EFFECT OF PRICE ON CONSUMERS PATRONAGE OF MARY KAY PERFUME

CHAPTER
ONE

INTRODUCTION

1.1     
Background
of the study

Perfume product is very important to the health of the
human being. It is used for preserving the odor. This product has to be
appropriately pricing in order to attract customer patronage and increase profitability.
According to (Kotler, 1996: 46) price is the amount of money customers pay for
the product or service and the time a place of change.(Mmamel, 1994: 10) in the
quality renew of marketing stated that price is the exchange value of
goods/services and the value of an item is what it can be exchange in the
market place, every product and service has its price. It is through price and
payment that firms recover their cost of production and active their margin of
profit.Pricing is the monetary expression of value is created on utility,
utility is an expression of usefulness while usefulness is based on the
potential for need and want satisfaction value and utility are culturally based
while needs and want-cultural, psychological, sociological and physiological
based, therefore price as an ultimate expression of needs and want satisfying
potential of an items of product or services which has cultural psychological
economic implication on market. (EdogaAni, 2000: 319) noted that price as
perceived quality increase, value increase. Also for a given price, value
decrease when perceived quality decrease. For some product price itself
influences the perception of quality and ultimately value to consumers. This
includes toilet soaps.Pricing is an important and compete element of the
marketing mix and generate the highest level of external interference. It is a
major determine with volume of goods and services available for the consumer in
any economy. Therefore, forms especially those on profit business has to choose
with the contain of the environmental variables both external and internal
pricing policies and techniques which are available to achieve its
organizational objectives. The importance of price in the marketing of Mary-Kay
perfume cannot be over emphasized. If an organization wants to maximize its net
profit, the right price must me selected for its products price in goods may
either be too high or too low to be good. When the price and changed are two
high the size of the market for that particular product may be unnecessarily
restricted and if the right price where used. The size of net profit is
directly related to the effectiveness of price because price usually causes
change in market demand for a given product and in turn it revenue and net
profit.(Monroe 1994: 210) Noted that the consumer perception of product quality
very directly with the price, the higher the price the better the quality is
preferred to be. In the words of (Adirika, Ebue&Nnolim 1993: 25) without
price there can be no marketing, product may be marched with market but only
when buyers or sellers agree on price, buyer or a seller may propose a price
but it is not effective unit price is accepted by the owner. In the view of the
complex nature of price and important to customers patronage decision the researcher
in the study critically examine the effect of piecing on consumer patronage of
Mary-Kay perfume in Enugu metropolis

1.2 STATEMENT OF THE
PROBLEM

The high mortality rate of manufacturing business
especially those firms in the beverages industries in our country Nigeria is a
source of concern to the management of business organization and the society in
general. Itseems that these forms do not adopt appropriate pricing strategies
in the pricing of their products.Today, one can see small manufacturing firms
spring up in the city in the guise of manufacturing perfume. Some of these
firms after a few months/years of operation start to experience low sales low
profit as a result of poor customer patronage caused partly by failure to adopt
appropriate pricing strategies.A situation where manufacturers of consumers
products and services continue to experience low sales volume or an eventual
close up of business as a result of low profit margin arising from the adoption
of wrong pricing strategies calls for investigation. The study seeks to find
out what pricing strategies are used by as well as those manufacturing firms in
the Mary-Kay industry and how far they have helped in goal accomplishment.

1.3 OBJECTIVE OF THE STUDY    

The
main objective of this study is effect of price on consumer patronage of MaryKay
perfume.  But for the successful
completion of the study; the researcher intends to achieve the following
sub-objectives;

1.   To
determine if the price of Mary Kay perfume affect customers patronage

2.   To
determine whether customers patronage Mary Kay perfume than others brand

3.   To
ascertain the relationship between the price of Mary Kay perfume  and 
customers patronage

4.   To
ascertain the level of advertisement carry out by the company

1.4 RESEARCH HYPOTHESES

For
the successful completion of the study, the following research hypotheses were
formulated by the researcher; 

H0: the
price of Mary Kay perfume does not affect customer’s patronage

H1:  the price of Mary Kay perfume
affects customer’s patronage

H02: customers
does not patronize Mary Kay perfume than others brand

H2:customers
patronize Mary Kay perfume than others brand

1.5 SIGNIFICANCE OF THE STUDY

It
is believed that at the completion of the study, the findings will be of
benefit to the company of Mary Kay and the customers. The study will also be of
great benefit to the researchers who intends to embark on research on similar
topics as it will serve as a guide. Finally, the study will be of great importance
to academia’s, lecturers, teachers, students and the general public.

1.6 SCOPE AND LIMITATION OF THE STUDY

The scope of the study covers the effect of
price on customer’s patronage of Mary Kay perfume. The researcher encounters
some constrain which limited the scope of the study;

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.

c) Organizational privacy:
Limited Access to the selected auditing firm makes it difficult to get all the
necessary and required information concerning the activities

1.7 DEFINITION OF TERMS

PRICE: price is the quantity of payment or compensation given by one
party to another in return for goods or services.

CONSUMER:A consumer is a
person or organization that uses economic services or commodities. In economic
systems consumers are utilities expressed in
the decision to trade or not.

PATRONAGE: Patronage is the support, encouragement, privilege, or financial
aid that an organization or individual bestows to another. In the history of
art, arts patronage refers to the support that
kings, popes, and the wealthy have provided to artists such as musicians,
painters, and sculptors

PERFUME:Perfume is a mixture of fragrant essential oils or aroma compounds,
fixatives and solvents, used to give the human body, animals, food, objects

1.8 ORGANIZATION
OF THE STUDY

This research work is
organized in five chapters, for easy understanding, as follows

Chapter
one is concern with the introduction, which consist of the (overview, of the
study), historical background, statement of problem, objectives of the study,
research hypotheses, significance of the study, scope and limitation of the
study, definition of terms and historical background of the study. Chapter two
highlights the theoretical framework on which the study is based, thus the
review of related literature. Chapter three deals on the research design and
methodology adopted in the study. Chapter four concentrate on the data
collection and analysis and presentation of finding.  Chapter five gives summary, conclusion, and
recommendations made of the study