IMPACT OF PRICING STRATEGIES ON SUCCESS OF SMALL AND MEDIUM ENTERPRISES. A CASE STUDY OF JUMIA UGANDA LIMITED

Abstract

ABSTRACT The paper addresses the essence of pricing strategies to the success of SMEs, given that over the years, SMEs have been playing a significant role in employment creation, income generation, and poverty alleviation. SMEs have to make such pricing decisions that ensure the prices are attractive enough to appeal to customers so that they can retain purchases and elevate sales volumes. While pricing strategies remain important in the operations of the SMEs, the literature remains scanty as to how various approaches affect sales volume. The study, therefore, intends to establish the effect of pricing strategies on the success of Jumia Uganda Limited, a construction equipment SME in Uganda, through analysis of the influence of cost based, demand-based, and competition-based pricing on the success of the firm. Subsequently, policy makers can draw on findings related to their demands when designing effective policies and supporting strategies for the purpose of regulating pricing strategies and successes in SMEs. This study outlined the description of the research design, study population, sample design, sources of data, procedures for data collection, sample size, sampling techniques, the instrument of data collection, data analysis, and the ethical considerations in undertaking a study on the effect of pricing strategies on the successes of SMEs in the marketing department of Jumia Uganda Limited. This study will adopt a cross-sectional research design. Stratified probability sampling will be used to draw a sample size of 34 from the total population of 30 respondents. The data collection shall involve the use of questionnaires and for analysis, SPSS software will be utilized. Validity and reliability issues in data collection will be put into consideration alongside considerations of ethics while undertaking the research. Both primary and secondary data will be gathered in the research in order to give a wider perspective to the researchers regarding the problem. The study identified that cost-based pricing is found to significantly contribute towards the success of the company, demand-based pricing guides revenue maximization, while competition-based pricing helps with maintaining competitive pricing in defense of market position. This study enumerates that the company has to monitor pricing strategies on a continuous basis and make the required adjustments, invest in sophisticated analytics tools, institute a feedback loop with the customers, improve knowledge of employees about pricing strategies by training and development programs, embed pricing strategies into other areas of the business, and from time to time review and measure the overall performance of the business to establish the benefits of pricing strategies.