Strategies for Determining the Production Cost and Pricing of Garments in Ghana: A Study of the Fashion Industries

Abstract

A good number of companies rely on the intuition and the market experience of their managers to price their products. Nonetheless, many business and marketing executives still face pricing difficulties. In the light of this, the study investigated the strategies employed in the Ghanaian fashion industries in costing and pricing their garments including the satisfaction level with their profit margin. With descriptive research and cross sectional survey through non- probability sampling techniques, data was collected from 210 respondents comprising company owners and workers in the fashion industry from Accra, Kumasi and Sunyani. Using mixed method approach, the study found that most companies as part of their strategies determined the detailed and actual garment cost by mostly considering the profit, fabric, labor, trim cost and overheads. The quality of the garments, market competition, production cost, company characteristics, and age of the client including company location largely influenced garment pricing in Ghana. Cost plus method, market analysis, discount strategy, customer based pricing and market segmentation were the most popular approaches to fixing garment prices. For a successful pricing, fashion producers should be creative, listen to their clients, do their homework well, improve their records and be flexible. Though a higher proportion of the enterprises were satisfied with their profit margin, notwithstanding, the study recommends that fashion producers should be educated on the right principles of costing and pricing so as to ensure increased profit. Keywords: