for the company as it affects the profit margins (Elmaghraby, et.al, 2015, p. 67). Higher prices with low costs lead to higher profit margin for the company (Haynes, 2015, p.12). On the other hand, higher prices can also affect the sales volume and wipe out the profits of the company, as fixed cost per unit increases with fewer units (Zhao, et.al, 2012, p. 409). In the case of complementary goods, higher prices of one product will affect the demand of the other products, as they are used simultaneously. Increasing or decreasing the prices of the product, will decrease or increase the sales volume respectively. The price set by the company also creates a perceive value for the customer, and its unique position sends a message to customers about a product of the company (Haynes, 2015, p.12). The price set by the company also affects the market share and in order to gain market share, some companies deliberately decrease the prices of the products. This is also known as cost effective strategy (McCann & Vroom, 2013, p. 99). Therefore, with the changing market, it is vital to analyse pricing and quality decisions in industries.

Literature ReviewCompetitive AnalysisToday, businesses are facing the toughest competition ever because of increased globalisation and technological advancement. In order to succeed in the fiercely competitive market of today, companies are required to shift from the philosophy of product and selling to the philosophy of customer and marketing (Kotler & Armstrong, 2012, p. 76). Winning in todays marketplace requires the companies to become competent in managing products and customer relationships with regards to competition and challenging economic situations. However, understanding customers is not enough (Healey & Gomez, 2013, p. 12). To build lucrative customer relationships and gain an edge over the competitors, businesses should provide more satisfaction and value to the consumers as compared to their competitors. To devise competitive marketing strategies, it is important that competitor analysis is carried out in order to identify, assess and select the key competitors (He, Zha& Li, 2013, p. 72).According to Kotler and Armstrong (2012, p.121), competitor analysis is a process where key competitors are identified, their objectives are assessed, and their strategies as well as their strengths and weaknesses are identified so that companies can select which competitors should be attacked or avoided. Ghosh&Galbreth, (2013, p. 260) defined competitor analysis as the assessment of weakness and strengths in strategic marketing of present and potential competitors. It is important for businesses to identify their current as well as potential competitors, collect information about them and establish an information system to monitor the market trends and moves of the competitors (Healey & Gomez, 2013, p. 10).

Competitive Analysis and Strategy FormulationCompetitive analysis serves as the keystone of effective and efficient strategy formulation and implementation in an organization (Peteraf, Gamble & Strickland, 2012, p. 45). Through competitive analysis, managers are able to understand and forecast the strategic actions of their competitors. It also assists the managers to test, develop and select appropriate strategies for their own brands. According to Healey & Gomez (2013, p. 8), companies needs to pay close attention to their competitors and regularly compare their prices, products, promotions and channels with their key competitors so that areas for competitive advantage can be identified and exploited. In order to identify the opportunities and threats, businesses can conduct competitor analysis in two different strategic contexts i.e. by engaging in marketing strategies that are offensive and defensive (Karakaya&Yannopoulos, 2011, p 172). The offensive context enables the company to capitalize on its strengths and exploit the opportunities. On the other hand, the defensive context enables the company to counter the threats posed by competitors more effectively, while overcoming the weaknesses. Rivalry happens when one or more competitors either see an opportunity or feel the pressure to enter a new industry or to improve its competitive position within the current industry (Peteraf, Gamble & Strickland, 2012, p. 46). To respond to the challenges and threats posed by the competitors, companies engage in counterattacking through increased advertising, reduced prices, increased innovation and creativity, launch of new products, etc. (Karakaya&Yannopoulos, 2011, p.180). Competitive Analysis, Pricing and QualityAccording to Czerny and Lindsey (2014, p. 21) the competitive analysis of a competitor gives the strategic background of the aggressive and defensive criteria of the threats and opportunities. Competitive analysis is an important element of corporate strategy and majority of the organizations do not conduct competitive analysis systematically. As an alternative, most of the organizations goes with the impressions that are informal, related to intuition and guesses. In the result, traditional scanning of environment takes place when most of the organizations are at risk and it is because of the absence of strong competitive analysis. Pricing plays a vital role for product because a product survives if there are more sales with maximum profit within the same amount of investment on the product. Pricing can be used as how customers consider the product to be, and develop their opinion about the product after evaluating the price. One of the major factors for customers to consider the product is pricing. Some studies have had prior research about the pricing strategy considering a single product or substitutable products. Wang, Zhaou and Wei (2014, p.38) has discussed the pricing decisions of two complementary products in detail. While analysing the differences of optimal retail pricing of two complementary products, a centralised pricing model is established. Organizations use captive product pricing for complementary products and charge high price for these products (Gamble & Thompson, 2014, p. 45). The quality level of a product that is offered to customers is an important feature of competition in most of the markets. Furthermore, quality concerns are regularly driving the improvement inside the market, thus, increasing dynamic effectiveness. However, there are hurdles in respect to quality measurement, defining the impact of quality aspect within the huge competition background. Therefore, majority of authorities related to competition would recognize the main role of quality (Curzi&Pacca, 2015, p. 158) Furthermore, organization struggles to increase the quality of product that is connected to modernization and consequently to the growth of economy. The significance of quality is certain but presenting a complete definition of quality is moderately complicated as it can be termed differently in different aspects. In general terms, quality is known as the service flow, or the level of worth that customers originate from the product. Quality of a product is an independent concept as diverse customers may recognize or give value to a specific attribute of quality to a different amount (Haucap& Klein, 2012, p. 521).

Research MethodologyAs the research approach is centred on quantitative inquiry, measurements and observations; therefore, the positivist philosophy will be utilized in this study since the research aim is to find the correlation between price and quality with strictly complementary products, through the formulation and testing of hypotheses.The current research will use quantitative research design in order to conduct the research study. The main advantage of selecting quantitative research design is that it enables the researcher to gather large amount of data from the respondents which can be analysed through the statistical tests. Through help of quantitative research, the researcher is able to take sample from large number of respondents through the help of survey questionnaire.Moreover, this research will be explanatory based on the hypothesis that examines the competitive analysis of pricing and quality decisions in industries with complementary products. The reason for selecting this research approach was that ample amount of secondary data was present on the topic already therefore, researcher developed hypothesis to study and test the relationship and impact of dependent and independent variables. The present research will be based on the deductive research approach as it gathers relevant data from already presented secondary data. For the purpose of this research, the author collected data from secondary research, developed a research hypothesis to test the impact of dependent and independent variable. The current research will adapt the non-probability sampling method for the purpose of selecting research respondents. The sample size of the study includes 100 employees who use Samsung mobiles and other Samsung appliances.

Hypothesis and VariablesThe testing of hypothesis includes two types of variables: the independent variable (IV) which is controlled by the researcher and the dependent variable (DV) is one on which the effect of IV is calculated.The hypothesis and variables involved in this research are:Hypothesis 1H11: Pricing and Quality decision affects complimentary products.H10: Pricing and Quality decision doesnt affect complimentary products.

Hypothesis 2H21: There is a positive impact of pricing decision on complimentary products of Samsung in UK.H20: There is no impact of pricing decision complimentary products of Samsung in UK.

Hypothesis 3H31: There is a positive impact of quality decision on complimentary products of Samsung in UK.H30: There is no impact of quality decision on complimentary products of Samsung in UK.

Independent Variables Price QualityDependent Variable Complimentary products

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AppendicesAppendix A: Survey QuestionnaireCompetitive analysis of pricing and quality decisions in industries with strictly complimentary products - a case of Samsung UK

Questionnaire

Demographics:Gendera. Maleb. Femalec. Other

Agea. 18-25b. 26-30c. 31-36d. Above 36

Educational backgrounda. High Schoolb. Collegec. Bachelorsd. Masterse. Other

Pricing1. Pricing strategies are formulated in our organization in consideration of the complementary products.a. Strongly Disagreeb. Disagreec. Neutrald. Agreee. Strongly Agree

2. Customer purchase decision is influenced by the pricing of a complementary product. a. Strongly Disagreeb. Disagreec. Neutrald. Agreee. Strongly Agree

3. Samsung engages in price bundling strategy with respect to the complementary products. a. Strongly Disagreeb. Disagreec. Neutrald. Agreee. Strongly Agree

4. Captive pricing strategy is more effective in the sale of complementary products. a. Strongly Disagreeb. Disagreec. Neutrald. Agreee. Strongly Agree

5. Two part pricing strategy is more effective in the sale of complementary products. a. Strongly Disagreeb. Disagreec. Neutrald. Agreee. Strongly Agree

Quality

6. The quality of Samsungs complimentary products depends on their pricing.a. Strongly Disagreeb. Disagreec. Neutrald. Agreee. Strongly Agree

7. Consumers perceive the value of a product based on its complementary products. a. Strongly Disagreeb. Disagreec. Neutrald. Agreee. Strongly Agree

8. The complementary products of Samsung are symmetric in quality through R&D. a. Strongly Disagreeb. Disagreec. Neutrald. Agreee. Strongly Agree

9. Maintaining quality is important because the value is shared between the base and the complementary products.a. Strongly Disagreeb. Disagreec. Neutrald. Agreee. Strongly Agree

10. The quality of the complementary products of Samsung is affected by those of the competitors. a. Strongly Disagreeb. Disagreec. Neutrald. Agreee. Strongly Agree

Complementary Products11. Complementary products attract the customers because of their quality and price.a. Strongly Disagreeb. Disagreec. Neutrald. Agreee. Strongly Agree

12. Complementary products positively influence the brand equity.a. Strongly Disagreeb. Disagreec. Neutrald. Agreee. Strongly Agree

13. Complementary products increase the purchase intention of the customers.a. Strongly Disagreeb. Disagreec. Neutrald. Agreee. Strongly Agree

14. Complementary products increase the sales of base products.a. Strongly Disagreeb. Disagreec. Neutrald. Agreee. Strongly Agree

15. Complementary products enhance customer satisfaction and loyalty.a. Strongly Disagreeb. Disagreec. Neutrald. Agreee. Strongly Agree