Pricing strategies within the South African veterinary profession

Abstract

ABSTRACT The pricing strategies followed by any business are of paramount importance from both an operational as well as a strategic perspective in generating revenue. In order to mitigate against the unintended consequences of pricing incorrectly, there are a variety of factors that should be taken into consideration. Within the veterinary industry, the increasingly competitive market requires veterinarians to focus on delivering value to customers and setting their prices accordingly. As a result, veterinarians need to gain a better understanding of the pricing environment and develop a systematic process to pricing so that prices can be set in accordance to costs, customer and competitor factors. This research seeks to identify the dominant pricing strategies used by South African veterinarians as well as expand on the understanding of whether the pricing strategies differ between the products and services offered. A structured, electronic questionnaire was sent out nationally to all South African veterinarians and practice managers. 79 veterinarians participated in the study in order to identify the dominant pricing strategies used by the profession. The results of the survey were analysed by means of a normal distribution fit algorithm and correspondence analysis. The results of the survey revealed that, similar to most small businesses and the majority of service industries, cost-plus pricing is the dominant pricing strategy used by veterinarians. Furthermore, it was identified that there are differences in the pricing strategies chosen by veterinarians for various products and services