Demand Based Pricing Strategies and Competitive Advantage: Evidence from MTN Company in Bushenyi - Ishaka Municipality, Uganda
Volume 4 - Issue 6, June 2020 Edition
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Author(s)
Mary Baineamasanyu, Muniru Sewanyina
Keywords
Competitive Advantage and Demand Based Pricing Strategies
Abstract
The study on “demand based pricing strategies and competitive advantage: a case of MTN Company in Bushenyi – Ishaka municipality, Bushenyi districtâ€. Issues of competitiveness in MTN seem to have arisen from keeping costs at a high level, overpricing products, and failure to address customers needs as these make the public unhappy making them want to migrate to other companies that offer better services. Hence, the pricing strategies and their leverage on competitive advantage in MTN Corporation was investigated. The objective of the study was to assess how demand based pricing affects competitive advantage. Cross sectional survey was used as research design. From a population of 70, a sample size of 60 respondents was selected. Purposive, stratified random and simple random sampling were used to select respondents. Questionnaires and interview guide were used to collect data. Data was presented, analyzed and interpreted by use of frequency tables, percentages and Pearson’s Linear Correlation Coefficient. The major findings indicated that: prices in MTN were very high; the pricing strategy used by MTN was demand-based rather than cost based or competition-based pricing strategies. It was established that customers preferred penetration pricing strategy. It was observed that by using demand-based pricing strategy, MTN is helped by the fact that most of its products are used by corporate customers. This allows MTN to have high prices that are not based on other competitor’s charges and which give it a competitive advantage. Nevertheless, penetration pricing strategy was regarded as the most suitable by the customers. It was concluded that, for a company that depends on non corporate clientele, penetration pricing strategy may help the company to have a competitive edge over rivals.
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