Abstract
Consumer shopping behavior is becoming increasingly polarized, which has an impact on price decisions, and the performance and sustainability of supermarkets. This study sets out to empirically determine the impact that pricing practice management has on the performance and sustainability of supermarkets in the urban area of Enugu State, Nigeria. The study explicitly attempts to ascertain the impact of value-informed pricing practice, competition-informed pricing practice, and cost-informed pricing practice on supermarkets’ performance and sustainability in urban Enugu. The paper also examines the impact of adopting three different pricing practices when the relative product advantage and/or competitive intensity are/is moderating variable(s). With a population of 100 supermarkets, 48 responded to the questionnaire. A multiple regression analysis was utilized to test the hypothesis formulated for the study. The study found that the adoption of a value-informed pricing practice, competition-informed pricing practice, and cost-informed pricing practice by management has no significant impact, negatively significant impact, and positively significant impact, respectively, on supermarkets’ performance and sustainability in urban Enugu. The study also found that the impact of the three pricing practices on performance and sustainability of supermarkets in the urban area of Enugu State, changes significantly when relative product advantage and/or competitive intensity are/is moderating variable(s). Amongst others, this study recommends that the management of supermarkets should carry out an internal and external environmental assessment of a product before deciding on the appropriate pricing practice to adopt for that product. Critical consideration should be given to the relative product advantage and the competitive intensity of the product. Moreover, the adopted pricing practice must be situated within the overall performance objective of the firm in such a way that resources are optimized, and the maximum value attained.
Highlights
The use of various pricing practices as a management tool in steering an organization towards the achievement of set goals and objectives becomes more pronounced during the period of transition from a barter economy to a money-based market system
Managers have begun to realize that, in order to stay competitive and achieve improved performance, they need to adopt superior pricing practices, which furthers this objective. This was founded on the belief that managers who have a deep understanding of pricing practices, and how they relate to their overall strategy and performance objectives, are more primed to succeed and achieve their company’s goals
We conclude that the impact of pricing practices on supermarkets performance and sustainability in urban Enugu is statistically significant., we do not accept the null hypothesis (H0)
Summary
The use of various pricing practices as a management tool in steering an organization towards the achievement of set goals and objectives becomes more pronounced during the period of transition from a barter economy to a money-based market system. Another layer of complexity is added when considering the effects of increased competition (due to the profound impact of globalization, which has shrunk the world into a global village). Managers have begun to realize that, in order to stay competitive and achieve improved performance (such as increased market share and revenue), they need to adopt superior pricing practices, which furthers this objective.
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