Determinants of Pricing Policy in the Nigeria Manufacturing Industry

25 Pages Posted: 14 Oct 2015 Last revised: 28 Oct 2015

See all articles by Olawale Luqman

Olawale Luqman

Olabisi Onabanjo University (OOU)

Date Written: October 14, 2015

Abstract

This research work examined the determinants of pricing policy in Nigeria manufacturing firm, most firms fails to incorporate some factors such as level of competition, close substitute, financial indices, among others in their pricing decision and this may lead to several crisis in the organization such as loss of profit and this may cause winding up in the long run. To this end, the study analyzes the factors that determine the pricing decision of manufacturing industries in Nigeria and the effects of the factors on revenue and profitability. Secondary data were employed, the secondary data were gathered from the annual reports of the selected firms in the sampled periods, the study select centered on cement companies in Nigeria and purposively select Dangote cement having about 85% of the market capitalization and 75% of the Net Asset of all the quoted cement companies in Nigeria. OLS and correlation was used in establishing the relationship among the variables used in this study. The results show that, ROE, CNA and DC have individual and combine impacts of pricing policies in Nigeria. Also, COS and INF also have individual and combined impacts on pricing policies in Nigeria while COS has the major determinants of pricing policies has individual impacts on pricing policy also ROE and INV have individual and combined impacts of pricing policy. Some of the recommendations made is this study are, Managers should may more attention on reducing cost of productions without having any negative impact on quality, this is in relation to optimality concepts; using the minimum resources to the achieve the maximum output. Manufacturing industries should also apply a operational research to tackle their logistics problems as well as supply chain in other to reduce the distribution cost this can be achieve by appropriate transportation algorithms and other simulating professional scientific methods.

Keywords: Pricing Policies, Organizational Objectives, Competition, Demand, Marketing, Finance. Introduction

Suggested Citation

Luqman, Olawale, Determinants of Pricing Policy in the Nigeria Manufacturing Industry (October 14, 2015). Available at SSRN: https://ssrn.com/abstract=2673946 or http://dx.doi.org/10.2139/ssrn.2673946

Olawale Luqman (Contact Author)

Olabisi Onabanjo University (OOU) ( email )

P.M.B.2002
Permanent Site
Ago-Iwoye, Ogun 234
Nigeria

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