Impact Of Pricing And Marketing Of Beverage

Project and Seminar Material for Marketing

Impact Of Pricing And Marketing Of Beverage


The purpose of this study was to find out the impact of pricing in marketing of beverages in Enugu state using Cadbury Nig Plc Enugu as a case study. This management of Cadbury Nig Plc Enugu ethically examined how pricing can create an impact on the marketing of beverage in the country particularly at Enugu. This is in the view of making some useful recommendation on the improvement of their pricing.

The questionnaires was structured on two sections. Section one is related to personal information on the respondents while section two contains the general questions on the research study.

From the data collected and analyzed through the consumers of Cadbury Nig Plc Enugu the management and staff and other respondents it was discovered that price has positive impact on the company’s products. The consumer and staff agreed that pricing strategy used by the company would enhance the profitability and improve the marketing performance of the company (Cadbury Nig Plc Enugu).

It was equally found out that the present prices of beverages has a positive effect on the buying habits of consumers while about % are been discouraged by the price of Cadbury Nig Plc Enugu.

Recommendations were however made that the company should put more effort on the prices of the products.

Chapter One

1.0 Introduction

1.1 The Background of the Study

Decision about prices of a company’s product and services are among the most important activities the business organization undertaken infact few decision that these organization make arouse as much interest as those concerning prices. The company should be tactful and dynamics with the pricing strategy of the business.

Whereas cost can be analyzed using information from within the firm prices cannot just be determined by only cost plus marketing for profit. External factors come into play including prices. Practiced by the competition secretary of the product in question timing supply difficulties substitute product taste fashion and so forth. Even over time the price can swing many times in both directions.

In as much as the price factors remains the strongest argument in selling its manipulation calls fro that information gathering flair instinct and even patience however in this guessing game the marketer should know the break even point which is the minimum price he ought to sell a given volume or quantity to be able to cover costs. Below the price the bad news if there are sales is that capital is drying up. As the spectrum widens and the firm may lease to trade.

The manufacturing companies must analyze the cost of production or of goods sold in determining the price. This applies not only to prices fixed by an organization but also to those if they are dictated to it by force in the external environment which include rent interest rate of any fund borrowed taxes and other charges and a marketing for net profit.

Business organization mainly the manufacturing industries do not put any pricing strategy for their goods and services into consideration before they do. It the company may not have much of a choice if the product on arriving the market place meets competitions products which are will known household names. In this circumstances the price will stay at or below the competitors unless there is effective product differentiation that succeed to pull and retain demand at a higher price.

Fixing the selling price is a tactful exercise involving a lot of vigilance. On one side the price should not be so high as to kill demand negative affect it one the other a low price cause the organization to loose valuable income. The best price is the one that produces the best or optimum revenue from sales such prices is seldom static or constant. Rather it fluctuates like mercury depending on market forces. At a static price competitor can undercut market share by offering the same goods or substitutes at a lower price.

Pricing policy is very important it influence sales turnover and profitability. The company should be very careful when fixing the price of a product is of low or shoddy quality even through sales may increase especially in a market with low or medium income earner. Invasively high price ought to indicate high quality.

Unfortunately this is not the case the time consumers cannot possibly be experts in all items. They rely four judgments on some aspects and price is among. Unscrupulous manager whose sale objective is profit use deceitful high pricing as their stock-in-trade likewise high pricing can literally scare the public into the waiting hands of the competitors. Tack and wisdom must prevails especially that the temptation to practice high prices is permanent.
However a high or a low price strategy must take into account the break even point of the product. It means that the entrepreneur must detail cost fixed and variable before determining the price below which there is capital erosion conversely above this break even point there is profit that grows depending on how high the price can be accepted by buyers and the quantity actually sold.

In short pricing is the strongest weapon in business strategy as well as deadly poison if poorly manipulated. In some cases sales and cash flow increase due to low price strategy. In other the effect can be a boomerang, the market might perceive or conclude form the low price that the product is not of good quality. Many people use price as an indication of quality.

1.2 Statement of the Problem

Price is a very important tool that is used in every marketing organization. By its nature pricing have created a lot of impact on the marketing of beverages mostly in a developing economy.

Effectively planned pricing policies are basically one of the prerequisites for proper co-ordination and realization of the ultimate pricing goals which will eventually need to the achievement of the organization goal. If revert is being the case that the pricing policy is unplanned arthritically the achievement of the organization’s goals fails.
“All things being equal” problems that tends to exists include.

  1. Inability to audit an appropriate and efficient pricing policy: In view of this problem there is need to enhance and critically examine the pricing policy applied in the food drinks industries and other manufacturing organizations in improving their marketing performance. Since pricing can be a routine activity, the marketer or the company should be creative in pricing for new product complementary product or substitute product line and product in joint cost which are the pricing objective and a guide post for effectiveness in pricing.
  2. Lack of information on the impact of price on the effectiveness of the product sales: This had been the major concern of the manufacturing firms. The best price is the can that produces the best or optimum revenue form sales. Relay high price ought to indicate high quality. Likewise high pricing can literally scene the public into the waiting hand of the competitors. Effective pricing should be that which is not static that which is flexible and dynamic. Where as cost can be analyzed using information from within the firm effective price cannot gust be determined by only cost plus a marketing for profit rather it puts in consideration the external factors prices practiced by the competitors scarcity of the product in question timing supply difficulties substitute product taste fashion etc. However in this tactful game the food drink industries/ business organization should a given quantity of good and services to be able to cover costs.
  3. Inappropriate use of marketing mix in the product sales: Pricing is an important and competence element of the marketing mix and generates the highest level of external interference because of its place as a major determinate of the volume of good and services available for the consumer in any economy. This marketing mix deal with the four Ps (product price place and promotion) which also calls for good display and presentation of products. Few persons who buy articles in various retails outlets are experts. For the vast majority of buyers the perception is done with eyes the company can win in sales turnover and unit profitability through slight price increase on differentiation by making the product smart looking (alternative packaging) sleek with good eyes appeals free gifts or taste of the product etc this is possible through observation analysis planning hand work and appropriate use of the marketing mix.
  4. Inability to determine the price that ensures high demand rate: Price of the product should be fixed in other to ensure high demand/rate of turnover the manufacturing company should put so many things into consideration to enable them attain the utmost demand level. In the first place the population level in the society should be looked into the know if the target market are of low or high income earners. This will enable the company to fix their product price at the affordable rate of the target audience. If the price of the product is high where the population or consumers are more of low income earners thee will be low demand but if on the other side the reverse will be the case. When there are competitors or that the product has subtitles the price should be fixed at or below the competitor in order to avoid the diversion of their customers into an affordable product. The nature of the product equally effects the demand habit of the consumer. If the product is seasonal product like umbrella which is mostly used during the rainy season the demand will be high during the season no matter the price level.

1.3 Objective of the Study

The major purpose of this study is to critically examine the impact of pricing in marketing of beverages in Enugu state. This work is in the view of making some useful recommendation on the improvement of price the study seeks.

  1. To determine the ways of improvement price and efficiency of marketing department in fixing prices.
  2. To determine the impact of pricing in marketing of beverages to ensure effective marketing performance
  3. To determine the best marketing strategy and techniques to adopt in other ensure effective marketing performance.
  4. To ascertain whether the price fixed on a product can convey the appropriate response required from the target audience or not.

1.4 Significance of the Study

There is a lot of benefit to derive from the study. The research will be of important to Cadbury Nig Plc and other beverages manufacturing companies. It will be useful to all manufacturing firms and business organization at large. It will suggest ways and select the best pricing policy to use in marketing of beverage and satisfying their market.

It is hoped that after some findings of this work the consumer of Cadbury Nig Plc will be able to determine easily the quality level of the product. It will lead to increase in the sale of the company’s products and ensure maximum profit. It will equally enable the Cadbury Nig Plc to appropriate use of the marketing mix in their sales.

Finally the study will make the researcher to acquires more knowledge in the field of marketing and research work. Students will equally benefit from the work as they use it for references.

1.5 Research Questions

  1. What pricing policy is appropriate for the improvement of the objectives
  2. What impact does the price review have in the sales of the product
  3. Does the present price of the company’s product affect the sales turnover and the level of the company
  4. How can price affect the buying habit of the consumers

1.6 Scope of the Study

The scope of this study is limited to the impact of pricing in marketing of beverages in Enugu state.

1.7 Limitation of the Study

Despite the researcher’s desire and willingness for investigation, a lot of limitations hindered such success. Among such hindrances includes. Partial responses and bureaucracy that is synonymous to most companies in Nigeria, where issues take longer than recessing before action taken to them.

Another limitation is that there is a code of silence or law of secrecy in the company as most staff are not willing to respond effectively to the questionnaire especially when it seems to be comparing their company with others or when it seeks to know the company’s competitive position.

Another limitation is the non-suitability of related textbooks and data to the topic under research which limited the depth, scope and length to which the researcher intends to view related literature.

In addition to the above limitation is the uncompromising attitude of top management staff. They regarded some information needed as top secrets which they cannot release to researcher.

1.7 Definition of Terms


Is said to be the sum of money which is given or that which must be sacrifice in other to obtain another thing.


It is the process of fixing or making that which must be given or done in other to obtain sale or buy something. It is also setting out what must be done or sacrifice for something to be sold bought or obtain.

Chapter Five

Summary, Conclusion and Recommendations

5.1 Summary

As a result of data collection from consumers distributors and management of the enterprise on the topic the impact of pricing in marketing of beverages in Enugu state. It is revealed that pricing policies of most organization need to be revealed. This is because that greater proportion of consumers expresses their dissatisfaction over organization price system, it therefore, indicates efficient and adequate pricing system have not been adopted by many organization.

The research also revealed that if good price were fixed by organization, it would lead to higher sales.

This is so because greater proportion of consumer expressed their minds t increase purchase if there is later reduction in the firm price. In a nutshell this project is based on five chapter upon which data concerning the subject matter were collected and analyzed accordingly which form the basis for its conclusion. Chapter one contains background of the study, significance of the study, research questions, scope of the study and limitation of the study, chapter two deals with Literature review of available facts, Chapter three deals with research design, area of the study, Population of the study, sample size used, instrument for data collection, validity of the instrument, reliability of the instrument, method of data collection and method of data analysis.

Chapter four deals with Respondents characteristics Presentation of data and analysis and discussion of findings.
Chapter five is fully concerned with the summary conclusion and recommendation.

5.2 Conclusion

In our economy price influence the allocation of resources. In individual companies, price is one significant factor in achieving marketing success. And in many purchasing situations, price can be of great importance to consumers.

However it is difficult to define price. A general definition is price is the amount of money and or other items with utility needed to acquire a product.

So base on the finding the researcher conclude;

  1. That management decision can lead to wrong choice of pricing strategy.
  2. That price has a strong impact on sales and profitability in the beverage industry.
  3. That competitor always react to change in price in the beverage industry.
  4. That distributors and consumers can react to price change in the beverage industry.
  5. That competitors price increase can lead to Cadbury Nig Plc price increase.
  6. That the pricing system of Cadbury Nig Plc is perfectly good.
  7. That the existing price system of the beverage industry bring about favourable consumer responds.
  8. That price change, especially increase cannot be necessary justify to consumers.
  9. That price increase can be adversely affect sales in the beverage industry.
  10. That Cadbury Nig Plc Price decrease can increase its market share
  11. That existing price of soft drinks in Nigeria are not favourable to consumers.
  12. That change on the price of a product can influence consumers purchasing decision.
  13. That Cadbury Nig Plc product do not necessary given valve for money.
  14. That existing price in the beverage industry affect consumer consumption rate.
  15. That consumers will buy more when there is price decrease on a product, given the same quantity.

5.3 Recommendations

The nature of this research study will be considered in complete of the researcher do not or fail to make his own aspect of recommendation in order to suit or assist future research work or aid an ideal marketer in his task of price setting. As such based on the research work conducted by the researcher and the effect of pricing policy on sales in the beverage industry, the researcher intend to make the following recommendations for possible consideration and implementation thus;

  1. Manager should have clear knowledge of price elasticity with the view of improving efficiency.
  2. The organization should also put into cognizarice other environmental pricing factors influencing pricing decisions. There are multiple of product line distributors marginal competitors reaction and legal constraints imposed by governmental bodies.
  3. The manufacturers must allow independent distributors at least as much margin as is available on similar items from other firms. Distributors are profit oriented and tend to push the product that makes the most money.
  4. For the obvious reasons that firms do operate in competitive environment they must consider the possible reactions of other companies when setting price.
  5. Firms should be aware that a number attractive pricing strategies under various federal and state laws. Unlawful activities include price fixing price discrimination, deceptive pricing and unfair pricing therefore trying to avoid such in order to increase the customer perception about its product and organization
  6. Before setting a product price, Management should identify its pricing objective major pricing objective are to;
    • Earn a target return on investment or net sales.
    • Maximize profit
    • Increase sales
    • Hold or gain a target market share
    • Stabilize price
    • Meet competitors price.

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