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http://dx.doi.org/10.5805/SFTI.2016.18.3.301

Global Pricing Strategy of the SPA Brand: Comparison with GDP and Big Mac Index  

Kim, Seo Jeong (Dept. of Clothing and Textiles, Hanyang University)
Lee, Ji Yeon (Dept. of Clothing and Textiles, Hanyang University)
Lee, Kyu-Hye (Dept. of Clothing and Textiles, Hanyang University)
Publication Information
Fashion & Textile Research Journal / v.18, no.3, 2016 , pp. 301-316 More about this Journal
Abstract
Due to the dramatic increase in consumers' price sensitivity and growing importance for global retailers to create relevant price strategies, this study investigates the global pricing strategy of the main SPA brands such as ZARA, H&M and UNIQLO. Based on price information shown on official website, the study developed SPA brand index by using exchange rates in terms of US dollars and ratio of differences between the local price and the US price. These figures were compared with GDP per person data in order to analyze each brand's price level against the income level. The study also compared SPA brand index with Big Mac index to identify the difference in price levels between the fast fashion market and the fast food market. ZARA and H&M were mostly targeting Middle East and Asia as a high-price market when considering index only. After taking the income level into account, however, Asia came out be the highest price market and Middle East was similar to the US market. On the other hand, UNIQLO targeted Asia as the lowest price market and the US and EU as the highest in terms of index only. But, Asia came out to be the highest price zone after considering the income level while the price of the US and EU was reasonable. Comparison with Big Mac Index indicated that most of Asia had a higher price level of the fashion market than the food market, whereas most European countries had a similar or high-price level of food market.
Keywords
pricing strategy; global SPA brand; fashion index; Big Mac Index; fast fashion;
Citations & Related Records
Times Cited By KSCI : 5  (Citation Analysis)
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