Key Factors Influencing Pricing Strategies For Small Business Enterprises (SMEs) Are They Important?
Price is a critical component for any business and can be crucial in the survival of the business. If the price is not set in line with the selected target market it can negatively impact on the product and the company's profitability. The main goals of any profit seeking organisation is to make a profit and in order to achieve this goal all areas related to the management of the product, costs and the setting of the price need to be managed correctly. The primary aim of this study was therefore to investigate the factors considered by small business enterprises (SME's) when developing their pricing strategies. To address this problem adequately, the research methodology was based on the primary data collected from South African SMEs. As SME's show common traits all over the world, it is accepted that any findings will be universally applicable. A questionnaire was distributed to 88 SMEs to gather relevant data regarding factors considered when determining prices. The data was quantified and analysed by examining the frequency of occurrences and the importance of the problem. The study found that SME's generally agree that price setting is influenced by competitor information and macro environmental factors such as fuel prices and inflation. There was a general agreement amongst the SME's that consumers relationships and the benefits that they, the consumers enjoy form the product as well as product performance are important aspects to consider when determining prices.