EFFECTIVENESS OF PRICING POLICY AND PROFIT PLANNING IN NIGERIAN ORGANIZATIONS: A PERFORMANCE APPRAISAL OF SOME SELECTED MANUFACTURING FIRMS

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CHAPTER ONE

INTRODUCTION

1.1      BACK GROUND OF THE STUDY

In  modern  economies,  prices  are  generally  expressed  in

units of some form of currency. Although, prices could be quoted as quantities of other goods and services (BARTER SYSTEM). Prices are sometimes quoted in terms of vouchers such as trading stamps. Price sometimes refers to the quantity of payment requested by a seller of goods or services rather than the actual payment amount.

One of the most crucial operating decisions management must make is establishing a setting price for its products but this is quiet unfortunately that many firms are still mismanaging pricing causing lots of money and anticipated profit to be unexplored and wasted.

In many financial transactions, it is customary to quote prices in other ways. The requested amount is sometimes called the asking or selling price, while actual payment may be called the transaction or traded price.

However in explaining the importance of pricing, Egbunike (2007:83) sustained that setting the price for an organizations

product or service is one of the most difficult, due to some number of variety of factors that must be considered. The primary decision arises in virtually all types of organization, just to mention but a few of them such as manufacturers set prices for their products, they manufacture, merchandising companies set prices for their goods, service firms set prices....

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