IMPACT OF PRICING STRATEGY ON SALES PERFORMANCE OF PHARMACEUTICAL FIRMS IN NIGERIA

Abstract

This study investigates the impact of pricing strategies on the sales performance of pharmaceutical firms in Nigeria. The study specifically examined the effects of cost-plus pricing, value-based pricing, competitive pricing, penetration pricing, and skimming pricing on sales performance. Using a qualitative research design, primary data were collected through structured questionnaires administered to management and marketing staff of selected pharmaceutical firms. The data were analyzed using multiple regression analysis to determine the impact of pricing strategy on sales performance of pharmaceutical firm in Nigeria. The results revealed that pricing strategy has a significant influence on sales performance, with an R value of 0.849 and an R² of 0.721, indicating that approximately 72% of the variation in sales performance is explained by pricing strategy variables. Among the predictors, cost-plus pricing exhibited a strong and statistically significant positive effect on sales performance (B = 0.861, t = 10.491, p < 0.001), implying that firms adopting cost-based approaches tend to achieve higher sales growth and profitability. Conversely, competitive pricing showed a significant negative effect (B = -0.231, t = -2.227, p = 0.029), suggesting that excessive price competition may reduce profitability and long-term market stability. Penetration pricing had a marginally negative effect (B = -0.158, t = -1.960, p = 0.054), while value-based pricing (B = 0.118, p = 0.171) and skimming pricing (B = 0.072, p = 0.364) had positive but insignificant effects on sales performance. The findings indicate that cost-plus pricing is the most effective strategy for enhancing sales performance in Nigeria’s pharmaceutical industry, while aggressive price competition and penetration tactics may hinder sustainable profitability. The study concludes that firms should adopt cost-reflective and value-oriented pricing policies to balance profitability with consumer affordability. It also recommends that managers employ data-driven pricing decisions to adapt to market changes and strengthen sales performance in a highly competitive and regulated environment.