PRICING METHODS AND ORGANIZATIONAL PROFITABILITY
DOI:
https://doi.org/10.64415/jgpmc.v3i1.88Keywords:
Pricing methods, cost-based pricing, value-based pricing, competition-based pricing, penetration pricing, psychological pricing, organisational profitability, FMCGAbstract
Pricing is a critical marketing decision because it directly influences revenue generation, consumer purchasing behaviour, market competitiveness and organisational profitability. This study examined the relationship between pricing methods and organisational profitability in the Fast-Moving Consumer Goods (FMCG) sector in Calabar, Cross River State, Nigeria. Specifically, the study examined cost-based pricing, value-based pricing, competition-based pricing, penetration pricing and psychological pricing in relation to organisational profitability and market-related outcomes. A descriptive survey research design was adopted. The population comprised employees of selected FMCG firms, particularly those in marketing, sales, finance and accounting departments. A sample of 150 respondents was selected through simple random sampling. Data were collected using a structured questionnaire, while the instrument recorded a Cronbach's alpha reliability coefficient of 0.78. Data were analysed using descriptive statistics, Pearson Product Moment Correlation and regression analysis with SPSS. The findings indicated that pricing methods significantly influence organisational profitability. Value-based pricing demonstrated the strongest positive effect on profitability, while competition-based pricing contributed to market competitiveness and customer acquisition. Penetration pricing supported market expansion, sales growth and product awareness, whereas psychological pricing influenced consumer purchasing behaviour and perceived affordability. The study concludes that FMCG firms can strengthen profitability by integrating customer value, cost considerations, competitive conditions and consumer responses into their pricing decisions rather than relying exclusively on cost-based pricing.
Keywords: Pricing methods, cost-based pricing, value-based pricing, competition-based pricing, penetration pricing, psychological pricing, organisational profitability, FMCG.
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