Analysis of Influence of Price to Customer Satisfaction Based on the Prediction Models ()
1. Introduction
The profitability of the system product is decided by the sales of the product influenced by the price and inherent attribute of the product. Furthermore, the customer satisfaction and price of product may have a big influence to the sales of the product. In order to improve customer satisfaction of the product, it is very important to determine the suitable price of product, and more attractive and cost effective products should be designed corresponding to the real customer needs during possible early stage of development. From the view point of expected profit, financial re-sources should be limited and the most suitable price should be determined from the view point of customer need and based on the consideration of reduction of cost. But it is necessary to implement the most attractive and cost effective product correspond to the real customer needs as much as possible.
Usually, relationship between sales and customer satisfaction, which is caused by the price and inherent quality of the product, is recognized closely. Also, cost of product for implementing the specific inherent attribute of product based on the consideration of customer satisfaction may have an influence to price. Furthermore, relationship between inherent attribute and price of system product may be closely recognized. In order to realize the suitable quality of product, it is necessary to grasp the quality requirements of customers for the system accurately, and the quantitative and concrete inherent quality for targets system product should be defined.
After that, requirement of inherent attributes should be described into the quality requirement specification.
After realize cost effective and high quality product successfully, we should determine the most suitable price in order to take the much sales and profit.
If we take the wrong approach to requirement specification based on the real needs of both quality and price of system product, it may cause a big loss for a purpose of investment.
In recent years, we have been working on developing the ISO/IEC25000 (SQUARE) series [1-6] of standards for quality requirements and evaluation for system and software product for a long time in ISO/IEC JTC1 (Joint Technical Committee 1 of the International Organization for Standardization and the International Electro technical Commission) SC7WG 6 (software and systems engineering under ISO technical committee, working group six).As part of this project, we have also worked on the developments of ISO/IEC9126-1 [7] (This standard has replaced by ISO/IEC25010:2011 [8]), which is the standards to provide the supporting technology for above mentioned works and also include the quality characteristics.
For the purpose of improvement of the customer satisfaction of system product, the method of quantitative quality requirement and evaluation based on the ISO/IEC- 9126 quality model that includes six quality characteristics is widely recognized.These six quality characteristics are described based on the precedent study [9,10], or from the view point of a stake holder’s wide experiences. ISO/IEC9126-1 is defining the six quality characteristics of the system and software. This model introduced in ISO/IEC9126-1 may be formulated with almost perfect quality target establishment and evaluation perspective of the system.
Through analysing customer requirements based on these six quality characteristics, it may become possible performing complete and objective evaluation of customer quality requirements for a system/software product. However, for an evaluation of the customer satisfaction of system product, application of these quality model and independency of each quality characteristics has not been inspected and the suitability of method by using these six quality characteristics for quality requirement and evaluation has not been certified statistically.
In recent years, customers are able to purchase the products based on an increasing number of customer reviews posted on the Internet web site. Degree of customer dissatisfaction may not be accurately obtained by simply classifying negative reviews of online into the six quality characteristics.
In the precedent study, I have introduced the requirements definition method for the quality of system product based on the system quality model defined in ISO/ IEC9126 by using dissatisfaction data obtained from internet and proposed the effectiveness of it statistically.
This study focuses on negative reviews of Laptop Personal Computers (LPCs) posted by consumers and this study used the statistical analysis approach based on the previous study of software product and process improvement [11,12].
In the previous study, I have also confirmed the relationships between inherent attributes of the product and quantitative result of a measured value of total customer satisfaction from the view point of six quality characteristics statistically. In addition, I performed the development of the prediction model to estimate the total customer satisfaction for the system product from the view point of inherent attribute of the product. And, I have already confirmed the causal relationships between total customer satisfaction and inherent attributes of product base on the validity of six quality characteristics and proposed the effectiveness of application of the estimated prediction model and possibility of improvement of the total customer satisfaction of a system product.
Based on the result of previous study, in this paper, I propose the result of investigation of influence of price to customer satisfaction, and the possibility of application of estimated prediction model for improvement of the total customer satisfaction of system product based on the price of product. Also, based on the result of investigation of relationship between customer satisfaction, price and inherent attributes of product, I propose the possibility of application of estimated prediction model and improvement of the total customer satisfaction and sales.
2. Concepts
2.1. General Concept of Price and Sales
Figure 1 shows the general concept about relationship between a price and other concerning factors of product.
From Figure 1, inherent attributes of product may cause a cost and customer satisfaction based on the cate-
Figure 1. Basic concept of customer satisfaction.
gorization of six quality characteristics of product. A price of product may be determined based on a cost, and the consideration of both expected sales and profitability.
On the other hand, sales of product may be influenced by both a price of product and total customer satisfaction of a product. Furthermore, customer satisfaction may be derived by a price and inherent quality of product from the view point of customer needs. Inherent quality of a product is implemented by the inherent attributes of product from the view point of six quality characteristic defined in ISO/IEC9126 quality model.
From the result of consideration of previous study, the total customer satisfaction can be constructed by using the inherent attributes from the view point of each six quality characteristics and a price of product.
2.2. Concept of Improvement of Customer Satisfaction
Figure 2 shows the concept of system product implementation. Customer needs include requirement of price and of inherent attributes of system product. In order to perform development, developers should specify a quality requirement based on the expected cost and the price from the view point of customer’s needs at the design stage.
We should make specifications that at first we grasp the real needs of the customers at the beginning, and described the concrete inherent attribute and cost that you should realize with a product. After development, developer and customer should evaluate the target system product based on the quality requirement specification in order to assure the quality of developed product.
From Figure 2, ISO/IEC25030 [3] provides the requirements and recommendations, process for defining quality requirements specification from selected and described customer’s needs based on the system product quality model include six quality characteristics described
Figure 2. Concept of prediction model of customer satisfaction for system product quality.
scribed in ISO/IEC9126-1, the specified quantitative quality requirements should be used as the criteria of system and software product evaluation. From Figure 2, system quality evaluation can be performed by using ISO/IEC25040 [4] and 25041 [5] based on the specified quality requirements, which are specified by using ISO/IEC25030 during system design phase.
Table 1 shows the price and the inherent attributes of the products which has used in this study. A good product is the product which is high in a sufficiency degree of quality of the product and cost effective for the customer, and it is thought that the satisfaction of the product for the customer is high. Result of decision of customer’s satisfaction concerning price and inherent attribute of product may cause the purchasing of target product.
It is thought that the customer satisfaction of the product may depend on the inherent attributes and a price of a product for the needs of the customer.
A developer should achieve implementing the inherent attribute of target product based on the limited cost and specifications of system product. As a result of products development, production cost and the concrete inherent attribute of the product may be decided.
If the customer satisfaction for an inherent quality of product is high and the price of product is low, as a result, the sales of the product may increase, and it is thought that profitability can increase.
2.3. Concept of System and Software Quality Model
Figure 3 shows the structure of the Software Quality Model defined in ISO/IEC9126-1. Recently, ISO/IEC- 9126-1 have replaced by ISO/IEC25010:2011, but ISO/ IEC9126-1 is widely recognized and actually used, then this study focus on the ISO/IEC9126-1.
From Figure 3, this model includes the six quality characteristics for system and software such as Functionality, Reliability, Usability, Efficiency, Portability and Maintainability.
The Functionality can provide to achieve the ultimate objective, such as increased productivity and sustainable development of a company, and Usability provide the ease of use of the system.
Reliability and Efficiency represent the capability possessed by the system, and are the characteristic associated with sustaining the quality objectives determined by the Functionality and Usability.
Maintainability and Portability provide the adaptability for the system to adapt to changes in the system environment and the usage environment.
3. Summaries
This study first collects customer complaints, i.e., ex-
Table 1. Example of attribute and price of LPCs.