ABSTRACT
The study investigated on the effect of pricing policy on marketing performance in beverage industry. The objectives of the study are; to examine the effects of penetration pricing policy on sales volume, to examine the effects of skimming pricing policy on market shares and to examine the effects of competitive pricing policy on profitability. To achieve the objectives of the study, correlational research design was adopted. The researcher adopted primary data in getting the required information. Out of 80 questionnaires issued to the respondents, 60 representing 75% were carefully filled and returned. In testing the hypothesis, correlation coefficient was used. The major findings reviewed that penetration pricing policy has a significant effect on sales volume in the beverage industry. The findings also reviewed that skimming pricing policy has a significant effect on market share in the beverage industry. The findings further reviewed that competitive pricing policy does not have any significant effect on profitability in the beverage industry. The researcher recommends that Organizations in Nigeria should take time to conduct market research, because this is a toll that can be used for effective pricing. The researcher also recommends that the organizational objective should be visited when making pricing policy, Management of small and medium enterprises should always have adequate information about the cost of production before changing price.
TABLE
OF CONTENTS
Title Page- - - - -- - - - - - i
Declaration - - - -- - - - - - ii
Certification - - - -- - - - - - iii
Dedication- - - -- - - - iv
Acknowledgement - - - -- - - - - v
List of Tables -- - - - - - - vi
Table
of Contents - - - -- - - - - vii
Abstract - - - -- - - - - - x
CHAPTER
ONE
INTRODUCTION
1.1 Background
to the Study - - - -- - - 1
1.2
Statement of the Problem- - - -- - - - 3
1.3 Objectives
of the Study- - - -- - - - 3
1.4 Research
Questions- - - -- - - - 3
1.5 Research
Hypotheses - - - -- - - - 4
1.6 Significance
of the Study - - - -- - - 4
1.7 Scope
of the Study - - - -- - - - 5
1.8 Limitation
of the Study - - - -- - - 5
CHAPTER
TWO
REVIEW OF RELATED
LITERATURE
2.1 Conceptual
Frame Work - - - -- - - 7
2.2 The
Effect of Pricing Policy on Sales Volume - - 8
2.3 Impacts
of Market Shares on Performance - - - 9
2.4 Impacts
of Pricing Policy on the Profitability
Level
of an Organization - - - -- - - 11
2.5 Internal
Factors Affecting Pricing - - - - 12
2.6 External
Factors Affecting Formation of Pricing - - 14
2.7
Economic Factors
Affecting Pricing - - - - 15
2.8 Price
Determination in a Competitive Market - - 15
2.9 Summary
of Literature - - - -- - - - 16
CHAPTER
THREE
RESEARCH
METHODOLOGY
3.1 Research
Design - - - -- - - - 17
3.2 Area
of Study- - - -- - - - - 17
3.3 Sources
of Data and Method of Collection - - - 18
3.4 Population
of the Study- - - -- - - - 18
3.5 Sample
Procedure and Sample Size - - - -- - 18
3.6 Validity
of the Research Instrument- - - -- - 19
3.7 Reliability
of the Research Instrument - - - 19
3.8 Method
of Data Analysis -- - - - - - 20
3.9 Model
Specification - - - -- - - - 20
CHAPTER FOUR
DATA PRESENTATION, ANALYSIS AND INTERPRETATION
4.1
Data Presentation - - - -- - - - 21
4.2 Test of Hypotheses - - - -- - - - 30
4.3 Discussion
of Findings - - - -- - - - 36
CHAPTER
FIVE
SUMMARY
OF FINDINGS, CONCLUSION AND RECOMMENDATIONS
5.1 Summary of Findings - - - -- - - - 38
5.2 Conclusion
- - - -- - - - - - 39
5.3 Recommendations - - - -- - - - 40
REFERENCES
APPENDIX
LIST OF
TABLES
Table
4.1: Distribution of Questionnaire and Response Rate 21
Table 4.2: Distribution of Respondents
According to Age 21
Table 4.3: Distribution of Respondents According to
Educational
Qualification 22
Table 4.4: Distribution
of Respondents According to Years of Services 23
Table 4.5: Religion 23
CHAPTER
ONE
INTRODUCTION
1.1 Background to the Study
A
product is incomplete if it does not attract any price, the principle of
pricing entails that companies must be cautious and efficient in setting up
price for their products. price as one of the four ps of marketing, demand good
attention, because it plays a major role in the successful marketing of a
company’s product, customers or consumer’s decide either to buy or not to buy a
particular product based on their ability to pay the market prices.
According
to ode (2011) the term price simply means the amount of money that you actually
pay in order to buy a particular goods or services so that the relationship
between the buyer and the seller is confined to the transaction itself. However
in explaining the importance of pricing, Egbunike (2007) sustained that setting
up the price for an organizations products or services is one of the most
difficult, due to some number of factors that must be considered. While Kotler (2002)
sees pricing as “the amount of money needed to acquire some or a combination of
product and its accompanying or separate services.
Therefore,
price of product is the major determinant of market demand for such product;
price is one of the most powerful weapons used in the business for effectively
high competition. Customers are likely to patronize company’s product whose
price is satisfying and psychologically fair to them. Effective strategy and
policy must be adopted in order for the company’s to succeed in its
marketing program so that it will
result to an effective implementation of policy. The main purpose of this study
is to examine the activities of pricing policy on performance of beverage industry
using unilever Nigeria plc as a case study. unilever Nigeria plc was
incorporated as lever brothers (west African) limited on 11th April,
1923 by lord levelhulne, but company’s antecedent have to be traced back to his
existing trading interest in Nigeria and west Africa generally and to the fact
that he had since the 19th century been involve with the soap
business in Britain .unilever Nigeria plc started at soap manufacturing
organization in Nigeria.
After
series of acquisition, the company diversified into manufacturing and marketing
of food, non soapy detergent and personal care product. These acquisitions
brought in Lipton Nigeria limited in
1985, cheese ponds limited in 1988. The company changed its name to Unilever Nigeria
limited in 2001.
Unilever
Nigeria plc is a public liability company quoted on the Nigeria stock exchange
since 1973 with Nigeria currently having 49% of equity holdings.
1.2 Statement
of the Problem
Pricing
policy entails that companies must cautious and efficient in setting up price
for their product. Whenever price goes up, it will affect the sales volumes
negatively thereby reducing the market share and profitability. Profitability
and market share will reduce because so many customers will not come back, due
to high price. But whenever there is a decrease in price, sales volume tends to
be high, thereby increasing market share and profitability.
1.3 Objectives of the Study
The
general objective of this study will be to examine the effect of pricing
policies on marketing performance of selected firm in beverage industry. The
specific objective of the study will include, to:
i)
examine the effects
of penetration pricing policy on sales volume;
ii)
examine the effects of skimming
pricing policy on market shares;
iii)
examine the effects of
competitive pricing policy on profitability;
1.4 Research Questions
Key research questions for this study will include;
i)
How
does penetration pricing policy affect sales volume in the beverage industry?
ii)
How
does skimming pricing policy affect market shares in the beverage industry?
iii)
How
does competitive pricing policy affect profitability in the beverage industry?
1.5 Research Hypotheses
Hypotheses
to be tested in the course of this study are stated as follows:
Ho1: Penetration pricing policy does not have any significant
effect on sales volume in the beverage industry
Ho2:
Skimming pricing policy does not have any
significant effect on market share in the beverage industry.
Ho3: Competitive pricing policy does not have any significant
effect on profitability in the beverage industry.
1.6 Significance of the Study
This
study will be quite significant in terms of those it will benefit and how it
will benefit them. The people that will benefit from this study includes
manufacturers, distributors and consumers. It will also be useful to
researchers for academic purpose. It will help manufacturers to know the
quality of product that they are producing, so that they will be able to cover
the cost of production and make profit. While distributors will report
consumers reaction to it products or services to manufacturers for adjustment
in order to satisfy consumers. Consumers tend to buy more products when price
is low.
1.7 Scope of the Study
This
study focused on effect of pricing policies on marketing performance in the beverage
industry. The study were been carried out in Aba, with data generated from
employees of Unilever plc, as respondents.
1.8 Limitation of the Study
This
study by nature will be limited by such constraint as:
1. Resources:-
·
Finance:
A major determinant of the sound research
is availability of fund research is a money oriented venture. Liquid cash is
needed for travelling, consulting and gathering materials. As such, the
researcher could not carry out the research on a bigger scale due to inadequate
capital.
·
Time: The limited time – target for the completion
of this research could not give me (the researcher) adequate time to carry out
the study as I would have wanted it (the researcher).
·
Academic
Materials: Accruing from inadequate capital the
research was unable to access some material mostly external due to lack of fund
and other problems encountered in the quest for information.
·
Co-operation: In a developing country like Nigeria, a research is
always posed with the unco-operative attitude of respondents, which probably because of some
sort reasons, were unable to release relevant information when approach.
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