Pricing Strategies, Market Share and Firm Perfromance of Real Estate Industry in Kenya: A Case of Knight Frank Ltd

Abstract

Pricing strategies significantly influence firm performance by shaping consumers' behaviours, brand perceptions, and market competitiveness. Effective pricing drives profitability, customer retention, and market penetration, especially in high-value sectors like real estate, where perceived value directly impacts purchasing decisions. Despite the real estate sector being a significant driver of economic growth in Kenya, there is a noticeable gap in understanding how pricing strategies impact realtors' performance. This research aims to bridge this knowledge gap by evaluating the impact of pricing strategies on the firm performance of realtors in Kenya, with a specific focus on Knight Frank Ltd. The purpose of this study was to evaluate the effect of pricing strategies on realtors' performance in Kenya, with a focus on Knight Frank Ltd. The specific objectives are to determine the Knight Frank Ltd pricing strategies, evaluate its performance, and investigate the effect of pricing strategies on the performance of Knight Frank Ltd. Price signalling theory, competitive advantage theory, and agency theory guided the study. A descriptive research design was employed. The target population was the 147 employees at Knight Frank Ltd., employing a census approach to ensure comprehensive insights. Validity was assessed through content, construct, and face validity. The research instrument, a structured questionnaire, was subjected to pretesting on 15 participants of Hass Consult Ltd to assess its clarity, consistency, and reliability. Validity was assessed through content, construct, and face validity. The questionnaire's reliability was determined using Cronbach’s alpha. Descriptive statistics was utilised in summarising central tendency and variations. Inferential statistics was used to determine how pricing strategies influence firm performance. The study demonstrated strong reliability and validity in its research instruments. Reliability was confirmed through Cronbach's alpha, which averaged 0.815 across all measured variables, indicating a high level of internal consistency and making the tool very reliable. Researchers upheld ethics by obtaining institutional approvals, informed consent, ensuring voluntary participation, anonymity, and data confidentiality, while safeguarding participants’ rights, well-being, and autonomy throughout the study. The findings revealed a moderate to substantial implementation of pricing strategies by Knight Frank Ltd., particularly in the domains of competitive pricing, value-based pricing, segmented pricing, and promotional pricing. These strategies were found to positively influence firm performance, measured through indicators such as operational efficiency, innovation capability, and customer satisfaction. Regression analysis, alongside the Baron and Kenny four-step mediation model, established that market share played a mediating role in the relationship between pricing strategies and firm performance. This implies that while pricing strategies directly influence performance, they also exert an indirect effect by enhancing market share. Based on these findings, the study recommended that Knight Frank Ltd should continue leveraging value-based and segmented pricing strategies to maintain and improve performance. It emphasised the importance of adopting technology for dynamic pricing, enhancing customer engagement, and strengthening internal organisational to support strategic pricing implementation.