Influence of Pricing Strategy on the Sales of a New Product: A Case Study of Gumalti Super Store Maiduguri Borno State
Chapter One
Objective of the study
The objectives of the study are;
- To know the influence, pricing strategy has on new product
- To establish the efficiency and effectiveness of pricing Strategy in Gumalti super store, Maiduguri, Borno state
- To find out the various factors that influence pricing decision in Gumalti super store, Maiduguri, Borno state
- To determine if pricing decision can make an impact of a firm’s profit and efficiency.
- To investigate if profit planning can result in cost reduction and increased profit performance.
CHAPTER TWO
REVIEW OF RELATED LITERATURE
Price strategy and retail performance
Price perception has a significant impact on consumer satisfaction, which determines performance in retail sales and consumer loyalty. Different dimensions of price perception and potentially can lead to customer satisfaction in addition to simple product price level. In a retail context, additional dimensionsinclude, for example, value for money and price fairness, convenience and price perception and mental processing the price833 . However, not only generally important to explore the power relationship between these dimensions and satisfaction, optimal strategy, but it is essential to identify asymmetric effects in these relationships. For example, based on opponent-process theory assumes that some dimensions of price perception, such as price fairness, are mandatory requirements. If these demands are not met, customers will become very unhappy, however, their fulfillment will not actually increase satisfaction. In contrast, a good performance in other dimensions may not come by itself. Underperformance in these dimensions could lead to dissatisfaction, but a good performance will increase satisfaction significantly. Low performance could not lead to dissatisfaction, but a good one rise notably the satisfaction. Knowing these asymmetric effects is extremely important because it helps retail managers to allocate resources to different performance dimensions. Retailers must be aware that price requirements must be met to a basic level and that their value must be fulfilled. A modern price policy must protect consumer perception on choosing the best place to buy for their family. Consumers face prices that’s hard to pay tend to buy elsewhere. Many consumers get confused by the pricing policy without having an understanding and only reacting to competition, prices or marginal goals. Even if some consumers are capable of saying why they are confused in retail trade environmental , the study done by the Wharton Business School indicates that consumers rely on three references points when they decide what they think is a fair retail price:
- How much does the object cost in the past?
- How much the rivals ask for same object?
- Their perception about selling costs of the same objects
Considering other areas for business improvement, development and implementation of strategic pricing schemes can produce higher repercussions compared with the of loss control efforts. Teachers at Wharton, Z. John Zhang and Jagmohan S. Raju had made an important statistic in a recent research paper: a 1% reduction in fixed costs improves profitability by 2.3%; a 1% increase in volume will result in a 3.3% increase in profit; a 1% reduction in variable costs will prompt a 7.8% rise in profit; but a 1% hike in pricing can boost profitability by 11%. 834 So far, satisfaction of the retail price has not been addressed in detail in the international marketing literature. Only a few researchers have discussed issues related to service satisfaction price. Therefore a satisfaction price definition has been derived for many common projections of client’s contentment.
CHAPTER THREE
RESEARCH METHODOLOGY
Research design
The researcher used descriptive research survey design in building up this project work the choice of this research design was considered appropriate because of its advantages of identifying attributes of a large population from a group of individuals. The design was suitable for the study as the study sought influence of pricing strategy on the sales of a new product
A case study of Gumalti super store Maiduguri Borno state
Sources of data collection
Data were collected from two main sources namely:
(i)Primary source and
(ii)Secondary source
Primary source:
These are materials of statistical investigation which were collected by the research for a particular purpose. They can be obtained through a survey, observation questionnaire or as experiment; the researcher has adopted the questionnaire method for this study.
Secondary source:
These are data from textbook Journal handset etc. they arise as byproducts of the same other purposes. Example administration, various other unpublished works and write ups were also used.
Population of the study
Population of a study is a group of persons or aggregate items, things the researcher is interested in getting information Influence of pricing strategy on the sales of a new product
A case study of Gumalti super store Maiduguri Borno state. 200 staff of Gumalti super store Maiduguri Borno state was selected randomly by the researcher as the population of the study.
CHAPTER FOUR
PRESENTATION ANALYSIS INTERPRETATION OF DATA
Introduction
Efforts will be made at this stage to present, analyze and interpret the data collected during the field survey. This presentation will be based on the responses from the completed questionnaires. The result of this exercise will be summarized in tabular forms for easy references and analysis. It will also show answers to questions relating to the research questions for this research study. The researcher employed simple percentage in the analysis.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
Introduction
It is important to ascertain that the objective of this study was to ascertain Influence of pricing strategy on the sales of a new product. A case study of Gumalti super store Maiduguri Borno state. In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges of Influence of pricing strategy on the sales of a new product
Summary
This study was on Influence of pricing strategy on the sales of a new product.
A case study of Gumalti super store Maiduguri Borno state. Four objectives were raised which included: To know the influence, pricing strategy has on new product, to establish the efficiency and effectiveness of pricing Strategy in Gumalti super store, Maiduguri, Borno state, to find out the various factors that influence pricing decision in Gumalti super store, Maiduguri, Borno state, to determine if pricing decision can make an impact of a firm’s profit and efficiency and to investigate if profit planning can result in cost reduction and increased profit performance. In line with these objectives, two research hypotheses were formulated and two null hypotheses were posited. The total population for the study is 200 staff of Gumalti super store, Maiduguri, Borno state. The researcher used questionnaires as the instrument for the data collection. Descriptive Survey research design was adopted for this study. A total of 133 respondents managers, customer care officers, marketers and sale reps were used for the study. The data collected were presented in tables and analyzed using simple percentages and frequencies
Conclusion
There are many factors that impact the sales of a product. Timing of product introduction was considered one of the important considerations for gaining the initial market share. For keeping the acquired market share once gained, strategies that govern economic factors, market trends and product quality are considered important. The paper in general provides a number of such “pricing strategies” and “timing strategies” for moving the products faster into the marketplace. Economic factors such as recession, high inflation, or high interest rates can change (increase or decrease) this balance. Market trends such as annual seasonal trends or fads could also lengthen or shorten the sales volumes. An example is clothing styles, which are usually short-lived. The effect of quality or “perceived quality of the product” can also have a very adverse influence in determining its market share. In many of those situations, “timing strategy” by itself such as early introduction is not enough. Both “pricing strategies” and “timing strategies” are required to maintain or to keep a good balance between the “initial market share” and “continued market growth.”
Recommendation
The most effective pricing strategy to reduce product costs and thus increase profitability whenever such a strategy is used. They should also adopt ways to implement their pricing strategies better compared to competitor firms. They should also ensure that the strategies they adopt help them discourage competition and focus more on both acceptance and profits
References
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- Ahmed, N., Zulfqar, A. &Ahmad, U. (2011). Determinants of Performance: A Case of life Insurance Sector of Pakistan International Research Journal of Finance and Economics ISSN 1450-2887 Issue 61 (2011).
- Akerlof, G. (1970).The Market for Lemons. Quarterly Journal of Economics 84 : 488-500.
- Andersen,T. J. (2008h).The Performance Relationship of effective Risk Management: Exploring the firm-specific investment Rationale. Long Range Planning 4(12) 155-176
- Bain, J.S. (2001).Relation of Profit Rate to Industry concentration: American manufacturing, 1936 – 1940, Quarterly Journal of Economics, 65: 293-324.
- Bain, J.S.(1996).Barriers to New Competition, Their Character and Consequences in Manufacturing Industries (Cambridge, MA: Harvard University Press).
- Bajtelsmit, V. L.&Bouzouita, R. (1998).Profit and Concentration in Commercial Automobile Insurance Lines .Journal of Insurance Issues 21(2) 175-182
