INFLUENCE OF PRICE REDUCTION ON CONSUMER BUYING BEHAVIOUR TABLE OF CONTENT Title page Approval page Dedication Acknowledgment Abstract Table of content CHAPTER ONE 1.0 INTRODUCTION 1.1 Background of the study 1.2 Statement of problem 1.3 Objective of the study 1.4 Research Hypotheses 1.5 Significance of the study 1.6 Scope and limitation of the study 1.7 Definition of terms 1.8 Organization of the study CHAPETR TWO 2.0 LITERATURE REVIEW CHAPETR THREE 3.0 Research methodology 3.1 sources of data collection 3.3 Population of the study 3.4 Sampling and sampling distribution 3.5 Validation of research instrument 3.6 Method of data analysis CHAPTER FOUR DATA PRESENTATION AND ANALYSIS AND INTERPRETATION 4.1 Introductions 4.2 Data analysis CHAPTER FIVE 5.1 Introduction 5.2 Summary 5.3 Conclusion 5.4 Recommendation Appendix ABSTRACT This research work examines the influence of price reduction on consumer behavior which has made the environment very complex and consumer preferences keep changing because of the low switching cost in the market. Due to this increasing demand of consumers in the market, management of business organizations have to increase their resources with attention focused more on attracting and retaining its customers by price reduction strategies. The instruments used were questionnaire and data was collected and analysed. Based on the findings, the following conclusion was drawn by the researcher; Price and quality has influence on the consumer buying decision. The fact remains that consumer consider both price and quality in their buying situation. The observation shows that customers feel reluctant to buy high price phone. CHAPTER ONE INTRODUCTION 1.1 Background to the study The business environment has become very competitive in the 21st century due to the growth in technology, infrastructure and access to information around the globe. This has made the environment very complex and consumer preferences keep changing because of the low switching cost in the market. Due to this increasing demand of consumers in the market, management of business organizations have to increase their resources with attention focused more on attracting and retaining its customers. The ever increasing competition in the global market has prompted organisations to be determined and ensure satisfaction of customer needs and wants more efficiently and effectively than ones competitors. Customers are not too blind to buy a product without searching information about a product or service. Actually, consumers are sensitive to the prices because they want to get maximum benefits of using their money and time. Consumers are very rational to judge what they are getting from buying a product or service in exchange of their payments for it. In the business environment in Nigeria due to the recent recession has been experiencing slow growths in terms of sales and revenue. This has led to the downsizing of many companies and closure of a handful. Today price determines to a large extent consumers behavior towards a particular product or service. Many companies and organizations have now acknowledged the critical importance of being customer-oriented and customer-driven in all their activities. Kotler (1997) asserts that it is not enough to be product-driven or technology-driven, without bringing the power of customer into the centre of the business. In marketing economy, customers are the lifeblood of every organization, and without customers no organization can be in its existence. Customers are important because they determine survival of an organization according to Kotler (1997). In mobile phone industry, price and quality may be among the factors that consumers consider when making purchase decision. Therefore, it is important for mobile phone organization to understand how customers compare price and quality when making purchase in mobile phone industry. This will help organization to strategize in order to meet the needs of customer. Customers are not only influenced by price and quality, they are influence by variety of factors but for the purpose of this study price and quality will be considered. According to Kotler and Armstrong (1990), price is the only element in the marketing mix which produces revenue and that all the other element represent cost. Price is the amount for which product, service or idea is exchanged, or offered for sale regardless of its worth or value to potential. The meaning of quality differs depending upon circumstances and perceptions. For example, quality is a different concept when focusing on tangible products versus the perception of a quality service. The meaning of quality is also time-based or situational. According to Kotler and Keller (1997), satisfaction will also depend on product and service. American society for Quality Control\u2019s definition for quality is the totality of features and characteristics of a product or service that bear ability to satisfy stated or implied needs. Quality is how the recipient of the product or service views the product or service: before buying, upon delivery, and after the delivery-and use. In other words, quality is satisfying the customer and it is defines by customer. Quality is exceeding the customer expectations and the extent to which the customers or users believe the product or service surpasses their needs and expectations. Product quality in a broad sense, is defined as \u201csuperiority or excellence\u201d of a product Zeithaml, Dawar, (1999). Two major problems can be reported on this definition: the first is that, this definition neglects the fact that a product\u2019s state of quality has a wide range of degrees, starting from \u201cpoor and unacceptance\u201d and ending with \u201csuperior\u201d. The second problem was the intrinsic element of subjectivity which can determine where the quality of the product lies, within what range, and how it is oriented. There are drivers of quality according to customers: in a customer-driven organization, quality is established with a focus on satisfying or exceeding the requirements, expectations, needs, and preferences of customers. Customer-driven quality is a common culture within many organizations. Also another driven of quality is products or services: a culture of product or service-driven quality was popular in the early stages of quality improvement. Conformance to requirements and zero defect concepts have roots in producing a product or service that meets stated or documented requirements. In some cases, product or service requirements originate from customer requirements, thereby creating a common link to customer-driven quality, but the focus of the culture is on the quality of the product or service. If the customer requirements is accurately stated and designed into the production or service delivery process, then as long as the product or service meets the requirements, the customer should be satisfied. According to Churchill and Patter (1994), the way consumer decides whether and what to buy depends partly on the significance of the purchase. Consumer purchase decision specifically refers to the activities consumer take when deciding what to buy and when making the actual purchase. Consumer research about price can show how to communicate price most effectively. Research indicates that, the ending of the price affect how consumer perceives quality of the product. It is not an exaggeration that every consumer want to use a product that is of high quality and at the same time at high price. This has lead to academic uncertainty that, it is price that influences consumer to purchase mobile phone and others are saying that it is quality that influences consumer to purchase mobile phone but not price, that is why there is the need to investigate whether consumer select a product by using price as indicator or quality In today marketing environment, price and quality of product is central issue, but not only in consumer decision making process and the outcomes of their overall satisfaction but decision making and marketing strategy of the producer. The concept of quality take a particularly special emphasis when there is juxtapose against price that consumer is able to pay. According to Robert (1995), price is the manager biggest marketing headache, and it\u2019s where they feel the most pressure to perform and the least certain that they are doing a good job. Pricing decision should consider customer and competitor reactions. In formal uses, customer will generally perceived price as an indicator of product or service quality and will normally evaluate the cost in terms of perceived benefit derived from the consumption of the offering. In most cases, customers have the opportunity to choose from a variety of offering and thus price will be one of the comparative indicators upon which their buying decision will be based, (Brian and Karen). The major determinant of prices, of course, is what the consumer is prepared to pay, which is in turn related to a number of other factors including quality. Price is one element of marketing mix. It can change very easily as compared to other element of marketing mix. The marketer can decide to lower or raise a price more frequently. 1.2 STATEMENT OF THE PROBLEM The study of consumer behaviour helps everybody as all are consumers. It is essential for marketers to understand consumers to survive and succeed in the competitive marketing environment. As competition and other environmental influences increase globally, it is obvious that there are growing emphases on quality improvement and cost reduction in order to achieve customer satisfaction and enhancing organizational value. Some companies have gon to the extent of constantly reducing prices of goods and services to remain in Business. This work is to study the influence of price reduction on consumer reduction using Abuja as a case study. 1.3. AIMS AND OBJECTIVES OF STUDY Objectives of the Study The general objective of the study is to make a comparative analysis of price and quality and how they influence consumer purchase of mobile phone. These specific objectives are as fellows; 1.4 RESEARCH QUESTIONS The study will be undertaken under the following research questions; 1). How does price influence consumer purchase of mobile phone? 2). How does quality influence consumer purchase of mobile? 3). How does consumers react to price? 1.5 STATEMENT OF THE HYPOTHESES HYPOTHESIS ONE Hi: There is no relationship between price reduction and the consumer buying behaviour. Ho: There is a relationship between price reduction and the consumer buying behaviour. 1.6 SIGNIFICANCE OF THE STUDY The role Consumer behaviour plays in the lives of humans cannot be overemphasized. Most of the free time is spent in the market place, shopping or engaging in other activities. The extra time is usually passed in knowing and thinking about products and services, discussing with friends about them, and watching advertisements related to them. The usage of them significantly reveals our life styles. All these reasons suggest the need for study. However, the purpose may be to attend immediate and tangible reasons. The study will assist companies especially the Nigeria Bottling Company to know how best to make their budget allocation to the different element of the marketing mix and particularly price reduction process. Finally, the study will serve as a source of secondary data to researcher in the field of advertising and consumer behavior. 1.7 SCOPE AND LIMITATIONS OF THE STUDY The scope of this study is the influence on consumer buying behaviour. Some of the respondent did not return their questionnaire distributed to them by the researcher. The researcher encountered some constraints, which limited the scope of the study. These constraints include but are not limited to the following. a) AVAILABILITY OF RESEARCH MATERIAL: The research material available to the researcher is insufficient, thereby limiting the study b) TIME: The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study. During the course of this study, relevant literatures which could have been of great help were not available in the Polytechnic Library. 1.8 OPERATIONAL DEFINITION OF TERMS Marketing Mix: The set of controllable tactical marketing tools product, price, place and promotion that the firm blends to produce other response it want in the larger market. Promotions Mix: The specific mix of advertising personal selling, sales promotion and public relations that a company uses to pursue its advertising and marketing objectives. Publicity: Activities to promote a company, its product by planning news about it in media not paid by the sponsor. Sales Promotion: Short term incentives to encourage purchase or sales of product or services. Personal Selling: Oral presentation in a conservation with one or more prospect purchase for the purchase of making sales. Consumer Buying Behaviour: The buying behavior of final consumer\u2019s individuals and household who buy goods and services for personal consumption. Consumer Behaviour: It is broadly the study of individuals, or organizations and the processes consumers use to search, select, use and dispose of products, services, experience, or ideas to satisfy needs and its impact on the consumer and society. Customers versus Consumers: The term customer is specific in terms of brand, company, or shop. It refers to person who customarily or regularly purchases particular brand, purchases particular company\u2018s product, or purchases from particular shop. Thus a person who shops at Bata Stores or who uses Raymonds clothing is a customer of these firms. Whereas the consumer is a person who generally engages in the activities, select, use and dispose of products, services, experience, or ideas. Consumer Motives: Consumer has a motive for purchasing a particular product. Motive is a strong feeling, urge, instinct, desire or emotion that makes the buyer to make a decision to buy. Buying motives thus are defined as those influences or considerations which provide the impulse to buy, induce action or determine choice in the purchase of goods or service. These motives are generally controlled by economic, social, psychological influences etc. 1.9 ORGANIZATION OF THE STUDY The study is divided into five chapters. Chapter one deals with the study\u2019s introduction and gives a background to the study. Chapter two review related and relevant literatures. The chapter three gives the research methodology while the chapter four gives the study\u2019s analysis and interpretation of data. The study concludes with chapter five which deals on the summary, conclusion and recommendation.