EFFECT OF EXCHANGE RATE ON PRICING IN BUSINESS OPERATIONS OF SMEs IN ENUGU STATE

https://doi.org/10.5281/zenodo.10610922

Authors

  • Okwara Valentine Obinna Department of Business Administration, Faculty of Management Sciences, Enugu State University of Science and Technology (ESUT)
  • Okechukwu Elizabeth Uzoamaka Department of Business Administration, Faculty of Management Sciences, Enugu State University of Science and Technology (ESUT)

Keywords:

Exchange rate, Pricing, Business, Operations, SMEs

Abstract

This work is on the effect of exchange rate on pricing in business operations of SMEs in Enugu state. Specifically, the objectives were to determine the effect of base currency on cost-based pricing in business operations and ascertain the effect of counter currency on value-based pricing in business operations of SMEs in Enugu state. The population of the study comprises two hundred and four (204) Manufacturing firms situated in Enugu State Nigeria and are registered under Manufacturing Association of Nigeria, total of seven (7) manufacturing SMEs in the Enugu State were selected. A total number of staffs from the seven selected manufacturing firm is 1360. Linear regression analysis was utilized to test the hypotheses of the study. The statistical tool used for the analysis is the statistical package for social sciences (SPSS) version 26. The findings of the study revealed that base currency does have significant effect on cost-based pricing in business operations of SMEs in Enugu state. counter currency does not have significant effect on value-based pricing in business operations of SMEs in Enugu state. The study concludes that changes in the exchange rate of the base currency can have a direct impact on the cost of inputs for SMEs, which in turn affects their pricing strategies, Value-based pricing is determined by factors such as customer perception, brand image, and competitive positioning, rather than exchange rate fluctuations. The study among other things recommended that SMEs should emphasize the unique value propositions of their offerings, such as quality, features, or customer experience, rather than solely relying on exchange rate fluctuations

Published

2024-02-02

How to Cite

Okwara , V. O., & Okechukwu, E. U. (2024). EFFECT OF EXCHANGE RATE ON PRICING IN BUSINESS OPERATIONS OF SMEs IN ENUGU STATE. International Journal of Interdisciplinary Research in Marketing and Management (IJIRMM), 11(1), 1–16. https://doi.org/10.5281/zenodo.10610922

Issue

Vol. 11 No. 1 (2024): January-March

Section

Original Peer Review Articles
Copyright & Licensing

Copyright (c) 2024 International Journal of Interdisciplinary Research in Marketing and Management (IJIRMM)

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

References

Altinay, G., & Özcan, M. (2017). Exchange rate uncertainty and economic activity: a meta-analysis. International Journal of Economic Development, 19(2): 167-192.

Anderson, J. C., Narus, J. A., & Van Rossum, W. (2016). Customer value propositions in business markets. Harvard Business Review, 84(3), 90-99. (Print)

Belghitara, Y., Clark, E., & Mefteh-Walic, S. (2012). The effect of floating exchange rates on SME performance. Journal of Business Finance & Economics, 3(4), 59-73.

Bordo, M. D., Eichengreen, B., & Flandreau, M. (2016). A history of Bretton Woods and its aftermath. Cambridge University Press.

Buckley, P. J., Cross, A. R., Tan, H., & Liu, X. (2018). Currency exchange rate volatility and multinational enterprise strategy. Journal of International Business Studies, 49(8), 1030-1050.

Central Bank of Nigeria (CBN). (2023, October 20). Currency Gallery. Retrieved from https://www.cbn.gov.ng/out/2022/ccd/press%20remarks%20on%20new%20naira%20banknotesoct2022%20final.pdf

Eggert, F., & Lehmkuhl, A. (2013). Dynamic pricing in markets with heterogeneous preferences. The RAND Journal of Economics, 44(4), 1106-1131.

Eichengreen, B., & Wyplosz, C. (2019). Exchange rates and international finance. Oxford University Press.

Frieden, J. A., & Martin, L. L. (2017). International political economy: Perspectives on global power and wealth. W.W Norton & Company.

Goldberg, L. S., & Knetter, M. M. (2017). The effects of exchange rate changes on US manufacturing: Evidence from microdata. Journal of Political Economy, 125(4), 1171-1216.

Jones, R. W. (2019). The Effects of Exchange Rates on Trade: A Survey. The Manchester School

Kotler, P., & Armstrong, G. (2016). Principles of marketing. Pearson.

Kumar, N., & Nambisan, S. (2009). The economics of strategic innovation. Journal of Management Studies, 46(2), 259-280.

Nagle, T. T., & Holden, R. K. (2002). The strategy and tactics of pricing: A guide to growing more profitably. Prentice Hall.

Obwulu, C. M. (2019). Exchange rate volatility and economic growth in Africa: A panel data analysis. African Journal of Economic and Management Studies, 10(4): 549-565.

Ogunleye, A., & Ogunleye, E. (2019). The impact of exchange rate fluctuations on the performance of small and medium enterprises in Nigeria: An empirical analysis. International Journal of Economics and Financial Issues, 9(1), 205-212.

Omolehin, R. O., & Adeyemo, A. S. (2018). Exchange Rate Movements and the Performance of Small and Medium Enterprises in Nigeria: A Macroeconomic Approach. Journal of Risk and Financial Management, 11(4), 84.

Pankoff, L., & Bearden, W. O. (2012). Consumer miscalibration of reference prices: Implications for pricing strategy. Journal of Retailing, 88(3), 389-402.

Porter, M. E. (1980). Competitive strategy: Techniques for analyzing industries and competitors. The Free Press.

Simonson, I., & Rosen, E. (2014). Absolute value: What really influences customers in the age of (nearly) perfect information? Harper Business.