Pricing and its Effects on Market Share of Security Firms in Kenya

Abstract

The pricing of any product in the market is an important determinant of the extent to which customers and competitors respond to it. It is also expected that market share of a company’s products may be determined by the pricing strategies adopted and implemented. The purpose of this study was therefore to evaluate the effects of pricing on market share of security firms in Kenya, with reference to Nakuru Municipality. The study employed cross-sectional survey method. The target population was 2,500 respondents comprising of customers to security firms. From the target population, a sample of 300 (12%) respondents was picked; using stratified sampling and simple random sampling techniques. The data were collected using structured questionnaires and analyzed using percentages and frequencies and presented in form of tables and charts. The study found out that price had a bearing on the market share of security firms since customers assessed the utility they got from the product/service based on benefits received and sacrifices made. Therefore, if consumers perceived price to be high, they could purchase competitive brands or substitute products/services leading to a loss of sales (market share). The study recommends that clear pricing structure/policy that takes into consideration a number of factors should be developed to harmonize the customer perception about service quality and the firm’s anticipated profitability level.