EFFECTIVE PRICING AN ESSENTIAL FACTOR IN THE PROMOTION OF SALES
ABSTRACT
The proposed research topic is summarized as follows: Firstly, it is aimed at establishing a coherent and comprehensive definition of pricing, by carefully identifying the parameters. That determines pricing. These parameters profit expectation, market value of the production and government but a few. Also, the research work intends to establish the similarities and differences critically analyzing the element that determines the price of products. Finally, the research work equally analyses the various significance of pricing in the promotion of products sales and patronage. Also, the various roles of the government organization and other stakeholders in the fixing and enforcement of the pricing policy.
CHAPTER ONE
INTRODUCTION
1.1 Background of the study
The concept of pricing dated back from the pre-colonial era when the barter system of trading was still in co-operation. During this period, the price of goods and services were usually determined in equivalent goods or services. That is, an individual in need or wants of a certain product, will search for another individual that posses what he desires and at the same time is willing to accept what he has in exchange for the other. However, after a long period of practicing the barter system, the associated limitations were discovered. These includes, lack of coincidence of two different products and most time the problem of durability of transportation of the exchanged items.
Due to the above stated problems, the system of pricing knows as “monetary system of pricing” was introduced to take care of the above-mentioned problem and enhance practice of sales, during marketing business, trade and other transactions. Within this context, the concept of effective pricing in over research issue of deliberation and how this has contributed to sales, using lever brother Nig. Plc Lagos, as our reference point.
1.2 Statement of problem
The present research topic posses the following problems. Firstly, the problem of determining the actual market prices of different products. Secondly, the problem of abnormal high prices, that are usually introduced by greedy marketers. Thirdly, the problem of high cost of raw materials that often creates high price situations. Also the research topic presents the problem of selling below actual price due to excessive negotiation between the customer and marketer. Finally, the problem of increased cost of production, that often causes unexpected increase in the prices of commodities.
1.3 Purpose or Objective of the study
The present research topic is carried out to achieve the following objectives.
Firstly, to educate marketers on the importance of accepting market prices of products as the way forward towards improved sales.
Secondly, to expose the various elements that determines the prices of various products.
Thirdly, to educate the prospective buyers or target markets on the need to equate price with quality of products when they are presented with these products.
Also, to showcase pricing as an organizational centered initiative rather than human centered initiative.
Finally, to create opportunity for marketers to enlighten their customer about the various price specification for their products which will help to kick-start the process of selling.
1.4 Research Questions
During the course of this research work, the following questions were, raised and answers.
(i) To what extent has price contributed to the profit maximization of the marketing organization?
(ii) What are those factors that determines the price of a given commodity?
(iii) What is the role of the marketing organization in determining the prices of their commodity?
(iv) To what extent does inflation and deflation affects the price of commodities?
(v) What are the implication of abnormal increasing in prices of products?
1.5 Hypotheses
The following hypothetical statement were tested during the course of the research work.
H1: Lever brother Nig. Plc Lagos operates an effective pricing mechanism for their products.
H2: Research has also shown that effective pricing is one of the tools that is used by the said organization for strong competition in the marketing environment.
1.6 The scope (Delimitation) of the study
The scope of this research work is effective pricing inb the marketing and sales of organizational products, with special reference to Lever brothers Nig. Plc, Lagos. The recent investigation that was conducted in the said organization shows that it posses the features for the discussion of the concept of “effective pricing”.
1.7 The significance of the study
The present research work has the following significance:-
(i) If creates the opportunity for appropriately defining the concept of pricing as it affects marketing activities.
(ii) It provides the basis for sales promotion.
(iii) Pricing concept enables prospective marketers to understand the degree of profitability realizable from various products.
(iv) The research work exposes the various parameters/concepts that determines the prices of products.
(v) It also educate marketers on the concept of price fixing and implementation.
1.8 Defining of Terms
During the course of the research work, the following terms were applied and they are defined as follows:
Price, cost of production, profit, sales, marketing, marketing environment, competition, market price, government policies and inflation to mention but a few. Briefly defined:
(i) Price: This is the monetary value of a given commodity, at which it will be purchased.
(ii) Cost of product: This is the total cost of acquiring and transforming raw materials into finished products.
(iii) Profit:- This is the financial reward that is accruable to an organization after marketing their products.
(iv) Sales: The exchange of product for money.
(v) Marketing: The exchange of a given product at a given price, place and promotional situation, between the marketers and the target market.
(vi) Marketing environment: This is the environment where marketers and buyers interact to achieve their respective objectives.
(vii) Competition:- This is the situation where the marketer struggle with other marketers to take the lead in the marketing environment.
(viii) Market price: This is the market monetary value of commodities.
(ix) Government policies: This is the decision or resolutions of the government concerning the fixing and implementation of pricing.
(x) Inflation: This is the abnormal increase in the prices of commodities. Which makes few commodities been cased by too much money.
