Abstract:
The purpose of this study was to examine effect of pricing strategies on customer satisfaction on
EthioTelecom, the case of east Addis Ababa zone. The study addressed four research questions,
which sought to establish the effects of low-cost leadership pricing on customer satisfaction,
differentiation pricing on customer satisfaction, psychological pricing on customer satisfaction, and
pricing strategy concerns in EthioTelecom.
The research adopted a mixed research design where 1000 made the population. The stratified simple
random sampling technique was fit for the study. The tool used to collect the data was a structured
questionnaire. A sample of 286 questionnaires was adequate and was arrived at using Yamane
formula although 286 all respondents returned the questionnaires. Statistical Package for Social
Sciences (SPSS Version 24) analyzed data based on descriptive and inferential statistics. The study
also used a correlation analysis to establish the relationship between the dependent variable and the
independent variables and data presented in tables and figures.
The study established that economies of scale was a competitive advantage that EthioTelecom has
over smaller entities and they disagreed that EthioTelecom products are sold at lower prices in the
market. It came out that EthioTelecom applies psychological strategy in its pricing and this has an
impact on the consumer’s price perception. Results established that consumers are interested in price
promotions and consumers experience pride and positive feelings because of attributing positive
outcomes to them. The study concluded that consumers tend to spread positive word-of mouth and
make repeat purchases when they feel they have a good relationship with the service provider. It was
agreed that perceived price changes like price increases, rebates, or deviations from a reference
price may have significance for consumer feelings.
Similar research should be conducted in other telecommunication firms for additional study in order
to generalize the findings. Furthermore, a study might be conducted to examine the effects of pricing
on customer satisfaction, how customer satisfaction influences pricing strategies, and what customer
satisfaction challenges are affecting pricing strategies among the country's top telecommunication
corporations. Alternatively, the objectives should be targeted toward the consumers so that direct
feedback on elements impacting their behavior can be obtained.
