Back to Blog
Elasty cost6/1/2023 ![]() Thereafter the authors designed a regression model with the help of academic theory. ![]() Methodology: In order to estimate the price elasticity for BA10’s products, the authors first had to gain knowledge concerning BA10’s products and the business areas’ current pricing strategies and procedures. In addition the model should preferably be applicable on both existing and new products. The tool will become a complement to the internal company factors and external environmental factors, which today have the greatest impact on the pricing procedures. Purpose: The purpose of this Master thesis is to develop a theoretical pricing model that will assist as a quantitative tool for future pricing decisions. ![]() Research questions: How will price altering affect sales volume for IKEA of Sweden Business Area 10’s products? Is it possible to estimate the products’ price elasticities? If so, what data is sufficient and how can these parameters contribute to future pricing procedures at BA10? What product properties are necessary in order to retain a reliable analysis? In which way are sales volumes influenced by macroeconomic factors such as real income, unemployment and business cycles? Is there an appropriate way to define homogenous markets for IKEA? If a model that describes the local behaviour is found, will this model be globally applicable or should it be modified to fit different markets? Are there any microeconomic substitution or complementary effects outside or within the IKEA range? Do internal factors, for example advertising and service levels, affect the demand and therefore sales turnover? How can a model take these effects into consideration?
0 Comments
Read More
Leave a Reply. |