ABSTRACT
The study analyzed the socio-economic determinant of consumer choice on foreign made leather among household in urban areas of Abia state, Nigeria. Four (4) research questions were formulated to guide the study. The population of the study consisted of respondent, selected from the three (3) senatorial zone of the state. One Local Government area was selected from each senatorial zone. From each local government, fifty (50) respondents were selected. Respondent were of different occupation, educational background, making a total of 150 respondents. The instrument used to collect relevant data were a structured questionnaire. Descriptive statistics was used to analyzed data on the first three research questions while probit model was adopted for the fourth. I was found that age, education, price, marital status, income and gender play critical role in the socio-economic determinant on the consumer choice on foreign made leather. It was recommended that education of the buyers should be stepped up to enable them make better choice. Income level however, should be also improved. Early marriage should also be discouraged.
TABLE OF CONTENTS
Title page - - - - - - - - - - i
Declaration - - - - - - - - - ii
Certification - - - - - - - - - iii
Dedication - - - - - - - - - - iv
Acknowledgement - - - - - - - - v
Table of Contents - - - - - - - vi
List of Tables - - - - - - - - - ix
Abstract - - - - - - - - - - x
CHAPTER ONE
1.0 INTRODUCTION 1
1.1 Background of the Study - - - - - 1
1.2 Statement of the Problem - - - - - 4
1.3 Research Questions - - - - - - 6
1.4 Objectives of the Study - - - - - - 7
1.5 Hypotheses - - - - - - - 7
1.6 Significance of the Study - - - - - 8
1.7 Scope of the Study - - - - - - 8
CHAPTER TWO
2.0 LITERATURE REVIEW 9
2.1 Consumer Choices - - - - - - 9
2.2 Socio Economic Characteristics affecting Consumer Choice 9
2.2.1 Cultural Factors - - - - - - - 9
2.2.2 Social Factors - - - - - - - 10
2.2.3 Personal Factors - - - - - - 11
2.2.4 Psychological Factors - - - - - - 12
2.3 Model of Consumer Choice - - - - - 13
2.4 Marketing Stimuli - - - - - - - 14
2.4.1 Product Attributes - - - - - - 14
2.4.2 Product Style/Design - - - - - - 15
2.5 Product Quality - - - - - - - 18
2.6 Product Price - - - - - - - 23
2.7 Target Group - - - - - - - 26
2.7.1 Age - - - - - - - - 27
2.8 Imported Products - - - - - - 27
2.9 Perceived Quality - - - - - - 28
2.10 Brand Loyalty - - - - - - - 29
2.11 Consumer Brand Association - - - - 32
2.12 Domestic Brands Versus Global Brands - - - 35
2.13 Consumer Perception and Preference for Global Brands 38
2.14 Country of Origin Effect - - - - - 39
CHAPTER THREE
3.0 RESEARCH METHODOLOGY 43
3.1 Study Area - - - - - - - - 43
3.2 Sampling Procedure - - - - - - 44
3.3 Data Collection Procedure - - - - - 44
3.4 Method of Data Analysis - - - - - 44
3.5 Model Specification - - - - - - 45
CHAPTER FOUR
4.0 RESULT AND DISCUSSIONS - - - - 46
4.1 Socio-economic Characteristics of the Respondents - 46
4.2 General Data - - - - - - - 47
4.3 The Relationship between Income and Expenditure
on Foreign Leather among the Respondents - - - 51
4.4 Socio-economic Determinants of Household Choice on
Foreign Leather Products in the Study Area - - 51
CHAPTER FIVE
5.0 SUMMARY, CONCLUSION AND RECOMMENDATIONS 55
5.1 Summary - - - - - - - - 55
5.2 Conclusion and Recommendations - - - 56
References - - - - - - - - 58
Questionnaire
LIST OF TABLES
Table 4.1: Distribution of the socio-economic characteristics
of the respondents - - - - 41
Table 4.2.1: Distribution of the types of foreign leather products
purchased by the respondents - - - 47
Table 4.2.2: Distribution of the respondents on the types of local
leather products purchased - - - - 47
Table 4.2.3: Distribution of the respondents according to occupation 48
Table 4.2.4: Distribution of students according to purchase price
of foreign leather products - - - 49
Table 4.2.4: Distribution of students according to purchase price
of local leather products - - - - 50
Table 4.3: Correlation coefficient of the relationship between
income and the expenditure of foreign leather
products - - - - - - - 51
Table 4.4: Estimates of the socio-economic determinants of
foreign leather products use - - - - 52
CHAPTER ONE
1.0 INTRODUCTION
1.1 Background of the Study
Consumer market includes all the individuals and households who buy or acquire goods and services for personal consumption. According to Kotler and Armstrong (2010), currently, the word consumer market consists of more than 6.6 billion people who annually consume an estimated $65 trillion worth of goods and services. Among these consumer goods, leather products are one of the basics. Currently, different types of leather are produced by different companies in different countries to different consumers around the world. These consumers around the world vary tremendously in age, income, education level, taste and choice even though they buy an incredible variety of goods and services (Endalew, 2011). But these diverse socio-economic conditions of customers relate with each other and with other elements of the world around them affect their choice among various products, services and companies producing these leather products.
Today, as a result of changing world business environment, global competition is intensifying, foreign firms are expanding into new internal markets and home markets are no longer as rich in opportunity. Local companies that never thought about foreign competitions suddenly find these competitions in their own back yards (Kotler et al, 2005).
Existence of such stiff competition among leather firms benefited the local consumers through providing ample of leather product choice in general. Nigeria, as one part of the world communities, changes in the world business activity may affect negatively or positively it’s business activities, these include business activities performed by leather and leather products industry.
Nigeria’s leather product sub-sector produces a range of products from semi-processed leather in various form to processe3d leather, such as leather uppers, leather garments, stitched upholstery, school bags, hand bags, industrial gloves and finished leather. The leather factories in the country facilitate the production and export of leather under the private labels of department stores, boutiques, leather retail chains and mail order houses and facilitate the production of internationally well-known brands under contract. The Nigerian leather industry produces leather that are globally competitive in terms of quality and price (Samuel, 2008). But studies conducted on leather and leather products sub-sectors indicated that the sub-sector in Nigeria is dominated by cheap imports. As a result, the country’s leather producers, strong competition from leathers and other leather products imported from China and elsewhere (Sutton and Kellow, 2010, Tegegne, 2007).
There is an upsurge in the consumption of foreign leather products in Nigeria, which falls within the category of consumer’s goods in the urban area of Abia state of Nigeria (Ewah and Ikwun, 2010). The rare of such buying if unfolding and the much desire for them has adverse effect on similar goods that are locally produced. Olakunori (2001) confirmed that, there is too much choice for foreign made goods in developing countries as a result of their citizens lingering colonial mentality and inferiority complex, which resulted to the importation of manufactured consumer goods. The socio economic background of the consumers goes a long way to determine the choice for either the local or foreign leather product. Ewah and Ikwun, (2010) identified the socio economic factors that influence the choice of foreign products to include age, sex, education, income, spouse, religion and social status of the consumer, they noted that these socio economic status may vary from one individual to the other, as well as from one product to the other.
1.2 Statement of the Problem
Leather factories sell their products to domestic markets and directly to overseas importers and wholesalers as well as direct buying offices (Embassy of Nigeria in United Kingdom, 2010). As it is obvious, Nigeria has the largest livestock population in Africa and the one of the largest in the world, the country had to one of the major leather producers and exporters in Africa as well as in the world having comparative advantage of raw material and cheap human resources advantages. Despite this fact, many studies indicated that the leather companies found in the country face strong competition from leather products imported from abroad.
According to World Bank Group, (2006), the domestic market for leather at present suffers from fierce price competition from synthetic leather imported from China at much cheaper prices. Though low in durability, these low quality Chinese leather are considered somewhat stylish and fashionable in design and heel heights and are available for men, women and children in all local shops. Tagegne (2007) mentioned that the domestic leathers’ market has flooded with cheap imports from Asia, particularly from China and this has inflicted heavy impacts on the sector, and threatened it’s competitiveness in the domestic market. Altenburg (2010) indicated, leather and leather products industry is stuck in a low quality trap in which problems at all levels of the value chain are mainly reinforcing. That is inappropriate techniques at the stages of livestock management, training and transport undermine competitiveness in high value leather product markets, and low quality of final products translates into low prices and under investment at all stages of the value chain. Sutton and Kellow (2010), also pointed out that the leather of Nigeria face strong competition from China and elsewhere. All above studies showed that domestic leathers markets are filled with various leather imports, and domestic leathers consumers are provided with multiple choices of leathers are facing stiff competition from abroad in their home market.
However, the consumers choice of leathers is still remained as often that need to be assesses. For this reason, this study conducted to assess the consumer choice for the foreign leather. Since understanding of what consumers choices and why they prefer is important for leathers manufacturers, wholesalers and retailers, it will lead to more accurate merchandise mix and marketing programmes.
But, failure to do so may result in disaster for a company’s product. In this regard, Kotler et al, (2005) noted that firms which delay taking steps and stay at home to play it safe may not only lose their chances to enter other markets, but also risk of losing their sales to companies from neighboring countries who have invaded their home markets.
Thus, it is worthy to study customers’ choices among leathers of different countries in comparison to domestic ones, identifying the socio-economic determinants that affected consumer leather choice.
1.3 Research Questions
This study was founded by the following question:
(i) What are the socio economic characteristics of the respondents?
(ii) What are the types of foreign leather products used by the households?
(iii) How do they (households) perceive the quality of the foreign leather products?
(iv) What are the socio-economic factors that determine the choice of leather products among the households?
(v) To what extent did the perceived quality and price influenced the household purchase of the foreign Ho2?
1.4 Objectives of the Study
The main objective of this study is to analyze the socio-economic determinants of choice of foreign made leather product among household in the urban areas of Abia state, Nigeria.
The specific objectives of this are to;
(i) identify and examine the socio-economic characteristics of the households;
(ii) identify the types of foreign leather products purchased by the household;
(iii) evaluate the perceived quality and price of the foreign leather products by the households;
(iv) estimate the socio-economic determinant for the households choice of foreign leather product in the study area, and
(v) make recommendations based on findings.
1.5 Hypotheses
Ho1 The perceived quality of the foreign leather has no significant influence on the household choice of the foreign leather.
Ho2 The socio-economic characteristics of the respondents have no significant effect on the household choice of foreign leather.
1.6 Significance of the Study
This study will generate important information useful to formulate policies and serve as a motivation for the entrepreneurs and marketers of leather products. The potential users of the result of this study would be management consultants, entrepreneurs, policy makers, governmental and non-governmental organization.
Furthermore, this study could be used as source of material for further studies.
1.7 Scope of the Study
The study is limited to study the households in the urban area of Abia state, Nigeria.
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