The store must there take advantage of the consumers who prefer luxurious good or even take advantage of a decline in the price of its goods in order to increase demand for its products in order to increase sales and therefore increase profits.
Twenty consumers were interviewed in order to find out what level of price they were willing to pay for a suit, the respondents were men and each respondent was interviewed for the purpose of collecting data, after randomly selecting a sample of 20 individuals who were to volunteer for the study it was found out that the mean price for the suits that the consumers were willing to pay was lower than the prevailing market prices.
Suit sales involves the purchase of these product at wholesale prices and then reselling them at a profit, the level of sales will depend on the prices attached to the product, however this will depend on the consumers preferences, some consumers may prefer high priced good because they have the assumption that the high price is a sign of quality. We will assume that we produce for the medium class individuals who are the majority in the market, using this assumption we will then assume that the store will only sell men suits whose study is accompanied in this paper, through the consideration of all the costs involved in sales we will be in a position to determine expected sales levels and also profits.
This study involves two methods of collecting data. The first form of data collected was to collect the consumer’s willingness to pay which involved a random sample of twenty who were involved in a face to face interview. The interview involved the collection of data aimed at determining the consumers willingness to pay, also it contained finding out how frequently consumers purchase suits. All the respondents were to be men due to our first assumption and this sample was collected randomly.
The second study was to determine the price level of existing companies in the market, due to time constraints and financial constraints the best method for collecting this data was to be online, data on the prices of these suits was done through the official websites Top shop, Burton, Marks Spencer, Austin reed store, Armani and Hugo Boss.
The choice of stores was in such a way that the study considered the various what segment the stores targeted depending on the income group, low pricing stores include top shop and Burton, medium priced stores include Marks Spencer and Austin reed store and finally the high pricing stores include Armani and Hugo Boss.
From the sample of twenty data was collected and the willingness to pay of these consumers was determined, there were variations in the data collected depending on the consumers preferences and economic class, the data collected is summarised in the table below:
class mid point
0 to 100
101 to 200
201 to 300
300 to 401
From the twenty respondents only 2 people agreed that they would pay 0 to 100 pounds for a suit, 14 agreed that they were willing to pay 101 to 201 pounds for the same suit and 3 respondents stated that they would pay 201 to 300 pounds and finally only one respondent agreed that he was willing to pay 0ver 301 pound for a suit. The data was grouped data and after analysing the data the mean price