Penetration Pricing Strategy and Customer Retention – An Analysis

Abstract

Price plays a significant role in operating the market economies through the linking of services and/or products. Several pricing strategies have been applied and each pricing strategy is according to a distinct set of situations and standards. The study aims to measure the relationship between pricing strategies (penetration pricing) and customer retention in international hotels in Kurdistan. In the current research, the researcher applied a quantitative approach. The researcher distributed the questionnaire to seven international hotels located in Erbil City, Duhok City, and Sulaymaniyah City. The method used in the current study was a random sampling method to make sure that each customer will have a chance to contribute to the study. First, the researcher applied reliability analyses to measure the reliability for the independent variable and dependent variable, then used relationship method to obtain the measure of the association between the independent variable and dependent variable and finally multiple regression analysis to test the developed research hypotheses. Though, based on the findings, the current research confirmed that pricing strategies (penetration pricing) had positively associated with customer retention.