Significance of Price in Introduction of New Product
Abstract of Significance of Price in Introduction of New Product
The topic titled “Significance of price in introduction of a new product” was chosen to examine the relevance of price in the introduction of a new product. The main objective of this study is to investigate the significance of price on a new product. In the course of this research the research methodology adopted were the primary method of data collection through the use of questionnaire and secondary method. Relevant literatures were reviewed and data collected were analyzed using simple percentage. This was equally used in hypothesis testing. The study revealed among others that no business can meet its set goals and objectives without pricing. It is therefore recommended that there should be the establishment of a pricing section in the marketing department to set prices and assist the marketing department in determining appropriate prices for products. Certainly, it is the belief\ of the research that, if these recommendation are complied with, they would go a long way in not only helping the business but the nation at large.
Chapter One of Significance of Price in Introduction of New Product
INTRODUCTION
BACKGROUND OF THE STUDY
Price has been a major problem in producing a product. Every company, that produces a product has one thing in mind which is the price. It is not easy for a company to fix a price for their products because the company or manufacturer will want to determine all the cost used in producing the product and in doing this, the company or manufacturer will want to determine all the cost used in producing the product and in doing this, the company or manufacturer will also want to put the consumers in mind because if the price is too high, it will affect the sales of the product and if it is too low, it will also affect the company or manufacturer’s cost of production. All this point, the manufacturer or producer will want to put at equilibrium.
On this note, the researcher decided to carry out t his research work to find out what role price plays in the market, the importance of price and possible solution on how price can be fixed in a product. Pricing is considered by many people to be the key activities within the capitalist system of free enterprise especially when introducing a new product into the market.
Furthermore pricing and price competition are problems facing marketing executives today. Price is too cost oriented, price is not lavished often enough to capitalize on mark changes (Aluyor, 2010).
STATEMENT OF RESEARCH PROBLEM
Many criticism have been made against certain pricing policies and some have questioned how certain pricing objectives can really fit in with overall corporation.
The problem is to investigate why certain pricing policies fail to assist in realizing company marketing objectives hence the problem has under the following pertinent questions.
i. What is the pricing method in manufacturing enterprise
ii. Should a company set prices independently of other marketing mix variables?
iii. That what extent should a company take in to consideration of the demand intensity for the product as well as the customer’s psychology w hen it assures a cost oriented pricing strategy?
iv. Should prices be tagged on a new product without proper consideration of its supply?
v. Should the production of a new product commence and price attached without proper investigation about consumer’s interest?
OBJECTIVE OF THE STUDY
In carrying out a research, a lot of things ought to be considered in respect to these products. One has to critically look at the recent political state of the country. The country is passing through a new political dispensation, which is headed by a civilian president; these might facilitate the opening of neighbouring boarders hence increasing the rate of imported goods into the country. These will help in a drastic reduction of the process of product in circulation in the country, hence increasing the rate of demand.
The aim of this research work is to evaluate the significance of price fixed for a new product hence avid the demand for the product.
The study is aimed at realizing the following objectives;
i. To check the reaction of consumers in the event of price increase over a product
ii. To identify the problems of new products pricing decisions and make useful suggestions to help avoid the practical problem of establishing a price.
iii. To find out if the relatively low price of a product could affects its purchases decision of the consumers of the product.
iv. Finally, the study will also investigate the place of price among other marketing mix varieties.
RESEARCH QUESTIONS
The following Research Questions shall direct the thrust of this study.
1. Is the increased patronage of Nigerian Bottling Company’s product influenced by its promotional activities?
2. Is advertising the most effective tool for reaching customers?
3. Is the patronage of Nigerian Bottling Company’s products influenced by the locations of its depots?
4. Does price influence the sales volume of a product?
5. Is pricing decision cumbersome?
6. Is new product pricing usually a difficult exercise involving many problems?
7. Does pricing decision has any impact on product success?
8. Is new product pricing responsible for product failure?
STATEMENTS OF THE HYPOTHESES
1. Ho: Prices does not influence sales volume
Hi: Prices does influence sales volume
2. Ho: Pricing decision is not cumbersome
Hi: pricing decision is cumbersome
Ho: New product pricing is not usually a difficult
Hi: New product pricing is usually a difficult exercise involving many problems
3. Ho: pricing decision does not impact on product success.
Hi: pricing decision has impact on product success
Ho: New product pricing is not often responsible for product failure
Hi: New product pricing is often responsible for product failure