MARKETING FACTORS AND DEMAND FOR LOCAL FARM PRODUCE IN EKA URUA MARKET, ABAK, AKWA IBOM STATE
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Abstract
This study sought to examine marketing factors and demand for local farm produce in Eka. Urua market, Abak, Akwa Ibom State. This research will looks at the marketing factors that influence the demand of local agricultural commodities. To achieve this four research questions and two hypotheses were formulated. The survey design was adopted and the simple random sampling techniques were employed in this study. A total of 30 respondents were validated from the enrolled 35 participants comprising of market women and men selling local farm produce in Eka Urua Market. Self-constructed and validated questionnaire was used for data collection. The collected and validated questionnaires were analyzed using frequency tables and percentage. While the hypothesis were tested using Chi-square statistical too. SPSS v23. The result of the findings reveals that; there are significant factors that influence pricing decisions of local farm produce sold in Eka Urua Market, while the quality of local farm produce available to consumers in Eka Urua Market was high. Also, the availability of local farm produce and the demand level of consumers in Eka Urua Market was high. Based on the findings, the researcher recommended that providing adequate credit to local farmers will help improve their output. Since increased output leads to increased income and increased capital investments in the agricultural sector.
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
Agriculture provides primary means of employment for Nigeria and account for more than one third of the total gross domestic product (GDP) and labour force. Agriculture is important to the society in terms of poverty alleviation, food security and economic growth. It is the backbone of many African economies including Nigeria (Balarane and Oladele, 2011). In the literature of agricultural production in Nigeria, agriculture has been described as the most important economic sector in terms of its contribution to the GDP, after oil (Bakare, 2013; Enoma, 2010). The discovery of crude oil in the 70s led Nigeria to neglect her strong agricultural and light manufacturing bases in favour of an unhealthy dependence on crude oil. The agricultural sector since then has suffered from years of mismanagement, inconsistent and poorly conceived government policies and the lack of basic infrastructure.
The most crucial marketing decisions farmers must make is establishing a setting price for farm produce but this is quiet unfortunately that many marketers are still mismanaging pricing causing lots of money and anticipated profit to be unexplored and wasted. However in explaining the importance of pricing, (Egbunike, 2007) sustained that setting the price for a product or service is one of the most difficult, due to some number of variety of factors that must be considered. Demand and supply are the two fundamental components of marketing farm produce. Understanding of how the level of demand affected supply situations in the past will help farmers understand possible supply prospects in the future. By identifying and understanding the factors that influence local farm produce, marketers have the opportunity to develop a strategy, a marketing message and advertising campaigns more efficient and more in line with the needs and ways of thinking of their target consumers, to better meet their needs and increase sales. Good marketing helps customers understand why a specific farm produce is better than, or different from, the competition (Burns, 2014).
Marketing factor is the demand for or the price of a good or service affected by some external variable. The four “Ps” of marketing are the key factors that are involved in the marketing of a good or service. They are the product, price, place, and promotion of a good or service. Marketing is defined as a process of satisfying human needs by bringing products to people in the proper form and at a proper time and place. Marketing has economic value because it gives form, time, place, utility to products and services. Demand is simply an economic principle referring to a consumer’s desire to purchase goods and services and willingness to pay a price for a specific good or service. Market demand in this present study is the total quantity demanded across all consumers in Eka Urua market for local farm produce. Marketing of local farm produce begins on the farm with planning of production to meet specific demand and market prospects (Bothloko and Oladele, 2013).
Consumer interest in local farm produce has grown in recent years. Local farm produce is not only in demand at farmers’ markets and natural food retailers, but also in conventional supermarkets and institutions such as schools and hospitals. In Nigeria, the rate of increase in human population which, according to the National Population commission, stood at 88.6 million people in 2006, (and is projected to hit 160 million within the next one decade) does not enjoy a corresponding rate of increase in local food supply (Okuneye, 2008). This thus creates a huge local farm produce supply deficit among Nigerians as local food demand far outstripped the level of supply, creating an immense pressure on the available food items with the attendant increases in market prices. Marketing information and market prices guide the farmer in making informed decisions (Uchezuba et al., 2009), and also assist farmers for planning at pre-planting stage and to sell the surpluses that have been produced. In the absence of marketing information, the retail end of the industry does not respond to supply and demand and the pricing is artificially static or unchanged (Xaba and Masuku, 2012). The failure of most marketers to incorporate factors such as economic situation, level of competition, availability of farm produce, among others in their pricing decisions, have resulted to the minding up of several small scale farming in Nigeria.
1.2 Statement of the Problem
There is persistent instability of consumer prices for most farm produce in Akwa Ibom State. This is occasioned by factors such as season, input price changes, production and marketing technologies and consumer taste, among others. The market price variations often affect the level of consumer demand and food security status of the households. Marketing challenges arise due to many factors such as limited knowledge and use of market information, lack of access to high-value reliable markets, high transactional costs, distance from the markets, poor quality of products, lack of storage facilities, low educational levels of small-scale farmers, poor agricultural extension services, lack of financial support (Antwi and Seahlodi, 2011), inadequate property rights (Matungul et al., 2002), inadequate and inaccessible market infrastructure, lack of adequate access to finance, socio-economic factors of the farmer, for example: training, farming experience, age, level of education and household size, lack of access to decent roads, price risk and uncertainty, electricity, poor communication (Senyolo et al., 2009), information regarding prices, inadequate local markets, lack of bargaining power, excess of intermediaries (Xaba and Masuku, 2012). Many studies have been conducted on how marketing factors influence the demand for local farm produce by sellers/traders, however there is no study which has been conducted in Eka Urua Market, Abak in relation factors. Therefore this research focused on marketing factors and their influence in the demand for local farm produce in Eka Urua Market, Abak, Akwa Ibom State, Nigeria.
1.3 Objectives of the Study
The main purpose of this study is to investigate marketing factors and demand for local farm produce in Eka Urua Market, Abak. The study intends to examine the following sub-objectives;
- To find out the degree to which price influence the demand for local farm produce sold in Eka Urua Market, Abak.
- To ascertain how product quality affect the demand for local farm produce in Eka Urua Market, Abak.
- To determine the existing relationship between promotion of local farm produce and the demand level of consumers in Eka Urua Market, Abak.
1.4 Significance of the Study
This research will serve as a guide to marketers of local farm produce in setting the most advantageous pricing policy giving its individual unique situation which will enhance profitability in the short and long run situation. It will help them to avoid choosing arbitrary prices without considering its distinctive situation and important factors such as economic situation, level of competition, and availability of farm produce. It will serve as a guide in balancing market demand and pricing strategy which will strikes a balance between what the consumers wants to pay for and the price the farmers is willing to sell; also this research will expose them (the farmers) to the need for marketing information in carrying out this decision. The research work will also be useful for the economy in the sense that if farmers/marketers have substantial control over price setting, then their pricing behaviour can influence national output/income and hence community welfare. Finally, the research work will be useful for those carrying on further research on this or related topic.
1.5 Research Questions
To achieve the objective of this study, the following questions are formulated.
- Does product quality affect the demand for local farm produce in Eka Urua Market, Abak?
- What is the degree to which price influence the demand for local farm produce sold in Eka Urua Market, Abak?
- Is there any existing relationship between promotion of local farm produce and the demand level of consumers in Eka Urua Market, Abak?
1.6 Research Hypotheses
The following hypotheses will be tested at 0.05 level of significance in the course of the study;
H0: Product quality does not affect the demand for local farm produce in Eka Urua Market, Abak.
H1: Product quality affect the demand for local farm produce in Eka Urua Market, Abak.
H0: There is no existing relationship between promotion of local farm produce and the demand level of consumers in Eka Urua Market, Abak.
H2: There is an existing relationship between promotion of local farm produce and the demand level of consumers in Eka Urua Market, Abak.
1.7 Scope and Limitation of the Study
Since this single research cannot validly cover all areas of the topic the researcher intends to cover, therefore the thrust of this project will be limited within the scope of how marketers of small scale farmers are influenced by the choice of its pricing policy and its profit planning. The study will focus primarily on local farmers in Akwa Ibom state, Eka Urua Market in Abak to be precise and its environs from where the marketers of small scale farmers of this study are drawn to enable the researcher carryout on extensive investigation on this subject.
1.7.1 Limitation of the Study
The researcher is limited by time constraints. Since the semester is very short and has a bulk of academic exercise. The researcher is also constrained by unavailability of funds required for an extensive research of this magnitude. Finally and importantly, most marketers of small scale farmers that were studied lack adequate and organized marketing and decision making system, poor organizational chart and structure also their general unwillingness to corporate or give out information, all, these tends to limit the smooth process of this research.
1.8 Definition of Terms
Marketing: Marketing is a process of satisfying human needs by bringing products to people in the proper form and at a proper time and place.
Marketing Factor: Marketing factor is the demand for or the price of a good or service affected by some external variable.
Agricultural Marketing: Agricultural marketing covers the services involved in moving an agricultural product from the farm to the consumer. These services involve the planning, organizing, directing and handling of agricultural produce in such a way as to satisfy farmers, intermediaries and consumers.
Demand: Demand is the quantity of consumers who are willing and able to buy products at various prices during a given period of time.
Local Farm Produce: These are crops and other agricultural products sold by local farmers in a rural area.
MARKETING MIX: The combination of the far primary element that comprises an industry’s marketing programme which are price, product, place and promotion (advertising).
Product: In marketing, a product is an object, or system, or service made available for consumer use as of the consumer demand; it is anything that can be offered to a market to satisfy the desire or need of a customer.
Place: Place in marketing mix refers to the geographical location in which the company sells its products and provides its services. It is said that location is one of the most important parts of marketing strategy.
Promotion: In marketing, promotion refers to any type of marketing communication used to inform target audiences of the relative merits of a product, service, brand or issue, most of the time persuasive in nature. It helps marketers to create a distinctive place in customers’ mind, it can be either a cognitive or emotional route.
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