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ABSTRACT
The study has examined pricing and distribution strategies of five manufacturing companies in Rivers State. The main objective is to examine pricing and distribution strategies of five manufacturing companies in Rivers State. The research design used descriptive and survey method of data collection. The sampling techniques is judgmental sample of respondents which comprise of both the senior and junior staffs of Nigeria bottling company, Nigeria engineering, Rivers vegetable oil LTD, Flour mills PLC. Nalin industries. findings revealed that there is a significant relationship between the pricing and distribution strategies adopted by manufacturing firms and firms performance. Based on the findings of the study summary, conclusion and recommendations are made that companies of both production of goods and services should acquire data on the price awareness of the wholesalers, retailers and consumers of the products or firms before their competitors so as to take greater care to ensure that its prices are not out of line with competitive products, companies should know when to raise a lower price, the companies also can be able to take advantage by under –cutting goals. However some condition should be exercise since competitors may retaliate, companies should adopt more of price discount and allowances as pricing strategies, companies should adopt more of penetration pricing strategies when introducing new product into the market, pricing strategies and policies should be changed as the situation of the market place changes.
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
This study investigates the comparative study of pricing and distribution strategies of five manufacturing companies in Rivers state. The capacity to pricing. Is recognizing today as one major way to gain competitive advantage in the marketing of product and services in particular and corporate world in general. A pricing firm would readily lead its support to new ideal novelty experimentation and the creative Processes that may result in new products services or technological processes (fulmar, Geishas and Scoff, 2003).
One traditional means of achieving competitive advantage is to create new products but can be easily copied. Low-cost of products as a competitive advantage also suffers from sustainability while the brand name as competitive advantage is possible only if there is a strong brand. Marketers are turning more and more to channels as a competitive advantage e.g. Dell computer (Rhodes Hung, Lok Ya-Huillen and Wu 2008). This maximizes control over service level/output enhances products image and engenders higher markups, promotes dealers loyalty, better forecast, better inventory and merchandising control and restricts resellers from carrying competing brands.
Pricing is best thought of as a process of adopting existing indigenous technologies. To do this, firms need to develop the capability to manage technology change. Oyelaren-Oyeyinka B;. kLaditan G.O.A; and Esubiyi A.O (1996) found out in their study of 50 Nigerian firms that pricing is mostly adaptive and incremental in nature within the Nigerian industrial sector. Because of constraints that are peculiar to developing countries (such as poor infrastructure and weak pricing systems), the results of pricing studies carried out in developed nations may not be of much use in Nigeria. Nigeria is presently witnessing an emerging entrepreneurial development in various sectors of the economy. This trend is championed by the presence of multinational corporations (MNCS) which are responsible for independent/sole venture capital development joint venture collaboration and complex intra and inter-industry relationship. The MNCS use this strategy to develop comparative upper reach in industrial structure over and above their domestic counterparts (Kuratko and Hodgetes 2004).
A broad categorization of pricing is difficult to achieve because pricing normally covers a considerable range and combination of products/markets and technological pricing as in the case of sophisticated technologically pricing products designed to meet demand in a specific market so far most research work have been based on technological pricing which mainly consists of the development of products and processes engineering research with emphasis on industry relevant technical expertise and knowledge.
It is pertinent at this introductory stage to distinguish between entrepreneurship and distribution for purpose of darity. Almost all definitions of entrepreneurship agreed that the concept entails a kind of behavior which includes:
- Initiative taking
- The organizing and reorganizing of social and economic mechanisms to turn resources into practical outputs which have utility value to the consumers.
- The acceptance of risk or failure (Hisrich and peters 2002)
According to peter Maris (1972) entrepreneurship is practical creativeness and pricingnesss which combines resources and opportunities in new ways. It involves the application of personal qualities finance and other resources within the environment of business success.
Distribution in the manufacturing sector on the other hand has been defined as the handling and moving of physical goods within industrial firms and through channel systems (MC Carthy 1968 1978). It also involves the planning and implementation of physical flow of materials and final goods from the point of production to the point of use to meet needs at a profit on the side of the marketer. (Gong, Law change and Xin 2009) the link between entrepreneurship and distribution is that any production without effective distribution system is useless because the produced goods do not gain any utility until the final consumer derives some level of satisfaction after using them.
1.2 STATEMENT OF THE PROBLEM
In examining manufacturing distribution strategies findings of earlier studies indicated a number of differences and similarities between indigenous and foreign firms using data gathered from.
Pricing has been one of the most importance decision variable in any organization. Considering the high mortality rate of companies in our state (Rivers State)is a source of concern to the management of firm (companies) in our country Nigeria .
It is seen that these companies do not adopt appropriate pricing then products. Nowadays it is common to see organization (companies) establish everywhere almost every day in corners of the cities Nigeria Bottling company Nigeria Engineering works Nalin industries, flour mills plc Rivers vegetable oil Ltd etc. some of these companies after few months of operation start to experience low sales low profit as a result of poor customer patronage caused by failure to adopt appropriate pricing strategies
In a situation where most companies both consumer product and services continue to experience low sale or eventual close up of business as a result of an absence of pricing strategies lying behind their price decision that took account of dynamic elements in the situation calls for this study.
This study seeks to find out what pricing strategies do these companies adopt and how far have they realize the companies objectives and goals.
1.3 OBJECTIVE OF THE STUDY
The primary objective of this study is to examine the comparative study of pricing and distribution strategies of five manufacturing companies in Rivers state. Other specific objectives include the following:
- To determine whether a proper pricing distribution strategies can make a manufacturing company achieve its aims
- To determine whether through pricing and distribution strategies a company can overcome its competitors
- To determine whether pricing and distribution strategies can lend to profit maximization of a company.
1.4 RESEARCH QUESTION
- Does proper pricing and distribution strategies make a manufacturing company achieve its aims?
1 Can company overcome its competitors through pricing and distribution?
2 Do pricing and distribution strategies lead to profit maximization of a company?
1.5 RESEARCH HYPOTHESES
HO: There is no significant relationship between the pricing and distribution strategies adopted by manufacturing firms and firms performance
HI: There is a significant relationship between the pricing and distribution strategies adopted by manufacturing firms and firms performance.
1.6 SIGNIFICANCE OF THE STUDY
The outcome of this study will help or contribute to the benefit of pricing and distribution strategies that are available for most firms (companies to adopt and how their adoption will enhance their performance)
This study will be helpful to scholars proposers the general public, it will bring about the awareness of the role pricing and distribution can play in ensuring their survival in their increasingly competitive marketing environment and avoid their failure in business. It will also enrich their knowledge about how pricing can be used as a means to achieve their objective.
1.7 SCOPE OF THE STUDY.
Because of the wide spread of industries in the economy, we will be limiting our study to the comparative study of the pricing and distribution strategies of five manufacturing companies in Rivers State which are:
- Nigeria bottling company pricing and distribution strategies
- Nigeria engineering works pricing and distribution
- Rivers vegetable oil ltd pricing and distribution strategies
- Four mills PLC pricing and distribution strategies
- Nalin industries pricing and distribution strategies
1.8 LIMITATIONS OF THE STUDY
There is no research work without some limitations. It is imperative to note that despite the diligent effort intended for the study, certain factors stand to limit the ambitious effort. These factors include finance, time, death of statistical data, lack of research facilities etc.
The researcher had difficulties in sorting for current materials for this work inspite of the moves made to ensure that this work meet not only the NBTE requirement. But contribute to the knowledge and existing literature on the comparative study of pricing and distribution strategies of five manufacturing companies in Rivers State.
1.9 DEFINITION OF TERMS
The following terms are based on the context in which they are being used in this study.
Comparative: Connected with studying things to find out how similar or different they are.
Price: This is the valuation of a product. It is a monetary value paid for a product.
Distribution: Can be defined as the planning and implementation of physical flow of materials and final goods from the point of production to the point of use to meet consumer needs and profit.
Strategies: A comprehensive description of how organization master plan for achieving its objective and purpose.
Manufacturing; The process of making things, it is the actuality of making things through by industrial processes. Company This is a group of people working together for business and for the purpose of profit making and to satisfy their customers.
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