EFFECT OF PRICE DISCRIMINATION ON CONSUMER PREFERENCE TOWARDS MADE IN NIGERIA TEXTILE PRODUCTS IN ABA, ABIA STATE

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No of Pages: 66

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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 productIt 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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