Approaches to Pricing Design Services: Evidence from Architectural Firms in Nigeria

Abstract

The approaches adopted by firms in pricing design services have hitherto been a matter of speculation. Professional bodies often specify percentage and time charges, but there are indications that these firms use other approaches. The approaches adopted by architectural firms in pricing design services were therefore the object of this study. A sample of architectural firms from Nigeria, were asked to rate the prevalence of use, perceived benefits, and difficulties of the pricing approaches. The data were analyzed using mean ranking to obtain the level of use; and regression analysis to investigate the perceptions, which influence the use of the pricing approaches. The findings reveal that percentage fees were the most popular approaches adopted by most of the firms in the study in pricing design services. The perceptions, which influence the use of the different approaches, were also presented. Samples were taken from only architectural firms in Lagos and Abuja, Nigeria, where there is a concentration of registered architectural firms. The results may therefore not be generalized to other service firms. In addition only design services were considered. The results suggest the reasons approaches may be used for pricing design services and may serve as a guide to upcoming firms. Implications for further research were also drawn. The value of this study lies in the fact that it represents one of the first attempts at examining the approaches used by architects in pricing design services.