PRICING STRATEGIES ADOPTED IN MARKETING OF ALLUMINIUM PRODUCT IN NIGERIA
How much do you think we ought to sell it for? This is the question frequently asked by the executives who have the responsibility for pricing the products, or service they produce.
How much do you think people will pay for this item? or how much should we ask for it? The question would then be in accordance with the generalization that prices are always on trial. A price is simple an offer on experiment to test the price of the market.
If customers accepts the offer, this price is fine, if the reject it, the price usually will be changed because in marketing a product, it must involve two or more people one side will be the offer, while the other will accept to the offer, if this does not exist it then means that nothing has takes place if the price is not accepted by both party. The price will either be changed or the product will be face out from the market by other forces.
Before being concerned with actual price determination however, execution should understand the meaning and importance of price and they should decide on their pricing goals.
To cap it all, pricing is considered by many to be key of activities within the capitalistic system of real enterprise.
The market price of a product influence wages, rent, interest and product, that is price of a product influence the pay for the entrepreneurship.
Price thus is a base regulator of the economic system because it influences the allocation of these factors of production.
High wages attract labour, high interest rates attract capital and so on.
In it role as an allocate of scarce resources price determine what will get, how much goods and services (demand).
Pricing takes an added importance during the inflationary period such as we have been experience for the past several years in the developed states.
Consumer confidence in the economic, consumer buying psychology an especially affected by price movement during inflation.
1.1 BACKGROUND OF THE STUDY
Before 2000, price of goods were very reasonable in Nigeria because of the oil boom.
Then her inhabitation were very much rich because she had much foreign reserves. There was full employment, full consummation and business was booming. At that time one can use a very little amount of money to roof a mighty house, how much do a sheet of alluminium cost them? Just N600.00.
But when the whole thing turned upside down in Nigeria, a sheet of alluminium now cost between N1,100.00 and N1,300.00 for 1meter as against N600.00 for 1meter in 1998, likewise all other commodities like rice, a bag that was costing N1,000.00 in 1998 now cost N7,000.00 a bag.
People especially public and civil servants manage to make end’s meet with their salaries. Most were living in great comfort but they could afford two square meals a day. And tide change inflation prices of most goods went up by more than 2,000%. Note many people talk or produce alluminium product either for personal use or sales purposes again, not bothering themselves for building or roofing a house.
Alluminium product has since assumed its price of place in many families as roofing was off the essential list. Now that the alluminium Company Ltd have found that they cannot have the last large; what do they intend doing? Most one still shy brining down their prices.
They do not want to be seen as having defeated by other competitors. They came out with one marketing mix variables pricing strategies because people do not seem to be in a hurry to buy over priced products and if the alluminium industries prefer to buy alluminium in the send, good for them, but we think that consumer can afford to want.
1.2 STATEMENT OF PROBLEM
A question which is worth looking at what guide companies in arriving at the price they set for their product? During the research study and discussion carried out with the Alluminium companies through one of the marketing officials, Mr. Akin O. Adegbemiro that took we round the company. It was obvious that they have a lot of problem which by the end of this research would having a lot of solution.
To start with, they do not have a uniform price for their products; that is the price that they sell their one meter of alluminium in south-south is different from those in the south-west and east and to the north of the federation.
More also they do not know how to use pricing strategy to meet up with their higher demand than supply. However, the price of their product is lower than other zinc for N1,500 in the market. To high pricing strategy for their product life cycle and pricing strategy with competitive situation.
1.3 PURPOSE OF STUDY
Planning the marketing job by a company involves setting a goal. Therefore, the purposes of this research are as follows;
i. To determine the uniform price for the marketing of alluminium throughout the federation.
ii. To show clearly how to use best pricing strategy (BPS) to meet up with their customer demand (because demand is higher than supply)
iii. To highlight pricing strategy for product life cycle starting from research and development to the end of the cycle and other stages like pricing strategies with competitive situation and so on.
iv. To show clearly, the benefits of the pricing strategy to the customer distributors, the company itself and the economy as a whole.
1.4 RESEARCH QUESTION
The research questions which will serve as a guide to the study are as follows;
- What type of pricing strategies are you using in marketing your alluminium product?
- Why did you decided to use pricing strategy for your product?
- What is your impression of the consumers on the current price of alluminium?
- Does the government having any control over the price of your alluminium product?
- What has been the response or reaction of consumers to the price of alluminium product?
1.5 SCOPE OF THE STUDY
This study is focused on the marketing of alluminium, only the investigation lovers “Pricing Strategies Adopted In Marketing Of Alluminium Industry Ltd (Asaba) Product”.
1.6 SIGNIFICANCE OF THE STUDY
This project work is a contribution of the various discussions and writing on issues of the pricing strategy, though not an expert opinion, it is significant in many ways. At least it will through more light in pricing strategy for aluminum product, it study will also immense, benefit to the marketing executives of alluminium industry for they set more facts on pricing.
To the scholars of marketing in particular, the research will benefit who need to be acquainted with importance and effect of pricing strategy for manufacturer, distributors, customers and government and for reference purposes too.
1.7 LIMITATION OF THE STUDY
The Major limitation of the project work is the short period within which to complete the study. Also to cover all branches of the company nation wide will be an uphill task for the researcher.
Furthermore, the food needed to conduct the research work constitute impediment to the research study especially in this area of high cost of research materials.
1.8 OPERATION DEFINITION OF TERMS
In order to achieve clarity and avoid misconceptions, an attempt will be made here in this study.
This is a plan that is intended to achieve a particular purpose.
This refer to the act of deciding how much to change for a product.
These are the persons who buy goods or use services.
This is the goods on service that can be transform out of basis combination of the factor of production.
Factors of Production
Land: This is the free gift of nature, it comprises of the resources of nature e.g. sunshine, rain, sea, rivers, and materials.
Labour: This is the physical and mental ability of man. Put into production.
Capital: This is man made wealth need for fortune production or to create other wealth.
Entrepreneurship: This is an investor, he is the person who has power (capital or money) to start an organisation
Competitor: This is a person or an organisation, that is competes against others.
Generalization: This can be define as a general statement that is based on only a few facts.