COMPETITIVE PRICING STRATEGY AND PERFORMANCE OF AGRI-BASED COOPERATIVES IN KENYA
Abstract
Purpose of the study: The study examined the effect of competitive pricing strategy on the performance of agri-based cooperatives in Kenya. The study was anchored on dynamic capabilities theory which provides the foundation for understanding how competitive pricing strategy influences organizational performance through adaptive pricing capabilities in changing market environments.
Methodology: A descriptive research design was employed, targeting 24 agri-based cooperatives with 144 respondents from various management levels. Primary data were collected through structured questionnaires using five-point Likert scales, while secondary data were obtained from financial reports covering 2018-2023. Data were analyzed using SPSS software involving data coding and analysis to produce descriptive statistics (means, standard deviations, frequencies) and inferential statistics (correlation and simple regression analysis).
Findings: The study found a strong positive correlation between competitive pricing strategy and performance (r = 0.766, p = 0.000), with competitive pricing strategy having substantial individual impact (R² = 0.386, β = 0.700, p = 0.000). Competitive pricing strategy explained 38.6% of the variance in cooperative performance, indicating that when cooperatives focus on cost minimization, efficient sourcing, and production optimization, these pricing-related activities account for more than one-third of the performance differences among cooperatives.
Conclusion: The study concludes that competitive pricing strategy significantly influences cooperative performance outcomes through strategic cost management and market positioning approaches.
Recommendations: The study recommends that managers should develop comprehensive competitive pricing strategies, conduct regular market research, implement dynamic pricing mechanisms, and foster continuous improvement culture through member engagement and cross-functional collaboration. Policymakers should create supportive regulatory environments, establish cooperative support hubs offering technical assistance and digital tools, develop market information systems, and provide incentives for pricing innovation, aligning with Kenya's Vision 2030 and Sustainable Development Goals to promote agri-based cooperative development and sustainability.
Keywords: Competitive pricing strategy, performance, agri-based cooperatives, Kenya
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