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THE EFFECT OF PRICING ON THE CONSUMPTION OF PHARMACEUTICAL PRODUCTS IN NIGERIAN HOSPITALS

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THE EFFECT OF PRICING ON THE CONSUMPTION OF PHARMACEUTICAL PRODUCTS IN NIGERIAN HOSPITALS

ABSTRACT

Price is seen as the amount for which a product, service or idea is offered for sales regardless of its worth or value to potential buyers. Where as pricing in the other hand is the process of determining this value and converting it into monetary terms and then making comparison in the marketplace. Factors like customers demand, competitors activities and production cost, are often the major determinants of price.

The study of A.B.U. Teaching Hospital was undertaken so as to have an insight on how price affect the consumption of Pharmaceutical products. The major findings of the research are that, the Hospital  Pharmacy Shop does not set price arbitrary and that price has little effect on the consumption of Pharmaceutical products. However the study revealed that availability and quality of drugs has a far greater effect on the consumption of a pharmaceutical product.

Apart from providing a basic framework of research on the organization understudy, this research has highlighted the general view of pricing. Thus the findings are likely to be of great interest or importance to both the hospital management and the pharmacists.

TABLE OF CONTENTS

Title Page
Declaration ii
Certification iii
Dedication iv
Acknowledgement v
Abstract vi

CHAPTER ONE

1.0 Introduction 1
1.1 Statement of the Problem 3
1.2 Objectives of the study 3
1.3 Significance of the Study 4
1.4 Hypothesis 5
1.5 Scope and limitation of the study 6
1.6 Research Methodology 7
1.7 Definition of terms 7
Footnotes

2.0 CHAPTER TWO – REVIEW OF RELATED LITERATURE



2.1 Definition of Price 10
2.2 Nature of Pricing 13
2.3 The Theory of Price 14
2.4 The Role of Price 16
2.5 The Importance of Price 17
2.6 The Importance of pricing Decisions 19
2.7 The Objectives of Pricing 21
2.8 Pricing Policies 25
2.9 Procedure in Price Determination 31
2.10 Pricing Determinants 34
2.11.1 Approaches to Product Pricing 35
2.11.2 Pricing Growth Stage Product 35
2.11.3 Pricing Products in Decline State 36
2.12 Initiating and Responding to Price Changes 36
2.12.1 Price Cuts 36
2.12.2 Initiating price Increase 37
2.12.3 Buyers reactions to price changes 39
2.12.4 Competitors reactions to Price Changes 40
2.12.5 Respondent to Price Changes 40
2.13 Method of setting Prices 43
2.13.1 Mark-up Pricing 43
2.13.2 Target Return Pricing 44
2.13.3 Perceived Value Pricing 44
2.13.4 Going Rate pricing 44
2.13.5 Scaled Bid Pricing 45
2.14 Factors Influencing Price Determination 45
2.14.1 Demand for the Product 46
2.14.2 Target share of the Market 46
2.14.3 Competitive Reactions 46
2.14.4 Cream-skimming Pricing Versus Penetration Pricing 47
2.15 Other part of the marketing Mix 48
2.16 Others 49
2.17 Types of Pricing Strategies 49
2.17.1 Skimming Pricing Strategies 49
2.17.2 Penetration Pricing Strategy 51
2.17.3 Meeting Competition Strategy 52
2.18 Pricing Adjustment 52
2.19 Discounts 52
2.19.1 Allowances 54
2.19.2 Legal issues in pricing adjustments 55
2.19.3Pricing Discrimination 55
2..2 Legality of Quantity Discounts 57
2.3 Legality of Trade Discount 57
Footnotes 58

CHAPTER THREE – RESEARCH METHODOLOGY

3.1 Method of data collection and analysis 61
3.2 Questionnaires 61
3.3 Genesis and Organization of A.B.U.T.H. Zaria
Pharmacy Shops 62
3.4 Operations of A.B.U.T.H. Pharmacy Shops 64
Footnotes 69

CHAPTER FOUR

4.0 Data Presentation and Analysis 70
4.1 Data Presentation 70
4.2 Data Analysis 70

CHAPTER FIVE

5.0 Summary, Conclusion and Recommendation 84
5.2 Summary and Conclusion 84
5.3 Recommendation 85
References 87
Appendix I
Appendix II
Appendix III

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