EFFECT OF PRICE ON CONSUMERS’ PATRONAGE OF MARY KAY PERFUME IN ENUGU METROPOLIS
Price plays a very important role both within the organization and in the national economy. For example, if consumers accept a product at a fairly high price, the producer will be certain of covering his cost as well as paying the staff well and still making a humble profit to keep the business going. On a macro scale, prices of products in an economy determine the level to which the citizens will be able to satisfy their needs for goods and services, where the general price level is high; we speak of an inflationary trend in the economy. People obtain products at exorbitant process and they are not sable to meet their needs of these products fully. The aim of this research work is to appraise the effect of price on consumers’ patronage of Mary Kay perfume in Enugu metropolis. For a successful completion of this research work, the researcher made use of both primary and secondary methods of data collection for information gathering, primary data were collected through.
a) Questionnaire administration
b) Oral interview, and
c) Personal observation
Second data were collected through
a) Periodicals and journals
b) Textbooks and lecture and note books and
The data collected were presented in tables and analyzed with simple percentage. Summary of findings, recommendations and conclusions were as well as drawn as regards to this research work.
TABLE OF CONTENTS
Title page - - - - - - - - i
Approval page - - - - - - - - ii
Dedication - - - - - - - - iii
Acknowledgement - - - - - - - iv
Abstract - - - - - - - - - v
Table of contents - - - - - - - vi
CHAPTER ONE: INTRODUCTION
1.1 Background of the study - - - - 1
1.2 Statement of the problem - - - - 5
1.3 Objectives of the study - - - - - 7
1.4 Scope of the study - - - - - - 7
1.5 Formulation of hypotheses - - - - 8
1.6 Significance of the study - - - - - 9
1.7 Definitions of terms - - - - - 10
CHAPTER TWO: LITERATURE REVIEW
2.1 Overview of pricing - - - - - - 11
2.2 Determinants of price - - - - - 13
2.3 Pricing structure and administration - - 22
2.4 Pricing strategies - - - - - - 26
2.5 Price discrimination - - - - - 30
2.6 Methods of setting prices - - - - 33
2.7 The effect of pricing on consumers’ patronage of Mary Kay perfume - - - - - - - 38
CHAPTER THREE: RESEARCH DESIGN AND
3.1 Research design - - - - - - 41
3.2 Sources of data - - - - - - 42
3.2.1Primary sources of data - - - - 42
3.2.2Secondary sources of data - - - 43
3.3 Population of the study - - - - - 43
3.4 Sample size determination - - - - 44
3.5 Questionnaire allocation and distribution- - 46
3.6 Method of data treatment and analysis - - 48
3.7 Limitations of the study - - - - - 49
CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS
4.1 Presentation of data - - - - - 50
4.2 Presentation of demographic characteristics - 51
4.3 Analysis based on key research questions - 54
4.4 Testing of hypothesis - - - - - 65
CHAPTER FIVE: SUMMARY OF FINDINGS, RECOMMENDATION AND CONCLUSION
5.1 Summary of findings - - - - - 75
5.2 Recommendations - - - - - - 77
5.3 Conclusions - - - - - - - 79
Bibliography - - - - - - - 81
Appendix - - - - - - - - 83
1.1 BACKGROUND OF THE STUDY
Perfume product is very important to the health of the human being. It is used for preserving the odor. This product has to be appropriately pricing in order to attract customer patronage and increase profitability.
According to (Kotler, 1996: 46) price is the amount of money customers pay for the product or service and the time a place of change.
(Mmamel, 1994: 10) in the quality renew of marketing stated that price is the exchange value of goods/services and the value of an item is what it can be exchange in the market place, every product and service has its price. It is through price and payment that firms recover their cost of production and active their margin of profit.
Pricing is the monetary expression of value is created on utility, utility is an expression of usefulness while usefulness is based on the potential for need and want satisfaction value and utility are culturally based while needs and want-cultural, psychological, sociological and physiological based, therefore price as an ultimate expression of needs and want satisfying potential of an items of product or services which has cultural psychological economic implication on market.
(Edoga Ani, 2000: 319) noted that price as perceived quality increase, value increase. Also for a given price, value decrease when perceived quality decrease. For some product price itself influences the perception of quality and ultimately value to consumers. This includes toilet soaps.
Pricing is an important and compete element of the marketing mix and generate the highest level of external interference.
It is a major determine with volume of goods and services available for the consumer in any economy.
Therefore, forms especially those on profit business has to choose with the contain of the environmental variables both external and internal pricing policies and techniques which are available to achieve its organizational objectives.
The importance of price in the marketing of Mary-Kay perfume cannot be over emphasized. If an organization wants to maximize its net profit, the right price must me selected for its products price in goods may either be too high or too low to be good. When the price and changed are two high the size of the market for that particular product may be unnecessarily restricted and if the right price where used.
The size of net profit is directly related to the effectiveness of price because price usually causes change in market demand for a given product and in turn it revenue and net profit.
(Monroe 1994: 210) Noted that the consumer perception of product quality very directly with the price, the higher the price the better the quality is preferred to be. In the words of (Adirika, Ebue & Nnolim 1993: 25) without price there can be no marketing, product may be marched with market but only when buyers or sellers agree on price, buyer or a seller may propose a price but it is not effective unit price is accepted by the owner.
In the view of the complex nature of price and important to customers patronage decision the researcher in the study critically examine the effect of piecing on consumer patronage of Mary-Kay perfume in Enugu metropolis.
1.2 STATEMENT OF THE PROBLEM
The high mortality ate of manufacturing business especially those firms in the beverages industries in our country Nigeria is a source of concern to the management of business organization and the society in general.
It seems that these forms do not adopt appropriate pricing strategies in the pricing of their products.
Today, one can see small manufacturing firms spring up in the city in the guise of manufacturing perfume. Some of these firms after a few months/years of operation start to experience low sales low profit as a result of poor customer patronage caused partly by failure to adopt appropriate pricing strategies.
A situation where manufacturers of consumers products and services continue to experience low sales volume or an eventual close up of business as a result of low profit margin arising from the adoption of wrong pricing strategies calls for investigation. The study seeks to find out what pricing strategies are used by as well as those manufacturing firms in the Mary-Kay industry and how far they have helped in goal accomplishment.
A delegated economy like one is an attempt to make quick money or an excess profit. Perfume industry especially soap manufacture usually increase a price of their products indiscriminately.
This is no doubt affect the patronage of customers it has also been discovered that the price of some Mary-Kay perfume are not commensurate with the quality of the product.
The pricing for the product calls for serious questioning.
1.3 OBJECTIVES OF THE STUDY
1) To determine whether the pricing system of Mary-Kay Perfume Company attract customers.
2) To find out the problem associated with the pricing system of Mary-Kay perfume.
3) To determine the effort of pricing system on the profitability of Mary-Kay perfume.
4) To see out how the companies fix their change
5) To make appropriate recommendation on how to improve on the pricing system of the product.
1.4 SCOPE OF THE STUDY
This research was undertaken to examine effect of pricing on consumer patronage of Mary-Kay perfume in Enugu metropolis.
However in the view of limited resources, time and other constraints emphasis was placed.
1.5 FORMULATION OF HYPOTHESES
Ho: Pricing system adopted for Mary-Kay perfume does not attract customers.
Hi: Pricing system adopted for Mary-Kay perfume attract customers.
Ho: Pricing system of the companies does not lead to increased profitability of the companies.
Hi: Pricing system of the companies lead to increased profitability of the companies.
Ho: Pricing system adopted for the product does not lead to customer repeat patronage.
Hi: Pricing system adopted for the product lead to customer repeat patronage
1.6 SIGNIFICANCE OF THE STUDY
The study is not only an academic exercise, it will have a substances benefit to the researcher. It will lighten the researcher knowledge, in research writing on pricing strategies adopted by Mary-Kay industries.
It will be immense benefit to the researcher or readers who will find the study as a source of literature review.
Mary-Kay performs manufacture and other related firms will find the write up very useful. It will help them to know to fix prices in their service/product.
The government also will equally benefit from the study since they equally involve in marketing perfume.
1.7 DEFINITION OF TERMS
1) PRICE: Is the monetary expression of value.
2) MARKETING: The process of identifying anticipating and satisfying customers needs and wants, through exchanged needs.