Content uploaded by Satya Subrahmanyam
Author content
All content in this area was uploaded by Satya Subrahmanyam on Jul 21, 2022
Content may be subject to copyright.
International Journal of Early Childhood Special Education (INT-JECS)
ISSN: 1308-5581 Vol 14, Issue 03 2022
2064
PREMIUM PRICING STRATEGY AND CUSTOMER RETENTION – AN
ANALYSIS
Prof. Dr. Satya Subrahmanyam1, Sara Azad Fouad Arif2
1Professor & Director , Department of Accounting, Catholic University, Erbil, Kurdistan.
CARME-Centre for Applied Research in Management and Economics, Polytechnic of Leiria, Portugal
2Department of Accounting, Catholic University, Erbil, Kurdistan
Email : 1satya.sub@cue.edu.krd, 2sarah.barzanji@cue.edu.krd
ABSTRACT: In today’s competitive business environment, pricing strategies have an essential role in gaining a
competitive advantage. Price plays a significant role in operating the market economies by linking the supply
and demand of services and/or products. Hotel industries are focusing on the positive exchange relations and
recognizing of relations value of a customer as there is an outline which suggests that interrelationship between
the aspects of pricing strategies and International hotel services and quality. The method in this research, the
reasons that the researcher applied a quantitative approach, is the best approach to measure and examine
between variables, in the current research. The researcher distributed 459 questionnaires to seven international
hotels located in the provinces of Erbil, Duhok, and Sulaymaniyah, but received only 417 correctly to examine
the relation between premium pricing strategy and customer retention at international hotels in Kurdistan
Region. The findings revealed that there is a positive and significant association between premium pricing
strategy and customer retention at selected international hotels in Kurdistan Region.
KEYWORDS: Premium Pricing, Customer Retention, Pricing Strategy, International Hotels, Kurdistan Region
INTRODUCTION
The businesses particularly should implement an effective pricing strategy which can result in beneficial effects
such as customer retention, customer loyalty, and customer satisfaction, enhancing quality-related services and
enhancing business performance (Fedorco & Hospodka, 2013). Pricing strategy is an essential aim of achieving
a sustainable competitive and effective source to build customer loyalty, retention and satisfy the customer. A
successful pricing method is a benefit grown completed entrants by providing purchasers inexpensive product or
service, either by applying fewer prices method or by using supplementary reimbursements and services that
explain comparable, or perhaps better, prices. The significance of price decisions to marketing leaders is that
when a business's costs are lower than the competitors', low prices can be used to win customers. Moreover,
Price cutting to build or maintain market share is a strategy that has been used by businesses. Customers rely
heavily on price as an indicator of a product’s quality, especially when they must make purchase decisions with
incomplete information (Vives et al., 2018).
Price is the value characteristic in payment when purchasing products and services (Achroll & Kotler,
2014). However, this research attempts to investigate premium pricing strategy and its relationship with
customer retention. According to Collado et al., (2017) proposed that the premium pricing tactic is the
preparation of retaining the price expensive to encourage satisfactory observations among customers, according
to exclusively on the price. As the solicitation of the main buyers are fulfilled and rivalry enters the market, the
business brings down the cost to pull in more buyers.
RESEARCH PROBLEM
There are numerous studies regarding pricing and customer retention; several academics concentrated on the
perception of marketing and retaining, though, nearly none of the academics concentrated on premium pricing
strategy on customer retention, furthermore, nearly none of the academics focused on the impact of the premium
pricing strategy on customer retention by international hotels. Therefore, this research attempted to examine the
influence of pricing strategy on customer retention at selected international hotels in the Kurdistan autonomous
region. Moreover, for the above-mentioned statement, the researcher set below research question:
International Journal of Early Childhood Special Education (INT-JECS)
ISSN: 1308-5581 Vol 14, Issue 03 2022
2065
Premium Pricing Strategy
Customer Retention
H1
Research Question-1-: Is there any relation between pricing strategy and customer retention in
International Hotels in Kurdistan's autonomous region?
Research Question-2-: Which pricing strategy (premium) positively influence customer retention
more than others at selected international hotels in Kurdistan autonomous region?
Aim of the Research
The main focus of this research is to investigate the relationship between premium pricing strategy with
customer retention at selected international hotels in Kurdistan autonomous region. For this purpose, the
research set the following research objectives:
RO1: To examine the relationship between premium pricing strategy and customer retention at
international hotels located in the Kurdistan autonomous region, Iraq.
RO2: To determine the effectiveness of premium pricing strategy to enable and increase customer
retention at international hotels located in the Kurdistan autonomous region, Iraq.
Significance of the Research
This research is significant to the researchers and academicians in that it will add more information and
knowledge in assessing the degree to which premium pricing strategy will be able to create customers loyalty
which results in customers retention. The findings of this research provide secondary data to individuals
interested to chase research in a similar domain. The research will be significant to international hotels as they
continue indulging in price wars with competitors in the competitive market environment. Corporate leaders in
Kurdistan autonomous region shall obtain further knowledge concerning (CRM), relationship marketing and
price perceived tactics as retention strategies practised in Kurdistan autonomous region to retain customers.
The research will provide information on a premium pricing strategy that similar businesses can adopt
to achieve customer retention. This will enable them to review the premium pricing strategy currently being
used, continue, and adapt to new potential retention strategies. As for the corporate leadership, it will guide how
well the corporates are utilizing the pricing strategy as a retention strategy, identify any gaps that may prevent
retention and work towards improving customer retention. Corporate leaders will also obtain extra knowledge
on which retention strategy is well utilized and the one that is less utilized. The results of this research shall help
corporate leaders instil the right measures towards the retention of their market share intending to improve on
performance. Leaders of the corporate shall also benefit from the findings in that the findings shall help them in
reviewing policies governing the retention of customers.
Conceptual Framework
The conceptual framework illustrates the research outline which includes an independent variable, premium
pricing on the other hand dependent variable which is customer retention. As shown below, the relationship
between the independent variable and dependent variable accordingly, the researcher developed a research
hypothesis to be measured during this research.
Hypothesis
Ha: There is no significant and positive relationship between premium pricing and customer retention.
REVIEW OF LITERATURE
Concept of Pricing
As per Achroll & Kotler (2014), price is the value characteristic in payment when purchasing products and
services. It is essential to marketing in that it enables the exchange of value between the hotel industry and the
customers. According to Haynes and Egan (2017), price is an opportunity cost - what an individual pay to a
service or a product that is the amount of payment of gaining or utilizing a service or a product. Price is the
evaluation by which the customer judges the value of an offering, and it powerfully influences brand assortment
among competing substitutes. Pricing is significant in enhancing customer products' true worth out there in the
competitive market environment. Moreover, pricing is the only component of the marketing mix that produces
profits for the business, though it is likewise the most flexible component of the marketing mix in the logic that
pricing decisions can be applied quickly and be modified simply to the circumstances surrounding a business’s
external or internal environment (Evanschitzky et al., 2017).
International Journal of Early Childhood Special Education (INT-JECS)
ISSN: 1308-5581 Vol 14, Issue 03 2022
2066
Role of Pricing in the Market
Pricing strategy has a significant role in marketing since it influences both income and purchasing decisions.
The entire pricing condition is accordingly viewed as, first from the perspective of the business and its systems
and after that from the part of the purchasers. In any case, it must not be overlooked that there are other, external
impacts on pricing - from business competitors as well as from government (Chen et al., 2015). A purchaser can
either be a definitive purchaser of the completed item or a business that buys segments of the completed item.
The customer tries to fulfil a need or set of requirements through the buy of a specific item or set of
items. Thusly, the customers utilize a few criteria to decide the amount they will use, or the price they will pay,
with a specific end goal to fulfil these requirements. Once these variables have been considered, different
pricing systems are surveyed, and some consideration is given to how best to actualize those strategies; how
estimating levels can be balanced and how such strategies do influence purchasers (Geng et al., 2018). Financial
aspects have attempted to comprehend pricing and estimating techniques, while dependable models for pricing
stay smooth as indicated by (Chen et al., 2016).
Pricing Strategy
Price strategies are routinely utilized as the item goes through its life cycles and often happen when a business
delivers another item to the market; they think about the customers’ enthusiasm for the item, or the adjustments
in the circumstance before making the price procedure. A business can utilize an assortment of pricing
techniques when offering an item. The price can be set to increase productivity for every unit sold or from the
market generally. It can be utilized to confirm a current market from new competitors, to expand the piece of the
overall industry inside a market or to enter another market. They consider which of the price systems can be
relevant to their item strategies like market-skimming and market entrance estimating.
Market skimming is placing a significant expense on another thing remembering the ultimate objective
to make the most extraordinary advantage on each level by level of the demography of everyone that will pay
the significant expense set on a thing. Market entrance evaluation is putting a minimal effort on another thing to
procure ground and pull in people's keenness concerning buying a thing. The market entrance makes a
considerable market for a thing; it uses lodgings with a particular ultimate objective to enter a national market to
get endless clients to purchase their thing in a remote circumstance (Lusch & Vargo, 2014).
Premium Pricing
According to Collado et al., (2017), proposed that the premium pricing approach is the practice of keeping
the price of a product or service high to motivate favourable perceptions among purchasers, based solely on the
price. The premium pricing consists of four variables: (1) Availability premium; (2) Reputation testability
premium; (3) Commitment motivation premium; and (4) Price affectability premium. Premium pricing
(likewise called prestige pricing) is the act of keeping the cost of an item high with a specific end goal to support
great recognitions among purchasers, construct exclusively considering the cost. Premium refers to a section of
a corporate's brands, items that convey extensively from the upper mid-to high value extend.
Customer Retention
Customer retention refers to the capacity of an organization or item to hold its clients over some predefined
period. High retaining hotel guests implies clients of the item or business will, in general, come back to, keep on
purchasing or in some other way does not abandon to another item or business, or non-use completely (Azad &
Singh, 2019). Retaining hotel guests is more than giving the client what they expect; it is tied in with surpassing
their desires, so they become steadfast backers for the brand. Observations by Azad and Singh (2019), confirm
that connected with clients generate many times more income than ordinary clients while having drawn in
workers and drawn in clients restores a revenue increase of several times the standard customer maintenance
alludes to keeping a customer's business rather than having the customer utilize rivals’ services or items.
Organizations need to decrease client rebellions to their rivals because a decrease in their piece of the pie and
benefits could bring about a breakdown of the organization (Subrahmanyam & Azad, 2019).
Client upkeep is a famous promoting procedure as it includes concentrating on meeting or surpassing
customers' desires to keep up their dependability. At the point when individuals feel faithful to a specific brand
or business, they are more averse to being convinced by a contender's adverts and offers. The present corporates
are confronting their hardest serious ever. Corporates are presently moving from items and deals reasoning to an
advertising theory. Subrahmanyam and Azad (2019), stated that “make your client the focal point of your way
of life of your organization” that firms need to quickly move into the new economy and utilize the web, remote
and different advancements to accomplish an upper hand which means organizations must consider creating
what the clients anticipate from them.
International Journal of Early Childhood Special Education (INT-JECS)
ISSN: 1308-5581 Vol 14, Issue 03 2022
2067
Customer Loyalty
Consumer loyalty delivers a positive budgetary outcome, particularly in customary buys. The present
unforgiving business sector where making and keeping up client faithfulness is more unpredictable than it used
to be in the previous years. This is a direct result of innovative advancement and broad web employment.
Reliability building requires the organization to centre the estimation of its item and administrations and to show
that it is intrigued to satisfy the longing or construct the relationship with clients (Subrahmanyam & Farwq,
2019). The cost to increase another client is significantly more than holding an existing one. Steadfast clients
will urge others to purchase from the same business and think more than twice before altering their perspective
to purchase from a different business. Client steadfastness is not picked up by a mishap, they are developed
through the sourcing and plan choices. Planning for client reliability requires client-focused methodologies that
perceive the need and enthusiasm of the administration recipient. Client unwaveringness is worked after some
time over numerous exchanges (Subrahmanyam & Azad, 2020).
Customer Satisfaction
Customer satisfaction can be knowledgeable about an assortment of circumstances associated with the two
products and ventures. It is exceptionally close to the home appraisal that is incredibly influenced by client
desires (Subrahmanyam & Azad, 2020). Fulfilment likewise depends on the client’s understanding of the two
contracts with the association and individual results. Customer satisfaction depicts the nature of items or
administrations given to the client in a positive way, whereby the degree of consumer loyalty upgraded
alongside an expanded degree of administration quality (Subrahmanyam & Farwq, 2020).
Factors Affecting Customer Retention
As per (Hanaysha, 2018), customizability and consistency during the time spent settling on choices and placing
them into training impacts the customer retention designs of a hotel. Lee and Fay (2017) also discussed his faith
inadaptability during the time spent settling on choices for he trusts that all techniques and procedures of a hotel
move around the thoughts chosen by product or services. The abilities that hotel workers demonstrate that are
aloof exceedingly influence the level of customer retention. Luo et al., (2018), in their exploration, found that
the best product and friend’s workers don’t have reasonable and extraordinary learning about the need and
consequences of customer maintenance. Top product or services does not profoundly take customer retention as
a genuine issue and delicately takes a gander at it as only a by-hotel component. Customer retention is an
essential component that ought to dependably be incorporated into the procedures of a corporate. Missions and
destinations in a hotel ought to be outlined such that they form practices of representatives into grasping
customer retention and giving it an upper need (Reen et al., 2017).
Pricing Strategy and Customer Retention
As per (Ascarza et al., 2018) “Higher customer retention implies a base of customers who purchase all the more
now and again and in more noteworthy volumes, are more inclined to attempt different contributions by the
hotel, for the most part, require to bring down upkeep and turn out to be less touchy to the effort, consequently
expanding income while bringing down the cost of showcasing and deals by participating in positive verbal
proposals. Consequently, held customers are an income creating resource for the hotel.” (Hamilton et al., 2017),
featured that with customer retention come costs, for instance, procurement and upkeep cost however this in the
long run offsets in income. They additionally express that customer retention endeavours are most compensating
when coordinated at high esteem, minimal effort customers, a little extent of any hotel customers. (Van Doorn et
al., 2017), there is an immediate relationship between customer retention, hotel gainfulness and customer
esteem, which can be recognized as one-of-a-kind mixes of advantages got by target customers. This
incorporates quality, value, comfort, on-time conveyance, and both before the deal and after deal benefit.
Fulfilled customers tend to enlighten three individuals regarding their experience and will probably wind up
steadfast (Tamaddoni et al., 2017).
METHODOLOGY
Research Design
In this research, the reasons that the researcher applied a quantitative approach are; it is utilizing statistical
information as an instrument for time-saving also less effort and resources. Moreover, another reason that the
researcher applied this method is quantitative method is the best approach to measure and examine between
variables, in the current research, the researcher attempted to measure premium pricing strategy as the
independent variable to find the relationship with customer retention at selected international hotels in the
Kurdistan autonomous region, Iraq.
International Journal of Early Childhood Special Education (INT-JECS)
ISSN: 1308-5581 Vol 14, Issue 03 2022
2068
74
78
86
64
50
34
31
Sample Size and Sampling Method
The researcher distributed the questionnaire to seven international hotels located in the provinces of Erbil,
Duhok, and Sulaymaniyah. The researcher calculated the sample size based on the number of rooms for each
hotel. The method used in the research was a random sampling method to make sure that each customer will
have a chance to contribute to the research. As we know the sample size is a small portion of the entire
population that represents the whole population, this will save the researcher’s time efforts and sources as shown
in table (1) and figure (1). The calculation for sample size, the researcher distributed questionnaire in the
province of Erbil to Rotan hotel, Dedeman hotel, and Divan hotel; it was found that Rotana has 201 rooms, for
this reason, the researcher distributed questionnaire along with the help of managers at the hotel 78
questionnaires, however only 74 questionnaires were able to be gathered and analyzed for the current study, As
for Dedeman has 151 rooms for this reason the researcher distributed 56 questionnaires, however only 50
questionnaires were able to be gathered and analyzed for the current study, As for Divan has 227 rooms for this
reason the researcher distributed 89 questionnaires, however, only 78 questionnaires were able to be gathered
and analyze for the research.
As for Sulaymaniyah province, the researcher distributed questionnaires in Grand Millennium hotel,
HighCrest hotel, and Titanic hotel; it was found that Grand Millennium has 253 rooms, for this reason, the
researcher distributed questionnaire along with the help of managers at the hotel 97 questionnaires, however
only 86 questionnaires were able to be gathered and analyzed for the current study, As for HighCrest has 95
rooms for this reason the researcher distributed 36 questionnaires, however only 34 questionnaires were able to
be gathered and analyzed for the current study, As for Titanic has 84 rooms for this reason the researcher
distributed 33 questionnaires, however, only 31 questionnaires were able to be gathered and analyze for the
research.
And for Duhok province, the researcher distributed questionnaires at Rixos hotel, it was found that
Rixos has 189 rooms, for this reason, the researcher distributed questionnaire along with the help of managers at
the hotel 70 questionnaires, however, only 64 questionnaires were able to be gathered and analyze for the
research.
Table 1: Sample Size
Hotel Number of rooms Distributed Sample
size
Respond sample
Rotana 201 74
Grand
Millennium
253 86
Dedeman 151 50
Divan
227
78
highest 95 34
Titanic 84 31
Rixos 189 64
Total 1200 417
Figure 1: Sample Size
International Journal of Early Childhood Special Education (INT-JECS)
ISSN: 1308-5581 Vol 14, Issue 03 2022
2069
97
23.3
320
76.7
Data Collection
As mentioned in the previous section that the researcher applied a quantitative approach by using a
questionnaire to examine the relationship between premium pricing strategy and customer retention at
international hotels in the Kurdistan region of Iraq. A survey is a collection of several questions to be asked
from respondents based on their opinion and previous experience regarding of chosen hotel. This approach is a
regularly utilized method to gather information concerning a certain imperial study. The researcher adopted a
survey from several academic sources as will be mentioned in the next section. a survey for this study consisted
of two main sections, firstly, the researcher attempted to gather personal information from respondents, for
instance, their age, education, gender, and marital status, and the second section; which consists of 26 questions
regarding the premium pricing strategy and customer retention.
Instruments
The researcher adopted a questionnaire from valid academic articles published in well-known international
journals. The researcher used the Likert scale to measure each question in the questionnaire. The scales were
ranged from 1 which stands for strongly disagree to 5 which stands for strongly agree. However, the
questionnaire was adapted from (Njeru, 2017; Rao, 2009).
ANALYSIS
Demographic Analysis
This section includes the results of background information for respondents who participated in this research
such as gender, age, education, and marital status.
Customers’ Gender
The researcher found customers’ gender participated in this research, as it is shown in table 2 and figure 2 that
320 male customers and 97 female customers from seven international hotels located in the Kurdistan region of
Iraq participated in the current research. It can be concluded that most customers who participated in the current
research were from the male gender.
Table 2: Gender
Gender
Items Frequency Per cent
Male 320 76.7
Female 97 23.3
Total 417 100.0
Figure 2: Gender
Customers’ Age
The researcher found customers’ age participated in this research, as it is shown in table 3 and figure 3 that 26
customers from seven international hotels located in the Kurdistan region of Iraq participated in the current
research were age ranged from 18 years old to 23 years old, 57 customers; age ranged from 24 years old to 28
years old, 57 customers; age ranged from 29 years old to 34 years old, 72 customers; age ranged from 35 years
old to 40 years old, 77 customers; age ranged from 41 years old to 45 years old, 88 customers; age ranged from
46 years old to 50 years old, and 40 customers and age ranged from 50 years old and older. It can be concluded
that most of the customers who participated in the current research were age range from 46 years old to 50 years
old.
frequencypercentage male
female
International Journal of Early Childhood Special Education (INT-JECS)
ISSN: 1308-5581 Vol 14, Issue 03 2022
2070
Table 3: Age
Age
Frequency Per cent
26 6.2
24-28 57 13.7
29-34 57 13.7
35-40 72 17.3
41-45 77 18.5
46-50 88 21.1
40 9.6
417
100.0
Figure 3: Age
Customers’ Social Status
The researcher found customers’ marital status participated in this research, as it is shown in table 4 and figure 4
that 290 married customers; 119 Single customers; 5 widowed customers and only 3 divorced customers
participated from seven international hotels located in the Kurdistan region of Iraq participated in the current
research. It can be concluded that most of the married customers participated in the current research.
Table 4: Social Status
Items Frequency Per cent
Married 290 69.5
Single 119 28.5
Widowed 1.2
Divorced
.7
Total 417 100.0
Figure 4: Social Status
International Journal of Early Childhood Special Education (INT-JECS)
ISSN: 1308-5581 Vol 14, Issue 03 2022
2071
Customers’ Education
The researcher found customers’ education participated in this research, as it is shown in table 5 and figure 5
that 8 customers with high school certificate; 26 customers with institute certificate; 265 customers with
university certificate; 90 customers with graduate school certificate and 28 customers with other than mentioned
certificate participated from seven international hotels located in Kurdistan region of Iraq participated in the
current research. It can be concluded that most of the customers with university degrees participated in the
current study.
Table 5: Education
Education
Items Frequency Per cent
High School 1.9
Institute 26 6.2
University 265 63.5
Graduate School 90 21.6
Other 28 6.7
Total 417 100.0
Figure 5: Education
Testing of Hypothesis
As it was found based on the reliability test which used to examine four questions related to premium pricing, as
it is shown in table 6 for the first question which stated that whether specific international hotel sets price all the
time high compared to other international and local hotels located in the region, the Alpha value was .843 which
is considered reliable to be measure as an item of premium pricing to examine the relationship with customer
retention at international hotels in Kurdistan.
As for the second question related to premium pricing which stated that whether a specific international
hotel sets price as a premium price, the Alpha value was .847 which is considered reliable to be measured as an
item of premium pricing to examine the relationship with customer retention at international hotels in Kurdistan.
As for the third question related to premium pricing which stated that whether specific international hotel sets
price extremely high compared to other international hotels located in the region, the Alpha value was .847
which is considered reliable to be measured as an item of premium pricing to examine the relationship with
customer retention at international hotels in Kurdistan. As for the fourth question related to premium pricing
which stated that whether a specific international hotel sets a high price for all types of reservation, for instance,
full board room, or half or only bed, the Alpha value was .843 which is considered reliable to be measure as an
item of premium pricing to examine the relationship with customer retention at international hotels in Kurdistan.
International Journal of Early Childhood Special Education (INT-JECS)
ISSN: 1308-5581 Vol 14, Issue 03 2022
2072
Table 6: Reliability Analysis
Questions Cronbach's Alpha
Q1 This hotel charges higher prices than other hotels. .843
Q2 These hotel prices are always high. .847
Q3 This hotel prices one version of our product at a premium, offering
more features than are available on other versions.
.847
Q4 The price of the B&B/half board/full board in this hotel is too .843
expensive.
Reliability Analysis of Customer Satisfaction
Table 7 was found based on the reliability test which used to examine three questions related to customer
retention as the dependent variable, as for the first question which stated whether customers are thinking of
shifting my loyalty to this hotel within the next six months, the Alpha value was .852. As for the second
question which stated whether customers are thinking to shift my loyalty to this hotel within the next two years,
the Alpha value was .846 which is considered reliable. As for the third question related to customer retention
which stated whether customers are thinking to shift my loyalty to this hotel within the next year, the Alpha
value was .819 which is considered reliable to be measured as an item of customer retention.
Table 7: Reliability analysis of Customer Retention
Questions Cronbach's Alpha
Q1 I am thinking to shift my loyalty to this hotel within the next six
months.
.852
Q2 I am thinking to shift my loyalty to this hotel within the next two
years.
.846
Q3 I am thinking to shift my loyalty to this hotel within the next year. .819
Relation between Independent Variable and Dependent Variable
This section consists of the results of the relationship analysis between the independent variable pricing strategy
(Premium Pricing) and the dependent variable (customer retention).
H1: There is a significant and positive relationship between premium pricing and customer retention.
As seen in table 8, Crosstab was used to find the relations between variables, the result revealed that 29
customers out of 417 customers rated as low concerning the relation between premium pricing strategy and
customer retention at selected international hotels in Kurdistan, 161 customers out of 417 customers rated as
fair concerning the relation between premium pricing strategy and customer retention at selected international
hotels in Kurdistan, 227 customers out of 417 customers rated as high concerning the relation between premium
pricing strategy and customer retention at selected international hotels in Kurdistan. Based on the above results,
one can conclude that the majority of customers rated as a high concerning between premium pricing strategy
and customer retention at selected international hotels in Kurdistan.
Table 8: Relation between Premium Pricing and Customer Retention
Crosstab
Custom Retention Classes
Low
Fair
Premium Classes Low 22
Fair 10 102
High 41
16 165
International Journal of Early Childhood Special Education (INT-JECS)
ISSN: 1308-5581 Vol 14, Issue 03 2022
2073
As per table 9, the chi-square statistic seems in the Value column of the Chi-Square Tests table directly
to the right of "Pearson Chi-Square". The results showed that the value of the chi-square statistic is 138.979. The
P-value was found in the same row in the "Asymptotic Significance (2-sided)" column (.000). The finding is
highly significant because the P-value is less than .001. This proved that there is a highly significant relation
between premium pricing strategy and customer retention at selected international hotels in Kurdistan.
Table 9: Chi-Square Tests Relationship Between Premium Pricing Strategy and Customer Retention
Chi-Square Tests
df Asymptotic Significance
(2-sided)
Pearson Chi
-
Square
138.979
a
0.000
Likelihood Ratio
0.000
Linear-by-Linear Association 0.000
N of Valid Cases 417
Model Summary
Based on the model summary as it can be seen in Table 10 that the value of Adjusted R Square is .690 this
means that 70% of variables were explained.
Table 10: Model Summary
Model Summary
Model R Square Adjusted R Square Std. The error of the
Estimate
.833a0.695 0.690 2.515
a. Predictors: Premium
ANOVA
As shown in table 11, ANOVA analysis, it was found that the value of F was 155.481, and the significant level
was equal to .000. The finding is highly significant because the P-value is less than .001, this indicated that there
is a positive association among each pricing with customer retention at chosen international hotels in Kurdistan.
Table 11: ANOVA
ANOVA
Sum of
Squares
df Mean
Square
Sig.
1 5901.626 983.604 155.481 .000b
Residual 2593.741 410 6.326
Total 8495.367 416
a. Dependent Variable: Customer Retention
Coefficients
The researcher applied a multiple regression test between pricing strategies as the independent variable and
customers' retention as a dependent variable to measure the research hypothesis which was developed earlier. As
shown in Table 12, multiple regression analysis was applied to measure the relationship between (premium)
pricing strategies and customer retention at the selected international hotels in Kurdistan. As for the first
research hypothesis which stated that there is a positive and significant relationship between premium pricing
strategy and customer retention, it was found that the value of B was .573 and the value of Beta was .339 with a
significant level of .000 this means that the finding is highly significant because the P-value is less than .001.
The results indicated that first the research hypothesis was supported which stated that there is a positive
relationship between premium pricing strategy and customer retention.
International Journal of Early Childhood Special Education (INT-JECS)
ISSN: 1308-5581 Vol 14, Issue 03 2022
2074
Table 12: Coefficients
Model Unstandardized Coefficients
Coefficients
Sig.
B Std. Error Beta
1 Premium 0.573 0.057 0.339 10.034 0.000
a. Dependent Variable: Customer Retention
DISCUSSION
According to the research which stated that there is a positive and significant relationship between premium
pricing strategy and customer retention. To measure the relationship between premium pricing strategy and
customer retention at international hotels in Kurdistan, the researcher applied Crosstab, the result revealed that
29 customers out of 417 customers rated as low concerning the relation between premium pricing strategy and
customer retention at selected international hotels in Kurdistan, 161 customers out of 417 customers rated as
fair concerning the relation between premium pricing strategy and customer retention at selected international
hotels in Kurdistan, 227 customers out of 417 customers rated as high concerning the relation between premium
pricing strategy and customer retention at selected international hotels in Kurdistan. Based on the above results,
we can conclude that the majority of customers rated as a high concerning between premium pricing strategy
and customer retention at selected international hotels in Kurdistan. Furthermore, the chi-square statistic seems
in the Value column of the Chi-Square Tests table directly to the right of "Pearson Chi-Square". The results
showed that the value of the chi-square statistic is 138.979. The P-value was found in the same row in the
"Asymptotic Significance (2-sided)" column (.000). The finding is highly significant because the P-value is less
than .001. This proved that there is a significant relation between premium pricing strategy and customer
retention at selected international hotels in Kurdistan. As for the first research hypothesis which stated that there
is a positive and significant relationship between premium pricing strategy and customer retention, it was found
that the value of B was .573 and the value of Beta was .339 with a significant level of .000 this means that the
finding is highly significant because the P-value is less than .001. The results indicated that the first research
hypothesis was supported which stated that there is a positive relationship between premium pricing strategy
and customer retention.
A similar result was found by Kim et al., (2018), applying premium pricing method to A five-start
international hotel, the researchers used ANOVA to measure the influence of the premium pricing strategy
method, moreover, the results were found to be a positive influence of premium pricing on customer retention,
loyalty and satisfaction at an international hotel.
CONCLUSIONS
The research aims to measure the relationship between premium pricing strategy and customer retention in
international hotels in Kurdistan. Several marketing sub-strategies have been applied by the hotels and each
strategy is according to a distinct set of situations and standards. The researcher used a quantitative research
method to find the relationship between premium pricing strategy and customer retention at international hotels
in Kurdistan. The method was carried out by gathering information from 417 customers at different hotels from
Erbil, Sulaymaniyah and Duhok city to measure and find the relationship. The findings revealed that there is a
positive and significant association between premium pricing strategy and customer retention at selected
international hotels in Kurdistan.
REFERENCES
[1]. Achroll, R. S., & Kotler, P. (2014). The services-dominant logic for marketing. The service-dominant logic
of marketing: Dialog, debate, and directions, 320.
[2]. Ascarza, E., Neslin, S. A., Netzer, O., Anderson, Z., Fader, P. S., Gupta, S., ... & Provost, F. (2018). In
pursuit of enhanced customer retention management: Review, key issues, and future directions. Customer
Needs and Solutions, 5(1-2), 65-81.
[3]. Azad, S., & Singh, U. S. (2019). A Study on the Effect of Pricing Strategy on Customer Retention in
Kurdistan. International Journal of Supply Chain Management, Vol, 8(1), 98-112.
International Journal of Early Childhood Special Education (INT-JECS)
ISSN: 1308-5581 Vol 14, Issue 03 2022
2075
[4]. Chen, C. M., Lin, Y. C., Chi, Y. P., & Wu, S. C. (2016). Do competitive strategy effects vary across hotel
industry cycles? International Journal of Hospitality Management, 54, 104-106.
[5]. Chen, C. M., Yang, H. W., Li, E. Y., & Liu, C. C. (2015). How does hotel pricing influence customer
satisfaction by the moderating influence of room occupancy? International Journal of Hospitality
Management, 49, 136-138.
[6]. Collado, E., Xu, E. L., Li, H., & Cui, S. (2017). Profit maximization with customer satisfaction control for
electric vehicle charging in smart grids. environments, AIMS Energy, 5(3): 529-556
[7]. Evanschitzky, H., Eiting, A., Woisetschläger, D. M., & Richelsen, V. (2017). How Customer Equity Drivers
Affect Behavioral Intentions and Behavior over Time: An Empirical Assessment. In The Customer is NOT
Always Right? Marketing Orientations in a Dynamic Business World (pp. 734- 734). Springer, Cham.
[8]. Fedorco, Ľ., & Hospodka, J. (2013). Airline Pricing Strategies in European Airline Market. Faculty of
Transportation Sciences, 2(8), 33-41.
[9]. Geng, X., Tan, Y., & Wei, L. (2018). How Add-on Pricing Interacts with Distribution Contracts.
Production and Operations Management, 27(4), 605-623.
[10]. Hamilton, R. W., Rust, R. T., & Dev, C. S. (2017). Which Features Increase Customer Retention?
MIT Sloan Management Review, 58(2), 79.
[11]. Hanaysha, J. R. (2018). Customer retention and the mediating role of perceived value in the retail industry.
World Journal of Entrepreneurship, Management and Sustainable Development, 14(1), 2-24.
[12]. Haynes, N., & Egan, D. (2017). Revisiting the relevance of economic theory to hotel revenue management
education and practice in the era of Big Data. Research in Hospitality Management, 7(1), 65-73.
[13]. Kim, M., Lee, S. K., & Roehl, W. S. (2018). Competitive price interactions and strategic responses in the
lodging market. Tourism Management, 68, 210-219.
[14]. Lee, S. H. S., & Fay, S. (2017). Why offer lower prices to past customers? Inducing favourable social price
comparisons to enhance customer retention. Quantitative Marketing and Economics, 15(2), 123- 163.
[15]. Luo, C., Huang, Y. F., & Gupta, V. (2018). Dynamic Pricing and Energy Management Strategy for EV
Charging Stations under Uncertainties. arXiv preprint arXiv:1801.02783.
[16]. Lusch, R. F., & Vargo, S. L. (2014). The service-dominant logic of marketing: Dialog, debate, and
directions. Routledge.
[17]. Njeru, I. M. (2017). Influence of pricing strategies on consumer purchase decision: a case of supermarkets
in Nairobi County (Doctoral dissertation, Strathmore University).
[18]. Rao, V. R., & Kartono, B. (2009). Pricing objectives and strategies: a cross-country survey. Handbook of
pricing research in marketing, 9-36.
[19]. Reen, N., Hellström, M., Wikström, K., & Perminova-Harikoski, O. (2017). Towards value-driven
strategies in pricing IT solutions. Journal of Revenue and Pricing Management, 16(1), 91-105.
[20]. Subrahmanyam, S., & Farwq, Z. (2019). The Role of Supportive Organisational Culture in Strategic
Success: A Research in Private Hospitals in Erbil City. Pacific Business Review International, 11(11), 50-
60.
[21]. Subrahmanyam, S., & Farwq, Z. (2020). Using the Training Intervention of Human Resources for
Advancement in Learning Organisations. Solid State Technology, 63(6), 19731-19741.
[22]. Subrahmanyam, S., & Azad, S. (2019). Carrefour’s Competitive Strategy – Cost Leadership and
Differentiation: A Case Study. Pacific Business Review International, 11 (8), 137-145.
[23]. Subrahmanyam, S., & Azad, S. (2020). Human Resources Practices as a Strategic Tool for Competitive
Advantage. Solid State Technology, 63(5), 1004-1019.
[24]. Tamaddoni, A., Stakhovych, S., & Ewing, M. (2017). The impact of personalised incentives on the
profitability of customer retention campaigns. Journal of Marketing Management, 33(5-6), 327-347.
[25]. Van Doorn, J., Onrust, M., Verhoef, P. C., & Bügel, M. S. (2017). The impact of corporate social
responsibility on customer attitudes and retention—the moderating role of brand success indicators.
Marketing Letters, 28(4), 607-619.
[26]. Vives, A., Jacob, M., & Aguiló, E. (2018). An online hotel demand model for two resort hotels in Mallorca.
Revista Turismo & Desenvolvimento, 2(27/28), 251-254.
