The Impact of Pricing Strategies on the Growth and Sustainability of Small and Medium Enterprises: Empirical Evidence from South Africa

Abstract

This study investigated the impact of pricing strategies on the growth and sustainability of small and medium enterprises (SMEs). The study employed a quantitative research approach and sampled 132 SMEs operating in a municipality in South Africa. A self-administered, closed-ended questionnaire was tested for reliability and validity and thereafter used to collect data from the respondents. This study employed simple linear regression analysis and performed the reliability test. In this study, the data were analysed using descriptive and inferential statistics. The results showed that SMEs primarily used cost-plus, value-based, and competitor-based pricing strategies. However, frequently modifying prices in response to market competition and technological advancements improves business performance. The study found a significant and positive relationship between pricing strategies and growth. Furthermore, a positive and significant nexus between pricing strategies and the sustainability of the SMEs. The practical implication of this study informs the SME managers and owners that SMEs that apply strategic and market-oriented pricing practices are more likely to achieve improved performance outcomes. The study, therefore, emphasises the importance of effective pricing in promoting both growth and long-term sustainability among SMEs. The findings of this study are expected to persuade the SMEs to pay crucial attention to the pricing strategies implemented in the business.