ABSTRACT
This study explores the impact of pricing policies on
the purchasing and consumption of alcoholic drinks, focusing specifically on
Nigeria Breweries Plc in Aba. The objectives of this research include examining
the various pricing policies of alcoholic drinks, identifying the determinants
of these pricing policies, assessing their impact on purchasing and
consumption, and pinpointing the factors responsible for ineffective pricing
policies in Aba. To guide the investigation, the study posits three hypotheses:
1. The pricing of alcoholic drinks is not significantly influenced by
production cost. 2. Arbitrary increases in the prices of alcoholic drinks do
not reduce their demand. 3. A coordinated pricing policy does not enhance the
purchasing and consumption of alcoholic drinks.
A survey approach was employed, using a
well-structured questionnaire to gather primary data. The population of the
study comprised the staff and management of Nigerian Breweries, Aba Branch,
with a sample size of 246 respondents. Data were analyzed using ANOVA to test
the hypotheses and derive conclusions.
The findings reveal that an increase in the price of
alcoholic beverages due to higher production costs significantly reduces the
number of alcoholic drinks consumed. The analysis further indicates a strong
interdependency among past, current, and future consumption patterns,
particularly among young adults. Despite these observations, it is noted that the
study's findings are based on cross-sectional data and not controlled
experiments, which limits the ability to definitively attribute causality to
specific factors.
The study concludes that the pricing behavior of
wholesalers and retailers primarily serves their interests and those of the
manufacturers. The coordinated pricing policies implemented by these parties do
not significantly alter the demand for alcoholic drinks. The study also finds
that wholesalers and retailers are heavily influenced by manufacturers in
determining product prices, a practice that does not undermine their operations
or those of the manufacturers.
Based on these findings, the study recommends several
actions to increase demand for alcoholic drinks. Nigerian Breweries should assist
wholesalers in their promotional activities through advertising and other
promotional materials. Manufacturers should consult wholesalers before
adjusting prices to ensure a coordinated approach that prevents negative
reactions in wholesale prices. Additionally, wholesalers should avoid engaging
in price cutting among themselves and consider regular meetings to review
operations and strategies for effective and efficient performance.
TABLE
OF CONTENTS
CHAPTER
ONE
INTRODUCTION
1.1
Background of the study
1.2
Statement of the problem
1.3
Objectives of the STUDY
1.4
Research questions
1.5
Research hypotheses
1.6
Significance of the study
1.7
Scope of the study
1.8
Conceptual Definition of
Terms
CHAPTER
TWO
REVIEW
OF RELATED LITERATURE
2.1 Historical
background
2.2 A
Chart of Nigerian Breweries Establishment Since Inception 1946
2.3 Nigerian
Breweries Plc Organizational Structure
2.4 The
meaning and concept of pricing
2.5 Flexibility in price
2.6 Pricing goals and objectives
2.7 De-emphasizing price in a marketing mix
2.7.1 Non-price competition
2.7.2 Price control
2.7.3 Price leadership
2.8 Pricing during the period of Inflation
2.9 Price situation
2.10 The Impact of pricing policies on consumption
CHAPTER THREE
RESEARCH METHODOLOGY
3.1 Research Design
3.2 Sources of data
3.2.1 Primary data
3.2.2 Secondary data
3.3 Population
of the study
3.4. Sample
Designs
3.4.1 Sample
size Determination
3.5 Sampling
procedure
3.6 Sampling
method
3.7 Research
instrument
3.8 Data analysis technique
3.9 Specification of Variables
CHAPTER
FOUR
PRESENTATION,
ANALYSIS AND INTERPRETATION OF DATA
4.1 Data presentation and interpretation
4.2 Response to Problem Areas
4.3 Test
of hypotheses
4.3.1 Hypothesis One
4.3.2 Hypothesis Two
4.3.3 Hypothesis Three
4.4 Discussion
of The Findings
CHAPTER
FIVE
SUMMARY
OF FINDINGS, CONCLUSION AND RECOMMENDATIONS
5.1
Summary of findings
5.2 Conclusion
5.3 Recommendations
5.4 Suggestions
for further studies
Bibliography
Appendix: Questionnaire
CHAPTER
ONE
INTRODUCTION
1.1 Background
of the study
One of
the primary objectives of every business is to maximize its profit and setting
price is one of the principal tasks of marketing and finance manager. In that,
the price of a product or service often plays a significant role in that
products and services success, not to mention in a company’s profitability.
Pricing
policies for every establishment plays an important role on the level of
profitability. Most private enterprise adopts pricing policies that maximizes
profits unlike their public counterparts. In public enterprises government
interferes in their pricing policies hence their poor performance (Igwemma
1999).
Pricing
police as an instrument to achieve this objective should be formulated in such
a way as to maximize the sales revenue and profits. However, pricing policy
refers to how a company sets the price of its product and services based on
costs, value, demand and competition or how a firm uses pricing to achieve its
strategic goods such as offering lower prices to increase sales volume or
higher prices to decrease backlog.
Generally,
products are said to posses utility if they are capable of satisfying human
wants and needs. Utility is often measured in terms of value and when such
values are expressed in monetary terms, they become the price of the product.
In fact, price is the value placed on something. What someone prepared to give
in order to gain something (Inyanga, 2013).
The
importance of price to producers and consumer cannot be over-emphasized. Price
is a distractive element of the marketing mix for the producer, because it is
the only one that generates revenue. Price is also important to the producer
because it provides the basis profit (Inyanga, 2013:159). Also, a producer’s
goal on profit maximization is only attainable with a good pricing policy for a
product. After all, the major aim of all marketing and merchandizing activities
is to sell goods and services at a price that will cover production lost and
still provide for reasonable profit to the businessmen (Ebue, 1996).
On the
other hand, consumers aim at maximizing satisfaction derived by consuming a
production. To maximize satisfaction, the consumer is going to weigh up those
promises against the price and decide whether it is worth paying (Inyanga,
2013). Also, ensure that the price of goods and services are not considered too
high. As a matter of fact, consumers react to changes in price through product
demand. According to Stanton, (1998:122), consumers normally agitate against
product price reduction. However, the extent to which they react to price
increase depend on certain factors (Elsie, 1997).
Pricing
policies significantly affect demand for consumer goods such as alcoholic
drinks. This is as a result of the existence of various brands that can only be
substitute for each other. Thus, in fixing his selling price, the marketing manager
must bear in mind the need to achieve the profitability objectives which has
been seen for the product as well as the price which the consumer is likely to
be prepared to pay (Elsie, 1997). The producer must also ensure that the price
upon which he decides is not higher than that which the consumer is prepared to
pay for the product. Furthermore, having once settled on a price should not
change too soon regardless of the possible fluctuation in cost or in market
situation. This is because, consumer are likely to express their
dissatisfaction through product demand. It is against this background that the
study is set to examine the impact of pricing policies on the purchasing and
consumption of alcoholic drinks in Nigerian Breweries Plc Aba.
1.2 Statement
of the problem
For the
past five years, the prices of alcoholic drinks have been steadily rising in
the market. Despite all the efforts made by the Nigerian Breweries Plc to
stabilize their prices unfortunately, such efforts have not been fruitful because
of the increasing cost of production and the need of the Nigerian Breweries to maximize
profits (Asika, 1991). Apparently, the pricing policies in the liquor industry
are ineffective as the constantly rising prices have adverse implication for
consumption of alcoholic drinks. Besides, it has led to significant switch over
to less costly brands of liquor by consumers. This not only adversely affects
product demand but the competitive of each brand (Okeke, 1993).
1.3 Objectives of the STUDY
The objectives of the study are to:
i)
Examine the various
pricing policies of alcoholic drinks in Aba.
ii)
Examine the determinants
of the pricing policies in Aba.
iii)
Determine the impact of
Pricing policies on the purchasing and consumption of alcoholic drinks in Aba.
iv)
Identifying the factors
responsible for ineffective pricing policies of alcoholic drinks in Aba.
1.4 Research questions
The following questions are formulated for this study;
i)
What are the various
pricing policies for alcoholic drinks?
ii)
How can the pricing policies
of alcoholic drinks be very effective in Aba?
iii) What
are the impact of pricing policies on the purchasing and consumption of
alcoholic drinks in Aba?
iv) What
are the factors responsible for ineffective pricing policies for alcoholic
drinks in Aba?
1.9
Research
hypotheses
To
guide the investigation of this study the following hypothesis are raised
H01:
The pricing of alcoholic drinks is not significantly influenced by production
cost.
H02:
Arbitrary increase in the prices of alcoholic drinks does not reduce their
demand.
H03:
A coordinated pricing policy does not enhance the purchasing and consumption of
alcoholic drinks.
1.10
Significance
of the study
This
research, when completed will contribute to knowledge in various ways;
i.
Companies
It will
enable Nigerian Breweries Plc understand the reaction of consumers whenever
there is arbitrary increase in prices of their alcoholic drinks. Such reaction
as reduction in demand adversely affects profitability motive or objectives of
the Nigerian Breweries. The Breweries Plc therefore will see in this study, the
need to consider the prices consumer is prepared to pay.
ii.
To
CONSUMERS
They
will also see in this research that they are sovereign. Meaning that, they can
determine what should be produced for them through their demand.
They will also see in the study how they can influence
pricing by looking for substitute goods when product price rise.
iii.
GOVERNMENT
The
government will benefit from this research work in that, since government
policy affects the price of raw materials used by the producers, it will see in
this study how to formulate and implement policies that will not escalate
product prices. It should also see the need to create conducive business
environment for producer so that they produce and sell their product as producer
will be assumed of its market shares and in the process generates revenue for
the government.
iv To
Academicians
It
would be as a reference material to future researcher.
1.11
Scope
of the study
This
study focuses on the impact of pricing policies in purchasing and consumption
of alcoholic drinks in Nigerian Breweries Plc Aba. The scope of this study also
shares the impact of different pricing policies and conducts a preliminary
analysis of the implications for interviewing in the market for alcoholic. However,
due to certain constraints under which the researcher finds herself in terms of
finance, distance and other constraints, the research work will be focused
mainly on Nigerian Breweries plc Aba in Abia state.
1.12
Conceptual
Definition of Terms
The following terms used in this study are explained
Price: This
is the amount of money that is given up to acquire a given quantity of goods
and services (Anyanwu A, 2000)
Profit: This
is the money that one male in business or by selling things, especially after paying
the cost involved. Oxford Advanced learner Dictionary, 2000)
Cost: This
is used as a base for determining the price of a product or services (Umeh,
2000).
Channel of
Distribution: This is referred to as the process by
which organization or individual along the route from producer to consumer.
(William and Micheal 1996)
Make-up: This
is an increase in the price of a product based on the difference between the
cost of producing it and the price it is sold at. Oxford Advanced Learners
Dictionary, 2000)
Middlemen:
A person or company that buys goods from the company that makes item and sell
them to somebody else. (Oxford Advanced learners Dictionary 2000)
Click “DOWNLOAD NOW” below to get the complete Projects
FOR QUICK HELP CHAT WITH US NOW!
+(234) 0814 780 1594
Login To Comment