CHAPTER ONE

1.0 INTRODUCTION

1.1 BACKGROUND INFORMATION

This study presents review of literature on the research topic. The researcher obtained the

literature from various authorities and presented it under a number of headings.

Every consumer psychologist would love to know what motivates people to buy certain goods

or services. If we knew what behaviour would lead to a decision to purchase, then perhaps we

could create a marketing program to instill or intensify those behaviours among potential

buyers. So why not just ask consumers about their behaviour? The answer is that unfortunately,

most people do not know exactly what their behaviour are, and even if they did, they would

often be unwilling to reveal their behaviour.

Motives may be difficult to identify but, basically, they have a pretty simple makeup. So far as

we know, they only have two key properties: direction and intensity. Buying behaviour

determine two things: what consumers want to do, and how much they want to do it. To market

successfully, purchase behaviour first has to be directed towards your goods, not someone

else's. Second, the drive has to be strong enough so that people will act on it; they have to be

willing to pay the price in terms of dollars, time, and effort.

1.2 STATEMENT OF THE PROBLEM

Many organizations are closing or down sizing their companies. This is because of poor pricing

on consumer behaviour or strategies. As a result of this many organization are now designing

ways of meeting the customers’ needs, in the attempt of establishing customer relationship.

Many organizations area developing promotional strategies like pricing on consumer

1
behaviour. The researcher seeks to establish the relationship between pricing on consumer

behaviour and sales volume in organization.

1.3 AIMS AND OBJECTIVES OF THE STUDY

Aim

The aim of this study is to examine the effect of pricing on consumer behaviour on corporate

performance.

OBJECTIVES

1) to find the existence of pricing on consumer behaviour in an organization

2) to determine the importance of pricing on consumer behaviour to an organization

3) To establish the relationship between pricing on consumer behaviour and sales volume.

1.4 RESEARCH QUESTIONS

The basis of the research is to answer the following questions.

1) Do you practice pricing on consumer behaviour in your organization?

2) What is the importance of pricing on consumer behaviour to the organization?

3) Is there a relationship between consumer motive and sales volume?

1.5 THE SIGNIFICANCE OF THE STUDY

The results of the study will benefit the business organization to discover effectiveness of

pricing on consumer behaviour on employee’s performance.

2
 i) Enables the organizations develop pricing on consumer behaviour that can be used

to specify details on how overall objectives are to be achieved.

ii) Enables the organization discover the importance of pricing on consumer behaviour

to employee performance.

iii) Suggestion and recommendation can be used to establish the relationship between

pricing on consumer behaviour and employee performance.

1.6 THE SCOPE OF THE STUDY

The researcher carries out the study in Coca Cola Company this is because most of the

organizations exist within Eldoret municipality.

1.7 LIMITATION

i) The research findings cannot be generalized because the study covered a few organizations

in Eldoret municipality.

ii) Some respondents were not cooperative when filling the questionnaires especially

management staff.

iii) Inadequate time to cover enough organization within Eldoret municipality

1.8 THE STUDY AREA

The researcher intends to conduct the research in organizations within Eldoret municipality

- Coca cola

3
1.9 DEFINITION OF TERMS

i) Pricing on consumer behaviour – there are plans that specify details on how to

handle consumers’ objectives.

ii) Strategic plans – plans that area organization wide establish overall objectives and

position an organization in terms of its environment

iii) Short term plans – plans that cover less than five years

iv) Long term plans – plans that extend beyond five years.

v) Specific plans- plans that are clearly defined and leave no room for interpretation.

4
 CHAPTER TWO

2.0 LITERATURE REVIEW

2.1 INTRODUCTION

The researcher obtained literature review in line with the research topic –the role of pricing and

consumer behavior. The researcher obtained literature concerning different pricing strategies

and then looked at consumer’s behavior.

2.2 PRICING STRATEGIES

Managers make decisions concerning pricing strategy in the context of general strategic

orientation of enterprise in order to achieve competitiveness and to raise profit and return on

invested capital. The fact is that the strategic approach is especially emphasized in the pricing

process for a new product and in the case of price change. It is important to mention that the

pricing goals could be different, but they are planed in accordance with the company's goals in

general. Having in mind that many factors have various effects on pricing, a greater number of

pricing strategies are implemented in practice. These are: Pricing strategies for new products,

Prestige price strategy, Expansionistic pricing, Preventive price strategy, Pricing strategy to

eliminate competition, Pricing strategy for a wide production program, Geographical pricing

strategy, Price discounts strategy.

2.3 PROMOTIONAL PRICING.

The ways of creating and realizing these strategies stress the importance of price as a factor of

competitiveness, simultaneously indicating a complex and dynamic relationship between price

and non- price factors of competitiveness.

5
2.3 PRICING STRATEGIES FOR NEW P RODUCTS

The new products/services pricing and the impact of these prices on the company's business

results have become the subject of an increasing managers' interest in contemporary firms [5].

This issue is directly related to intensive innovating activities as well as the emergence of a

considerable number of new products and services. Many enterprises often make efforts to

achieve a competitive advantage by introducing a new product on market before all others. The

key managerial problem in the new product pricing process is the lack of reliable market

demand information. The demand for a new product is hardly predictable until the consumers

openly show their preferences by buying the given product. Therefore, the market research is

indispensable. The company introducing a new product gathers information on the product

demand, expecting that the value of this information would be higher than the cost of its

collecting. The new product market testing is carried out very often by inquiries and surveys on

a limited area. The difficulties arise due to the fact that there is no referential point on which a

potential buyer could base his answers in the given inquiries and surveys. However, the market

research should be carried out in order to get the base for an initial new product price level.

Therefore, the first and the most important step is setting the initial price of a new product. As

a matter of fact, the initial price of a new product is set by implementing either an exclusive

price strategy or a penetration price strategy. Which of these two strategies will be selected

depends on several factors including the following: the time horizon of the company's business

activities, the new product demand characteristics, the access barriers and the new product

features on the market [12].

The exclusive price strategy comprises a relatively high initial product price, aimed at realizing

as much profit from the product as possible [12]. This pricing strategy proved to be successful

6
considering new, complex, unusual or highly ranged products, especially those which

incorporate some technological innovation. Such cases imply high research and development

expenses, together with the promotion ones, which are inevitable for a product to attract the

attention of potential buyers. The implementation of this strategy could be effective in market

segmentation, as well as in pricing the products which the consumers are not very familiar

with. For example, when the first digital watches were presented, their prices were very high

because their manufacturers realized that in the initial phase, the buyer is more aware of the

prestige than the price itself. Implementing the exclusive price strategy, the demand for a new

product is mostly limited to the buyers who are ready to pay a high price for the product, but

therefore, the profit for each sold product unit is relatively high.

The exclusive price strategy is also implemented when mangers forecast that the demand for

new products will be realized only in a short time. This is the case with the so- called "hit"

products, which generate instant customers' interests. Then the exclusive price of these

products will maximize the short-run profit.

In general, the exclusive price strategy is often implemented by the enterprises whose main

goal is short-run profit maximization. However, the exclusive price strategy could be also

accepted by enterprises which have a longer time horizon related to a certain product sale that

is by an enterprise whose goal is to maximize long-run profit [7]. Two cases when an

enterprise maximizes a profit for a longer period of time, implementing the exclusive price

strategy, should be emphasized.

The pricing strategy which maximizes long-run profit could be based on exclusive price, if

there are insurmountable barriers for entering the market. During the new product introduction

stage, the company has a monopolist position, due to the fact that a similar product does not

7
exist in the market. In practice, the company can prevent its competitors' access by creating

insuperable access obstacles, such as the patent right for the new products, or by an

impenetrable approach to technology and specialized resources. When the entry of new firms is

blocked, the company can maximize its long-run profit by an exclusive price.

Long-run profit maximization could be also achieved on the exclusive price base when the

managers expect that, due to the selected high price, the customers and potential buyers will

create a positive attitude towards the product quality. In that case the company presumes that

the higher price will have an effect on product acceptance and its higher quality evaluation.

Therefore, the demanded quantity will be higher than in the case of lower price and the

previously established attitude towards lower product quality.

The penetration price strategy is realized by setting a relatively low price for the new product

aiming at reaching deeper market penetration in the current period and providing, as well as, a

greater market share in subsequent periods [12]. This strategy is applied only in the case when

the price of demanded product is at the level which provides a sales volume increase. This

explains the following case in setting the price for a Model T in the company Ford. H. Ford

was convinced that the low prices will result in the mass market for this type of car, as well as

in a drastic cost decrease by the product unit [13]. This is what actually happened, after all,

since the great sales volume and a high market share caused the cost reduction [3]. Therefore,

in an industry where the considerable part of total costs could be reduced thanks to the

economies of scale and experience, the justified penetration pricing application enables the

company to realize greater a profit in the market. It is assumed that the penetration prices

include minimal profit as a limit, that is, the penetration price is set only in the case when the

8
minimal profit level is reached. In this sense, the penetration price strategy is analogous to the

maximizing sales strategy with limited profit [1].

The Penetration pricing is applied in the following cases: when a lower price of

product/services is a key buying factor for the consumers majority, if the low price is not

attractive for competitors to enter the new product and service market (no possibility to realize

high profit), and, when lower initial prices ensure the dominant market position for the

enterprises promoting the new product.

However, the penetration pricing has effects only under the following conditions: when the

product has an elastic demand, in the case when the product has certain competitive

advantages, and, if price modification could be performed in different phases.

The key factors in setting the initial price for a new product are: the type and nature of barriers

for competitors in the process of market entering, the new product features and the company's

time horizon [12]. It is obvious that if the entering barriers are relatively high and if it is

expected that the enterprise, entering the market, will have relatively high production costs, the

price limit will be relatively high, that is it will be defined as an exclusive price. Alternatively,

if the entering barriers are relatively low, and the existing enterprise expects low or no cost

advantages in relation to an enterprise which enters the market, then, the pricing limit will be

rather low, that is, it will be set at the level of the penetration price.

The exclusive price strategy could be accepted in the case when the main goal of a firm is

short-run profit maximization, when the entering barriers of competitors are unsurpassable and

when the product/services demand is short-termed. This strategy will be also adequate when

the consumers form a positive attitude towards the "price-quality" relation of the product or the

9
service. The penetration price strategy is applied if the goal of an enterprise is to maximize its

long-run profit and if the product/service demand is long-lasting.

2.4 PRESTIGE PRICES TRATEGY

Unlike the exclusive price, the prestige price is set to be maintained through the whole product

life cycle because of quality and prestige which are added to the product features.

The high price itself could be the key factor for consumers' motivation for buying certain

products. The buyers of luxurious cars, cameras, perfumes, watches and other products have

satisfaction because of the prestige they acquired by using these expensive products.

The business history of a number of enterprises showed that the price reductions for certain

prestige products have resulted in the sales decrease. For some population categories, a lower

price has the same effect as the prestige image removing, which could be an instrument for

providing specific products buying. Therefore, the lower prices could interfere in buying

instead of increasing it.

In a broader sense, the prestige and quality often become two basic motifs for buying a product

and using a service. Therefore, in practice, besides using the term "prestige pricing setting," the

term "quality pricing" is simultaneously used. This term has a positive meaning and explains

he relationship between realized buyers satisfaction and a product and its pricing structure. The

consumers' attention is drawn to the ways in which products and services could, to certain

extent, meet their expectations and needs.

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2.5 EXPANSIONISTIC PRICING

The expansionistic pricing is a strategy of very low pieces aimed at establishing mass markets,

often at the expense of other competitors. This strategy is developed in the case of products

whose price elasticity of demand is high, so that setting low prices results in a considerable

increase of sales volume. Nowadays, many enterprises try to win new markets or to widen the

existing ones for their products and services applying the expansionistic pricing. The famous

Japanese car companies Toyota and Honda have implemented this pricing strategy in order to

realize the acceptance of their products in the global market. The standardized versions of cars

with low production costs Toyota Corolla and Honda Civic have been successfully introduced

in order to provide satisfactory market acceptance Later on, some more expensive models were

offered.

Basically, dumping is a negative domination strategy which comprises the product sales abroad

below their production costs. If applied to the extreme, damping can force the domestic

manufacturers of some country to get out of business. Damping can be considered as an

extreme case of expansionistic pricing. Anti-damping laws were introduced in many countries

in order to prevent this pricing practice.

The expansionistic pricing strategy has been used effectively by some publishers of magazines

and papers. The sale has drastically increased by decreasing annual subscription rates for many

well-known magazines and papers. The publishers' benefits resulted from an income earned

owing to higher advertising rates [3]. These changes have increased the publication sales level.

A similar method for realizing the expansionistic pricing strategy has been used by many book

clubs in order to increase the number of members, which should result in greater business

success.

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2.6 PREVENTIVE PRICE STRATEGY

The preventing pricing is a strategy of low prices, designed to discourage possible market

competition. As a result, the price prevailing in the market is unattractive for possible

competitors. This strategy is especially accepted when an enterprise does not have remarkable

advantage in relation to its competitors (for example, it does not have protected patent or any

differentiation advantage in relation to other enterprises), and when the market entering is

relatively easy. The postponing of the competitors market penetration gives a chance to the

enterprise to acquire a market share, to reduce costs, based on economies of scales, to make

profit and to create its recognizable image. For example, the management of RCA Corporation

chose the preventing pricing strategy during fifties (of the last century) when promoting, at that

time, their new product-color TV set on the market. The low price was intended to provide

necessary time for the experts of RCA

Corporation to improve new technology for the color TV set production before market

competition with the same or a similar product appears, thus establishing the strong market

position for the corporation.

2.7 PRICING STRATEGY TO ELIMINATE COMPETITION

The pricing strategy, aimed at complete eliminating competition is a strategy of low prices,

whose task is to ruin market competition. During the realization of this strategy an enterprise

set a price under the level of production costs. Once the competition is eliminated, the

product/services prices are increased to the profit levels.

The same strategy was used by Standard Oil at the end of nineteenth century in order to get rid

of market competition. Decreasing prices in local regions up to the level of half production

costs, the competition was eliminated, and then, other competitors were bought out at nominal

12
prices by Standard Oil [3]. Afterwards this company made up the losses in non-competitive

fields by selling their products and services on high level prices.

The above-mentioned experience showed that the pricing strategy regarding complete

elimination of competition could be applied by a company if it has a dominant position in

industry and a strong financial position in the market and if it is able to bear temporary

monetary losses caused by the strategy's implementation. This practice was connected with the

attempts to establish a monopoly market position. In contemporary conditions some enterprises

use a mild form of this strategy, selectively realizing it on particular articles within the

production line.

2.8 PRICING STRATEGY FOR A WIDE PRODUCTION PROGRAM

The pricing strategy for a wide production program implies managers' decisions on mutual

relation between the prices for products and services of the firm. It is important to establish a

relationship among between the product demand in the form of "independent- complementary"

or substitutes [8]. The relevant reliable data on the existing competition (number of enterprises

in market, their market share by product and the similarity level of competitors' products in

relation to the firm products) could be available. The evaluation of potential competitors is

more complex and less reliable.

The managers in enterprises with a wide production program should be cautious not to disturb

good mutual balance among product prices in the production program. Trying to use different

elasticity of demand in certain market segments, enterprises could introduce many new

products in the production program, from those with a rather low quality and price, up to the

ones with a high quality and price (for example, deluxe and super deluxe models of the

13
basically same product) [8]. The practice has proved that the intention to fulfill needs of certain

market segments, regarding the quality and the product price, provides buyers' loyalty and

profit increase.

The prices of optional and added products accompanying the main product are difficult to be

established. Many enterprises include them into the main product price, but their prices could

also be defined separately. In the case of by-products, unless they have the market value,

getting rid of their costs should be included in price of the main product. When the by-products

have their market value, mangers make efforts to cover at least the costs of warehousing and

sale.

In the case when a new product is introduced, its price must be in accordance with the existing

production line. Many enterprises prefer widening the production line to lower the price of the

existing brands when the price competition exits.

It is very important to calculate cross-price elasticity of demand (Ecp), for analyzing

competition between two concrete products by measuring the responsiveness of changes in the

quantity demanded of one product to changes in the price of another product percentage

change in quantity demanded of product 1 and − percentage change in the price of product 2.

If the cross-price elasticity of demand is positive, then the products are substitutes. On

the other hand, in the case of complementary products, cross-price elasticity of demand is

negative. The risk of adding a substitute brand into the production line is connected to possible

transfer of demand from the old to the new brand. However, in spite of this, managers,

specially in the case when an enterprise has a high market share, often make decisions on

widening the production line aimed at further increase of its market share, attracting new

buyers and strengthening the market position, offering more products to the buyers so they

14
could make their own choice in buying process. The best examples for this are vari- ous

manufacturers of soups, soft drinks, cars, detergents, bread and biscuits. Considering the

potential risk, the goal of the pricing strategy for production line is to maximize profit.

2.9 GEOGRAPHICAL PRICING STRATEGY

The geographic pricing strategy is based on respecting the fact that the buyers could be situated

in different locations, even in different countries and regions, that is, at diverse distances from

the delivery spot. The main issue is whether to absorb the costs requested for a product to reach

a buyer, or to transfer these costs to customer which would result in a price increase. First of

all, transportation costs treatment, depending on concrete area distance, is very important. This

pricing strategy is applied in different ways, depending on various business activities and goals

which firm intends to realize.

It often happens that pricing based on production costs does not include costs of product

transfer to a buyer. Once an enterprise defines a price for the goods on this principle, a buyer

pays transportation costs, taking a risk regarding the goods. This pricing strategy is

inconvenient for the buyers from distant locations, who, in that case, bear higher transportation

costs. Practically, an enterprise offer is more inconvenient for these buyers in relation to those

who are near the delivery place.

On the contrary, the price could include all transportation costs or goods delivery costs. It is the

price including insurance and freight charges.

Pricing policy according to delivery zones presents a specific combination of former

mentioned cases of geographic pricing. The main fact is that an enterprise divides a total

market into specific zones according to the distance level of certain zones from their sites. All

15
buyers within the specific zone pay the same price, whereas the price should be higher in more

distant zones. In practice, this pricing strategy has significant advantages, especially in the case

of market expansion, when an enterprise has to identify changes, in order to be competitive.

That is especially important if the transportation costs are high for the concrete product.

Pricing strategy according to the basic point system accepts the fact that all the buyers bear

transport costs from the site that present the basic point to the delivery site, regardless of the

shop location or the delivery location warehouse. This strategy is often applied in the case of

homogenous or massive products, which include a great deal of transportation costs within

total costs, such as cement, iron or steel, sugar or lumber products. One should bear in mind

that nowadays in some cases a greater number of basic points is used.

In the case when the price is formed by selective undertaking of transportation costs, the

manufacturer transports the purchased goods at his own expense only to certain buyers that the

manufacturer wants to animate or keep them buying its products. All other buyers, of less

importance for the seller, do not have this privilege.

2.10 PRICE DISCOUNTS STRATEGY

The price differentiation based on distinction between buyers is designed separately for every

buyer according to certain criteria. This differentiation is realized by rebate, by various types of

discounts, financial and material stimulations, which should stimulate the buyers to buy

products and services of concrete enterprise, providing the significant market penetration. The

most often discounts and stimulations are: cash discount, quantity discount, season discount,

functional discount, stimulations for promotion and allowance.

16
2.11 PROMOTIONAL PRICING

The promotional pricing refers to a special pricing strategy, used by an enterprise to stimulate

psychologically buyers to buy its products and services. One segment of this strategy is a

special "trick" used by sellers in order to attract buyers. There are several types of promotional

prices such as a "loss-leader price", occasional prices, psychological discounts and a

psychologically designed price.

"Loss-leader price" (a "price decoy" or "price hook") is intentional price reduction of the

product well known to buyers in order to convince them that the prices of the other products

are lower than the competitors'. This strategy is sometimes applied by supermarkets and big

stores, but this can provoke the protest of the manufacturers whose products are the object of

"loss-leader pricing" due to a possible future bad image of their products.

Occasional prices are designed in specific circumstances - during holydays, celebrations,

various manifestations or at the end of the season, aimed at attracting more buyers who are,

already, "tired" of shopping.

Psychological discounts are realized in several ways. A method often used in trade is that a

seller intentionally sets a rather high price for some product and then gives a considerable

discount so that the potential buyers have an impression of special price convenience.

17
 CHAPTER THREE

RESEARCH METHODOLOGY

3.0 INTRODUCTION.

This chapter focuses on the methodology that was used in the Study. The area under focus in

the study, as well as the study population has been discussed. Further in this chapter, sampling

procedures employed in the study have been described. The research instruments are stated

and discussed as well. Last but not least, data collection procedures as well as data analysis

and interpretation techniques have been discussed.

3.1 RESEARCH DESIGN.

This is a case study that seeks to generate quality information regarding the role of

interpersonal communication in conflict management. The study is therefore descriptive as it

seeks to answer various specific questions with regard to the process of conflict management in

organizations.

3.2 Description of the Study Area.

The study was carried out at the Eldoret Branch of the Coca Cola Company. The Company

comprises four departments with varied number of employees in each department.

Organizations deal mainly with financial business, that is, selling products, hence transactions

mainly involve both small and big monies. Money matters can be very delicate and sensitive,

18
such that those parties involved in the marketing process need to be cautious, honest and

reliable. Organizations also deal with varied types of customers, and thus they must work to

satisfy all of them and to meet their organizational objectives. It is for these reasons of

delicacy and sensitivity of the nature of business of the Company and the magnitude of their

customers that the researcher chose to study the role of interpersonal communication in the

process of conflict management in the company. This was done on the assumption that

conflict is inevitable in Organizations, as is the case with any other organization, and on the

hope that the Coca Cola Company is a representative of other Organizations.

3.3. The Population.

The participants of this study were selected from all four departments of the branch company,

that is, Eldoret branch, of the Coca Cola Company. This included members of the customer

service department, the accounts department, the marketing department as well as

management.

3.4. The sampling Procedure.

Purposive sampling was used to select all members at the branch to participate in the study.

That is, all members of marketing department (40), all members of management (5), the

accounts department (1), and the customer service department (1) participated in the study.

There was no need to sample out a few members to participate in the study considering the

small number of workers at the Eldoret Branch.

19
3.5. Data Collection

In order to achieve the stated objectives two data collection instruments were used. That is,

interview schedules and questionnaire. These two instruments were deemed ideal for the study

as they helped to elicit or collect primary data or first hand information. Quite often, the

questionnaire is considered as the heart of a survey operation (Kothari, 1985:125).

3.5.1. The Questionnaire.

A questionnaire is a set of questions formulated by the researcher, to be responded to by the

respondents in a study. A questionnaire is away of getting information or data about persons

by asking them via documented questions, to which they write their responses. In essence, a

questionnaire as a research tool is in the hands of the respondents and is completed by them.

The respondent is free to read the questions, and complete the questionnaire and return it at

his/her convenient time.

In this study, there was a common questionnaire for all the respondents or participants. The

questions of the questionnaire were constructed to generate data in answer to specific target

research questions so as to help achieve the objectives of this study. Both structured and non-

structured questions were used in the questionnaire. Open-ended questions were used so that

they could give the respondent a chance to express himself/herself freely. Closed-ended

questions on the other hand were used to save time and to motivate the respondent to answer.

20
3.5.2. The Personal interviews

An interview involves a one-on –one, face to face interaction of the researcher and a research

participant, also called the respondent. Interview involves the presentation of verbal questions

to the respondents by the researcher and reply in terms of verbal responses by the respondents.

This kind of interaction implies that, the researcher and the respondent are involved in a direct

face-to-face personal investigation.

All members of the management were interviewed. This was because of the position of the

management in the organization, and by extension their role, duty and function in the

organization. That is, the management, by virtue of their leadership position in the

organization may have a special or defined role in managing conflict and it is therefore

important to get such and other information directly from them by way of interview. Other

respondents included in the interview were representatives of the customer care department,

the accounts department and a representative of the marketing department who was randomly

selected.

The interview schedule was used because of its flexibility, as it allowed for rephrasing of

questions and probing. Interview was also important because it helped in eliciting effective

responses from the respondents particularly through observable non-verbal cues.

21
3.6. Administration of the Research Instruments.

3.6.1. Administration of the Questionnaire.

A total of 46 copies of the questionnaire were administered to the participants in the entire

study. The questionnaires were administered to fourty (40) members of the marketing

department who were purposively selected. member of the accounts department member of

the customer service department and members of the management also had the questionnaires

administered to them.

3.6.2. The Administration of Interview Sessions.

A total of seven (5) respondents were interviewed. These included members of management

who were purposively selected, the accounts assistant and the customer service personnel who

were both purposively selected, since they serve their respective departments singly.

Since these members were also required to complete the questionnaire, the interview was

carried out after they had completed the questionnaire.

3.6.3. Reliability and Validity of Data Collection Instruments

For the purpose of this study, two administrators of Eldoret polytechnic and five

marketing/sales personnel were served with the research instruments, namely the questionnaire

and the personal interview schedules. A test-retest approach was used to assess the reliability

of the research instruments. From their responses the researcher realized that the instruments

were reliable, and hence were employed in the study.

Regarding the validity of the instruments the supervisor of the study was requested to assess

the relevance of the content in the research instruments. Her comments and suggestions were

incorporated in the improvement of the validity of the instruments.

22
 CHAPTER FOUR

DATA PRESENTATION AND DATA INTERPRETATION

4.0 Introduction

This chapter gives the findings of the research as stipulated in the objectives. The graphs

given shows the analyzed respondents responses without alteration

gender % of respondents

Male 60

female 40

Table 1: showing the gender of the respondents

Gender of the respondemts

45
40
Number of respondents

35
30
25
Series1
20
15
10
5
0
Male Female
Gender

Fig 1: shows the gender of the respondents

23
 It is evident that most of the employees in most organizations are men.

Number of years % of respondents

< 20 2.86

20-29 18.57

30-39 45.71

40-49 28.57

> 50 4.29

Table 2: shows the age bracket of the respondent has worked

Age of respondents

40
frequancy

30
Series1
20
10
0
<20 20-29 30-39 40- >50
yrs yrs yrs 49yrs yrs
no. of yrs

Fig 2: shows the age of the respondents

The majority of the employees are 30-39 years of age followed by 40-49 years, 20-29 years

and the rest are below 20 and above 50 years.

24
Position held by respondent % of respondents

Managerial 20

Subordinate 80

Table 3: shows the position held by the respondent

position held by respondents

managerial
20%

surbordinat
e
80%

managerial surbordinate

Fig3: showing the position held by the respondents in the organization

The majority of the employees hold subordinate positions (80%) and a few (20 %) hold the

managerial positions.

Number of years worked by respondent % o respondents

<2 14.29

2-6 28.57

6-10 37.14

> 10 20

25
 Table 4: shows the number of years worked by the respondent

It is clear from the figure above that most of the workers have worked for 6-10 years,

followed by those who have worked for 6-10 years, more than 10 years and less than 2

years.

Employee involvement in decisions % of respondents

Yes 40

No 60

Table 5: shows if there is employee pricing on consumer behaviour in organization

From the figure above it is evident that most employees are not involved in managerial

decision making

Areas of pricing on consumer behaviour % of respondents

Financial 28.57

Salary and wage administration 21.43

Strategic management 35.71

Disciplinary action 14.29

Table 6: shows the area of employee involvement

The figure above indicates that most employees are involved in strategic management

mostly followed by financial, salary and wage policies and discipline

26
Levels of pricing on consumer behaviour % of respondents

Departmental 42.86

Top level management 7.14

Subordinates 50

Table 7: shows the levels of employee involvement

Most employees are involved at subordinate level and departmental but rarely in

managerial levels

Impact of pricing on consumer behaviour % of respondents

Yes 25.71

No 74.29

Table 8: shows the impact of employee involvement

As much as the employees are involved in decision making the impact failed is minimal

(26%).

Outcome of pricing on consumer % of respondents

behaviour

Increased production 12.86

Motivated employees 28.57

Decrease in employee indiscipline 42.86

Reduced absenteeism 15.71

27
 The minimal impact is failed in decreasing the disciplinary action, decrease in absenteeism,

and increase production in that order.

Challenges experienced % of respondents

Inferiority from workers 5.71

Lack of experience 14.29

Superiority complex 28.57

Bureaucracy 51.43

Table 10: shows the challenges faced during the process of employee pricing on consumer

behaviour

The most challenging barrier in pricing on consumer behaviour is bureaucracy followed by

superiority complex from the management while lack of experience and inferiority

complex from the subordinates takes small portions

Managerial efforts % of respondents

Training 68.57

Motivation 25.71

feedback 5.71

Table 11: shows the efforts of management in curbing these challenges

The management is concentrating in training to make employee pricing on consumer

behaviour more efficient.

28
Recommendations % of respondents

Training 42.86

Reduce bureaucracy 14.29

Clear policies on involvement 40

Benchmarking 2.86

Table 12: shows the recommendations to involve employee pricing on consumer behaviour

Training and clear policies are the most recommended ways to improve employee pricing

on consumer behaviour in managerial decision making

29
 CHAPTER FIVE

SUMMARY OF THE FINDINGS, CONCLUSION AND RECOMMENDATIONS

5.0 Overview

This chapter outlines the summary of major findings, discussion of findings, conclusion,

recommendation and suggestions for further research.

5.1 Summary of findings

The researcher found out that in most organizations employees are not involved in

managerial decision making. this is evident from the (60% )of respondents responding

negatively and only (40%) responding positively. further the researcher found out that

those involved in decision making are limited to subordinate levels ( 50 % ) and very rare

occasions on top management (7.14%)

The impact is not much failed through employee pricing on consumer behaviour as shown

from the responses (25.71), that there is an impact while (74.29) responding no impact.

However the area where the impact is failed most is on employee indiscipline reduction

(42.86) followed by reduction in absenteeism (15.71), motivating the employees (28.57)

and lastly increased production (12.86)

the most challenging factor influencing the employee pricing on consumer behaviour is

bureaucracy from the management (51.43) followed by unwillingness by the management

to encourage pricing on consumer behaviour (28.57), most employees do not have the

experience of making managerial decisions (14.29) and finally the employees feel inferior

that they are not competent to be involved in decision making (5.71)

30
to curb these challenges the researcher found out that the management is carrying out

training of the employees on the importance of pricing on consumer behaviour on

organizational performance. In addition they are motivating them and giving the feedback

as required. This marches with the recommendations given by the respondents; training

should be the key to success in pricing on consumer behaviour, followed by clear policies

governing the pricing on consumer behaviour, the management to reduce the bureaucracy,

and through carrying out benchmarking from other organizations.

From the findings most employees are not involved in managerial decisions of the

organization. This can be attributed to the fact that employee pricing on consumer

behaviour leads to the formation of the unions in the organization. The unions have proved

to be relatively unstable and short-lived with the majority of most organizations returning

to conventional ownership. (Pendleton, 2001).

This means therefore that a democratic, participative firm will invariably fail to survive this

form and will degenerate into a conventionally organized and controlled enterprise in order

to remain economically viable. (Jensen and Meckling, 1979).

The employee pricing on consumer behaviour has not received much impact in the

organization probably due to pressures from other economic and organizational factors

such as organizational pricing on consumer behaviour (Marching ton, 2000). However

successful use of employee pricing on consumer behaviour has seen overall company

performance through reduced absenteeism, reduced employee discipline and motivation,

this is also evident by Newell et al., 20002) employee pricing on consumer behaviour

31
realizes many challenges in the process of instituting it n the organizational decision

making. The surveys have revealed convincing challenges in adoption of employee pricing

on consumer behaviour.

Following the environmental pressure, new forms of management often based explicitly or

implicitly on Human resource principles have emphasized on contracts rather collective

bargaining. There is a call for more supervisory activity as compared to employee

involvement (Gallie et al., (1998)

it is evident that integrative forms of management policy are more sensitive to be exposed

on non-manual employees. Managerial decision making requires skilled and experienced

personnel to minimize errors. Rising of skill levels and the granting of increased discretion

to employers today are the factors in improving the quality of work experience. Most

research have shown that high levels of commitment to the organization can reduce

absenteeism and labour turnover but there was no evidence that organizational commitment

added anything over and above other organizational and task characteristics with regard to

quality of work performance.

5.2 CONCLUSION

Pricing strategy is very vital in any organization towards consumer behaviour among

others. In the modern system of management employee pricing on consumer behaviour

forms the pivot around which most of the problems are solved. Pricing on consumer

behaviour frequently settles the grievances and restores industrial dispute.

There are forms of pricing on consumer behaviour which are predominantly direct, such as

briefing groups and individual I nature for example attitude surveys or suggestion schemes.

32
Most of these forms are conflated into the term employee involvement or employee

empowerment, and most of them can be included under Human Resource Strategic.

As associated impulse propelling managers towards a commitment-based regime derives

from the growth of so-called knowledge sectors of the economy in which the means of

production are locked in the head of valued employees. Poor performance has been

regarded as being contributed by lack of employee pricing on consumer behaviour. The

growing emphasis on all forms of flexibility in industry in responses to competition,

pressure subsequent changes in work organization and the current political climate is

reflected in the emerging models of pricing on consumer behaviour.

The research reveals that employee involvement as a whole translates to improved

performance in the organizations. Therefore it is vital to encourage pricing on consumer

behaviour in all areas and levels of the organization since the success of any organization

lies on the hands of the employees.

33
5.3 RECOMMENDATIONS

Pricing on consumer behaviour in decision making on management involves commonly

three parties; the managers, the employees and the employee representatives. these parties

incorporate the job reward and the career of the individuals with the culture and

communication of the organizations as it affects them (Kessler and Undy (1996). in

addition it includes the collective agreement and joint employee relationship with the

management whereby the formal dimensions being rules and procedures while the informal

dimension includes, expectations , assumptions and understanding.

Pricing on consumer behaviour exists at different levels in the organization: at management

level and supervision level: through management to individual employees or with their

representatives or group of people representing the employees.

These relationships in most cases is affected by the management styles prevailing

throughout the organization

34
REFERENCES

1. Mr Ilić B., dr Milićević V., Ilić B., Kvantificiranje uticaja cena na rezultate poslovanja

preduzeća u

konkurentskom okruženju, Simpozijum o operacionim istraživanjima SYM-OP-IS, zbornik

radova,

Herceg Novi, 1998.

2. Dr Pokrajčić D., Strategija cena novih proizvoda, u knjizi: Ekonomska efikasnost strategije

preduzeća,

Ekonomski fakultet, Institut za ekonomska istraživanja, Niš, 1994.

3. Douglas E., Managerial Economics - Analysis and Strategy, Prentice Hall International,

Englewood

Cliffs, NJ, 1992

4. Dr Milićević V., Upravljanje troškovima i profitabilnost, Poslovna politika, februar, 1998.

5. www.ford.com

6. Hanna N., Dodge H., Pricing-Policies and Procedures, Macmillan Business, Houndmills,

Basingstoke

and London, 1997

10. Dr Milisavljević M., Marketing, Savremena administracija, Beograd, 2003.

11. Mr Ilić B., Odredjivanje prodajnih cena u uslovima različitih tržišnih stanja, Ekonomski

vidici, br.3, 1997.

12. Parkin M., Microeconomics, Addison Wesley, Boston, 2003.

13. Pass C., Lowers B., Davies L., Economics, Harper Collins Publishers, London, 2000.

14. Gabor A., Pricing, Gower, Cambridge, 1988.

35
 APPENDIX 1

RESEARCH QUESTIONARRE: STAFF OF COCA COLA COMPANY

RESEARCHER: JEPCHIRCHIR EUNICE

TOPIC: ROLES OF PRICING ON CONSUMER BEHAVIUOR

PURPOSE OF RESEARCH: PARTIAL FULFILLMENT FOR THE AWARD OF

DIPLOMA IN MARKETING-ELDORET POLYTECHNIC.

Matters to Note

Note that all information collected will be held in complete confidence; under no

circumstances will your name be associated with any specific responses.

Section 1: GENERAL INFORMATION

1.0 Gender of the respondents

Male

Female

1.1 Age bracket of the respondents

0-25

26-35

36-45

46-55

Over 55

36
1.2 Which position doe you hold in your organization?

………………………………………………………………………

Section 2: information on objectives

2.1 Do you carry out pricing on consumer behaviour?

Yes

No

2.1.1 If yes, which area (s) do you use?

sales

production

manufacturing

Magazines

Shows and exhibitions

Any other (specify) ………………………….

2.2 Who does the pricing on consumer behaviour?

Departmental

Top level management

Subordinates

Any other (specify)………………………

37
2.3 Is there any impact of pricing on consumer behaviour?

Yes

No

2.3.1 If yes, what impact does your organization experience?

Increased sales volume

Corporate image

Expansion of organization

Other (specify) …………………………………….

2.4 What challenges do you experience when practicing pricing on consumer behaviour?

Legal implication

Lack of experience

Technological advancement

Limited resources

Other (specify)…………………………….

2.5.1 If yes, what are they?

Promotes consumption

Creates unnecessary desires

Insults

Misleading

Any other (specify)……………………………..

38
2.5 What efforts is the management doing in order to improve on pricing on consumer

behaviour?

Training

Sourcing for resources

Motivation

Other (specify)…………………………………………

2.6 On your own opinion what recommend to be done so as to improve pricing on consumer

behaviour?

Thank you

39