pricing and competition

pricing and competition

Introduction

This report aims at analyzing the pricing and competition of the given four brands and report the findings. Also, insights ought to be provided upon the completion of the analysis. The business has adopted the culture of analyzing their data, and data analysis have been accredited by the firms on the finding they make after the analysis. Data analysis to business is a core unit to its success. It helps the business owners to make concrete conclusions and decisions about their business, especially when it comes to the performances of the company. In this scenario, we will focus on the. In this report, we will focus mainly on the pricing and competition among the Resort, Cottage, and Classic accommodation types. Also, we will focus on the effect of the introduction of a comfort type of accommodation to the internal competition. Five issues need to be solved by the report. The first issue is to understand the pricing of the accommodation according to the state, location, and brands. The second issue that will be tackled is to test whether the accommodation prices of the Resort, Classic, and cottage brands are different. The third issue that needs to be solved is to check whether the state factor does influence the pricing of Resort, Cottage, and Classic brand. The fourth issue that needs to be solved is to check whether the location factor does change the pricing of Resort, Cottage, and Classic brand. The last point that needs to be addressed is to test whether If competition exists, the pricing of a brand say Resort with a Comfort nearby is lower than a similar Resort with no Comfort nearby.

Issue 1

The first issue that needs to be checked is the price of the accommodation according to the state, location, and brands. To achieve this, a pivot table will be created, checking the sum and averages of the prices of the three different brands (Resort, cottage, and Classic). The amount and average accommodation prices of three states will also be determined, and lastly, the sum and average accommodation prices of the two locations will be determined

1. Brands

Table 1.1: Total and Average accommodation prices of the brands

Table 1.1 shows that the total and average accommodation prices of 48 Resort were $ 9612.98 and 200.27, respectively. The total and average accommodation prices of 48 Cottage were $ 9727.5 and 202.66, respectively. The total and average accommodation prices of 48 Classic were $ 9670.21 and 201.46, respectively.

1. State

Table 1.2: Total and Average accommodation prices of the states

Table 1.2 shows that the total and average accommodation prices of New South Wales State were $ 9649.14 and $ 201.024, respectively. The total and average accommodation prices of Queensland State were $ 9705.45 and $ 202.197, respectively. The total and average accommodation prices of Victoria State were $ 9656.1 and $ 201.46, respectively.

• Location

Table 1.3: Total and Average accommodation prices of the Location

Table 1.3 shows that the total and average accommodation prices of Metropolitan Cities were $ 14512.26 and $ 201.559, respectively, and the total and average accommodation prices of Regional Cities State were $ 14498.43 and $ 201.367 respectively.

Issue 2

The accommodation has been allowed to input their rates. In this part, we will test whether there is price differentiation between the Resort, Cottage, and Classic brands. First, we will filter the prices of each brand and attribute them in each column, and therefore, we will have three columns containing the prices of Resort, Cottage, and Classic. The type of test that will be used to solve this issue is the ANOVA test. The hypotheses will be formulated before conducting the test

H­­­₀ – The prices of all the brands are not significantly different

H­­­₁ – The prices of all the brands are significantly different

Table 1.4: ANOVA test

The average prices of the three brands will be used to assess the difference in pricing among the brands. The classic brand had an average price of 201.46. The Cottage brand had an average price of 202.656, and the Resort brand has an average price of 200.27. To check whether the costs of the three brands were significantly different, we will use the obtained p-value. The obtained P-value is less than 0.05 i.e., P (0.001 <0.05); therefore, the null hypothesis is rejected, and thus, we conclude that the prices of the three brands are significantly different. Mr. Oscar had the right idea to believe that there was price differentiation among the Resort, Cottage, and Classic brands

Issue 3

The issue that needs to be solved in this part is to access whether there is price difference across the three states among the brands. This problem will focus on accommodation prices, the states, and the three brands. The accommodation prices of the three brands need to be divided among the three states before conducting any analysis. The type of test that will be used to access this issue is Two-factor with the replication ANOVA test. The hypotheses are formulated before performing the test.

H₀ – The state does not have a significant influence on the prices of the brands

H₁ – The state does have a substantial impact on the prices of the brands

Table 1.5: ANOVA Test

We will use the p-value obtained from the ANOVA test to test the hypothesis. There are three p-values obtained from the ANOVA test. Our focus will be on the interaction between the states and the brands, and thus we will see the interaction p-value. The obtained p-value is higher than 0.05 i.e., P (0.62 >0.05), and therefore we fail to reject the null hypothesis. Thus, we conclude that the states don’t have a significant influence on the prices of the brands. Thus the knowledge which Mr. Oscar showed find is that there is no price difference across the three states among the accommodation brands.

Issue 4

The issue that needs to be solved in this part is to access whether there is price difference across the location among the brands. This problem will focus on accommodation prices, the location, and the three brands. The accommodation prices of the three brands need to be divided between two locations before conducting any analysis. The type of test that will be used to access this issue is Two-factor with the replication ANOVA test. The hypotheses are formulated before performing the test.

H₀ – The location does not have a significant influence on the prices of the brands

H₁ – The location does have a considerable impact on the prices of the brands

Table 1.6: ANOVA Test

Similarly, the obtained p-value is greater than 0.05 i.e., P (0.108 >0.05), and thus, we fail to reject the null hypothesis. Therefore, we conclude that the location won’t have a significant influence on the prices of the brands. Consequently, the knowledge which Mr. Oscar should conclude is that there is no price difference between the locations among the accommodation brands

Issue 5

This part aims at testing whether the introduction of the Comfort brand has increased internal competition among the accommodation brands. To answer this, we will use comfort and brands to filter the prices of the presence and absence of comfort. A paired sample t-test will be used to assess this issue. The hypothesis is formulated before conducting the test

H₀ – The accommodation prices of the brands are equal in the presence and absence of comfort

H1 – The accommodation prices of the brands are different in the presence and absence of comfort

Table 1.7: A paired sample t-test

The table 1.7 shows that the variance and average brand accommodation price when there was comfort was 2.5707 and 198.57 respectively, while the variance and the average brand accommodation price when there was no comfort was 9.585 and 201.01, respectively. The p-value will be used to test the hypothesis. The obtained p-value was less than 0.05 i.e., P (0.0178 <0.05); therefore, the null hypothesis was rejected. Thus we conclude that the accommodation prices of the brands are different in the presence and absence of comfort. This means that when competition exists, the pricing of a brand with a Comfort nearby is lower than a similar brand with no Comfort nearby.