ATTENTION:
BEFORE YOU READ THE ABSTRACT OR
CHAPTER ONE OF THE PROJECT TOPIC BELOW, PLEASE READ THE INFORMATION BELOW.THANK
YOU!
INFORMATION:
YOU CAN GET THE COMPLETE
PROJECT OF THE TOPIC BELOW. THE FULL PROJECT COSTS N5,000 ONLY. THE FULL
INFORMATION ON HOW TO PAY AND GET THE COMPLETE PROJECT IS AT THE BOTTOM OF THIS
PAGE. OR YOU CAN CALL: 08068231953, 08168759420
IMPACT OF
PRICING POLICIES ON THE PROFITABILITY LEVEL OF AN ORGANIZATION
CHAPTER ONE
INTRODUCTION
1.1 BACK
GROUND OF STUDY
One of the
most crucial operating decisions management must make is establishing a setting
price for its products but this is quiet unfortunately that many firms are still mismanaging pricing causing lots of
money and anticipated profit to be unexplored and wasted. However in explaining
the importance of pricing, Egbunike (2007:83) sustained that setting the price
for an organizations product or service is one of the most difficult, due to
some number of variety of factors that must be considered. The primary decision
arises in virtually all types of organization, just to mention but a few of
them such as manufacturers set prices for their products, they manufacture,
merchandising companies set prices for their goods, service firms set prices
for such services as insurance policies, bank loans etc. A company’s survival
and profitability depends upon its pricing decisions, thus price is the only
element in the marketing mix that produce s revenue and thus ensures profit
ability (kotler and keller 2006:475) Price adopted by firms must be able to
cover all cost in the long run as well as to leave a profit margin to reward
management. The Price of a Product has a direct relationship with many
operations of the firm’s activities. A price decision will affect demand and
this in turn affects the revenue generated by the firm. Similarly, a firm which
makes profit has the propensity of attracting more new capital. This shows that
the public has confidence in the ability of the firm to yield return to them.
So, the performance of management is usually measured by the amount of revenue
it generates to satisfy the share holders of the organization.
It is
evident that management has a big responsibility before them in setting and
adopting the most advantageous pricing policy and the most effective profit
plan for their firms, since prices are not set arbitrarily therefore management
must focus on all the important factors in setting its price. Thus, it has
become imperative to investigate the effectiveness of pricing policy and profit
planning in Nigerian organizations.
1.2
STATEMENT OF THE PROBLEM
Hilton
(1991:201) observed that both the market forces of demand and supply and the
cost of production have a Significant bearing on determining prices. Equally he
explained that there are other variables that influences pricing decisions
according to him, this includes: Manufacturer’s pricing objective, economic
situation, level of competition, and availability of close substitute.For
pricing to be effective, firms must incorporate all these factors in selecting
the most advantageous price for it’s product. At times, firms are not in the
habit of considering these factors and this has led to the shutting down of
many factories, downsizing of workforce and in most cases, winding up of firm’s (Hilton, 1991:201).Profit plan are
made in form of budget and they help firms to forecast the level of profit,
cost and revenue, they intend to generate in order to gain competitive
advantage. Unfortunately many firms still do not prepare these plans, thus,
this has led firms undertaking unplanned ventures resulting in escalation and
inability of firms to foresee shortage in resources or finance or personnel
needed in the future operation of the firm. Where no plans exist, there will be
no basis for firm to compare or evaluate their performance. Based on the
foregoing, the problem of this study is in three (3) folds. Firstly, the
failure of some firms to incorporate factors such as economic situation, level
of competition, availability of close substitute, among others in their pricing
decisions, may have resulted to the minding up of several small scale
manufacturing firm (SSMF) in Nigeria. Secondly, it has been shown in accounting
literatures that profit planning is a potential tool for achieving profit
objectives and efficiency. which small scale manufacturing firms seems to
ignore the use of profit planning ( or budget) in their operations. This has
led to far reaching problem such as huge unforeseen operating cost as well as
shortages in good financial and human resources.
Thirdly, and
most importantly, the problem that stringated this study is the knowledge gap,
that is, it looks as if small scale manufacturing firms are not aware that
pricing policy and profit planning impact positively on profit performance.
1.3 OBJECTIVE OF THE STUDY:This research is
aimed at achieving the following objectives.
(i) To establish the efficiency and
effectiveness of pricing policy in selected firms.
(ii) To find out the various factors that
influence pricing decisions in selected firms.
(iii) To determine if pricing decision (s) can make
an impact on a firm’s profit and efficiency.
(iv) To investigate if profit planning (or
budgeting) can result in cost reduction and increased profit performance.
(v) To make recommendation based on the
findings of this study to the management of firms.
1.4 FORMULATION OF HYPOTHESES.
To achieve
the objective of the study, the following hypotheses are formulated.
HYPOTHESIS
ONEHo – Pricing Policy of a firm has no influence on the degree to which a firm
can achieve optimum profitability.
Hi – Pricing
Policy of a firm has influence on the degree to which a firm can achieve
optimum Profitability.
HYPOTHESIS
TWO
Ho –
Effective profit planning has no effect on the profit performance of a firm.
Hi-
Effective profit planning has a major effect on the profit performance of a
firm.
1.5 SCOPE AND LIMITATION OF THE STUDY
Since no
single research can validly cover all areas of the topic the researcher tends
that thrust of this project will be limited within the scope of how
management’s performance of small scale manufacturing firms are influenced by
the choice of its pricing policy and its profit planning. The study will focus
primarily on small scale manufacturing firms
in Anambra state Awka to be precise and its environs from where the
manufacturing firms of this study are drawn to enable the researcher carryout
on extensive investigation on this subject. The companies to be studied are:
Crescent spring waters Awka and winco foam limited Agu Awka.
1.5.2 LIMITATION OF THE STUDY
The
researcher is limited by time constraints. Since the semester is very short and
has a bulk of academic exercise. The researcher is also constrained by
unavailability of funds required for an extensive research of this magnitude.
Finally and
importantly, most small scale manufacturing firms that were studied lack
adequate and organized accounting and decision making system, poor organizational
chart and structure also their general unwillingness to corporate or give out
information, all, these married the effectiveness of this research.
1.6 SIGNIFICANCE OF THE STUDY
This
research will serve as a guide to firms in setting the most advantageous
pricing policy giving its individual unique situation which will enhance
profitability in the short and long run situation. It will help them to avoid
choosing arbitrary prices without considering its distinctive situation and
important factors. It will serve as a guide in choosing pricing strategy which
strikes a balance between what the consumers wants to pay for a product and the
price the firm is willing to sell; also this research will expose them (the
firm) to the need for accounting information in carrying out this decision. The
research work will also be useful for the economy in the sense that if firms
have substantial control over price setting, then their pricing behaviour can
influence national output/income and hence community welfare.
Finally, the
research work will be useful for those carrying on further research on this or
related topic.
1.7 DEFINITION OF TERMS.
PRICING
POLICY: It is a guiding philosophy or course of action designed to influence
and determine pricing decisions. Pricing policies set guidelines for achieving
objectives.
PROFIT PLAN:
The profit plan is the operating plan detailing revenue expenses and resulting
to net income for specific period of time. It is the firm’s optimal plan in the
light of management expectation in future.
COST:
Expenses incurred to procure something which may be labour, material,
facilities or resources
EFFICIENCY:
Ability to work or produce well, without wasting time or resources.
EFFECTIVENESS:
Producing the intended result.
FIXED COST: Cost
that remains constant within a level of production. It does not vary with
production.
MARKETING
MIX: The combination of the far primary element that comprises a company’s
marketing programme which are price, product, place and promotion
(advertising)/
VARIABLE
COST: They are cost that varies with level of production. They are constant per
unit but vary with total production.
STRATEGY:
Strategy is a general statement of the vary in which an organization plans to
achieve its objectives. The strategy contains the basic approach but not the
details of how a firm plans to attain its objective.
SHORT RUN:
It is a period of time that is less than one year. The firm is unable to vary
all its input in this span of time.
LONG RUN: It
is a period of time sufficiently long to allow the firm to change the physical
amounts of all resources in its production. It is usually five (5) years and
above.
HOW TO GET THE FULL PROJECT
WORK
PLEASE, print the following
instructions and information if you will like to order/buy our complete written
material(s).
HOW TO RECEIVE PROJECT
MATERIAL(S)
After paying the appropriate
amount (#5,000) into our bank Account below, send the following information to
08068231953 or 08168759420
(1)
Your project topics
(2)
Email Address
(3)
Payment Name
(4)
Teller Number
We
will send your material(s) after we receive bank alert
BANK ACCOUNTS
Account
Name: AMUTAH DANIEL CHUKWUDI
Account
Number: 0046579864
Bank:
GTBank.
OR
Account
Name: AMUTAH DANIEL CHUKWUDI
Account
Number: 2023350498
Bank:
UBA.
FOR MORE INFORMATION, CALL:
08068231953 or 08168759420
AFFILIATE
Comments
Post a Comment