Date of Award

1992

Document Type

Thesis

Degree Name

Master of Business Administration

Department

Business

First Advisor

Daniel W. Kemper

Second Advisor

Joe Ancona

Third Advisor

Joseph Silverio

Abstract

This thesis will focus on the study of promoting price, quality, and value and the effect they have on sales and profits.

Research reveals that promotion of products with price alone has varied short and long-term effects. Most managers and marketers are only concerned with the short-term effect price promotion has on increasing sales. Long-term effects of pricing should be considered because of t heir possible harmful effect on sales and profits. Marketers and managers need to better understand how price promotion affects consumers and their buying habits.

The purpose of this present study is to investigate how companies have become more interested in increased sales volume with the use of price promotions at the expense o f profits. Specifically, it is hypothesized that marketers need to evaluate consumer's individual buying behavior in terms of pricing and the perception of quality to increase sales and profits. It is important for a marketer to relate both price and quality in the promotion of the product. Product's sales will increase if the product's promotional activities emphasize quality received for the price paid.

Results from data analysis reveals that the sales from different products (durable and nondurable ) react differently to the promotion of price or quality. Their is not enough evidence to conclude that the higher the price paid for a product the higher the quality received, and the lower the price paid for a product the lower the quality received. Research does show that this tends to be more true for nondurable goods rather than durable goods.

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