ABSTRACT
Price
discrimination is the practice of charging different customers different prices
for the same product. This study set out to study effect
of price discrimination on consumer preference towards made in Nigeria textile
products in Aba, Abia State. The problem envisaged stems from a major
problem that has bedeviled Nigeria in her effort to develop her industrial
sector is the apparent preference by Nigerians for foreign made goods and the
price discrimination that exists among them. The overall objective of this
study was to examine the effect of price discrimination on consumer preference
towards made in Nigeria textile products in Aba, Abia State. Specifically, the
objectives are to determine the effect of price discrimination on consumer
preference towards made in Nigeria textile products; examine the relationship
between changes in price and consumer purchase behavior towards made in Nigeria
textile products; ascertain the effect of product discrimination on consumer
repurchase intentions; to ascertain overall perception of the consumers towards
made in Nigeria textile products. This study adopted a descriptive survey design. The study
therefore involved a sample size of 400 respondents. The study collected
primary data from the respondents. The data collected quantitative data.
Qualitative data is a categorical measurement expressed not in terms of
numbers, but rather by means of a natural language description. Analysis was done
using (Simple Regression) Statistical Package for Social Sciences 22.0 (SPSS),
allowing the researcher to present the information in form of tables and
figures. It was found that there is a significant relationship between Price
discrimination and customer preference. The study concludes
that Price discrimination was identified as major determining factors for the
preference among foreign and local textile materials by Nigerian consumers. It was recommended that for enhanced marketing
performance, our local manufactures should try as much as possible to improve
on the quality of their products by using high quality raw materials and use of
modern techniques and technologies so as to reduce price.
Limitation and suggestions of areas for
further study were given therein.
TABLE
OF CONTENTS
Title
Page
i
Certification
ii
Dedication
iii
Acknowledgement
iv
Abstract v
Table of Contents
vi
CHAPTER ONE
1.0 Introduction 1
1.1
Background
of the Study
1
1.2 Statement of Research Problem 3
1.3 Objectives of the Study
5
1.4
Research
Questions 5
1.5 Research Hypotheses
6
1.6 Significance of the Study
6
1.7 Scope of the Study
7
1.8 Definition of Terms
7
1.9
Limitation of Study 8
CHAPTER 2
2.0
Review of Related Literature
9
2.1 Conceptual Framework
9
2.1.1 Consumer Behavior
9
2.1.2 Consumer Repurchase Intentions
10
2.1.3 Culture
12
2.1.4 Consumer
Ethnocentrism Effects
12
2.2 Price Discrimination
14
2.2.1 Types of Price Discrimination 15
2.3 The Attitude of Consumers towards Made-
In Nigeria Textile Materials
16
2.4 The Development and State Of Textile Industry in Nigeria. 17
2.5 Theoretical Framework
20
2.6 Empirical Review 25
CHAPTER 3
3.0Research Methodology
29
3.1 Research Design 29
3.2 Area of Study 29
3.3 Population of the Study
30
3.4Sampling Technique
30
3.4.1
Sample Size Determination 31
3.5 Validity of Instrument
32
3.5.1 Reliability of the Instrument
32
3.6 Sources of Data Collection
32
3.7 Method of Data Analysis
32
3.7.1 Decision Rule
33
CHAPTER 4
4.0Data
Presentation and Analysis
34
4.1 Introduction
34
4.2Data
Collection and Collation 34
4.3
Summary of
Demographic Characteristics
36
4.4 Analysis of Research Questions
38
4.5
Test of Hypotheses
42
4.5.1 Hypothesis 1
42
4.5.2 Hypothesis 2
43
4.5.3 Hypothesis 3 44
4.6 Discussions of Findings
46
CHAPTER 5
5.0Summary,
Conclusion and Recommendations 48
5.1 Summary of Findings
48
5.2 Conclusion
49
5.3 Recommendations 50
5.4 Suggested Areas for Further Studies
52
REFERENCES
53
APPENDIX 55
QUESTIONNAIRE 56
CHAPTER ONE
Introduction
1.1 Background
of the Study
Since
1914, when the amalgamation of southern and northern Nigeria took place, Nigerians
were taught or made to believe that our cultural heritage or norms were not
good, and as such we should abandon them and take to those of our colonial
master Britain. The effect of this indoctrination has gone deep into the
society so much so that its impact on our ways of thinking, and mode of
dressing is enormous (Sani, 2006).
Before
the amalgamation, Nigeria’s different ethnic groups had their own ways of
dressing, using the local materials, such as calico, Akwete, Sanyan Gwado,
hides and Skins, and so forth. Though the change from Calico hides and skin, etc.
to cotton and refined wool materials as clothing is a welcome development.
The
majority of cloth used now is produced with cotton or synthetics woven into
fabric in large textile mills. Generally, consumers in Nigeria prefer foreign
goods to made-in-Nigeria goods, the case of textile materials follow the same
trend (Sani, 2006).
In
recent years, price discrimination has been viewed as a challenge in the
marketing of some locally manufactured goods and this account to the fierce
competition with products from developed countries of the world. Price
discrimination is the practice of charging different customers different prices
for the same product. It is also referred to as “differential pricing
or “tiered pricing”, and more recently, “dynamic pricing” or “smart
pricing”.
In
1990, there were 175 textile factories operating in Nigeria but today we have
42 epileptic operators. Only 12 of these can boast with operating at 30%
capacity (Olaleke, 2010). Among these, 4 textile factories produce lace
materials as part of their product brands. This further establishes the
inadequacy of the local supply of textile products in Nigeria (Olaleke, 2010).
The
preference among Nigerians for foreign made goods is both alarming and
disturbing especially when considered in the light of its effect on local
industries. The general notion among some Nigerians is that locally made goods
are inferior to imported and foreign made goods in terms of quality and performance
to the extent that some local manufacturers have resorted, in a bid to remain
relevant, to claiming a foreign origin for their products.
As
our society undergoes rapid changes and becomes more affluent, newer social
forces make consumers spend a greater part of their income in ways remarkably
different from what took place in the past. Consumers want the advantage of the
affluent and latest services that technology and business can offer (Achumba,
2006).
Price
discrimination is a microeconomic pricing strategy where identical or largely
similar goods or services are transacted at different prices by the same
provider in different markets (Krugman & Maurice, 2003). Price
differentiation is distinguished from product differentiation by the more
substantial difference in production cost for the differently priced products
involved in the latter strategy (Robert, 2015). Price differentiation
essentially relies on the variation in the customers' willingness to pay and in
the elasticity of their demand.
1.2 Statement of Research
Problem
Also
marketing failures have been caused by ignorance and underestimation of
consumer motivation, perception and behavior in the market place. In the past
manufacturers have had a wrong view that consumers accept or buy anything they
are being offered in the market particularly in this part of the world.
A
major problem that has bedeviled Nigeria in her effort to develop her industrial
sector is the apparent preference by Nigerians for foreign made goods. The most
immediate manifestation of this problem is the seemingly intractable problem of
smuggling in the face of various attempts by governments of Nigeria to curtail
the indiscriminate importation of consumer goods. Some of the major attempts to
check this discrimination against locally made goods include the ban on certain
imports, the concerted promotional appeals to Nigerians to patronize Nigerian
made goods in radios and televisions.
In
spite of these, and other efforts, the problem has largely remained unsolved.
The consequence has been a decline in various local industries, with the most
adversely affected being the textile industry. Employment in this industry
decreased from 137,000 jobs in 1997 to 57,000 in or by almost 58percent in a
period of seven years.
This
assumption has led to gross marketing failure of many manufacturing
organization. The consumer is a personality whose behavior is governed by
different and varied influences such as: his society beliefs, attitude, his
past learning, experience, perception and his expectations. These form his
taste choice and product preference.
There
is scanty empirical literature on effect of price discrimination on consumer
preference towards made in Nigeria textile products in Aba, Abia state. There
is therefore, need to examine how price discrimination affect consumer preference
with a view to uncovering reasons behind Nigerian consumers‟ seeming
preference for foreign products over locally manufactured goods.
The
study attempts to examine the effect of price discrimination on consumer preference
with reference to made in Nigeria textile products in Aba, Abia State.
1.3 Objectives of the Study
The
main objective of this study is to examine effect of price discrimination on
consumer preference towards made in Nigeria textile products in Aba, Abia State.
Specifically, the study set out to achieve the following sub-objectives;
i. to
determine the effect of price discrimination on consumer preference towards
made in Nigeria textile products.
ii. to
examine the relationship between changes in price and consumer purchase
behavior towards made in Nigeria textile products
iii. to
ascertain the effect of product discrimination on consumer repurchase
intentions.
iv. to
ascertain overall perception of the consumers towards made in Nigeria textile
products.
1.4 Research
Questions
The
following research questions were explored to gain more insight on the subject
matter and they include as follows;
i. how
does price discrimination affect consumer preference towards made in Nigeria
textile products.
ii. what
is the relationship between changes in price and consumer purchase behavior
towards made in Nigeria textile products
iii. to
what extent does product discrimination affect consumer repurchase intentions.
iv. what
is the overall perception of the consumers towards made in Nigeria textile
products
1.5 Research
Hypotheses
The
following research hypotheses were formulated for the study and they include;
i. Ho1: there
is no significant relationship between price discrimination and consumer
preference towards made in Nigeria textile products.
ii. Ho2: there
is no significant relationship between changes in price and consumer purchase
behavior towards made in Nigeria textile products
iii. Ho3: there
is no significant relationship between product discrimination and consumer repurchase
intentions.
1.6 Significance of the Study
This research work would be beneficial to the
traders and middlemen in the sense that it will enhance the traders’ knowledge
on the best strategy to use in increasing their sales turnover. Thereby
attracting the consumers to patronize made in Nigerian textile.
It will add to the body of knowledge and
literature and will be of great benefit to researcher as they will use the
study as a reference material when carrying out further research work in the
area under study.
It will be beneficial to the producers of
textile materials as this will go a long way to improve sales turnover and
market share in and out of the industry, as their scarce resources will be
beneficial to consumers as it will help to improve their satisfaction.
It
will also be beneficial to marketing students as they will understand the
relationship that exists between price discrimination and consumer preference
towards made in Nigeria textile products.
1.7 Scope of the Study
The study is limited to Aba, Abia State, Nigeria. The content scope
is combined to price discrimination and consumer
preference towards made in Nigeria textile products in Aba, Abia State.
1.8 Definition of Terms
It is pertinent to consider the use of terms in the course of this
study, many which are familiar to the layman. To this and the following
applicable are explained for the purpose of clarity and every understanding.
Preference:
opportunity of prior choice or claim, a greater liking-giving of priority or
advantage to one person, object over others (Hornby2001).
Textile: a type
of cloth or woven fabric.
Price
discrimination: is a pricing strategy that charges customers
different prices for the same product or service.
Consumer
behavior: a dynamic interaction of affect and
cognitive, behavior, and the environment by which human beigns conduct the
exchange aspects of their lives (Peter.J.P 2005).
Importation: action
of bringing goods or services into a country from abroad.
1.9 Limitation of Study
Just like any other human endeavor, this research work entails a
lot of constraints. But the three major limitations the researcher encounters
are:
i.
small sample size which was used for this study and the variables which
was used as the working variable. Hence, future studies should address these
shortcomings.
ii.
time constraint limited areas covered by the
researcher.
iii.
the researcher encountered a lot of
difficulties in gathering information.
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