ABSTRACT
This study evaluates pricing strategies as a
survival tool in the marketing of drinks, focusing on Nigerian Breweries Plc.
The primary objective is to assess how effective pricing strategies can ensure
the company's survival and competitiveness in the market. Specific objectives
include understanding the socio-economic characteristics of the staff,
identifying the pricing strategies adopted by Nigerian Breweries, evaluating
their effectiveness, and determining the factors influencing these strategies.
The study adopts a descriptive survey research
design, which involves collecting and analyzing data from a sample of elements
taken from the study population. This approach is suitable for obtaining a
comprehensive understanding of the pricing strategies used by Nigerian
Breweries and their impact on the company's performance. The population
consists of staff and management from five locations of Nigerian Breweries Plc:
Ama, Enugu, Aba, Lagos, and the headquarters. From each location, 20
participants were selected, comprising five senior staff and 15 junior staff,
making a total of 100 respondents. The probability sampling method was
employed, ensuring each element of the study had an equal chance of being
selected.
Data were sourced from both primary and secondary
sources. Primary data were collected through administered questionnaires and
personal interviews with employees, while secondary data were obtained from
magazines, journals, annual reports, and textbooks. The data were analyzed
using tables and percentages, and the chi-square statistical tool was used to
test the hypotheses.
The analysis of the pricing strategies employed by
Nigerian Breweries Plc revealed that good pricing strategies significantly
benefit the Nigerian market by increasing sales volume and profitability. Also,
the inherent problems associated with pricing strategies include competition,
government policies, marketing costs, and consumer reactions. Findings showed that
pricing is the only revenue-generating component of the marketing mix,
emphasizing its importance in increasing the company's market share.
Based on the empirical study and statistical
analysis, the following conclusions were drawn. Pricing strategies and
objectives positively influence the sales volume and profitability of Nigerian
Breweries. Competition, government policies, and consumer reactions negatively
affect the company's pricing objectives and strategies. Competition, poor
advertising, and poor product packaging are significant factors impacting
pricing strategies. Nigerian Breweries employs cost-oriented,
competition-oriented, and demand-oriented approaches in its pricing strategies.
The study offers several recommendations to enhance
the effectiveness of pricing strategies for Nigerian Breweries Plc and other
beverage companies, among which are that breweries should employ professional
marketers to fully explore the market for maximum profit; Companies should consistently
apply effective marketing strategies to stay competitive and ensure survival; breweries
should view competition as an opportunity to improve operations rather than a
"do or die" affair; The government should support the beverage
industry by maintaining product standards, regulating prices, and encouraging
new companies to enter the market.
TABLE OF CONTENTS
CHAPTER ONE
1.0 Introduction
1.1 Background of the Study
1.2 Research Questions
1.3 Objectives of Study
1.4 Research
Hypothesis
1.5 Significant of Study
1.6 Scope of Study
1.7 Limitation
of the Study
CHAPTER TWO
2.0 Review
of Related Literature
2.1 Pricing
Strategy Defined
2.2 Price
Defined
2.3 Concept
of Pricing
2.4 Pricing
Objectives
2.5 Pricing
Methodology
2.6 Factors
That Affects Product Pricing
2.7 Nigerian Breweries Plc Pricing Policies
2.8 Nigerian
Breweries Plc Promotional Pricing
CHAPTER THREE
3.0 Research
Methodology
3.1 Research Design
3.2 Area of
Study
3.2.1 History of Nigerian Breweries
3.2.2 Company's Mission Statement
3.2.3 Company's Social Responsibility
3.2.4 Company's Brands
3.3 Study
Population
3.4 Sample
Size
3.5 Sampling
Size
3.6 Data
Collection
3.6.1 Instrument
3.6.2 Data
Sources
3.6.3 Validity
and Reliability
CHAPTER FOUR
4.0 Data
Analysis, Presentation and Discussion of Findings
4.1 Questionnaire Administration
4.2 Personal Data Analysis
4.4 Testing Of Hypothesis
4.5 Summary and Findings
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
5.1 Summary
5.2 Conclusion
5.3 Recommendation
Questionnaire
References
CHAPTER ONE
1.0 INTRODUCTION
1.1 BACKGROUND
OF THE STUDY
Price is one of the elements of marketing
mix which practices revenue. It is very crucial as the prime mover
of trade in any market economy where goods and services are traded. one can
conclude that price is one variable that is very important to
both the buyer and the seller. (Boniface et al,
2007).
According to Agbonifoh et al (1998), price
is the monetary value for which the seller is willing to exchange
the item, also they defined/price as what a buyer gives in return for it.
Price since history has remained a major
determinant of buyer choice. Price is one of the most flexible elements
that can be changed quickly and still remains one of the most important element
in determining market share and profitability (Anuforo
and Boniface, 2013).
Pricing
is the process of determining price or product companies handle pricing in a
variety of ways. For small companies, prices are often assessed by company’s
boss. The is different for large companies where pricing is handled by a
division and product-line managers. Here the top management sets the general
pricing objects, policies and often approves proposed prices from the lower
level management. Companies often establish a pricing department. The aim is to
assist management in price setting and implementing appropriate price.
(Agbanifoh et al, 1998).
Different
people have different names for their price. The local utility will give its
rise as rate, the insurer will give its price as
premium, and the employer will give his price as salary/wages. Price for
education is tuition, while price for telephone service
is bill.
From the above, one may wonder what
determines the price of a product or service. They include:
·
Cost of production of the product.
·
Competition.
·
Ability and willingness of buyer to pay for the product.
·
Government legislation.
Many
companies do not handle pricing well as price competition is the number one
problem facing them. The most common mistake or misconceptions made by
companies are:
Ø Price is too cost-oriented.
Ø Price is not revised often enough to
capitalize on market changes.
Ø Price is set independent of the rest of
marketing mix rather than as an intrinsic element of market positioning
strategy.
Ø Price is not varied enough for different
product items, market segments and purchase occasions.
For pricing to be useful as a strategy,
Nigeria Breweries Plc established its pricing policies within the content of a
carefully structured set of pricing objectives. This is because failure to
coordinate pricing policies with the over-all
objectives of pricing often lead to a reduction in profitability.
Achieving set objectives are the major aims
or purposes of all business organization's especially the profit oriented ones.
These objectives include:
a. Marketing profits.
b. Remaining
in business.
c. Competing
favorably with other firms that are in the same line of business.
For an organization to achieve these
objectives, it must embark on the development of a structure and design
a programme which would facilitate effective and efficient accomplishment of
the set objectives. The above can only be achieved by having a
good pricing strategy.
An
organization with a good pricing strategy, objectives policies and methods
stand a better chance of making a lot of profit and
its product will live longer in the market so long as its strategies does not negatively
affect it.
1.2 RESEARCH QUESTIONS
This study will admit the following research
questions so as to enable the researcher attain his pre determined
to objective;
1.
Government legislation
affects pricing products?
2.
Does high price means high
quality of products?
3.
What are the company's
various pricing strategies in use?
4.
What are the most appropriate
pricing strategies for the company in its competitive market environment?
5.
To what extent do price
affect the level of sales?
6.
Does the price of other
products affect the price of the company’s product?
1.3
OBJECTIVES OF STUDY
The major objectives of this study examine
among other things the organizational pricing strategies, policies, marketing
and market acceptance
of alcoholic and non-alcoholic beverages in Nigeria with special interest on
Nigerian Breweries Plc. the study will also have
to:
1.
Examine price policy effectiveness.
2.
Find out the most appropriate pricing strategies
for the company in its competitive
market environment.
3.
Examine
the company's various pricing strategies.
4.
Study the effect of cost, competition and demand
or pricing strategies in use.
5.
Find out if government legislations affect
pricing of products.
6.
Make recommendations based on findings.
1.4
RESEARCH HYPOTHESIS
The
following hypothesis will be tested:
Ho1: There is no relationship between effective pricing
and sales volume.
Ho2: cost, demand, competition and government policies
do not affect the pricing strategies of the firm.
1.5 SIGNIFICANCE OF STUDY
The benefits of
this study are enormous but in specific term, the study will be of benefit or
import f the following groups:
a.
Business organizations;
the result of this study will be significant to business organizations because
they will be become more aware of the factors that affect and influence
pricing, and adopt those factors to get more market share for itself which
means higher profits from sales.
b.
The
Investors: if it is noted that a particular beverage company has a high level
of sales resulting from good pricing
strategies, the investors may decide to invest in the beverage company as its
profits will be high as well as dividend.
c. Academic:
the result of this study will be significant to the academic as it will form
the basis for research work in pricing strategies.
1.6 SCOPE OF STUDY
This work was limited to priding strategy and
Nigerian Breweries Plc was chosen as a case study.
The study covers some Nigeria Breweries
locations i.e Aba, Enugu, Amah and the corporate headquarters which were
reached mostly by calls and the questionnaire.
1.7 LIMITATION OF THE STUDY
In carrying out this project work, research
encountered certain limitations, which adversely affected the findings for this
work. They include:
·
High cost of
transportation and materials
·
Delay in material
retrieval.
·
Scarcity of sufficient
data for this work’s effectiveness.
·
Lack of trust to
disclose some vital information and documents for fear of disclosing it to
competitors.
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