Content Vol. 3 N 4, 2017

Pages 70 - 80

The influence of pricing strategy on organizational performance of seed maize companies in Kenya; Munyaradzi Jonga, Esther Waiganjo, Agnes Njeru; Inter. J. Acad. Stud.; 3(04):70-80

This study focused on the influence of product pricing strategy on organizational performance of seed maize companies in Kenya. The study used a cross-sectional survey research design to collect data from the target population which comprised of all the 24 seed maize companies registered at the Seed Trade Association of Kenya. The respondents were the managerial employees within the seed companies and key seed experts in Kenya. Primary data was obtained by administering questionnaires to four employees within each seed company. The four employees were randomly selected from the production, marketing, finance and warehousing departments. The key seed experts were selected through snow balling and judgment technique. Interviews were conducted with the selected seed experts. The collected data was analysed using SPSS software. Both descriptive and inferential statistics were used. Inferential statistics included the use of bivariate analysis and the study used the Pearson correlation coefficient. The study also ran a multiple regression model in order to establish the effect of pricing strategy on organizational performance of seed maize companies. The study findings indicated that product pricing strategy was statistically significant in explaining organizational performance of seed maize companies. Product pricing strategy and organizational performance had a strong positive relationship as indicated by a correlation coefficient of 0.748 (74.8%). The fitted regression equation showed that one positive unit change in product pricing strategy effectiveness leads to a change in organizational performance at the rate of 55.1%. The results indicated that low price of seeds, variety of pack sizes with different prices, availability of credit facilities to farmers and volume discounts for large purchase can boost sales and organizational performance by meeting quantity needs for various buyers. The results also indicated that charging high price for premium seed varieties creates better margins from high net worth farmers. Competitor pricing strategy also affected the business of seed companies. The study recommends that the seed companies should embrace competitive pricing strategies to ensure that they gain superior advantage. This can be achieved by offering low prices, volume discounts, different product pack sizes and access to credit facilities to increase sales. Higher profit margins would be achieved through charging high prices for premium seed varieties.

Key words: 
Pricing strategy; Organizational performance; Seed maize companies; Competitiveness.

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