ABSTRACT
This project aims at examining pricing strategy and profit planning as a general phenomenon in an organization that needs urgent attention especially the profit making organization.
This study is mainly focused on whether effective pricing policy rely more on the estimate of likely demand than knowledge of lost in order to make a logical profit planning decision in a manufacturing company (case study of Brazilian hair). A test was conducted based on the above among some respondents of the case study and it was discovered that out of the 35 respondents that responded 20 supported that effective pricing policy really depend on likely demand of the customers than the
Knowledge of cost estimate which is represented by 15 respondents out of 35. The results really show that the pricing policy and decision of the users of Brazilian hair rely more on the likely demand than knowledge of cost. The above illustration now made the researcher to conclude that any organization that want to remain in business survive and grow faster more than its equals must take into account and cognizance of customer’s demand and needs before arriving at the final pricing policy and decision.
CHAPTER ONE
1.0 INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Pricing is a strategy for selling the product or services of a new business, it is a reflection of how serious a company is in meeting the competition ahead. A good pricing strategy plan is backed by carefulling collected market, consumer and competitor information, sometime citing professional device.
Pricing strategy plan will help to improve your chances against more experience competitors and newly emerging once the plan enable you to recognize and take action on any trends and consumer preferences that other companies have overlooked, and to develop and expand your own select group of loyal customers new and into the future. The plan will also show to other that you have carefulling considered how to price a product that is innovative, unique and marketable- improving your chance of stable sales and profits –reasons for investors to financially back you.
Setting a price for new product is usually difficult because as a product passes through it life cycle, the introductory stages is especially challenging company developing a new product face the challenge of selling for the first time. They can choose between the three major pricing strategy which include market skimming pricing, market penetration pricing and market demand curve. The price of new product has a way of determining the acceptance or rejection of the product. Thus, it has become imperative to investigate the influence of pricing strategy on the sales of new product using Brazilian hair as a case study
1.2 STATEMENT OF THE PROBLEM
Price is seen as a perception of value. Consumers mostly beliefs that the price of goods and services determine the quality in the product. Business organization do not seems to appreciate the use of a good pricing system in the introduction of their new product.
The problem that this work will look at are:
i. Knowing if the pricing strategy of the organization affects the present economic situation in the environment.
ii. Examining if effecting pricing strategy affect consumer behaviour.
iii. Finding out if profit planning result in cost reduction
1.3 RESEARCH QUESTION
1. Dose the pricing strategy of the firm affect the present economic situation in the country?
2. Does effective pricing strategy affect the consumer behaviour through its product?
3. What influence does pricing strategy have on new product?
1.4 RESEARCH HYPOTHESIS
To achieve the objective of the study the following hypothesis are formatted.
1 Ho: Pricing strategy does not affect the buying habits of consumers in the country.
H1: Pricing strategy affects buying habits of consumer in the country-.
2 Ho: Effective pricing decision does not rely more on the estimate of likely demand than knowledge of cost of Brazilian hair.
Hi: Effective pricing decision rely more on the estimate of likely demand than the knowledge of cost of Brazilian hair.
1.5 PURPOSE OF THE STUDY.
This research is aimed at achieving the following purpose:
1. To know the influence, pricing strategy has on new product
2. To establish the efficiency and effectiveness of pricing Strategy in selected organizations
3. To find out the various factors that influence pricing decision in selected organization.
4. To determine if pricing decision can make an impact of a firm’s profit and efficiency.
5. To investigate if profit planning can result in cost reduction and increased profit performance.
1.6 SCOPE OF THE STUDY
In an attempt to achieve the predetermined objective, this research work will be limited with the scope of how management’s performance of manufacturing firms are influenced by the choice of it’s pricing strategy and it’s profit planning. The study will focus primarily on Brazilian hair.
1.7 SIGNIFICANCE OF THE STUDY.
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