An investigation into pricing strategies on financial performance: a case study of Old Mutual property

Abstract

The study is about an investigation into pricing strategies at Old Mutual Property. Although the company initiated pricing strategies, the number of credit losses and voids continued to increase, this therefore impelled the researcher to undertake a research into pricing strategies on financial performance. A case study approach was employed with the use of interviews and questionnaires as research instruments. The gathered data was presented on tables, graphs and pie charts and was analysed with the use of mode, while interviews were summarized. Major findings revealed that the current pricing strategy used within OMP was not effective in the current environment, which resulted in it passing unfair rental costs and this caused tenants to move out of the firm’s property thus increasing the number of voids consequently reducing revenue. The current pricing strategy also increased credit losses as tenants terminated leases at the middle of contract periods thus also reducing revenue for the company .Theoretical views from scholars, authors and journals as well as findings were used by the researcher to provide recommendations. The researcher recommended Old Mutual Property to use strategic pricing when pricing its rental space as it is the one suitable in the current economy of Zimbabwe. Strategic pricing maintains market share, reduces number of voids and controls credit losses thereby increasing revenue. Further research can be done on other aspects that causes revenue to decline in property companies, like the impact of lease contracts on financial performance.