INFLUENCE OF PRICING STRATEGY ON THE SALES OF NEW PRODUCTS
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INFLUENCE OF PRICING STRATEGY ON THE SALES OF NEW PRODUCTS
CHAPTER ONE INTRODUCTION
Background of the study.
In recent years, the world has seen a significant rise in the pricing of critical commodities such as energy and agriculture. For example, from 2006 to 2008, the average global price of oil increased by 110 percent, rice by 217 percent, wheat by 136 percent, maize by 125 percent, and soybeans by 107 percent.
The economic impact on enterprises, households, and entire economies has refocused attention on the scarcity of natural resources and the best method to manage them in the twenty-first century.
Kotler (2004) defines pricing as the amount of money charged for a product or service, or the sum of the values that customers trade for the benefits of owning or utilising the product or service. The proper price should suit both the buyer’s and seller’s objectives.
According to the premise, if you set the right price, your consumers will be happier, your profit will increase, and your bottom line will improve. In truth, pricing is anything but easy.
Setting the optimal price is one of the most challenging decisions that managers must make. Most businesses are so lousy at it that they leave money on the table. Pricing is more than just setting prices.
Pricing is a technique for increasing sales volume and profit while incorporating and communicating essential information about the value the item provides to the client. Most organisations do not use price in such a rigorous manner (Monroe, 2003).
The importance of price decisions to Marketing Managers stems from the fact that when a company’s costs are lower than its competitors, it may offer a lower price to attract customers. Furthermore, price-cutting as a tactic to develop or maintain market share has
used by businesses. Consumers rely extensively on price as an indicator of a product’s quality, especially when making purchasing decisions with little information. Price is an important factor in influencing the consumption of new fast food products at any hotel in Uyo town and its surroundings because it influences its performance.
Statement of the problem.
According to Kotler (2004), price is the only revenue-generating aspect in the marketing mix. The remaining items indicate costs. Price is also one of the most adaptable aspects of the marketing mix.
Price, unlike product characteristics and channel commitments, is subject to rapid adjustment. At the same time, pricing and price competition are the most pressing issues for many marketing professionals. Another typical error is pricing that is more cost-oriented than customer-value-oriented.
Customers’ patronage of new fast food restaurants has decreased due to increased competition from various hotels that have developed in the same region, including Cicada Hotel, Hotel Comfy, among others that offer the same services and new fast food goods.
low prices like those offered at new fast food products restaurant, thereby making them favoured alternatives due to various or lower pricing charged. Furthermore, prices have fluctuated across different hotels and restaurants in order to attract more customers. Because of the industry’s homogeneity, measuring quality is difficult.
Pricing is also tough. Most fast food restaurants have had pricing issues since they have had to decrease their prices at times to attract and keep customers and at other times to raise their prices to cover costs.
This has resulted in clients staying or leaving, depending on the amount charged. This has impacted eateries since they cannot promise specific guests.
These, among other aspects, were the basis of this study, which sought to establish the impact of pricing adjustments on consumption of new consumer products in the context of fast food restaurants in Uyo.
The purpose of the study
The primary goal of this study was to investigate the impact of price changes on the consumption of new consumer products at fast food restaurants in Uyo, Akwa Ibom.
Objectives Of the Research
The study was directed by the following aims.
To assess the impact of sales-oriented pricing on the consumption of new fast food products in fast food establishments in Uyo.
To determine the impact of competition on price at fast food restaurants in Uyo.
To investigate the impact of sales promotions on the consumption of new fast food products in fast food restaurants in Uyo.
To study how product quality influences the consumption of new fast food products at fast food establishments.
Research Questions
The study provided answers to the following questions:
What impact does sales-oriented pricing have on the consumption of new fast food products at fast food businesses in Uyo?
How does competition affect price at fast food outlets in Uyo?
What effect does sales promotion have on the consumption of new fast food goods at fast food restaurants in Uyo?
How does the quality of the items influence the consumption of new fast food products at restaurants?
Significance of the Study
The study has implications for a variety of stakeholders, including the researcher, the University of Uyo and other schools of higher learning, as well as managers and business owners in the fast-moving consumer products market.
The study’s findings and recommendations are useful to the management of fast food restaurants and other businesses because they can lead to the development of appropriate mechanisms for determining product prices so that an appropriate price increase is implemented without negatively impacting sales.
The University of Uyo, as an academic institution, has a library where finished studies are kept for students and faculty members to reference.
The study will benefit students by allowing them to learn more about the effects of price on consumption of new food products; in other words, the study will add to the existing pool of information, making it beneficial to all other institutions of higher learning.
Limitations of the study
The study focused on the impact of price changes on consumption of a firm’s new consumer products, which may not be the only factors determining the firm’s growth or failure because other factors such as production, technology, financing, skilled labour levels, and supplier sources all contribute to growth.
Employees’ sources of knowledge were mostly based on memory status, which led to the exclusion of other significant facts. Low response from responders due to suspicion that useful information may leak to competitors.
Limitation of the Study
The study focuses on the impact of price changes on consumption of new consumer products at fast food restaurants in Uyo. Managers, supervisors, employees, and customers were among those who responded most frequently. The study was conducted in Uyo town from May to July 2013.
Definition of significant terminology utilised in the study.
New fast food products are foods that can be cooked and served rapidly.
While any meal with short preparation time might be regarded
Price is the amount of money that an object is offered or sold for.
Pricing strategy is a process used by marketers to come up with a pricing that is equal to the services given.
Strategy Criteria or Basis for Doing Things
Market skimming entails pricing a new product to maximise revenue for segments ready to pay high rates, resulting in fewer but more profitable sales.
Market penetration entails setting a low beginning price in order to swiftly infiltrate the market and gain a significant market share
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