ASBTRACT
This
project investigates “The Impacts of Pricing in Marketing of Coke Drinks in
Enugu State” Every individual is interested in the prices, so everyone whether
a consumer or a producer is affected by rise or fall in price. The purpose of
this research work is to lay emphasis on the important of pricing in other to
achieve a target return on capital invested by the organization, to develop
forecast for sales and gross profit considering all the various internal and
external factors that are relevant to the forecast. The literatures were
reviewed. The researcher made use of both primary and secondary data, which
were collected using questionnaire, personal interview, written materials or
work of other journals, textbooks, handouts. And questionnaire were
distributed, hypothesis formulated were tested. Finally, the findings of the
study, it is recommended that:
a.
The company should put into
consideration the company’s products over all corporate objectives profit
maximization before their selling prices.|
b. In
deciding pricing strategy, concerned personnel and minimization of production
cost so that selling price per product is reduced which many head to increase
in turnover and net profit.
TABLE
OF CONTENT
Title
page-----------------------------------------------------------------i
Approval
page-----------------------------------------------------------ii
Dedication---------------------------------------------------------------iii
Acknowledgment---------------------------------------------------------iv
Abstract-------------------------------------------------------------------v
Table
of content----------------------------------------------------------vi
CHAPTER ONE
1.0
Introduction----------------------------------------------------------1
1.2 Background of the
study-------------------------------------------1
1.2 Statement of the
problem-------------------------------------------7
1.3 Objective of the
study------------------------------------------------8
1.4 Research
Questions-------------------------------------------------8
1.5
Hypothesis-------------------------------------------------------------9
1.6 Significance of the
study-------------------------------------------10
1.7 Scope of the
study-------------------------------------------------10
1.8 Definition of
terms--------------------------------------------------11
CHAPTER TWO
2.0
Review of the related
literature---------------------------------13
2.1
An overview of price-------------------------------------------13
2.2
Objective of
pricing--------------------------------------------16
2.3
The role and the benefits of
pricing--------------------------18
2.4
Factors Affecting Pricing
Decision---------------------------19
2.5
Pricing in Different types of
Market-------------------------25
2.6
Determination of
pricing-------------------------------------27
2.7
Classification of
pricing--------------------------------------29
2.8
Pricing
strategy-----------------------------------------------31
CHAPTER
THREE
3.0
Research Design and Methodology-----------------------------34
3.1
Sources of Data
collection---------------------------------------34
3.2
Population of the
Study------------------------------------------35
3.3
Sample Size Determination--------------------------------------35
3.4
Research
instrument----------------------------------------------36
3.5
Validation of research or
Instrument---------------------------37
3.6
Method of Data analysis and
treatment------------------------37
3.7
Limitation of the
Study-------------------------------------------38
3.8
Area of the
study---------------------------------------------------38
CHAPTER FOUR
4.0
Presentation, Analysis and
Interpretation of Data------------39
4.1
Data Presentation and Analysis---------------------------------39
4.2
Test of
Hypothesis-------------------------------------------------51
CHAPTER
FIVE
5.0
Discussion of findings, Recommendation
and conclusion--63
5.1
Summary of the
findings----------------------------------------63
5.2
Conclusion -------------------------------------------------------64
5.3
Recommendation
------------------------------------------------65
References----------------------------------------------------------67
Appendix-----------------------------------------------------------69
Questionnaire
----------------------------------------------------70
CHAPTER ONE
0.1 INTRODUCTION
1.1 BACKGROUND OF THE STUDY
One of the most important operating
decisions management must take is establishing the selling price for its
product and services, moreover manufacturing companies are always faced with
numerous decisions. The management has to decide on what to produce, how to
produce at what quality and quantity to produce and at what price, the
management also have to consider what policies and method to be adopted.
Management must decide on the right price of the product, it is offering to the
market and then set up policies and then set up policies on discount allowance,
payment period, freight payment, credit terms and many other price related
situation which ultimately affects the
list price.
IMPACT OF PRICING IN MARKETING OF
COCA-COLA
Marketing
consist business related activities that see to anticipate demand, help in
developing and making the goods and services available to the satisfaction of
consumers and users and as a profit to the organization. When a product is
produced by an organization, the consumer usually do not collect the product
free of charge but for a price.
This consideration depends on the
perceived worth of the product. All profit and nonprofit organization face the
task of selling price on their product and services. (Philip Kotler 1987).
Through history, sellers and buyers in
the process of negotiation set prices, it is than he is expected to receive,
and the buyer will offer less than he is expected to acceptable price is
reached.
Pricing in marketing is the key
activity within the capitalistic system of free market enterprises, in other
words it is the most critical element of marketing mix that determines a
company’s marketing shares and profitability. Price is the only marketing mix
that yield revenue, while the other 3ps generate cost. Most companies do not
only find it difficult but also mishandle their pricing strategies.
Price is one of the major variables
that a marketing manager controls. Originally price is considered vital among
the factors which influence buyer’s choice and behavior. In 1950’s and 1960’s
non-price factors grew relatively more important and it had reached a point
where over half of a sample of company managers did not select pricing as one
of the five most important policy areas in their firm and marketing success.
Recently, because of the world wide
inflation price has again attracted considerable attention and is now viewed by
many marketers as one of the most important element in the marketing mix
following the product.
Bush and Houston (1985,558) defined
price as the value assigned to the utility one receives from goods and
services, usually price is the amount of money that is given up to acquire a
given quantity of goods and services. It is the regulator of the economic
system because of its influence on the reward for all factors of production and
the allocation of these factors. However in the marketing of a new product
price policy should take cognizance of its importance on other element of the
marketing mix. In recent time the question is how do you much do you think we
can get this item, how much do you think we ought to sell it for, have been
asked by managements who are in charge with the responsibility of pricing the
products or services. Therefore considers the reaction of its competitors in
deciding the pricing strategy to go for. That is, how will the dealers and
distributors react to this when they see ours? And will the government
intervene and prevent this price? In all, market need to know the laws, and
regulations affecting and to comply with it. guided by the company’s objective,
the marketing management must develop a set of pricing objective and policies.
They must anticipate what the pricing policy of the firm will face and how it
is going to overcome it. Some of this pricing policies should be seen as how
flexible price will be, at what level i9t will be set, how pricing will be
handled during the cost of the product life cycle.
Pricing is handled in various ways. in
small business organization pricing is handled by the top management rather
than the marketers. While in large scale organization, pricing is typically
handled by divisional and product line managers, then the general pricing is
done by the top management as it is with the case study.
Business these days is becoming
competitive and sophisticated. This demand has made companies to adopt various
price policy decision and other strategies to attract customer. Price is one of
the 4ps under the control of the marketing practitioners. It’s importance
within the marketing mix cannot be overlooked. The pricing policy which a firm
adopts in setting their product price normally goes to affect the organization
and profit. Although it is not out of place to recognize the important place of
the other aspect of the marketing mix (product, place or distribution,
promotion) in working in harmony with price towards the attainment of marketing
objective. The purpose of pricing is not to cover cost, but to capture the
value of the product or services in the mind of the customers. Manager have to
develop a set of pricing objective and policies decision that will work towards
the achievement of the overall marketing objective must be translated into
pricing decisions but, who is to accomplish the task? Pricing decision is a
major decision area and as such every department or functional areas are
committed into it. No single department takes care of pricing. Pricing policy
decision is expressed with the guideline set by the organization, which
regulates future activity of the firm. There are so many pricing policy
decisions which a firm has to adopt order to increase the performance of the
firm. It includes the following.
1.
Skimming or penetration pricing policy
2.
Resale agreement policy
3.
Product line pricing policy
4.
Discount pricing policy
5.
Psychological pricing policy etc.
1.2
STATEMENT
OF PROBLEMS
In
an unstable economy like ours, determining the price of items or product is
difficult because of high inflation rate affecting the business environment.
When there is increase in the overhead expenses of production then, the
anticipation price will change and will bring about difficulties and possible
failure of the product, also there is an adverse effect on pricing policy
decision when firms are faced with the complex of false future forecast, for
instance when a budget is wrongly appropriated and implemented, this is going
to affect the organization adversely. The research work, therefore talks on
“Impact of pricing on marketing of coca-cola drinks in Enugu State.
1.3 OBJECTIVE OF THE STUDY
The
objective of this research work is to know how companies price their new
products, especially coca-cola in particular. For all objectives, pricing is as
important to the customers, as it is one of the parameter to evaluating the
firm’s image. Thus the research work seeks to find out the extent to which
coca-cola company carryout It’s pricing policy in their within the competitive
marketing environment.
1.4 RESEARCH QUESTIONS
1. What
kind of pricing strategy is coca-cola using?
2. Do
you consider pricing to be of importance more than coca-cola product?
3. Is
there any significant relationship between pricing of coca-cola and companies
image?
4. Do
you meet your target on investment at the price you sell coca-cola product?
5. Do
you think that the pricing strategy coca-cola are using is competitive?
6. Do
pricing assist coca-c0la in increase sales volume ?
1.5 HYPOTHESIS
Ho1
: pricing of coca-cola is more important than coke
H1 : pricing of coke is not more important than
coke
Ho2
: there significant relationship between pricing of coke and companies image
H2
: There is no significant relationship between pricing of coke and company’s image.
H03
: do you meet your target investment with the price you sell coke?
H3
: you did not meet your target investment with the price you sale coke.
H04
: The pricing strategy used is competitive.
H4
: the pricing strategy used is not competitive.
1.6 SIGNIFICANCE OF THE STUDY
This research project being done under a
case study of coca-cola in Enugu state, will enable the reader to understand
the relevance of price and pricing in marketing of coke. It will also highlight
the importance of selling as a standard pricing policy for new product as well
as that of the existing products. It will reveal to the management of the
organization the adverse effect of wrong price policy to its business growth
and development.
However this project work will serve as
a source of information to the future researcher who would like to conduct
studies related to this work.
1.7 SCOPE OF THE STUDY
Coca-cola as the researcher base of
study has many branches in some part of the country. They have branches in
Lagos, Benin, Enugu, Onitsha, Owerri, Jos and Aba etc, but the researcher
decides to carry out this research in Enugu state due to the researcher’s
inability to reach out other branches as a result of researcher’s economic
handicap time and logistic reasons.
1.8 DEFINITION OF TERMS
For easy and fast comprehension
of this project work, there are some certain key terms which ought to be
defined. they are as follows;
1. Price: price
can be defined as sacrifice made to acquire a given product, which may be
monetary or non monitory.
2. Pricing:
Onunla .J. Kelechi (2004,p.77) defined pricing as the activities involved in
setting the price for which a product will be sold.
3. Pricing policy:
it is referring to as guideline philosophy or course of action designed to
influence and determine pricing policy decision.
4. Product:
Kotler and Amstrong (2001 p7) a product is anything that can be offered to a
market for an attention acquisition, use or consumption that might that satisfy
a want or need. It includes physical object, services, objects, places,
organizations and ideas.
5. Strategy: a plan of action
intended to accomplish a specific goal.(source : internet)
6. Quality: the
ability of a product to consistently meet or exceed customers requirement
(source : internet)
7. Market:
these are the potential buyers of your product.
8. Value:
a customer perception relative price (the cost to own and use) and performance
(quality). (source : internet)
Management: is defined as the process by which operative
groups directs action towards common goals.
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