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      Determinants of pricing objectives and price flexibility policies of pork-based agro-businesses in Mashonaland Central province, Zimbabwe

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          Abstract

          BACKGROUND: The article focuses on the pricing strategies that are used in a dynamic institutional environment of land reform and indigenisation policies. Zimbabwe underwent a land reform incorporating new players in the pork agribusinesses, as well as indigenisation, altering agro-business decision-making structures. One such decision is effective pricing. AIM: The objective of the study was to highlight the determinants of utilising a particular pricing objective and price flexibility policy in the Zimbabwean pork industry. SETTING: The study examined the pricing objectives and price flexibility policies of pig producers, pork abattoirs and butcheries in Mashonaland Central province, Zimbabwe. METHODS: The study used a cross-sectional, descriptive and quantitative survey of pig producers, pork abattoirs and pork butcheries. A structured precoded questionnaire-based interview of 166 pig producers, 6 pork abattoirs and 24 butchers was used as the data collection tool and method. A logit model was used for analysis, ascertaining determinants of a binary choice model. RESULTS: The study found that agribusinesses' pricing objectives were determined by the product portfolio, margin, merchandise handled, distance the furthest buyer travels and consideration of other industry players' pricing at the p < 0.01 level. Furthermore, factors such as seasonality in April to September sales, quality considerations (p < 0.05), frequency of retailers and size considerations (p < 0.1) were also significant determinants of pricing objectives. Also, the agribusinesses' price flexibility policies were shown to be determined by agribusiness location, average weight of merchandise, frequency of individual customers, size consideration and consideration of other industry players' pricing at the p < 0.01 level. In addition, margin, frequency of abattoir buyers (p < 0.05) as well as pork product portfolio (p < 0.1) were also observed to be major factors towards a flexible pricing policy. CONCLUSION: The results suggest that pork industry players in Zimbabwe are myopic in their pricing strategies, having factors such as product portfolio, margin, merchandise handled and considerations of other industry players' strategies as dualistically determining pricing objective and price flexibility policy utilised. The study recommends that pork industry players shift from myopic pricing objectives of profit and survival and devise new pricing strategies based on sales and competitive pricing. There is also need for less rigidity in flexible price policies to take advantage of the dynamic external environment.

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          Most cited references 20

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          'Piggery production and the Empowerment of Rural People in Ward 21 of Gutu District, Masvingo Province, Zimbabwe'

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            'Consumer choice and suggested price for pork as influenced by its appearance, taste and information concerning country of origin and organic pig production'

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              'Non regulatory constraints affecting Pig Industry in Zimbabwe'

               J. Mutambara (2013)
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                Author and article information

                Contributors
                Role: ND
                Role: ND
                Journal
                sajems
                South African Journal of Economic and Management Sciences
                S. Afr. j. econ. manag. sci.
                University of Pretoria (Pretoria, Gauteng, South Africa )
                1015-8812
                2222-3436
                2018
                : 21
                : 1
                : 1-11
                Affiliations
                orgnameUniversity of Fort Hare orgdiv1Faculty of Science and Agriculture orgdiv2Department of Agricultural Economics and Extension South Africa
                S2222-34362018000100029
                10.4102/sajems.v21i1.2029

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

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                Figures: 0, Tables: 0, Equations: 0, References: 62, Pages: 11
                Product
                Product Information: SciELO South Africa

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