Effect of pricing decisions on performance of small and medium enterprises in Kwara State.
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Date
2014
Journal Title
Journal ISSN
Volume Title
Publisher
Department of Accounting, Kaduna State University.
Abstract
The strategic nature of price determination has been trivialized by the SMEs in Nigeria as they jumped at any opportunity of temporary raw material scarcity or associate price hike to increase their product prices leaving the consumers with paying higher for products that remain the same in quality and quantity. This share lack of pricing and marketing strategies had led to constant strike actions and increase in prices by bakeries in Kwara State and thus propelled the need to evaluate the effect of pricing decisions on turnover of these bakeries which forms the fundamental objectives of this paper. The primary data used in this study were obtained through questionnaire administration on 100 purposively selected respondents from 20 registered bakeries in Kwara State while the secondary data were obtained from the records of these bakeries. The primary data were analyzed descriptively while the secondary data were analyzed using student t-distribution test of two mean and price elasticity of demand was conducted while Pearson Moment Correlation Coefficient was carried out to establish the degree of relationship between turnover and changes in pricing decision. The result reveals an insignificant increase in turnover /profitability as price of bread increase while no form of conventional pricing methods or marketing strategies is followed in pricing policy of the bakeries but they depend on the rule of thumb as well as their desire profit margin in fixing product prices (X1-X2=65.06, T=0.67 and R2=84%). More so, the demand for bread is inelastic as it has no close substitute. The study recommends that training of the bakery operators on conventional pricing and marketing strategies, while serviced of experts should be engaged in price determination with a view to keep cost of production under control and evolves appropriate prices that will increase their turnover and bring value to the consumers.
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Keywords
Pricing decision, performance, marketing strategy, turnover
Citation
Olaniyi, T.A., Abiola, W.O., Oluwatusin, R.G. & Sakariyahu, O.R. (2014): Effect of pricing decisions on performance of small and medium enterprises in Kwara State. KASU Journal of Accounting Research and Practice. 3 (1); 111-125