Effects of pricing strategies on customers’ buying behaviour: the case of commercial banks in Kenya
Kithinji, Rukwaru G
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The study attempted to establish the effects of pricing strategies on consumer behavior in the commercial banks in Kenya. A sample of 150 customers was conveniently obtained from the target population of 30 commercial banks which have branches within the Nairobi county. A descriptive survey design was used to achieve the objective of the study. Semi-structured questionnaires were used for data collection. Descriptive statistics were used to summarize the findings of the study while statistical package for social sciences (SPSS), Ms Excel, and regression were used to perform the analysis of quantitative data. From the study, consumers utilize most of the products/services provided by their commercial banks. Banks’ pricing strategies which influence the utilization of their products/services by consumers are based on the need for the banks to increase their profitability. The study also found that commercial bank’s pricing strategies are based on; demand, value, and cost-plus pricing of the products/services. Consumers agree that the price of products/services and their income level are the major reasons for their reluctance to use some of the products/services provided by their commercial banks. Age, income level, occupation, awareness of products, and lifestyle affect the buying behaviour of consumers more compared to their friends/family’s utilization of the same products/services. Many customers are satisfied with the pricing of products/services by their banks compared to those of substitutes available in the market. The study recommends that commercial banks and other policy makers should intensively and expansively focus formulating pricing strategies that suit both parties i.e. the bank and the consumer. The relevant agencies should also fully participate in the processes of pricing strategy formulation to ensure that all parties are put under considerations.