A study of pricing strategies in competitive markets on consumer behavior: Evidence from an FMCG firm in Kano.
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Background of the Study
Pricing strategies play a critical role in influencing consumer behavior, especially in competitive markets where FMCG (Fast-Moving Consumer Goods) firms face intense price competition. In Kano, an FMCG firm has implemented various pricing strategies such as promotional discounts, dynamic pricing, and premium pricing to attract different consumer segments. This study examines how these pricing approaches affect consumer purchase decisions and overall buying behavior. It evaluates how competitive pricing influences brand perception, price sensitivity, and purchase frequency, while also considering the impact of external factors such as market trends and economic fluctuations (Bello, 2023). The research employs both quantitative sales data analysis and qualitative consumer interviews to determine the effectiveness of different pricing strategies in a highly competitive FMCG market. It also addresses challenges such as price wars, margin pressures, and potential consumer perceptions of quality linked to pricing. The study aims to provide actionable insights for optimizing pricing strategies to balance competitiveness with profitability in dynamic market conditions (Bello, 2024).
Statement of the Problem
Despite the importance of pricing strategies in shaping consumer behavior, there is limited empirical evidence on how different pricing tactics affect consumer decisions in competitive FMCG markets in Kano. The main challenge is to determine whether promotional discounts and dynamic pricing strategies effectively drive consumer purchases or if they lead to perceptions of lower quality and brand dilution. Inconsistent pricing and aggressive competition further complicate the evaluation of consumer responses (Bello, 2023). This study seeks to address these issues by analyzing the impact of pricing strategies on consumer behavior, providing insights to optimize pricing approaches for enhanced market performance (Bello, 2024).
Objectives of the Study
To analyze the pricing strategies used by the FMCG firm.
To evaluate their impact on consumer purchase behavior.
To recommend optimal pricing approaches for competitive markets.
Research Questions
How do different pricing strategies affect consumer behavior?
What are the key factors influencing consumer response to pricing?
How can pricing strategies be optimized for competitive advantage?
Significance of the Study
This study is significant as it offers insights into how pricing strategies influence consumer behavior in competitive FMCG markets. The findings will help firms in Kano optimize their pricing tactics to boost sales while maintaining brand integrity and profitability (Bello, 2023).
Scope and Limitations of the Study
The study is limited to one FMCG firm in Kano and focuses exclusively on pricing strategies, excluding other marketing elements.
Definitions of terms
Pricing Strategies: Methods used by firms to set product prices.
Consumer Behavior: The decision-making process of consumers regarding purchases.
FMCG: Fast-Moving Consumer Goods.
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