Marketing Research

Wollo university college of business and economics Master program in Page 1 of 24
Business Administration 1st year

Impact of price on some products of kombolecha textile share company
sells volume
CHAPTER 1
INTRODUCTION
1.1. Back ground
Kombolcha textile Share Company is an integrated textile mill which consist of Spinning,
Weaving, Processing & Garment departments with utility services. It is providing 100% cotton
products for local and export market supported by the new technology machineries. the
company has marketing department which set the price of the company product on the base of
production cost .the company profitability depends on the production cost, the price and sell
volume .and now a days the company market changed from monopoly to monopolistic market
due to the increase in No of the textile manufacturing companies ,so to compete in this market
and to attract new customers and to retain the current customer price is the main point .this study
is done to see the effect of price on sells volume and to have customer insight .
1.2. Objective of the study

 To Know customer insight about company product
 To see the effect of price change on the sells volume
 To creating high customer value and to be profitable by adjust the price of
kombolecha textile share company product price .
1.3. Statement of the problem
Kombolecha textile company make price increase and decrease on April but the effect of the
price on sells volume and the perceptions of the customers have not seen formally and in
detail . the main objective of changing the price was earning profit and increasing the
customer value, after the price change is practiced it is necessary to see weather the objective
meet or not. this study shows the impact of price on sells volume of kombolecha textile
factory and customers perception about kombolecha textile share company product quality
and price .
sells volume
1.4. Significance of the study

 The study will show the effect of price change on the sells volume and customers
perception on kombolecha textile share company product quality and price .
 So that ,
 The company may adjust the right price
 The know the perceptions of the customers and according to it the company may take
corrective actions.
1.5. Scope of the study
The study done on 3 type of kombolecha textile share company products .That are Grey
abujedid 150 cm, printed mattress cover 154 cm and Bleached mulmul 150 cm. and the study
have been finished on January 2016
1.6. limitation of the study

I. Limitation of time to gather additional data
1.7. Methodology of the study
The study has been conducted through
a) Primary date gathering
By preparing likert scale type questioner and by selecting samples by non probability sampling
method specially convenience sample . the sample size is 36 and the questioner is given for
kombolecha textile share company employees ,since they are one and main customer of the
company
b) Secondary data gathering

 9 months Price and sell volume Data from marketing department
c) Techniques for Data Analysis
 Tabular analysis
 Graphical analysis and
 Descriptive
sells volume
Chapter 2
DATA ANALYSIS
2.1 primary data analysis
2.1 .1 sample size and type analysis

I. Total sample size
Statistics
sex age education level salary in brirr
Valid 36 36 36 36
N
Missing 0 0 0 0
Mean 1.4167 2.1667 2.7778 2.5833
II. Percentage of male and female from total sample

sex
Frequency Percent Valid Percent Cumulative
Percent
male 21 58.3 58.3 58.3
Valid female 15 41.7 41.7 100.0
Total 36 100.0 100.0
sells volume
III. Age variation of the sample

age
Percent
<2o 3 8.3 8.3 8.3
20-30 27 75.0 75.0 83.3
Valid 30-40 3 8.3 8.3 91.7
>40 3 8.3 8.3 100.0
Total 36 100.0 100.0
IV. Education level variation of the sample

education level
Percent
cirtificate 3 8.3 8.3 8.3
college diploma 4 11.1 11.1 19.4
Valid first degree 27 75.0 75.0 94.4
second degree 2 5.6 5.6 100.0
Total 36 100.0 100.0
sells volume
salary in brirr
Percent
1000-200 6 16.7 16.7 16.7
2001-3000 7 19.4 19.4 36.1
Valid 3001-4000 19 52.8 52.8 88.9
above 4001 4 11.1 11.1 100.0
Total 36 100.0 100.0
2.1.2 Likert scale questioner analysis

Q No1. Effect of price on sell volume
price has big effect in sell volume

Percent
disagree 1 2.8 2.8 2.8
unsure 3 8.3 8.3 11.1
Valid agree 9 25.0 25.0 36.1
stonglly agree 23 63.9 63.9 100.0
Total 36 100.0 100.0
sells volume
Hypothesis Respondants answer Remark

Price has effect on sell volume Since the more than 88% The company should give
responses show that the attention on price change
price has big effect on sell
volume .
sells volume
Q No2. About company marginal profit

company marginal profit is high
Percent
strongly dis agree 2 5.6 5.6 5.6
disagree 3 8.3 8.3 13.9
unsure 10 27.8 27.8 41.7
Valid
agree 12 33.3 33.3 75.0
strongly agree 9 25.0 25.0 100.0
Total 36 100.0 100.0

The company  More than 58% of the respondents answer the internal public is one of the
marginal profit affect show that company marginal profit is advertizing method of the
the price high and marketer so the company should
 around 27% respondent answer shows that give awareness for the
they have not information about the employees to have good mouth
company marginal profit in this case about the company
sells volume
Q No3. The company is not flexible in price setting

the company is not flexable in price setting
Percent
strongly disagree 1 2.8 2.8 2.8
disagree 2 5.6 5.6 8.3
unsure 18 50.0 50.0 58.3
Valid
agree 10 27.8 27.8 86.1
Total 36 100.0 100.0

According to the product type and Around 50% of the Employees positive
the external environment respondent have no information increase the
condition price flexibility is information about the company good will .the
necessary company price flexibility employs should have
positive perception about
the company
sells volume
Q No4. The company price versus the competitors price
compared to the compitators the company product price is high

Percent
disagree 2 5.6 5.6 5.6
unsure 10 27.8 27.8 33.3
Valid agree 15 41.7 41.7 75.0
Total 36 100.0 100.0

If the company price is high relative to More than 60% of the respondents the company should have to
the compotators the customers may shift agree that kombolecha textile share give attention on production
to the compotators and so the sell company price is high compared to systems to decrease the cost
volume will decrease the competitor’s price of production and to decrease
the price
sells volume
Q No5. Impact of price on the demand
I will buy additional products if the company decreases the price

Percent
disagree 1 2.8 2.8 5.6
unsure 6 16.7 16.7 22.2
Valid
agree 16 44.4 44.4 66.7
strongly agree 12 33.3 33.3 100.0
Total 36 100.0 100.0
Hypothesis Respondents answer Remark

Price decrease increase the demand More than 77% of the respondent The company should give
agree that the price decrease attention for price
increases the demand
sells volume
Q No 6. Value for price and quality
I give equal value for price and quality

Percent
disagree 3 8.3 8.3 13.9
unsure 7 19.4 19.4 33.3
Valid
agree 18 50.0 50.0 83.3
Total 36 100.0 100.0

According to the customer status the More than 66% of the respondents Customer segmentation is
values given for quality and price may agree that the value for quality and necessary .
vary price is equal
sells volume
Q No 7. Value of quality is more than price
I give more value for quality than price

Percent
disagree 3 8.3 8.8 11.8
unsure 7 19.4 20.6 32.4
Valid
agree 16 44.4 47.1 79.4
Total 34 94.4 100.0
Missing System 2 5.6
Total 36 100.0

According to the customer status the More than 63% respondent agree Customer segmentation is
values given for quality and price may that the value of quality is more than necessary .
vary the value of price
sells volume
Q No 8. Value of price is more than price
I give more value for price than quality

Percent
disagree 4 11.1 11.8 32.4
unsure 10 27.8 29.4 61.8
Valid
agree 10 27.8 29.4 91.2
Total 34 94.4 100.0
Total 36 100.0

According to the customer status the Only around 37% respondents give And from analysis of
values given for quality and price may more attention for price than quality. question 5,6 and 7 more
vary customers need both good
quality and acceptable price
sells volume
Q No 9 about kombolecha textile product price

I buy kombolecha textile product because of its acceptable price
Percent
disagree 5 13.9 13.9 22.2
unsure 6 16.7 16.7 38.9
Valid
agree 16 44.4 44.4 83.3
Total 36 100.0 100.0

Acceptable price retain the customer More than 60% respondants agree
that kombolecha textile share
company products price is
acceptable
sells volume
Q No 10 company customer value

I buy kombolecha textile share company product not only due to its acceptable
price but also its good quality

Percent
disagree 2 5.6 5.9 5.9
unsure 8 22.2 23.5 29.4
Valid agree 17 47.2 50.0 79.4
Total 34 94.4 100.0
Total 36 100.0

To increase customer satisfaction and More than 66% respondent agrees The company should keep it
sell volume customer value is back bone that company products have high
customer value
sells volume
Q No 11effect of quality on demand even if the price is high

because kombolecha textile share company product quality is good i buy the product
even if the product price is high

Percent
disagree 3 8.3 8.6 17.1
unsure 3 8.3 8.6 25.7
Valid
agree 20 55.6 57.1 82.9
Total 35 97.2 100.0
Total 36 100.0

More than 71% respondant agree that
kombolecha
sells volume
Q No 12. Customer perception about company product price
kombolecha textile share company product price is high

Percent
disagree 3 8.3 8.6 11.4
unsure 6 16.7 17.1 28.6
Valid
agree 13 36.1 37.1 65.7
strongly agree 12 33.3 34.3 100.0
Total 35 97.2 100.0
Total 36 100.0
More than 69% respondents agree that company price is high

sells volume
2.2. Secondary data analysis
Report
price in birr revenue in birr demand product type
Mean 649062.2000 62934.4000 2.0000
15.10 Maximum 828311.00 79376.00 gray abujedid
Minimum 480892.00 46128.00 gray abujedid
Mean 642419.5000 62062.5000 2.0000
15.38 Maximum 1314690.00 124242.00 gray abujedid
Minimum 211725.00 21251.00 gray abujedid
Mean 741128.8000 64991.8000 4.0000
16.74 Maximum 1033145.00 92771.00 bleached mulmul
Minimum 616651.00 40359.00 bleached mulmul
Mean 367331.0000 32954.0000 4.0000
16.78 Maximum 744428.00 67016.00 bleached mulmul
Minimum .00 .00 bleached mulmul
Mean 717821.0000 46119.2500 3.0000

23.16 Maximum 1172116.00 77924.00 printed matress cover
Minimum 417227.00 21251.00 printed matress cover
Mean 544418.4000 38324.0000 3.0000
23.53 Maximum 861198.00 56364.00 printed matress cover
Minimum 341720.00 22709.00 printed matress cover
Mean 619764.6944 47034.0278 2.5000
Total Maximum 1430960.00 124242.00 bleached mulmul
Minimum .00 .00 bed sheet
sells volume
Case Processing Summary

Cases
Included Excluded Total
N Percent N Percent N Percent
revenue in birr * price in
36 100.0% 0 0.0% 36 100.0%
birr
demand * price in birr 36 100.0% 0 0.0% 36 100.0%
product type * price in
36 100.0% 0 0.0% 36 100.0%
birr
2.2.1 demand curve

i. Gray abugedid demand curve
Demand
Chart Title
63200
63000
62938
62800
62600
Column2
62400
62200
62000 62062.5
61800
61600
price15.10 price15.38
sells volume
ii. Bleached mulmul demand curve

Demand
Chart Title
70000 64991.
60000 8
50000
40000 Series 3
30000 32954
20000
10000
0
Chart Title
50000 4611
40000 9.25 3632
30000
20000
4 Column2
10000
0
2.2.2. price elasticity of demand

Price elasticity= єp=percentage change in quantity demanded/percentage change in price
=((∆x/x)*100)/( (∆p/p)*100)
єp==((∆x/x)*(p/∆p)
x=quantity demanded
p= price
A. Price elasticity of gray abugedid =

((62062.5-62934)/62062.5)/((15.38—15.10)/15.38)=0.76
sells volume
 Since it is less than 1 the price elasticity of abujedid demand is inelastic ,that meanse small
change in price have not big impact on the demand
B. Price elasticity of bleached

mulmul=((64991.8-32954)/64991.8)/((16.74-16.78)/16.74)=206
 Since it is greater than one and very high the price elasticity of bleached mulmul is
perfectly elastic ,that means small change in price has big effect on the quantity demanded
C. Price elasticity of printed mattress cover

=((36324-46119.25)/36324)/((23.53-23.16)/23.53)=17
 since the price elasticity is greater than one the price elasticity of printed mattress cover is
elastic that means small increase in price has significant effect in quantity demanded
2.2.3 Effect of price decrease on profit
i.)gray abujedid
cost per m2 of gray abujedid =11.63
profit=quantity demanded*price-quantity demanded*cost
when the price was is 15.38 the quantity demanded was 62062.5
when the price becomes 15.10 the quantity demanded becomes 62934
profit when the price was 15.38=(15.38*62062.5)-(62062.5*11.63)=232734.375
profit when the price was 15.10=(15.10*62934)-(11.63*62934) =218380.98
 The above data shows that the company was not benefited by decreasing the price since
because the change in demand is small, so it is not necessary to decrease the price in products
whose price elasticity is inelastic .
ii) Bleached mulmul

cost per m2 of gray bleached mulmul =12.88
sells volume
when the price was is 16.78 the quantity demanded was 32954
when the price becomes 16.74 the quantity demanded becomes 64991.8
profit when the price was 16.78=(16.78*32954)-(12.88*32954)=127202.44
profit when the price was 15.74=(15.74*644991.8)-(12.888*644991.8) =1,839,516.
Profit increase percentage by price decrease=1346%
 The above data shows that the company benefit increases by 1346% this is big difference so
the price decrease not only increase the sell volume but also increase the profit gain from the
product
iii) printed mattress cover
cost per m2 of printed mattress cove r =19.61
when the price was is 23.53 the quantity demanded was 36364
when the price becomes 23.16 the quantity demanded becomes 46119.25
profit when the price was 23.53=(23.53*36324)-(19.61*36324)=142390.08
profit when the price was 23.16=(23.16*46119.5)-(19.41*46119.5) =172948.13
Profit increase percentage by price decrease=21.46%
 The above data shows that the company benefit increases by 21.46% this is big difference so
the price decrease not only increase the sell volume but also increase the profit gain from the
product
CHAPTER THREE
CONCLUSION AND RECOMMENDATION
3.1 Conclusion
 According to the result taken from the analysis :-

 The price change has significant change on sells volume
 Some employees are not aware about the company product
sells volume
 Kombolecha textile share company product price is acceptable

 Kombolecha textile share company product quality is good
 To buy the products most customers give attention not only for price but also for product
quality.
 The customer value of kombolecha textile share company is moderately high
 The price elasticity of
 abujedid is is inelastic
 bleached mulmul is perfectly elastic
 printed mattress cover is elastic
 the effect of price change on sell volume of product which price elasticity is
 inelastic is insignificant
 perfectly elastic more significant
 elastic is significant
 price decrease in products which price elasticity is inelastic decrease the profit.
 price decrease in products which price elasticity is perfectly elastic and elastic increase
the profit significantly .
3.2. Recommendation
 The company should aware the employees about the company product quality and price
to receive good mouth from the employees and to increase good will out side the
company
 Before the company decrease or increase the price of the product it is preferable to check
weather the product price elasticity is elastic or inelastic
 It is not necessary to decrease the product price which price elasticity is inelastic
4. Reference
sells volume
o Kotler,Philip,(2009),principle of marketing 10th ed prentice-hall inc new dlhi

Marketing Research

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Wollo university college of business and economics Master program in Page 1 of 24

Business Administration 1st year

1.1. Back ground

1.2. Objective of the study

1.4. Significance of the study

1.6. limitation of the study

1.7. Methodology of the study

The study has been conducted through

a) Primary date gathering

b) Secondary data gathering

2.1 primary data analysis

2.1 .1 sample size and type analysis

II. Percentage of male and female from total sample

III. Age variation of the sample

IV. Education level variation of the sample

2.1.2 Likert scale questioner analysis

price has big effect in sell volume

Hypothesis Respondants answer Remark

Q No2. About company marginal profit

Hypothesis Respondants answer Remark

Q No3. The company is not flexible in price setting

Hypothesis Respondants answer Remark

Q No4. The company price versus the competitors price

compared to the compitators the company product price is high

Hypothesis Respondants answer Remark

Q No5. Impact of price on the demand

I will buy additional products if the company decreases the price

Hypothesis Respondents answer Remark

Q No 6. Value for price and quality

I give equal value for price and quality

Hypothesis Respondents answer Remark

Q No 7. Value of quality is more than price

I give more value for quality than price

Hypothesis Respondents answer Remark

Q No 8. Value of price is more than price

I give more value for price than quality

Hypothesis Respondents answer Remark

Q No 9 about kombolecha textile product price

Hypothesis Respondents answer Remark

Q No 10 company customer value

Frequency Percent Valid Percent Cumulative

Hypothesis Respondents answer Remark

Q No 11effect of quality on demand even if the price is high

Frequency Percent Valid Percent Cumulative

Hypothesis Respondents answer Remark

Q No 12. Customer perception about company product price

kombolecha textile share company product price is high

More than 69% respondents agree that company price is high

2.2. Secondary data analysis

Mean 717821.0000 46119.2500 3.0000

Case Processing Summary

2.2.1 demand curve

ii. Bleached mulmul demand curve

2.2.2. price elasticity of demand

A. Price elasticity of gray abugedid =

B. Price elasticity of bleached

C. Price elasticity of printed mattress cover

ii) Bleached mulmul

 According to the result taken from the analysis :-

 Kombolecha textile share company product price is acceptable

o Kotler,Philip,(2009),principle of marketing 10th ed prentice-hall inc new dlhi

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