DETERMINANTS OF SALES VOLUME AND PROFIT AMONG LIVESTOCK FEEDSTUFF DEALERS IN ABIA STATE NIGERIA

ABSTRACT

As key components of livestock products, feedstuff products have long been a pathway for income generation for the poor. Rapidly growing and changing markets in the developing world provide not only real opportunities but also significant threats to participation of the poor in production and marketing of livestock and poultry products. Enough thought have not been given to the components that facilitate the growth of livestock and poultry products. This work takes a look at the various feedstuffs that is used to enhance growth and wellbeing of livestock. The determinants that affect sales volume of feed stuff dealers was the major worry of this work. The study discussed the role of animal feeds in the global food industry and how it enabling economic production of animal proteins throughout the world. Feed stuff was discovered to be the largest and most important component to ensuring safe, abundant and affordable animal proteins. Objectively the researcher specifically describe the price of livestock feed stuff and features of the dealers in the market, estimate the determinants of sales volume among the dealers, analyze factors that affect sales volume and profit among livestock feedstuff dealers and ascertained the relationship between sales volume and profit performance in livestock feed stuff market. The study area was Abia state as a purposefully sample techniques was used which have 50 respondents. The data collection was both primary and secondary as descriptive statistics such as frequency, tables and percentage were used as part of the analytical tools. Other tools employed by the researcher were econometric model, regression analysis, spearman correlation and income statement. It was discovered that determinants of sales volume of the dealers in the study area were price, transportation cost, competition, product quality and experience. While price, transportation, competition were inverse related with sales volume product quality and experience were positively related to sales volume. Sales volume and number of customers were the factors that affect profit performance among the dealers of feedstuff in the study area. There is a strong relationship between sales volume and profit of the dealers as the business proved to be profitable because its income is more than its cost. It was recommended that government should encourage the players in the market as that will help to reduce unemployment.

TABLE OF CONTENTS

Title page                                                                                           i

Declaration                                                                                        ii

Certification                                                                                       iii

Dedication                                                                                         iv

Acknowledgement                                                                              v

Table of contents                                                                                vi

List of tables                                                                                      viii

Abstract                                                                                             ix

CHAPTER ONE

INTRODUCTION

1.1         Background to the Study                                                                                                               1

1.2         Statement of the Problem                                                                                                              3

1.3     Objectives of the Study                                                                            4

1.4     Research Questions                                                                      5

1.5    Research Hypothesis                                                            5

1.6     Significant of the Study                                                                          6

1.7    Scope of the Study                                                                       6

CHAPTER TWO          

LITERATURE REVIEW

2.1     Conceptual View                                                                                      8

2.1.1  Marketing of Feedstuff in Nigeria                                                           10

2.1.2  The Role of Feed stuff in Nigeria Economy                                            12

2.1.3  Definition/Feedstuff and Ingredients                                                       14

2.2     Theoretical Framework                                                                            15

2.2.1  Breakeven Sales Volume                                                                         17

2.2.2  Sales Volume Analysis                                                                            18

2.3     Empirical Framework                                                                              21

2.3.1  Factors Affecting Feedstuff Marketers in Nigeria                                   22

CHAPTER THREE

RESEARCH METHODOLOGY

3.1     Study Area                                                                                               23

3.2     Sampling Techniques                                                                               24

3.3     Sources of Data                                                                                        24

3.4   Data Analysis                                                                                             24

3.5     Model Specification                                                                                 25

CHAPTER FOUR          

RESULTS AND DISCUSSIONS

4.1      Describe the price of livestock and features of the dealers in the market     28

4.2     Analysis on the determinants of sales volume among dealers                    31

4.3     Analyzing factors that affects sales volume and profit among livestock Feedstuff dealers                                                                                             33

4.4     Ascertaining the relationship between sales volume and profit performance of feedstuff dealers in the study area                                                              36

CHAPTER FIVE

SUMMARY OF FINDINGS, CONCLUSION AN RECOMMENDATIONS

5.1     Summary of Findings                                                                              37

5.2      Conclusion                                                                                                40

5.3     Recommendations                                                                                    41

REFERENCES

Appendix

LIST OF TABLES

Table 4.1:     Distribution and Return of Questionnaires                                        28

Table 4.2:    Distribution on Age of the Respondents                                       29

Table 4.3      Marital Status of Respondents                                                          29

Table 4.4:     Distribution on type of livestock feed stuff sold by the respondents

and their prices                                                                              30

Table 4.5:    A multiple response on factors that facilitate the respondents

sales                                                                                               31

Table 4.6:    Determinants of sales volume among feed stuff dealers                   31

Table 4.7:  Distribution on the major source of income of the

respondents                                                                                    33

Table 4.8:     Factors affecting sales volume and profit among livestock

feedstuff dealers                                                                              33

Table 4.9:    Distribution on the problems encountered by feedstuff dealers in

the study area in a multiple response                                             34

Table 4.10:  Income Statement of supermarkets in the study area              35

Table 4.11:  Spearman correlation matrix showing the relationship between

sales volume and profit performance of feedstuff dealers

in the study area                                                                             36

CHAPTER ONE

INTRODUCTION

1.1       Background to the Study

Animal feeds play a leading role in the global food industry, enabling economic production of animal proteins throughout the world. Feed stuff is the largest and most important component to ensuring safe, abundant and affordable animal proteins (FAO, 1982).

Leseinde (2004) opined that livestock feed occupies a place of pride in agricultural enterprises and that its marketing constraints and determinants if well ascertained can help improve livestock production. According to Akinwumi and Ikpi (1999). the supply of key inputs in livestock feeds has continued to becloud the industry especially where some of the ingredients needed in feed formulation are sourced abroad. Dukem (2003) showed that animal feeds and nutrition research largely concentrated on biological aspects both on station and on farm. Experts have called for adoptions of animal nutrition technologies on the on-farm, but the truth remains that feed technologies development should be accompanied by efficient feed market system Asamaro (2001).

An efficient feed marketing system is rewarding both for marketing agency and livestock producers. So far, very few studies have addressed issues of feed supply and marketing. However, information concerning livestock feed demand and supply, feed quality issues, feed marketing, feed prices, price trends and sales and profit of the feed stuff dealers are scarce.

Livestock feed marketing is a very profitable business, the demand for animal feeds in Nigeria is gradually getting high due to the fact that, livestock farmers cannot do without feeding their animals except they want to go out of business (Anayo 2010). Feed stuff marketing require being creative, communicating skill and delivering feed value to 'customers and managing customers relationship in ways that benefit the marketer and increases the sales of profit. A lot of factors can affect or determine the sales of livestock feed dealers in the study area such as material handling, advertising, and delivering feed pattern to the people who need it.

Since every firm/business exist with the intention of making profit, a firm must weigh the possibility of increasing its sales and profits. Livestock feed dealers in Abia State not withstanding may have numerous challenges in the cause of marketing their products but there is need to determine how best to market these feed stuff to the potential customers and what affects the firms sales and it profit.

1.2       Statement of the Problem

Despite the contribution of livestock to the economy and small holders livelihood, the production system is not adequately market-oriented and livestock feed marketing remains very low due to various constraints that include poor nutrition and disease prevalence. These problems are compounded by inefficiencies in the input (feed, genetic material and veterinary services) and output (livestock and livestock products), marketing including poor market infrastructure, lack of marketing support services and limited market information.

The marketing situation in Abia State exhibits a number of diverging issues. For most livestock feed dealers, the above stated problems might not be the only problems, as there are other barriers related to institutional factors, such as lack of access to markets (Mendelsohn 2006). Understanding these issues require a methodology that will facilitate the inclusion of all the different situations of types of situations to ensure a well representative sample.

Feed stuff shortage in quantity and quality has been another critical problem in Nigeria livestock production system (Samuel, 2005). Egbe opined that the single largest expense in animal production is feed cost and it dictates feasibility of livestock enterprise. Overall, among the dominant factors contributing to the feed shortage both in terms of quantity and quality is the poor feed marketing system characterized by poor marketing information among feed stuff dealers/marketers. A lot of dealers leave the business due to lack of their ability to understand or determine what affect the drop in the patronage by the customers. This problem is what necessitated the study of determining what really affect the sales and profit of livestock feed dealers in Abia State, Nigeria.

1.3    Objectives of the Study

The main objective of this study is to analyze the determinants of sales volume and profit among livestock feed stuff dealers in Abia State, Nigeria.

The specific objectives are to:

        i.         describe the price of livestock feed stuff  and features of the dealers in the market.

      ii.         determine the level of performance with respect to sales volume, profit and market share of livestock feedstuff dealers.

    iii.         estimate the determinants of sales volume among the dealers.

    iv.         analyze factors that affect sales volume and profit among livestock feed dealers with respect to price, advertising, competition and product quality.

      v.         ascertain the relationship between sales volume and profit performance in livestock feed stuff market.

1.4   Research Questions

Having considered the problems and the objectives of the study, the following questions are to be examined.

        i.         what are the prices of livestock feed stuff market and features of the dealers
in the market?

      ii.         what are the determinants level of performance with respect to sales volume, profit and market share of livestock feedstuff dealers?

    iii.         what are the determinants of sales volume among the livestock feed dealers?

    iv.         what are the factors that affect the sales volume and profit among feed dealers?

      v.         what  is  the  relationship  that  exist  between  sales  volume  and  profit performance among livestock feed dealers in the study area?

1.5  Research Hypothesis

This study seeks to prove or disprove the following hypothesis which is stated in null (H₀) form.

Ho:   There is no significant relationship between sales volume and profit of livestock feedstuff dealers in Abia State.

1.6    Significant of the Study

This study ascertained the basic determinants of livestock feed dealers profit and sales in Abia State, Nigeria. The result of this work shall strengthen the knowledge of the dealers on the best practices to enhance the performance of the industry.

Marketing aspect of feed stuff of livestock has not gotten attention for sometimes now, but with this research work, an insight on the best marketing practices of livestock feed stuff will be appreciated as the factors that affect performance will be distinguished.

This study will also enable some students who may need additional information on marketing strategy of livestock feed. The importance and significance of this study cannot be overemphasized as the work will bridge the marketing gap already noticed in livestock feed industries. Addition to the researcher's knowledge on the importance of the feed stuff of livestock and to the extent it will add value to livestock and its economic importance is another appreciable contribution of this research work.

1.7   Scope of the Study

The study examined concept of feed stuff livestock marketing as it affects the sales and profit of the dealers in Abia State, Nigeria.

Although the research based on livestock feed stuff determinants of the dealers profit and sales, the work x-ray the economic importance of livestock feed stuff and its contribution to the growth of livestock. The work also covered: the history of livestock feed stuff, the definition of livestock and the marketing strategies applied by the dealers in the study areas.

This work is strictly on the livestock feed stuff as it relates to the sales and profit performance of the dealers in the study area. Therefore, any other agribusiness, agric economic or marketing component that does not contribute directly or relate the sales and profit of livestock feed stuff is not within the' scope of this study

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