DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN

CLAVER, SURIGAO DEL NORTE

DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET

RETAILERS IN CLAVER, SURIGAO DEL NORTE

A Research Paper Presented to

CLAVER NATIONAL HIGH SCHOOL
Senior High School
Tayaga, Claver, Surigao del Norte

In Partial Fulfillment of the Requirements for the Course

Practical Research 2
Academic Track
Accountancy, Business and Management (ABM) Strand

By

Charles Christian V. Galido

Shiela Marie G. Piape
Joytrisha Y. Dumanig
Jessa Belle B. Iligan
Jayferson D. Ata

September 2019
 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
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TABLE OF CONTENTS

Page

TITLE PAGE i
APPROVAL SHEET ii
ACKNOWLEDGEMENT iii
DEDICATION iv
ABSTRACT v
TABLE OF CONTENTS vi
LIST OF TABLES AND FIGURES
CHAPTER
1. THE PROBLEM AND ITS BACKGROUND 1
Introduction 1
Conceptual Framework of the Study 2
Statement of the Problem 5
Hypothesis 5
Significance of the Study 6
Scope and Limitation 7
Definition of Terms 7
2. REVIEW OF RELATED LITERATURE 10
3. METHOD 34
Research Design 34
Participants 34
Sampling Technique 35
Research Instrument 35
Pretesting 35
Validity and Reliability Test 36
Data Gathering Procedure 37
Data Analysis 37
4. RESULTS AND DISCUSSIONS 38
5. SUMMARY, CONCLUSIONS AND RECOMMENDATIONS 49
REFERENCES
 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
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vii

APPENDICES
A. Questionnaire 57
B. Letter to Conduct the Study 61
C. Letter of Request to Validate the Questionnaire 62
D. Proposed Pricing Policy 63
CURRICULUM VITAE 70
 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
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APPROVAL SHEET

This research entitled

DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET

RETAILERS IN CLAVER, SUROGAO DEL NORTE

Prepared and submitted by CHARLES CHISTIAN V. GALIDO,

SHIELA MARIE G. PIAPE, JESSA BELLE B. ILLIGAN,
JOYTRISHA Y. DUMANIG and JAYFERSON D. ATA
has been examined and recommended for approval and acceptance for
ORAL EXAMINATION

CRIS S. SARANZA, MBA

Adviser

PANEL OF EXAMINERS

Approved by the Committee on the Oral Examination with grade of __________.

on .

MARY CATHERINE B. GOMOCIO, MA

Chairperson

________________________ _______________________
Member Member

ACCEPTED in partial fulfillment of the requirements for the course

PRACTICAL RESEARCH 2
ACCOUNTANCY, BUSINESS AND MANAGEMENT STRAND

NOEL D. PECATO
Senior High School Coordinator

MARISOL MOLETA – GALIDO

School Principal IV
 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
CLAVER, SURIGAO DEL NORTE iii

ACKNOWLEDEGEMENT

First of all, we would like to give our praises and thanks to the God Almighty, for

His unlimited blessings that He had showered upon us throughout our research work to

complete the research successfully.

We would like to express our deepest and sincere gratitude to our research

adviser, MR. CRIS S. SARANZA, for giving us the opportunity to do research and

providing invaluable guidance throughout this research. His active reminders, vision,

sincerity and inspiration have deeply inspired us. He has taught us the steps to carry out

the research and to present the work as presentable as possible. It was a great privilege

and honor to work and study under his guidance. We are extremely grateful for what he

has offered to us.

We would like to thank our parents for their understanding and for their financial

support. To our friends who have helped us with their valuable suggestions that has been

helpful in various phases of the completion of this research.

We are also extremely grateful for MR. JEFFORD VILLAVERDE, who never

had a second thought to lend his laptop to us and let us used it for the time being.

THE RESEARCHERS
 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
CLAVER, SURIGAO DEL NORTE iv

DEDICATION

The research would like to dedicate our research study to the Almighty God, to

our Alma Mater- Claver National High School, to our classmates, teachers and to our

adviser, Mr. Cris S. Saranza.

We dedicate our research work to our family and our friends. Especially to our

parents who gave us words of encouragement that ring in our ears.

We also dedicate our research to the people who have always been supportive us

throughout the process. We always appreciate all they all done, their support and prayers.

C.C.V.G.

S.M.G.P.

J.Y.D.

J.B.B.I.

J.D.A.
 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
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v

ABSTRACT

There are two (2) internal and external determinants to consider in pricing a
certain product. The purpose of this study is to identify the degree of influence of these
determinants of pricing decision to the public market retailers in the municipality of
Claver in terms of pricing their product based on marketing, return of investment, cash
flow, market share, fixed cost and variable cost as internal determinants; and elasticity of
demand, customers’ expectation, direct competition pricing, related product pricing,
primary product pricing and government regulations as external determinants of pricing
decision.

Using the quantitative – descriptive survey, the study tested its significant
difference. The paper recommends that the municipality of Claver in partnership with the
Local Enterprise Economic Development and management Office (LEEDMO) should
implement a pricing policy in Claver public market to standardize the pricing decisions of
product offerings.

Keywords: Pricing Decision, marketing, return of investment, cash flow, market

share, fixed costs, variable costs, elasticity of demand, customers’ expectation, direct
pricing competition pricing, related-product pricing, primary product pricing and
government regulations.
 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
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LIST OF TABLES AND FIGURES

Figure/ Titles Page

Tables

Figure 1 Research Paradigm on Determinants of Pricing Decisions 4

Among Public Market Retailers in Claver, Surigao del Norte

Table 1 Profile of the Business 38

2 Degree of influence of the internal determinants in pricing 39

decision.

3 Degree of influence of the external determinants in pricing 42

decision to the public market retailers.

4 ANOVA Result of the degree influence of internal determinants 44

when grouped according to capital variable

5 ANOVA Result of the degree influence of internal determinants 45

when grouped according to types of product sold variable

6 ANOVA Result of the degree influence of internal determinants 46

when grouped according to years of operation variable

7 ANOVA Result of the degree influence of external determinants 46

when grouped according capital variable

8 ANOVA Result of the degree influence of external determinants 47

when grouped according to types of product sold variable

9 ANOVA Result of the degree influence of external determinants 47

when grouped according to years of operation variable
 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
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1

Chapter 1

THE PROBLEM AND ITS BACKGROUND

Introduction

In the business environment, pricing policy signifies how the company sets its

product prices and services based on costs, value, demand and competition. This pricing

policy allows company to either fit costs to prices or services that cannot be generated

cost-effectively and enables the company to earn greater profits and increase or defend

their market shares (Karl Heil, 2014). And because of that, pricing decisions play a vital

part in order for a business to be successful.

The reason of the food amount hikes in the Philippines according to Ponce (2014),

is the ineffective implementation of pricing policy that cause by the absence of

framework in the policy structure, antiquated administration and impolite trader. And

also, the effect of natural calamities, limitation in land resources and other factor that

affect the pricing policy should also handle government well.

In the Municipality of Claver, Surigao del Norte, the pricing issues has always

been the major in both retailers and consumers. According to Mr. Eric Elpa, Local

Economic Enterprises Development and Management Office (LEEDMO) head, the

primary issue in the municipality is the inevitable increasing prices of the basic

commodities. Mr. Elpa specified that they have no ability to control those prices because

these are locally imported products. The suppliers and the national government are the

one who sets the prices of these products, he added. These are the primary concerns in the
 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
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municipality other than some factors affecting the increasing prices of goods like train

law and the preference of the consumer.

In the current data of LEEDMO Office (2018), there are approximately 75

establishments in the public market. The office cannot determine if the prices that are

given by the retailers are over pricing, but they are only allowed to put up to 20%

markup, enough to cover up all of their expenses.

Thus, pricing decision is very crucial in the success of ones businesses to provide

uniformity and price controls of basic commodities in the market. That is why, the

researchers are encouraged to conduct a study on to identify the determinants of pricing

decisions and to know how these decisions affect the flow of the businesses and the

consumers. The researchers are also encouraged to conduct this research to help the

consumer be aware of what are the things that the business owners need to be considered

in pricing a product.

Conceptual Framework

This study is anchored on the concept of Onkvisit and Shaw (1997), price is an

important element in marketing and the decision to establish the price of a product is

crucial to a marketer. The price variable is concerned with the decision and actions

associated with establishing pricing objectives and policies and the determination of

product price. A sound marketing strategy demands that a framework for decision

making in the pricing area is evolved. In the absence of such a framework, the firm runs

the risk of allowing its pricing to run out of control. The problem becomes even more

acute in an area of exchange anarchy and floating currencies as cited in Atuma (2013).
 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
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Pricing policies and practices may be defined as the set of standard procedures

used by a firm to set its wholesale or retail prices for its products or services. It refers to

the method of decision making that is used to set prices for a company’s goods or

services. The policy assists in determining prices based on various social and economic

factors such as cost of production. It also relies on provision with a margin, Atuma,

(2013).

According to Ololawe Samuel (2006), when pricing decision is to be made, some

factors have to be put into consideration, so that the decision will not affect the overall

objective of the company. Some of the factors which must be considered among other

things include cost of production, nature of, market competition, customer and market

segment, demand, consumer behavior and perception, channel of distribution and

company objectives.

Thus, as shown in the figure 1, pricing decision is related in proposing pricing

policy. And there are many determinants that may affect in implementing pricing

decision and in the proposing of pricing policy.

 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
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Internal
Determinants

Public Market Retailers

Profile Proposed
Pricing Pricing
Capital; Decisions Policy
Nature of Business;
Years of Operation

External
Determinants

Figure 1. Research Paradigm on Determinants of Pricing Decisions Among Public

Market Retailers in Claver, Surigao del Norte
 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
CLAVER, SURIGAO DEL NORTE 5

Statement of the Problem

This study aimed to identify the determinants of pricing decisions among public

market retailers in Claver, Surigao del Norte.

Specifically, it sought to answer the following questions:

1. What is the profile of the business in terms of;

1.1. Capital;

1.2. Nature of Business;

1.3. Years of Operation?

2. What is the degree of influence of the internal determinants in pricing decision

to the public market retailers?

3. What is the degree of influence of the external determinants in pricing decision

to the public market?

4. Is there a significant difference between the degree of influence of internal and

external determinants in pricing decision when grouped according to the profile

variables?

5. Based from the results, what possible pricing policy may be proposed to

improve the pricing decisions of the retailers?

Hypotheses

This study was guided by a single null hypothesis at a 0.05 level of significance.

Thus, it is hypothesized that:

H1: There is no significant difference between the degree of internal determinants

in pricing decision when grouped according to the profile variables.

 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
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H2: There is no significant difference between the degree of external determinants

in pricing decision when grouped according to the profile variables.

Significance of the study

This section provides the importance and the possible benefits of the research to

the following:

Business Owner. The study will help the business owner to understand the

factors of pricing policy and how if affect the business development.

Consumers. This will help them to be aware of the factors that influence the

pricing policy.

Municipality of Claver. The research will help the municipality to be

knowledgeable enough to the prices that the seller allotted to their products.

Department of Trade and Industry. The presented study will help the agency to

guide them in perceiving the pricing policy situation within their municipality.

Local Economic Enterprise Development Management Office (LEEDMO). It

will help them by determining if the prices in Claver public market are affordable by any

customer. It will help them to be aware of what are the possible determinants in pricing

that business owner of Claver public market has engaging.

Future Entrepreneurs. It will help the future entrepreneurs for them to

understand the importance of proper implementation of price so that they can avoid

failure.

Future Researcher. The proposed study will serve as an instrument for the future

researcher to assist and guide them in escalating the source of knowledge about this topic.
 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
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Scope and Limitation

The concern of this study identified the determinants of pricing decisions in

public market of Claver, Surigao del Norte. The scope of the study was focused on all the

public market retailers. The study was limited on the internal and external determinants

of how the retailer sets their prices and what are the references in setting product prices.

The primary sources of the data were derived from the information given by the

respondents in Claver through a questionnaire and guided in-depth interview. On the

other hand, secondary sources were taken from books, and internet sources.

Definition of Terms

For the purpose of clarity and misunderstanding the study, the following terms

were defined operationally.

Consumers. The term indicates a person who purchases goods and services for

personal use in public market.

Determinants. It refers to factors that may affect the pricing decision of local

materials.

Price. It refers to the amount of money expected, required, or given in payment

for something.

Pricing Policy. It signifies how the business owner set its product prices and

services based on costs, value, demand and competition.

Retailers. It refers to the person or business that sells goods to the public in

relatively small quantities for use or consumption rather than for sale.
 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
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Marketing. Refers to the action or business of promoting and selling products or

services, including market research and advertising

Return of Investment. Refers to the profitability measure that evaluates the

performance of a business by dividing net profit by net worth

Cash Flow. The total amount of money being transferred into and out of a

business, especially as affecting liquidity

Market Share. The portion of a market controlled by a particular company or

product.

Maximize Profit. A process that companies undergo to determine the best output

and price levels in order to maximize its return

Fixed Cost. Business costs, such as rent, that are constant whatever the quantity

of goods or services produced

Variable Cost. A cost that varies with the level of output

Elasticity of Demand. How sensitive the demand for a good is to changes in

other economic variables, such as prices and consumer income.

Customers Expectation. The perceived value or benefits that the customers seek

when purchasing a good or availing a service.

Direct Competition Pricing. Situations in which two or more businesses offer

products or services that are essentially the same; as such, the businesses are competing

for the same potential market.

Related Product Pricing. Products whose demand is influenced by a price

change of another related product

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Primary Product Pricing. Goods that is available from cultivating raw materials

without a manufacturing process.

Government Regulations. A law that controls the way that a business can

operate, or all of these laws considered together.

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Chapter 2

REVIEW OF RELATED LITERATURE

This section presents the related literature that provides a frame of reference to

support the study.

2.1 The concept of Price

Price is an important element in marketing and the decision to establish the price

of a product is crucial to a marketer. The Price variable is concerned with the decision

and actions associated with establishing pricing objectives and policies and the

determination of product price. A sound marketing strategy demands that a framework

for decision making in the pricing area is evolved. In the absence of such a framework,

the firm runs the risk of allowing its pricing to run out of control (Onkvisit and Shaw

1997).

Every business entity is set up with the primary objective of making profits and

several considerations underlying their profit motive come to bear in determining the

pricing of their goods between associated parties. A business, whether small or big,

simple or complex, private or public is created to provide competitive prices. Price is

often misunderstood, especially by many executives. Consumers do not object price.

What they object to is the lack of relationship between the perceived value of the product

and the price being charged. They want a fair price, and a fair price can be either high or

low as long as it reflects the perceived value of the product in question. Price can be

absolutely high from a cost standpoint yet relatively low from a demand standpoint, in

relation to its value and other features (Atuma, 2013).

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2.1.1 Pricing Objectives

Pricing objectives should be derived from overall marketing objectives,

which in turn should be derived from corporate objectives. Since it is traditionally

assumed that business firms operate to maximize profits in the long run, it is often

thought that the basic pricing objective is solely concerned with long-run profits.

However, the profit maximization norm does not provide the operating marketing

manager with a single, unequivocal guideline for selecting prices. In addition, the

marketing manager does not have perfect cost, revenue, and market information to be

able to evaluate whether or not this objective is being reached. In practice, then, many

other objectives are employed as guidelines for pricing decisions. In some cases, these

objectives may be considered as operational approaches to achieving long-run profit

maximization (Peter and Donnelly, 2011).

According to Stanton, et al., (2000), every marketing activity, including

pricing should be directed towards a goal. To be useful, the pricing objective selected by

management must be compatible with the overall goals set by the company and the goals

of its marketing programmed.

Pricing can be defined as the process of determining an appropriate price

for the product, or it is an act of setting price for the product. Pricing involves a number

of decisions related to setting price of product. Pricing policies are aimed at achieving

various objectives. Company has several objectives to be achieved by the sound pricing

policies and strategies. Pricing decisions are based on the objectives to be achieved.
 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
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Objectives are related to sales volume, profitability, market shares, or competition (S.

Jaideep, 2017).

2.2 Pricing Policies and Practices

Pricing policies and practices may be defined as the set of standard procedures

used by a firm to set its wholesale or retail prices for its products or services. It refers to

the method of decision making that is used to set prices for a company’s goods or

services. The policy assists in determining prices based on various social and economic

factors such as cost of production. It also relies on provision with a margin (Atuma,

2013).

According to Gorkan Ahmetoglu, et al., (2010), pricing policies will have an

effect on consumer decisions and behavior as they serve as cues that simplify decisions.

Good pricing policy and practices helps you determine the price point at which

you can maximize profits on sales of your products or services. When setting prices, a

business owner needs to consider a wide range of factors including production and

distribution costs, competitor offerings, positioning strategies and the business’ target

customer base (Miguire, A. 2016).

2.2.1 Pricing Practices in the Philippines

The reason of the food amount hikes in the Philippines according to Ponce

(2014), is the ineffective implementation of pricing policy that cause by the absence of

framework in the policy structure, antiquated administration and impolite trader. And
 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
CLAVER, SURIGAO DEL NORTE

also, the effect of natural calamities, limitation in land resources and other factor that

affect the pricing policy should also handle government well.

In the Philippines, as one of the developing countries have begun to

reevaluate the traditional pricing policy of charging uniformly low prices for such social

services as education and health. But the reform of social service pricing has been

controversial. Some disagreements are ideologically based and inherently irreconcilable

(Jimenez, 1998).

2.2.2 Considerations in Pricing

The price of a product usually must cover costs of production, promotion,

and distribution, plus a profit, for the offering to be of value to the firm. In addition,

nothing can cause confusion and doubt in a business like pricing your products and

services. While you don’t want to charge less than you are worth, you also don’t want to

price yourself out of the market. Whether you are starting out or starting over, some

factors to consider when pricing your products and services like cost, customers and

competitions (Jesnoewski, 2018).

A price is a value in monetary terms that one party pays to another in a transaction in

exchange for some goods or services. So, the definition of price is the amount of money the

buyer will pay as consideration to the seller in exchange for goods or services. Pricing is not

always as easy as setting a price the seller hopes to obtain. It involves aspects such as

demand and supply, cost of the product, its perception and value for the customer and many

such factors.
 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
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So while pricing a product, the company has to take immense care and consideration. If the

price is too high or even too low the product will fail in the market. This is also the reason

why the determination of price is not a one-time event. A company changes the prices

according to the market conditions and other circumstances (Retrieved from

https://www.toppr.com/guides/business-studies/marketing/pricing/ Accessed on August

29, 2019).

2.3 Determinants of Pricing Decisions

According to Jackson et al., (2009), one of the determinants of pricing policy is

the price elasticity or the peoples sensitivity to price changes, affects the demand of the

product. When customers are very sensitive to the price change of a product, they buy

more of it at low price and less at high prices. Furthermore, according to tanner and

Raymond (2012), there are four group factors influencing price policy are follows:

demand of the product, competitors, quality of the product, as well as the product cost.

In the other hand according to Shma (2014), competition affects the price setting

of the product. The marketer must have knowledge about the activities of the competitor.

Price is the only element of marketing mix that helps in generating income.

Therefore, a marketer should adopt a well-planned approach for pricing decisions. The

marketer should know the factors that influence the pricing decisions before setting the

price of a product like Organizational Objectives, Costs, Legal and Regulatory Issues

((Nitisha, 2018).
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2.3.1. Internal Determinants

a. Marketing

According to J Haron, A. (2019), marketing decisions are directed

by the overall objectives of the company. It is important to appreciate that all marketing

decisions, including price, work to help achieve company objectives.

Marketing objectives are internal factors that affect pricing

decision. Before setting price, the firm must decide on its price strategy for their goods. If

the company has already selected its target market and positioning attentively, then its

marketing mix strategy, with price, will be comparatively straightforward. Thus, pricing

strategy is mainly determined by decisions on market positioning (Retrieved from

https://www.vtexperts.com/ marketing-objectives-affect-pricing-decisions/ Accessed on

July 6, 2019).

The company may search further general or specific objectives.

General objectives include survival, market share leadership, current profit maximization,

and product quality leadership. At a more specific level, a company can set prices low to

avoid competition from entering the market or set prices at their competitors’ level to

stabilize the market. It can set prices to keep the support and faithfulness of resellers or to

stay away from government intervention. Prices can be cut down temporarily to create

excitement for existing products or to draw more customers into the retail stores. Or one

product may be priced to help the sales of other products in the company’s product line.

Therefore, pricing may play a vital role in helping to accomplish the objectives of

company at many levels.

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According to Atuma (2017), growing a business isn’t easy. First

you need to find an idea. From here, you need to discover a profitable riche, defined a

target demographic and have something of value to sell them. Whether you’re peddling

products, services or information, getting the world out has become increasingly burden.

And without a right marketing to fuel your growth churning a profit and staying afloat is

virtually impossible.

b. Return of Investment

Return on investment isn't necessarily the same as profit. ROI

deals with the money you invest in the company and the return you realize on that money

based on the net profit of the business. Profit, on the other hand, measures the

performance of the business. Don't confuse ROI with the return on the owner's equity.

This is an entirely different item as well. Only in sole proprietorships does equity equal

the total investment or assets of the business (Retrieved from

https://www.entrepreneur.com/encyclopedia/return-on-investment-roi/ accessed on

December 9, 2018).

Return of investment goals are common in commerce and these

can be either short or long run goals, stated as profit as a percentage of either sales or

assets. This is a cost-oriented approach to pricing decisions. The targets set will depend

very much upon the economy within which the organization operates. If one views

organizations as competing for limited funds from prospective shareholders, financial

institutions and perhaps even government, then the rate of return achieved by an

organization must be competitive with the sorts of returns others in the economy are able
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to achieve. Potential investors have to consider the opportunity cost they incur by

investing in one organization rather than another (Retrieved from

http://www.fao.org/3/W3240E/W3240E08.htm Accessed on July 6, 2019).

c. Cash Flow

As cited by Clarke, D. (2014), cash flow is how much money goes

into a company and how much money goes out. Think of it as a tank of water: water

enters the top and drains the bottom. So you want to get in more than to go out to

maintain your tank nice and complete. Cash flow is the net change in your company's

cash position from one period to the next. If you take in more cash than you send out, you

have a positive cash flow. You have a negative cash flow if you have more cash outflow

than inflow. Cash flow is a key indicator of financial health.

Cash flow issues can lead to a downward spiral, especially as it

relates to your marketing efforts. First, one of the budgets companies often cut when cash

is tight is marketing. This means you won't have as much money to invest in advertising

to attract customers. Plus, if you start offering sales discounts to generate cash and

improve your situation, you can effectively diminish customer perception of your brand's

value. This can have very negative long-term impacts on your pricing and revenue

potential (Kokemuller, 2017).

According to Murray., J, (2019), cash flow is the money that is

moving (flowing) in and out of your business in a month. Although it does seem

sometimes that cash flow only goes one way - out of the business - it does flow both

ways. 
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Lack of cash is one of the biggest reasons small businesses fail. Murray

added that that "inadequate cash reserves" are a top reason startup don't succeed. It is

called "running out of money," and it will shut you down faster than anything else. 

Cash inflow is the lifeblood of your business and comes from sources like

payments from customers, receipt of a loan, monetary infusion from an investor, or

interest on savings or investments. Cash is also important because it later becomes

payment for things that make your business run: expenses like stock or raw materials,

employees, rent and other operating expenses. Naturally, positive cash flow is preferred.

Positive cash flow means your business is running smoothly. High positive cash flow is

even better and will allow you to make new investments (hire employees, open another

location) and further grow your business (Clarke., D, 2014).

Cash Flow importance is that it measures the cash inflows or cash

outflows during the given period of time. Such details of cash position of the company

can not only help the company or the financial analyst to plan for the short term or long

term but also in analyzing the optimum level of cash and working capital needed in the

company.

 Furthermore, according to Patrick., J, (2017), a profit and loss statement

says nothing about principal payments you make to the bank.  You could have reasonably

good profits, but the amount of money you pay your bank every month could be putting

you out of business.

Cash flow statements tell you where you spent your money.  If you

increased inventory you used cash.  If you extended more credit to customers you used
 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
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cash.  If you bought lots of capital equipment you used cash.  All three of these issues

will not show up on your profit and loss statement.

d. Market Share

 Market share is a firm’s percentage of an industry’s total sales. It

is calculated as the product of the firm’s sales over the industry’s sales during a specified

period. In other words, it is the amount of sales a company gets compared with its

industry as a whole.

Furthermore, the firm wants to secure a large share in the market

by following a suitable price policy. It wants to acquire a dominating leadership position

in the market. Many managers believe that revenue maximization will lead to long run

profit maximization and market share growth (Shivan, 2014).

There are various types of market share. Market shares can be

value or volume. Value market share is based on the total share of a company out of total

segment sales. Volumes refer to the actual numbers of units that a company sells out of

total units sold in the market. The value-volume market share equation is not usually

linear: a unit may have high value and low numbers, which means that value market

share may be high, but volumes share may be low.

The market share indicates how a firm performs relative to its

competitors. Usually, a higher market share implies that a firm realizes higher sales than

its competitors because it successfully expands its customer base. This isn’t always the

case though. Sometimes there are simply barriers to entry in the industry that allows a
 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
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firm to control a high percentage of the industry. This often leads to a monopolistic

structure (Retrieved from

https://www.accountingverse.com/managerial-accounting/pricing-decisions/ accessed on

December 7, 2018).

Companies try to gain sales and beat their competition in many different

ways. Some try to increase their economies of scale (a greater output at a lower average

cost) in an effort to provide lower cost products to consumers while others try to increase

brand recognition and consumer loyalty.

e. Maximize Profit

The monopolist's profit maximizing level of output is found by

equating its marginal revenue with its marginal cost, which is the same profit maximizing

condition that a perfectly competitive firm uses to determine its equilibrium level of

output. Indeed, the condition that marginal revenue equal marginal cost is used to

determine the profit maximizing level of output of every firm, regardless of the market

structure in which the firm is operating. In order to determine the profit maximizing level

of output, the monopolist will need to supplement its information about market demand

and prices with data on its costs of production for different levels of output

(Retrieved from https://www.cliffsnotes.com/study-guides/economics/monopoly/profit-

maximization accessed on August 29, 2019 ).

Business owners want their bottom line to be as profitable as

possible. To increase profit, you must be diligent in cutting frivolous costs and boosting

productivity among employees. This ongoing process often faces many challenges. The
 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
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key to success is to focus on the end goal and always remember that the business's profits

will serve two purposes. You can reinvest your profits in the business which will allow

further growth and expansion, or you can take the profits as personal income in the form

of a distribution (Kent., J, 2018).

Most of the time, small business owners can't afford to wait for the

results of long-term, large-scale changes to their business model. As much as possible, if

you want to turn a bigger profit as a small business owner, the quicker you can do it, the

better. Convert One-Time Clients into Recurring Clients and Encourage Referrals are

some way to maximize your profit (Rouqe., C, 2019).

Hence, according to Intelligenteconomist.com, the use of the profit

maximization rule also depends on how other firms react. If you increase your price, and

other firms may follow, demand may be inelastic. But, if you are the only firm to increase

the price, demand will be elastic.

It is difficult to isolate the effect of changing the price on demand.

Demand may change due to many other factors apart from price. Increasing price to

maximize profits in the short run could encourage more firms to enter the market.

Therefore firms may decide to make less than maximum profits and pursue a higher

market share.

f. Fixed Cost

Marks., J. (2016) states that, the cost is something that can be

classified in several ways depending on its nature. One of the most popular methods is
 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
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classifying them into fixed costs and variable costs. Fixed costs do not change with

increases/decreases in units of production volume. 22

According to Schmitz, A. (2012). fix cost, which occurs when

firms get together and agree to charge the same prices, is illegal. Usually, price fixing

involves setting high prices so consumers must pay a high price regardless of where they

purchase a good or service. Video systems, LCD (liquid crystal display) manufacturers,

auction houses, and airlines are examples of offerings in which price fixing existed.

When a company is charged with price fixing, it is usually ordered to take some type of

action to reach a settlement with buyers.

  Fixed costs, or overhead expenses, are costs that a company must

pay regardless of its level of production or level of sales. A company’s fixed costs

include items such as rent, leasing fees for equipment, contracted advertising costs, and

insurance. As a student, you may also incur fixed costs such as the rent you pay for an

apartment. You must pay your rent whether you stay there for the weekend or not.

Determining the cost of producing a product or service plays a

vital role in most pricing decisions. Fixed costs are business expenses that are not

dependent on the level of goods or services produced by the business. They tend to be

time-related, such as salaries or rents being paid per month. They and are often referred

to as overhead costs. This is in contrast to variable costs, which are volume-related and

are paid per quantity produced. In management accounting, fixed costs are defined as

expenses that do not change as a function of the activity of a business, within the relevant
 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
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period (Retrieved from https://courses.lumenlearning.com/boundless-marketing/chapter/

inputs-to-pricing-decisions/ accessed on July 6, 2019).

23

g. Variable Cost

According to Schmitz, A. (2012), variable costs are costs that

change with a company’s level of production and sales. Raw materials, labor, and

commissions on units sold are examples of variable costs. You, too, have variable costs,

such as the cost of gasoline for your car or your utility bills, which vary depending on

how much you use.

In addition, variable costs are corporate expenses that vary in

direct proportion to the quantity of output. Unlike fixed costs, which remain constant

regardless of output, variable costs are a direct function of production volume, rising

whenever production expands and falling whenever it contracts. Examples of common

variable costs include raw materials, packaging, and labor directly involved in a

company's manufacturing process. Variable costs will correlate with the number of

products manufactured. Because average variable costs differ widely among industries,

comparisons are generally most meaningful among companies operating within the same

industry (Retrieved from https://investinganswers.com/dictionary/v/variable-cost

accessed on August 28, 2019 )

In a business, the "activity" is frequently production volume,

with sales volume being another likely triggering event. Thus, the materials used as

the components in a product are considered variable costs, because they vary directly
 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
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with the number of units of product manufactured. It is useful to understand the

proportion of variable costs in a business, since a high proportion means that a

business can continue to function at a relatively low sales level. Conversely, a high

proportion of fixed costs require that a business maintain a high sales level in order

to stay in business (Retrieved from https://www.accountingverse.com/managerial-

accounting/pricing-decisions/ accessed on December 7, 2018).

2.3.2. External Determinants

a. Elasticity of Demand

According to West, B. (2019), the price elasticity of demand

affects a company’s pricing strategies by determining the optimal profit margin. Price

elasticity of demand defines the degree of change of demand in relation to the change in

price of a product. The higher the elasticity, the higher the demand fluctuates in response

to price. In general, most companies would like for their products to be inelastic. When a

product is inelastic, the price of the good may increase, while the supply and demand of

the product are unaffected. In other words, if the price of a product were to go up,

consumers would still buy the product, as well as if the product price were to go down,

consumers would still buy the product.

It refers to change in demand of a product due to change in price.

There are situations that arises under it, first, the products that have inelastic demand will

be highly priced, products that have more than elastic demand will be priced low and

products that have elastic demand will be reasonably priced. According to Ghose, S.

(2010), the market demand for a product or service obviously has a big impact on pricing.
 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
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Since demand is affected by factors like, number and size of competitors, the prospective

buyers, their capacity and willingness to pay, their preference etc. are taken into account

while fixing the price. 25

A firm can determine the expected price in a few test-markets by

trying different prices in different markets and comparing the results with a controlled

market in which price is not altered. If the demand of the product is inelastic, high prices

may be fixed. On the other hand, if demand is elastic, the firm should not fix high prices,

rather it should fix lower prices than that of the competitors.

As stated to Malhotra, S. (2016), to understand demand, the

supplier or marketer prepares demand curves for the product at different prices. The

marketer prepares separate curves for normal products and prestige goods. In addition to

understanding price and quantity relationship, the marketer must determine the price

elasticity of demand to understand price sensitivity of customers.

Demand for your products or services will have a great influence

on price. Generally, the higher demand for your product, the higher you can price your

product and services. Demand can also be influenced by price. For example, lowering the

price of a product can increase demand temporarily. (Retrieved from

https://www.businessplannigeria.com.ng/pricing-strategies-methodspricedeterminants/

accessed on August 27, 2019).

Moreover Olawale, L. and Okewale, J. (2017) state that for a new

product, there is need to price such product strategically in such a way that it penetrates

the market, even if it will be at par with the total cost, while for a highly demanded
 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
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product, an increase in price may not really have a high effect on the demand for such

products, so is the need for management when making pricing decisions to consider the

demand for the product. Some companies who receive order from customers may decide

to reduce their price per unit or increase their discount, when it is noted that demand from

a customer is high, and this may be on the other way around, depending on other factors

considered by the management.

b. Customers’ Expectations

According to Newman., E. (2015), true customers satisfaction and

stellar customers service can only happen through a complete and proper understanding

of the customers’ expectations. Unless your company knows what they want, who they

are and what they expect, it would be difficult to even match up to the expectations.

Companies should make it a practice to ask their customers whether they have been able

to meet or exceed their expectations through the products or services and customers’

service. It is only based on this feedback that companies can assuredly know that they

match customers’ expectations. The reality now is that customers’ expectations are

continually on the rise, and unless companies are attuned to them, they will fall short of

those expectations leading to customers’ ire and attrition.

Yet Olawale, L. and Okewale, J. (2017) state that consumers

attitude and perception about the product must be considered, when making pricing

decisions. The company should consider if an increase in price will lead to an increase or

a decrease in demand, and vice versa.

 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
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In addition, Balle, L. (2019) state that the price you set for a

product or service has a very significant effect on how the consumers expectation. If

consumers believe that the price, you’re charging is lower than competitors it could

cause a major spike in sales. But if the price you set is significantly higher than

expected, the response can be disappointing. In either case a change in price could

produce unexpected results when it comes to consumer buying behavior.

Consumers’ attitude and perception about the product must be

considered, when making pricing decisions. The company should consider if an increase

in price will lead to an increase or a decrease in demand, and vice versa (Olawale, L. and

Okewale, J. 2017).

Based on the gathered information, there are a lot of factors or

determinants in pricing policies. Demand, competition and consumers behavior are some

of the determinants in pricing decision.

c. Direct Competitor Pricing

Affects prices significantly. The organization matches the prices

with the competitors and adjusts the prices more or less than the competitors. The

organization also assesses that how the competitors respond to changes in the prices.

Influence the pricing policies of the organizations. The price of a

product should be determined in such a way that it should easily face price competition.

(Retrieved from http://www.economicsdiscussion.net/price/factors-affecting-the-pricing-

decisions/3833 accessed on December 9, 2018).

 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
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In the other words, two or more virtually identical goods or

services are offered in the same target market for the same customer base by different

companies. At all times, it is important for the company to keep a tab on relative pricing

and significant technological innovations of direct competitors in order to avoid

competitive disadvantage and maintain its market share (Rowley, J. 2014).

d. Related Product Pricing

According to K. Holden, R. (2017), products that offer new ways

for explaining customer needs may look to pricing of products that consumers are

currently using even though these other products might not appear to be direct

competitors. For instance, a marketer of a new online golf training service that allows

customers to access golf training via their smart phone might look at prices charged by

local golf professionals for in-person instruction to measure where to set their price.

Although on the surface, online golf training may not be a direct competitor to a golf

coach, marketers for the online service can use the cost of in-person instruction as a

reference point for setting price.

In line to Infointrepreners.com, the price you charge to related

product or service is one of the most important business decisions you make. Setting a

price that is too high or too low will - at best - limit your business growth. At worst, it

could cause serious problems for your sales and cash flow.

If you are starting a business, carefully consider your pricing

strategy before you start. Established businesses can improve their profitability through

regular pricing reviews.

 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
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29

When setting your prices, you must make sure that the price and

sales levels you set will allow your business to be profitable. You must also take note of

where your product or service stands when compared with your competition.

(Retrieved from https://www.infoentrepreneurs.org/en/guides/price-your-product-or-

service/ accessed on July 8, 2018 .)

e. Primary Product Pricing

According to Pettinger, T. (2017), primary products are goods that

are available from cultivating raw materials without a manufacturing process. The price

of primary products tends to be much more volatile. e.g. they can be influenced by

weather and speculation. These prices changes can be damaging to countries. If prices

fall and demand is price inelastic, then producers can go out of business and the country

loses its main form of export revenue.

Furthermore, for many developing economies, their main

comparative advantage will be in producing primary products. The industry becomes an

important source of economic growth, employment, tax revenue and export earnings.

Without primary products, countries would be worse off. However, primary products are

limited sources. One day developing economies may run out of its finite primary

products.

It is corresponded to Chand, S. (2017), a company extends its

product line rather than reduce price of its existing brand, when a competitor launches a

low-price brand that threatens to eat into its market share. It launches a low price fighter

brand to compete with low price competitor brands.

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The company is able to protect the image of its premium brand,

which continues to be sold at a higher price. At a later stage, it produces a range of brands

at different price points, which serve segments of varying price sensitivities. 30

And when a customer shows the inclination to trade up, it

persuades him to buy one of its own premium brands. Similarly, if a customer of one of

its premium brands wants to trade down, it encourages him to buy one of its value brands.

Primary commodities are bought and sold in spot and futures

markets. In spot markets, sellers have existing stocks to sell, and buyers expect

immediate delivery, or in the very near future. Prices in spot markets reflect the

interaction of buyers and sellers who use all available information to bid, offer and accept

prices and settle debts in a short space of time, on-the-spot. The process has been

described as price discovery, with price offers and bids converging until a price are fixed.

In futures markets, delivery and payment is not on-the-spot, but at

some agreed point in the future, such as in three months’ time. Prices are determined in a

similar way to spot prices, the difference being that final settlement and delivery occur in

the future, and contracts can be resold before maturity, creating the possibility of a

speculative gain. The main advantage is that buyers and sellers can 'lock in' current prices

and reduce risks (https://economictimes.indiatimes.com/definition/pricing-strategies

Accessed on December 7, 2018).

f. Government Regulations

According to Schmitz, A. (2012), the economy also has a

tremendous effect on pricing decisions. When the economy is weak and many people are
 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
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unemployed, companies often lower their prices. In international markets, currency

exchange rates also affect pricing decisions. Pricing decisions are affected by federal and 31

state regulations. Regulations are designed to protect consumers, promote competition,

and encourage ethical and fair behavior by businesses.

It also coincide to Malhotra, S. (2016), inflation in economy is an

important factor in pricing. In India during the last two years the inflation has been a

great burden on the common man and even the government has failed to do anything.

During recessionary conditions, the price level also drops, to maintain the same level of

turnover. Resellers’ needs are important in price determination. If you remember, petrol

pump dealers went on strike a number of times and finally the oil marketing companies

had to agree the margin for the resellers. It will naturally reflect in the final price to be

charged to the consumers.

Government’s concerns about pricing are reflected in laws and

regulations. Government regulations include price controls, import duties, quotas and

taxes. The volatility in international markets also affects the prices at home. Persuade

marketers to change price decisions. The legal and regulatory laws set prices on various

products, such as insurance and dairy items. These laws may lead to the fixing, freezing,

or controlling of prices at minimum or maximum levels according to Zale, J. (2015)

It is in-lined to Carey, J. (2019), regulations may restrict

businesses from trying out certain pricing strategies. For example, it is illegal for you to

practice predatory pricing in which you deliberately set the lowest market price for your

products. This can occur in jurisdictions where there are government regulations that set
 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
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price ceilings, including how low or high the prices of products can be set. Ignoring the

regulation can cause legal problems for your enterprise, which could dent you financially. 32

Marketers must be aware of regulations that impact how price is

set in the markets in which their products are sold. These regulations are primarily

government enacted meaning that there may be legal ramifications if the rules are not

followed. Price regulations can come from any level of government and vary widely in

their requirements. For instance, in some industries, government regulation may set price

ceilings (how high price may be set) while in other industries there may be price floors

(Mohammed, R., 2019).

Government regulations and policies can have a positive as well as

a negative impact on production and employment. when imposed on businesses

substantially increase production and operating costs of the business which could result in

reduced operating and economic profit, earning per share, earning stream, dividend and

eventually market equity value for shareholders. Government regulation is needed to

ensure fairness in the low-calorie microwavable food industry. Government involvement

is needed in a market economy to maintain social efficiency and equity. Social efficiency

is attained at the mark where the marginal benefits to consumers for either production or

consumption are equivalent to the marginal costs of either consumption or production.

Matters of equity are challenging to evaluate due to the subjective assessment of what is

and is not a fair sharing of resources (West, 2019).

2.4 Pricing Decision and Cost

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Price decision is a crucial task that confronts a marketer. In order to take

correct decision, it is important that he understand the concept and its influence on

pricing decision (Saxena, 2009). 33

Furthermore, according to Manroe, K. (2015), the prices of products and

services are determined by the interplay of five factors: demand and supply condition,

production and associated costs, competition, buyers bargaining power and the perceived

value. These are varied and multiple factors affecting pricing decision.

Several pricing methods are available to businesses. Before adopting a

pricing strategy, certain factors need to be considered. Internal pricing factors include

production and other costs, and marketing strategies. External factors include market

competition, demand and supply relationships, customer behavior, and legal

requirements. (Retrieved from: https://www.accountingverse.com/managerial-

accounting/pricing-decisions/ accessed on December 7, 2018).

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34

Chapter 3

METHOD

This chapter presents the research design, environment, sampling technique,

instrument, data gathering procedure and data analysis that will be utilized in the study.

Research Design

In this study, quantitative research design, descriptive survey was used to

determine the degree of influence of internal and external determinants of pricing

decision. According to McCombes, S. (2019), a descriptive research method aims to

accurately and systematically describe a population, situation or phenomena. It can

answer what, when, where and how but not why questions. It is an appropriate choice

when research aim is to identify characteristics, frequencies, trends, correlations, and

categories. It is useful when not much is known yet about the topic or problem. Before

you can research why something happens, you need to understand how, when and where

it happens.

Participants

The study was conducted in Claver Public Market, Claver, Surigao del Norte

among the retail business owners. With a total population of forty – eight (48) business

owners, and we considered all of them as respondents in this study because of the limited
 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
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population. The researcher also utilized the ten (10) sample respondents for the pre –

testing activity.

35

Sampling Technique

The study used non-probability purposive sampling. The researchers used this

technique because only those well-established business owners who rented stalls inside

the Claver public market building were considered as respondents. According to

Jacqueline Guarte and Ernie Barnos (2006), purposive sampling is described as a random

selection of sampling units within the segments of the population with the most

information on the characteristic of interest.

Research Instrument

A researchers-made questionnaire was used to gather necessary information. The

questions aimed at eliciting relevant information about the determinants of pricing

decision in Claver public market. The questionnaire design by the researchers was titled

“Determinants of Pricing Decision among Public market retailers in Claver, Surigao del

Norte”. The research instrument covered three (3) parts. First part gathered the profile of

the business. Next was the degree of influence of the internal determinants in pricing

decision. And finally, the degree of influence of the external factors in pricing decision.

Pretesting
 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
CLAVER, SURIGAO DEL NORTE 36

The questionnaire developed was pre – tested. Pretesting involves testing your

research instrument in conditions as similar as possible to the research, but not in order to

report results but rather to check for glitches in wordings of questions, lack of clarity of

instructions. It should be conducted systematically, with potential respondents and using

the same method of administration. This was done by administering a questionnaire to ten

(10) respondents who were also business owners outside the Claver public market

building.

Validity and Reliability Test

After the completion of the pilot survey, the data were analyzed using SPSS.

Before the distribution of the questionnaires, the draft was initially submitted to the

adviser and experts and also to the typical respondents for face and content validity.

Reliability refers to an assessment tool’s degree in producing consistent and stable

results. The study resulted 0.854 Cronbach alpha, indicating that the instrument was

reliable. Commonly, Cronbach alpha is a convenient test used to estimate the reliability,

or internal consistency of a composite score. It gives us a simple way to measure whether

or not a score is reliable. Theoretically, Cronbach’s alpha results should give you a

number from 0 to 1, but you can get negative numbers as well. A negative numbers

indicates that something is wrong with your data. The general rule of thumb is that a

Cronbach’s alpha of .70 and above is good, .80 and above is better and .90 above is best

(Taber, K. 2014).

Data Gathering Procedure

 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
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For the accomplishment of the study, the following procedures were used:

A letter of approval to the Local Economic Enterprise development and

Management Office (LEEDMO) Head was accomplished to allow the public market

retailers in Claver, Surigao del Norte to participate in the study. 37

The survey questionnaires were handed over to the participants along with the

request to answer the questionnaire. To ensure the proper accomplishment of the

questionnaire, the researchers explained the purpose of the study to the respondents.

The data gathered were classified, tabulated, and analyzed to answer the

statements of the problem.

Data Analysis

The statistical tests below were utilized the collected data:

Frequency Count and Percentage Distribution. This was used to represent the

average rating as to the profile of the business.

Mean and Standard Deviation. This was applied to determine the degree of

influence of the determinants of pricing decision.

Analysis of Variance. It was utilized to determine the significant difference in

the degree of internal and external determinants of pricing decision when they grouped

according to the profile variables.

 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
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38

Chapter 4

RESULTS AND DISCUSSIONS

This chapter presents the results and discussion of the gathered data. It

specifically answers the following questions:

Problem 1: What is the profile of the business?

Table 1 – Profile of the Business

PROFILE VARIABLES F (%)
Capital
Less than 10,000 6 13
10,001 - 30,000 20 42
30,001 - 50,000 17 35
More than 50,000 5 10

Types of Product Sold

Chicken meat 9 19
Grocery Items 5 10
Fish/Dried Fish 15 31
Fruit, Veg. and Egg 13 27
Pork, Beef, Meat 6 13

Years of Operation
Less than 1 year 1 2
1 - 4 years 13 27
5 - 8 years 16 33
9 - 12 years 9 19
More than 12 years 9 19
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As indicated in Table 1, it shows that the majority of the business owners in

Claver public market have a capital of 10,001 – 30,000 with about 42%. Most of them

sell fish and vegetables, 27% and 31% respectively and operates the business within 5 – 8

years or 33% of the population.

39

Problem 2: What is the degree of influence of the internal determinants in pricing

decision to the public market retailers?

Table 2: Degree of influence of the internal determinants in pricing decision.

ITEM INDICATORS M SD VD QI
1. Marketing 3.27 0.89 AC VHI
The action or business of promoting and selling
products or services, including market research and
advertising.
2. Return of Investment 2.83 0.81 OC HI
A profitability measure that evaluates the
performance of a business by dividing net profit by
net worth.
3. Cash Flow 3.19 0.70 OC HI
The total amount of money being transferred
into and out of a business, especially as affecting
liquidity.
4. Market Share 3.08 0.36 OC HI
The portion of a market controlled by a
particular company or product.

5. Maximize Profit 3.27 0.32 AC VHI

A process that companies undergo to determine
the best output and price levels in order to maximize
its return.

6. Fixed Cost 3.08 0.77 OC HI

Business costs, such as rent, that are constant
whatever the quantity of goods or services produced.
7. Variable Cost 3.13 0.89 OC HI
A cost that varies with the level of output.
 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
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Grand Mean 3.12 0.68 OC HI

Legend:
Scale Range Verbal Description Qualitative Interpretation
4 3.25 – 4.00 Always Considered (AC) Very Highly Influential
(VHI)
3 2.50 – 3.24 Often Considered (OC) Highly Influential (HI)
2 1.75 – 2.49 Sometimes Considered Less Influential (LI)
(SC)
1 1.00 – 1.74 Never Considered (NC) No Influence (NI)
40

Table 2 shows the degree of influence of the internal determinants of pricing

decision in Claver Public Market, Claver, Surigao del Norte. Based on the rating above,

the marketing and maximize profit as internal determinants of pricing decision have the

same average mean which is 3.27 both with verbal description of “always considered”

and interpreted as “very highly influential”. However, the “marketing” indicator shows a

dispersed answer from the respondents (SD = 0.89), compared to “maximize profit”

which the respondents have mostly the same perspective (SD = 0.32) as one of the

internal determinants in pricing a product. It demonstrates that the business owner of

Claver public market prefer to consider marketing and maximize profit in pricing

decision. According to Thompson, J. (2019), marketing covers a lot of activities – all

associated with selling your company’s product and services. Marketing encompasses not

only determines consumer need, it also helps create consumer need. It really begins with

understanding your potential customers.

In contrast, the Return on Investment has the least mean generated with 2.83 with

a standard deviation of 0.81, this means that some of the business owner “often
 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
CLAVER, SURIGAO DEL NORTE

considered” return of investment as internal factor in pricing decision as it interpreted

“highly influential”. However, it also revealed that the respondents have scatter answers

with regards to return of investment as basis for pricing decisions. Return of investment,

better known as ROI, is a key performance indicator that’s often used by businesses to

determine profitability of expenditure. It is exceptionally useful for measuring success

over time and taking the guesswork out of making future business decisions (Hawkins, E.

2016). 41

As a result, the general mean of 3.12 interpreted as “highly influential” shows

that those internal determinants of pricing decision were “often consider” by the business

owner of Claver public market, Claver, Surigao del Norte. With the standard deviation of

0.68 which mean that the business owner of Claver public market as respondents have

slightly dispersed answer in considering those internal determinants in pricing a certain

product.

Internal determinants are very relevant in pricing a product. It is relative to the

statement of Andy Schmitz (2017), for setting a product prices. Those internal factors

include marketing, cash flow, return of investment and etc. are design to meet

organizational or the business goal. Organization must understand how these

determinants .affect pricing decision before they can price a product successfully.

Problem 3: What is the degree of influence of the external determinants in pricing

decision to the public market?

Table 3 displays the level of influence of the external determinants in pricing

decision to the public market retailers. The highest mean response is the elasticity of
 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
CLAVER, SURIGAO DEL NORTE

demand and related product pricing with the same mean of 3.31, their standard deviation

is 0.75 and 0.90 respectively, interpreted as “very highly influential”. The table below

shows that both factors have dispersed answers which mean that the respondents have

different views in terms of the both determinants. In comparison, the related product

pricing has more dispersed answers compared to elasticity of demand. However, it also

revealed that the business owners “always considered” these determinants in their pricing

decision. 42

Table 3: Degree of influence of the external determinants in pricing decision

to the public market retailers.
ITEM INDICATORS M SD VD QI
1. Elasticity of Demand
How sensitive the demand for a good is to changes
3.31 0.75 AC VHI
in other economic variables, such as prices and
consumer income.
2. Customers Expectation
The perceived value or benefits that the customers 3.17 0.91 OC HI
seek when purchasing a good or availing a service.
3. Direct Competition Pricing
A situation in which two or more businesses offer
products or services that are essentially the same; as 3.25 0.81 AC VHI
such, the businesses are competing for the same
potential market.
4. Related Product Pricing
Products whose demand is influenced by a price 3.31 0.90 AC VHI
change of another related product
5. Primary Product Pricing
Goods that are available from cultivating raw 2.81 0.87 OC HI
materials without a manufacturing process.
6. Government Regulations
A law that controls the way that a business can 3.27 0.89 AC VHI
operate, or all of these laws  considered  together.
Grand Mean 3.19 0.86 OC HI
 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
CLAVER, SURIGAO DEL NORTE

Legend:
Scale Range Verbal Description Qualitative Interpretation
Very Highly Influential
Always Considered (AC)
4 3.25 – 4.00 (VHI)
3 2.50 – 3.24 Often Considered (OC) Highly Influential (HI)
Sometimes Considered
Less Influential (LI)
2 1.75 – 2.49 (SC)
1 1.00 – 1.74 Never Considered (NC) No Influence (NI)
43

According to West, B. (2019), the price elasticity of demand affects a company’s

pricing strategies by determining the optimal profit margin. Price elasticity of demand

defines the degree of change of demand in relation to the change in price of a product.

The higher the elasticity, the higher the demand fluctuates in response to price. In

general, most companies would like for their products to be inelastic. When a product is

inelastic, the price of the good may increase, while the supply and demand of the product

are unaffected. In other words, if the price of a product were to go up, consumers would

still buy the product, as well as if the product price were to go down, consumers would

still buy the product.

On the contrary, the primary product pricing response got the lowest mean of

2.81 with standard deviation of 0.87, yet it is described as “often considered” and

interpreted as “highly influential”. This indicates that the respondents have diverse

answer in considering primary product as external determinants in pricing a certain

product.

The external determinants show a grand mean of 3.19, described as “often

considered” and interpreted as “highly influential” this means that the external
 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
CLAVER, SURIGAO DEL NORTE

determinants are “often consider” by the business owners of Claver public market in

pricing a product. According to Pettinger, T. (2017), the price of primary products tends

to be much more volatile. e.g. they can be influenced by weather and speculation. These

prices changes can be damaging to countries. If prices fall and demand is price inelastic,

then producers can go out of business and the country loses its main form of export

revenue. 44

Elasticity of demand is part of the external factor that affects the pricing decision

in any business. That affects the quantity of demanded with respect to related product

pricing and other outside factor. And your business needs to consider how these internal

factors can affect your business for better or worse (Sherman, F., 2018).

Problem 4: Is there a significant difference between internal determinants external

determinants in pricing decision when grouped according to the profile variables?

The following table revealed the summary of Analysis of variance (ANOVA) that

presents the level of difference between the internal and external determinants and

respondents’ profile. Significant alpha value decision rule was used. According to this

rule, any computed alpha value greater than the alpha value (0.05) indicates that the result

is not statistically significant. On the other hand, if the computed alpha value is less than

the alpha value (0.05), it implies that the result is statistically significant.

Table 4. ANOVA Result of the degree influence of internal determinants when

grouped according to capital variable
Dependent Variables SS MS F p-value Decision
Marketing 1.205 0.402 0.487 0.693 Accept H1
Return On Investment 4.149 1.383 2.295 0.091 Accept H1
 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
CLAVER, SURIGAO DEL NORTE

Cash Flow 1.950 0.650 1.339 0.274 Accept H1

Market Share 3.263 1.088 1.184 0.327 Accept H1
Maximize Profit 3.605 1.202 1.474 0.235 Accept H1
Fixed Cost 1.242 0.414 0.689 0.563 Accept H1
Variable Cost 2.559 0.853 1.082 0.367 Accept H1

Table 4 indicates the results of the analysis that internal determinants of pricing

decision and capital of the respondents does not statistically differ based on the decision

rule. And so, the null hypothesis 1 was accepted. This is because the significance level 45

provided it is greater than 0.05, which implies that the profile variable does not

significantly differ in internal determinants of pricing decision.

Capital comes in many forms and includes cash flow from the company’s sales

and other revenues. It can also come from cash infusions from the owners’ personal

savings and investments. Securing lines of credit with banks and other lenders also plays

an important part stabilizing your company’s finance and building your company’s

capacity to grow. (Oppong, T. 2017)

Table 5. ANOVA Result of the degree influence of internal determinants when

grouped according to types of product sold variable
Dependent Variables SS MS F p-value Decision
Marketing 3.654 0.731 0.907 0.485 Accept H1
Return On Investment 1.152 0.230 0.328 0.893 Accept H1
Cash Flow 3.671 0.734 1.570 0.189 Accept H1
Market Share 8.737 1.747 2.101 0.084 Accept H1
Maximize Profit 3.315 0.663 0.770 0.577 Accept H1
Fixed Cost 3.055 0.611 1.043 0.406 Accept H1
 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
CLAVER, SURIGAO DEL NORTE

Variable Cost 5.797 1.159 1.548 0.196 Accept H1

As shown in Table 5, the results of the analysis on the degree of influence of

internal determinants when groped according to types of product sold indicates no

significant difference statistically based on the decision rule. And so, the null hypothesis

1 was accepted. Thus, the significance level provided it is greater than the alpha value

0.05, which implies that the internal determinants of pricing decision do not significantly

differ in the types of product sold in Claver public market. 46

When it comes to effective selling, making purchases convenient for your

customers key. Spend time how best to reach your customers and ensure that your

product is readily available in the places your target market shops (Caan, J. 2013)

Table 6. ANOVA Result of the degree influence of internal determinants when

grouped according to years of operation variable
Dependent Variables SS MS F p-value Decision
Marketing 1.550 .388 0.464 0.762 Accept H1
Return On Investment 4.222 1.056 1.716 0.164 Accept H1
Cash Flow 4.195 1.049 2.359 0.068 Accept H1
Market Share 1.174 .293 0.297 0.878 Accept H1
Maximize Profit 3.354 .838 0.998 0.419 Accept H1
Fixed Cost 2.815 .704 1.217 0.317 Accept H1
Variable Cost 4.112 1.028 1.334 0.273 Accept H1

Table 6 indicates the results of the analysis that the internal determinants, years of

operation of the respondents does not statistically differ significantly based on the
 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
CLAVER, SURIGAO DEL NORTE

decision rule. And so, the null hypothesis 1 was accepted. This is because the

significance level provided it is higher than the alpha value of 0.05, which indicates that

the years of operation do not significantly differ in the internal determinants of pricing

decision.

Everything that happens within a company to keep it running and earning money

is referred to collectively as business operations. Business plans often include a section

dedicated to operations so that the founders understand the system, equipment, people

and processes need to make the organization function. (Toni, D. 2013)

47
Table 7. ANOVA Result of the degree influence of external determinants when
grouped according capital variable
Dependent Variables SS MS F p-value Decision

Demand 1.564 0.521 0.927 0.436 Accept H2

Customers Expectation 2.125 0.708 0.853 0.472 Accept H2
Direct product pricing 2.385 0.795 1.223 0.313 Accept H2
Related product pricing 2.829 0.943 1.169 0.332 Accept H2
Primary product Accept H2
1.762 0.587 0.770 0.517
pricing
Government Accept H2
4.614 1.538 2.059 0.119
regulations

Table 7 indicates the results of the analysis that the external determinants, capital

of the respondents does not statistically differ significantly based on the decision rule.

And so, the null hypothesis 2 was accepted. This is because the significance level

provided it is higher than the alpha value of 0.05, which indicates that the capital does not

significantly differ in the external determinants of pricing decision.

 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
CLAVER, SURIGAO DEL NORTE

According to Seth, T. 2010, capital is an essential to a company’s fundamental

health and operational success as a business. A good business management is the ability

to utilize capital management to maintain a solid balance between growth, profitability

and liquidity.

As shown in table 8 of the ANOVA result. It indicates that there is a significant

difference in government regulations as to the types of product sold with a p – value at

0.014, possibly, the government regulations may influence the product pricing. Since it

should be followed because it is mandated my law or government rules and regulations.

48
Table 8. ANOVA Result of the degree influence of external determinants when
grouped according to types of product sold variable
Dependent Variables SS MS F p-value Decision
Demand 1.748 0.350 0.598 0.702 Accept
H2
Customers Expectation 4.010 0.802 0.972 0.446 Accept
H2
Direct product pricing 6.152 1.230 2.080 0.087 Accept
H2
Related product pricing 6.713 1.343 1.784 0.137 Accept
H2
Primary product pricing 3.265 0.653 0.856 0.519 Accept
H2
Government regulations 10.488 2.098 3.264 0.014 Reject H2

The different product sold in the market help to maintain customers’ satisfaction

and loyalty and reduce the risk and cost of replacing faulty goods. Companies can build a

resolution for quality by gaining accreditation with recognized quality standards (Quain,

Sampson, 2019)
 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
CLAVER, SURIGAO DEL NORTE

Table 9. ANOVA Result of the degree influence of external determinants when

grouped according to years of operation variable
Dependent Variables SS MS F p-value Decision
Accept
Demand 1.755 0.439 0.768 0.552
H2
Accept
Customers Expectation 2.831 0.708 0.849 0.502
H2
Accept
Direct product pricing 1.130 0.283 0.407 0.803
H2
Accept
Related product pricing 5.067 1.267 1.639 0.182
H2
Accept
Primary product pricing 4.304 1.076 1.492 0.221
H2
Accept
Government regulations 2.884 0.721 0.896 0.475
H2 49

As shown in Table 9, the results of the analysis on the degree of influence of

external determinants when grouped according to years of operation indicate no

significant difference statistically based on the decision rule. And so, the null hypothesis

1 was accepted. Thus, the significance level provided it is greater than the alpha value

0.05, which implies that the external determinants of pricing decision do not significantly

differ in the years of operation in Claver public market.

In the broadest sense, operational excellence involves making continuing

improvements to a company in order tp achieve a competitive advantage, in doing so,

companies maximize value for the customer as well as their own financial benefits. With

operational excellence, companies develop efficient systems in which employees focus

on fixing problems as soon as they arise. (Sulivan, J. 2016)

 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
CLAVER, SURIGAO DEL NORTE

50

Chapter 5

SUMMARY, CONCLUSION AND RECOMMENDATION

This chapter includes the summary, summary of findings, conclusions and

recommendations of the study.

Summary

The study was focused on the determinants of pricing decision among public

market retailers in Claver, Surigao del Norte. Only those business owners who sells their

products in Claver public market building were considered as the respondents of the

study. It utilized the quantitative research design, descriptive survey to gather information

to test the hypotheses. There were forty-eight (48) actual respondents and ten (10) sample
 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
CLAVER, SURIGAO DEL NORTE

respondents utilized for pre-testing activity. The non-probability, purposive sampling

technique were used in the selection of the respondents of the study. A researchers-made

questionnaire was used in gathering data. The study also utilized frequency count and

percentage distribution, mean and standard deviation and analysis of variance as tools in

analyzing the data.

Summary and Findings

Based on the analysis and the interpretation of data, the study revealed the

following results and findings:

1. The study shows that out of forty-eight (48) respondents, there were 6 (13%) of

the respondents having less than 10,000 pesos as their capital, 20 (42%) with 10,001 –

30,000 pesos capital, 17 (35%) who have beginning capital of 30,001 – 50,000 and 5 51

(10%) of the respondents has more than 50, 000 as their capital to start the business.

Moreover, 1 (2%) of the respondents who sells at Claver public market in less than a

year, 13 (27%) who were 1 – 4 years in the business, 16 (33%) operates the business

between 5 – 8 years, 9 (19%) who’s 9 – 12 years in the business and 9 (19%) respondents

also who were operates their business at Claver public market in more than 12 years.

2. The study indicates that the respondents have a “highly influential” degree of

internal determinants of pricing decision with an overall mean of 3.12 and a standard

deviation of 0.86. The variables; marketing (3.27) and maximize profit (3.27) were

interpreted as “very highly influential,” however, return of investment (3.27), cash flow

(2.83), market share (3.08), fixed cost (3.08) and variable cost (3.13)were all only rated

as “highly influential”.
 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
CLAVER, SURIGAO DEL NORTE

3. The external determinants of pricing decision have a “highly influential” degree

of influence to the Claver public market retailers with an overall mean of 3.19 and a

standard deviation of 0.87. the variables; elasticity of demand (3.31), direct product

pricing (3.25), related product pricing (3.31) and government regulations (3.27) were

interpreted as “very highly influential,” however, customers expectation (3.17), primary

product pricing (2.81) were only rated as “highly influential”.

4. In the analysis of variance in the degree of determinants of pricing decision

when grouped according business profile variable, there was no significant difference

between the internal determinants to capital (p-value = 0.364), internal determinants to

types of good sold (0.404) and internal determinants to years of operation (0.411) 52

5. Also, the analysis of variance in the degree of determinants of pricing decision

when group according to business profile variable, there were no significant difference

between the external determinants to capital (0.365), external determinants to types of

product sold (0.318) and external determinants to years of operation (.456).

Conclusions

The leading determinants of pricing decision are marketing and maximize profit

as internal determinants, elasticity of demand and related product pricing as external

determinants of pricing decision. These indicate that the determinants mentioned above

are always considered in pricing a product of public market retailers in Claver, Surigao

del Norte.

As a result, the upper mentioned determinants are very highly influential compare

to the other internal and external determinants of pricing decision. Pricing decision
 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
CLAVER, SURIGAO DEL NORTE

mainly requires business owners’ engagement and cooperation because of the complexity

of the pricing policies that results a successful pricing decision. Like other policies,

pricing policies have an essential role in pricing decision. Its effectiveness will allow

business owner to come up with the price that they aimed to a certain product.

Pricing decision plays a very crucial role in properly pricing a certain product to

achieve the goal of one’s business. The scope of this research offers business owners a

clear picture of the areas to improve to maximize the way how business owner price their

product.

53

Recommendation

In the development of the pricing decisions among the retailers of Claver public

market, a standard pricing policy should be implemented. The policy should focus on

internal and external determinants of pricing decisions (see the proposed policies in

Appendix C). It provides the guidelines within which management formulates and carries

out pricing policies.it aims at promoting long-term welfare of the enterprise for the entire

operation over the long run.

To make of these policies more meaningful, it is essential for the business owners

to apply these policies to ensure that they price their product successfully. This will also

reveal the inappropriate ways in pricing their product.

The result of this research may be used as a basis of the business owner that is

very useful in identifying what factors may be considered in pricing decision to have a

successful way in pricing a certain product.

 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
CLAVER, SURIGAO DEL NORTE

Finally, because of the variability of price in the Philippines, particularly in our

municipality, the study’s limitation is focuses only on some internal and external

determinants of pricing decision in Claver public market. Future studies could investigate

a broader population and additional internal and external determinants of pricing

decision.

54

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Availableat:http://www.yourarticlelibrary.com/marketing/pricing/pricing-
objectives-top-5-objectives-of-pricing-explained/48639. Accessed on December
8, 2018.

Schmitz, A. (2012). Factors That Affect Pricing Decisions. 2012books.lardbucket.org.

Available at: https://2012books.lardbucket.org/books/marketing-principlesv1.0/
s18-02 -factors-that-affect-pricing-de.html Accessed on July 6, 2019. 57

Sharma, S. (2011), “Determinants of equity share prices in India”, Journal of Arts,

Science & Commerce, 2(4): 51-60. Accessed on December 6, 2018.

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policy-meaning-objectives-and-factors/21757 Accessed on July 6, 2019.

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Available at: https://www.vtexperts.com/marketing-objectives-affect-pricing-
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pricing-decisions-in-a-market/112825. Accessed on December 9, 2018
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58

APPENDIX A

QUESTIONNAIRE

Control No. ____________

Dear Respondents:

We are the researchers from Claver National High School and we are conducting
a survey about Determinants of Pricing Decision among Public Market Retailers in
Claver, Surigao del Norte. We are requesting you to kindly spare a few minutes and help
us in a survey. Rest assures that the information from you will be kept confidential and
will be used for academic purposes only. Your cooperation is highly appreciated. Thank
you and God bless.

Sincerely,

The Researchers

I. PROFILE OF THE BUSINESS

Name of Store (Optional):

Capital: Less than 10,000:

 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
CLAVER, SURIGAO DEL NORTE

10,001 – 30,000:
30,001 – 50,000:
More than 50,000:

Types of Product Sold:

Chicken :
Fish :
Grocery Items :
Pork :
Vegetable :
Others (Please Specify):

Years of Operation:

59

II. INTERNAL DETERMINANTS OF PRICING DECISION

DIRECTION: Please indicate your answer on every item in the space provided by
putting a check () based on the following scale.

Rating Scale
4 Always Considered
3 Often Considered
2 Sometimes Considered
1 Never Considered

INTERNAL DETERMINANTS 4 3 2 1
1. Marketing
The action or business of promoting and selling products or
services, including market research and advertising.
(Mga pamaagi kung unsaon nimo pag baligja o pagpromote sa imo
mga produkto.)
2. Return of Investment
A profitability measure that evaluates the performance of a
business by dividing net profit by net worth.
(Ang kantidad nga mubalik sa imo gikan sa tag invest.)
 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
CLAVER, SURIGAO DEL NORTE

3. Cash Flow
The total amount of money being transferred into and out of a
business, especially as affecting liquidity.
(Kantidad sa kwarta nga musoyod og lugwa sa imo negosyo)
4. Market Share
The portion of a market controlled by a particular company or
product.
(Ang imong bahin sa merkado nga gipanag iya sa munisipyo.)
5. Maximize Profit
A process that companies undergo to determine the best
output and price levels in order to maximize its return)
(Mga paagi na pwede himoon para mudako ang possibleng kita)
6. Fixed Cost
Business costs, such as rent, that are constant whatever the
quantity of goods or services produced.
(mga gastohonon nga dili makaapekto sa kadaghanon sa
produktonga pwede mabaligja)
7. Variable Cost 60
A cost that varies with the level of output.
(Mga gasto sa korporasyon na maka bag o sa kadaghanon sa
produkto na pwede mabaligka)
EXTERNAL DETERMINANTS 58
1. Elasticity of Demand
How sensitive the demand for a good is to changes in other
economic variables, such as prices and consumer income.
(Pag bag-o bag-o sa kadaghanon sa mamalitay)
2. Customers Expectation
  The perceived value or benefits that the customers seek
when purchasing a good or availing a service.
(Mga benipesyo ng mamalitay kung mupalit sa imo produkto)
3. Direct Competition Pricing
A situation in which two or more businesses offer products or
services that are essentially the same; as such, the businesses are
competing for the same potential market.
(Mga nag baligja ng pariha nga serbisyo o produkto.)
 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
CLAVER, SURIGAO DEL NORTE

4. Related Product Pricing

Products whose demand is influenced by a price change of
another related product.
(Presyo sa produckto nga kapariha sa imo tagbaligja)
5. Primary Product Pricing
Goods that are available from cultivating raw materials
without a manufacturing process.
(Ang presyo sa mga pangunahing produkto pariha ng isda og uban
pa)
6. Government Regulations
A law that controls the way that a business can operate, or all
of these laws considered together
(Mga balaod sa gobyerno na nakaapekto sa pag presyo sa produkto)

Thank you!

61

APPENDIX B

Letter to Conduct the Study

DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
CLAVER, SURIGAO DEL NORTE

62

APPPENDIX C

Letter of Request to Validate the Questionnaire

DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
CLAVER, SURIGAO DEL NORTE

63

APPENDIX D

Proposed Business Owners Pricing Policies among Public Market Retailers

(See Attached File)

DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
CLAVER, SURIGAO DEL NORTE

64

CLAVER PUBLIC MARKET:

PRICING POLICY PROPOSAL
CLAVER, SURIGAO DEL NORTE
DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
CLAVER, SURIGAO DEL NORTE

Prepared by

Charles Christian V. Galido

Shiela Marie G. Piape
Joytrisha Y. Dumanig
Jessa Belle B. Iligan
Jayferson D. Ata
 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
CLAVER, SURIGAO DEL NORTE 65

RATIONALE:

Nowadays we experienced the variability of price not just in our municipality but

in the whole country. The changes in product prices are unpredictable, it changes

anytime. This affects the whole process of the business and the consumers. This research

seeks to determine the possible determinants in pricing decision among public market

retailers in Claver, Surigao del Norte in order to help not just the consumers but also the

whole municipality to be aware on how market retailers come up with their product

prices.

OBJECTIVES:

- To help business owner to identify what to follow in terms of pricing their

product;

- To help develop fairness and stable product pricing; and

- To develop well established product prices.

PROPOSED POLICY:

The Local Government of Claver together with the help of Local Economic

Enterprises Development and Management Office (LEEDMO) of the municipality of

Claver should implement these following pricing policies to improve pricing decision of

Claver public market retailers.

 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
CLAVER, SURIGAO DEL NORTE
66

When determining how much market retailers in Claver public market should

charge for their products or services make sure they consider the policies based from the

following:

Cost Price your product or services according to your cost

structure. Above anything else, your price structure

must account for all the fixed and variable cost of

conducting your business, including marketing and

distribution costs, such as the cost of providing volume

discounts, advertising subsidies and shipping.

Competition Price your product or service according to what the

competition is charging. Since your products or

services are competing in the market place, you must

know exactly what the competition is doing before you

can finalize your policies.

Customers’ Price your product or services according to the

expectations of your customers. Some customers are

Expectations
very price conscious, because of this variation, you

need to learn about your customers desires and

expectations in relation to your kinds of product to

price them more effectively.

Demand Price your product or services according to how many

people want it and how badly and quickly they actually

DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
CLAVER, SURIGAO DEL NORTE

need it. Obviously, if there is a large demand for your

product or services and you’re the only one on the

block selling it, you can pretty much charge what you

want.

Industry Averages Price your product or service according to pricing

standards and guidelines set by your industry. Every

industry has a standard pricing strategy or structure.

Research you market to determine what your industry

markup percentage is.

Legal Concerns Price your product or service according to local and

national laws and regulations. In some cases, laws may

restrict how much you can charge for certain items.

Location of Price your product or services according to how good

your location is. A business with a prime location can

Business
usually get away with charging more for its products or

services.

Profit Goals Price your product or services according to your profit

goals. Naturally, your prices should motivate customers

to buy, be competitive, and cover selling costs.

 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
CLAVER, SURIGAO DEL NORTE 68

DEVELOPING A PRICE STRUCTURE:

CALCULATING RETAIL MARK-UP

One technique to establish a price is to mark up goods sold by adding an initial

percentage to the total cost of the good sold. This percentage should take into accounts

the two major costs; costs of merchandise and operating expenses.

For example;

A retailer purchases a 1 kl. garlic at 50 pesos and marks it up 10 pesos for a resale

price of 60 pesos. The markup percentage is then calculated by dividing the markup

amount by the cost of the garlic.

Cost of 1 kl. garlic 50 pesos

Markup amount 10

Selling price 60

Markup percentage 20%

This 20% markup should cover all operating expenses.

POSSIBLE IMPACT OF THE POLICY:

Retailers: This policy helps the retailers from Claver public market on how to

price their product properly. Or what possible determinants may considered in pricing

their product. This also serves as their guidelines in pricing decision which is very

essential in achieving their business goal and in order to have a well-established and

productive business.
 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
CLAVER, SURIGAO DEL NORTE
69

Consumers: Being aware is one of the possible impacts that this policy can offer

to the consumers. In a way that the consumer will have knowledge on how business

owner come up with the selling prices. They will be informed on what are those policies

or factors that the business owner considered in pricing their product. In that way, the

consumer will understand why they experienced a variability of product prices.

Local Economy: It encourages small businesses in the municipality of Claver to

be competitive also. Because they know whether what your business status is, as long as

there are policies to be considered and followed specially in pricing a product, small

businesses have the opportunity to earn profit and customers as what big or stable

business are doing.

CONCLUSION

Product prices nowadays are unpredictable. It may be affordable today but will

costs expensive in the next day. Unstable product pricing may lead to many challenges

and difficulties especially to the retailers and customers. This policy will not just help the

business owner, it also help customers by giving knowledge about pricing decision which

is very important so that the changes will not cause a huge impact to the both sides. They

will easily embraced and adjust in any changes specifically in product prices.
 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
CLAVER, SURIGAO DEL NORTE 70

CURRICULUM VITAE

Charles Christian V. Galido

Claver, Surigao del Norte
Philippines
Mobile Number: 09566954317
Email Address: [email protected]

PERSONAL INFORMATION
Age: 16
Date of Birth: November 20, 2002
Gender: Male
Civil Status: Single
Height: 5’4”
Weight: 50 kg
Nationality: Filipino
Permanent Address: Brgy. Panatao, Claver, Surigao del Norte

EDUCATIONAL BACKGROUND
Secondary: Senior High School
Academic Track – ABM Strand
Claver National High School
Tayaga, Claver, Surigao del Norte

Junior High School

Claver National High School
Tayaga, Claver, Surigao del Norte

Elementary: Panatao Elementary School

Panatao, Claver, Surigao del Norte

REFERENCES

Upon Request
 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
CLAVER, SURIGAO DEL NORTE 71

CURRICULUM VITAE

Jayferson E. Ata
Claver, Surigao del Norte
Philippines
Mobile Number: 09077334200
Email Address: [email protected]

PERSONAL INFORMATION
Age: 18
Date of Birth: May 26, 2001
Gender: Male
Civil Status: Single
Height: 5’3”
Weight: 41 kg
Nationality: Filipino
Permanent Address: Brgy. Urbiztondo, Claver, Surigao del Norte

EDUCATIONAL BACKGROUND
Secondary: Senior High School
Academic Track – ABM Strand
Claver National High School
Tayaga, Claver, Surigao del Norte

Junior High School

Claver National High School
Tayaga, Claver, Surigao del Norte

Elementary: Urbiztondo Elementary School

Panatao, Claver, Surigao del Norte

REFERENCES

Upon Request
 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
CLAVER, SURIGAO DEL NORTE 72

CURRICULUM VITAE

Shiela Marie S. Piape

Claver, Surigao del Norte
Philippines
Mobile Number: 09197507059
Email Address: [email protected]

PERSONAL INFORMATION
Age: 18
Date of Birth: August 25, 2001
Gender: Female
Civil Status: Single
Height: 5’3”
Weight: 50 kg
Nationality: Filipino
Permanent Address: Brgy. Sapa, Claver, Surigao del Norte

EDUCATIONAL BACKGROUND
Secondary: Senior High School
Academic Track – ABM Strand
Claver National High School
Tayaga, Claver, Surigao del Norte

Junior High School

Claver National High School
Tayaga, Claver, Surigao del Norte

Elementary: Claver Central Elementary School

Tayaga, Claver, Surigao del Norte

REFERENCES

Upon Request
 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
CLAVER, SURIGAO DEL NORTE 73

CURRICULUM VITAE

Jessa Belle Iligan

Claver, Surigao del Norte
Philippines
Mobile Number: 09
Email Address: [email protected]

PERSONAL INFORMATION
Age: 18
Date of Birth: July 2, 2001
Gender: Female
Civil Status: Single
Height: 5’3”
Weight: 43 kg
Nationality: Filipino
Permanent Address: Brgy. Cabugo, Claver, Surigao del Norte

EDUCATIONAL BACKGROUND
Secondary: Senior High School
Academic Track – ABM Strand
Claver National High School
Tayaga, Claver, Surigao del Norte

Junior High School

Claver National High School
Tayaga, Claver, Surigao del Norte

Elementary: Cabugo Elementary School

Cabugo, Claver, Surigao del Norte

REFERENCES

Upon Request
 DETERMINANTS OF PRICING DECISION AMONG PUBLIC MARKET RETAILERS IN
CLAVER, SURIGAO DEL NORTE 74

CURRICULUM VITAE

Joytrisha Dumanig
Claver, Surigao del Norte
Philippines
Mobile Number: 09095100876
Email Address: [email protected]

PERSONAL INFORMATION
Age: 18
Date of Birth: March 3, 2000
Gender: Female
Civil Status: Single
Height: 4’8”
Weight: 39 kg
Nationality: Filipino
Permanent Address: Brgy. Villafranca, Gigaquit, Surigao del Norte

EDUCATIONAL BACKGROUND
Secondary: Senior High School
Academic Track – ABM Strand
Claver National High School
Tayaga, Claver, Surigao del Norte

Junior High School

Gigaquit National School of Home and Indstry
Gigaquit, Surigao del Norte

Elementary: Villafranca Elementary School

Villafranca, Gigaquit, Surigao del Norte

REFERENCES

Upon Request