THE IMPACT OF TRANSPORTATION COST ON CONSUMERS RETAIL GOODS PRICES.
(A CASE STUDY OF GARRIKI MARKET, ENUGU SOUTH LOCAL GOVERNMENT ENUGU STATE).
This project work examine the “impact of transportation cost on customer goods retail process”.
The population addressed were the wholesaler each was drawn. Data were collected using questionnaire that was distributed to the wholesales and retailers of Afor Awkuanaw market (Garriki) in Enugu South Local Government Area Enugu State whom the researcher believed were more informed about the topic.
The data generated were analyzed using descriptive statistical tool, mainly frequency distribution with accompanying comments.
The major findings made include:
1. Cost of transportation affects agricultural goods retailers than manufacture goods retailers.
2. Profit maximization was not always the desire for most dealers particularly those who have retired and set no retail business in order to avoid being ideal. The reported recommended that:
dealers should strive to procure goods from the one source in order to develop transporters.
TABLE OF CONTENTS
STATEMENT OF THE PROBLEM
OBJECTIVES OF THE STUDY
SIGNIFICANCE OF THE STUDY
SCOPE AND LIMITATION OF STUDY
THE GARRIKI MARKET
TRANSPORTATION OF GOODS
YAM MARKETING AND DISTRIBUTION
NATURE AND OPERATION OF PHYSICAL DISTRIBUTION
MODULE FOR PRICE
DEFINITION OF TRANSPORT
YAM PRODUCING AREAS
SOURCES OF DATA
PRIMARY SOURCE OF DATA
SECONDARY SOURCE OF DATA
POPULATION OF THE STUDY
DETERMINATION OF SAMPLE SIZE
PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA
SUMMARY OF FINDINGS
SUGGESTED AREAS FOR FURTHER STUDY
BACKGROUND OF THE STUDY
As life started mankind begin to nurse the need for basic necessities of life for physiological satisfaction as food, shelter, safety, among other things.
At first man tried to provide the necessary things to satisfy his needs to engaging in hunting, fetching some selected plants for food and find shelter among tree shades as well as applying plants leaves to cover his nakedness.
In the process of advancement man learnt that he could not provide all his needs by himself. Then the exchange process started. This began as an exchange of goods for goods otherwise called trade by barter. The person who has a particular product in excess of his need of that particular moment would look for the person that has a need for his excess. Produce and at the same time has the produce he lacked so that an exchange could take place.
So the earliest trading or buying and selling practices were done on retail basis through the barter process.
When a common medium of exchange could monthly was inverted the practices of trade by barter became less relevant in the exchange process. When barter was in vogue buyers and sellers did not take a conscious account of the cost and burden of carrying the goods around in search of a market. As money became the means of payment even the service of carrying marketable commodities tot eh market was paid for.
Price has to be put on every commodity using money as the standard of measurement. The seller in calculating the expenses of this business has to add the cost of transporting product from the point of production to the point of consumption.
In the ancient times, man used mostly the bests of burden to carry his goods from the point of production to the point of consumption, transportation nowadays has become more sophisticated, convenient, and faster. Some of the mode of transportation include transport on railway, motor vehicles on road, ship, boats, canoes paddling though water and the airoplane flying I the airway. The nature of production items of the order as well as the location of the market and the type of the market will determine the mode of transportation to employ. (Onyebunagu 1995).
Transportation is involved in every level of production and distribution until the product reaches the final users.
Industrial revolution came into place and led to increasing productive capacity.
Most manufacturers and sellers want to enjoy the benefit of the economy offered by large-scale production and distribution. They also aspire to explore large markets and operate at competitive levels. They have to manage costs and process to be able to operate with efficiency and remains a float. In the Nigerian case, these distribution cost specifically transportation costs are sometimes viewed as some of the factors that account fro increasing prices of goods.
This study “the impact of transportation cost on consumer goods retail prices”, a case study of yam prices at the garriki market Enugu south L.G.A, Enugu State will discover whether cost of transportation constitute significance proportion of the price of consumer foods, particularly yams in the Garriki market.
STATEMENT OF PROBLEM
There has been a continuous increase in the price of consumers goods in Nigeria for many years now. These price increases have been alleged to be as a result of increase in the cost of raw materials, transportation, rent, capital and labour. Among these variable, this study will attempt to determine the degree to which cost of transportation affects process of consumer goods, particularly this study tries to find out the following:
The consumers allege that the increasing price are indication of the profiting attitude of sellers. On their own side, the seller level the blame of increasing prices on the increasing cost of input materials and facilitating agents. The difficulty now becomes how to determine which of the claims is the truth about increasing prices.
It has been reported that the increasing price have confirmed to make many families unable to fetch their three saure meals daily. The government, labour and consumerists have show concern and made some efforts to bring the price increase under control without making any tangible headway.
OBJECTIVES OF THE STUDY
The activities of retailers in the market affect everybody in the society and most consumers are dissatisfied with the rapid increase of prices of goods in the market. This study is designed to:
i. Determine the effects of transportation cost on the prices of consumer goods particularly yam.
ii. Ascertain, if it is the desire for excessive gains that influence retailers infixing prices of goods.
iii. Find out what can be done to alleviate the problems of increase prices of consumer goods in the market.
The following research question are considered: -
1. Does cost of transportation contribute substantially to the price of yams?
2. Is it desire to make high profit that cause rapid price increase of yams in the market?
3. Have government efforts at reduction of prices helped to solve the problems of continuous price increase?
4. Does transportation cost lead to rise in the price of other category goods?
SIGNIFICANCE OF THE STUDY
This study will be of benefit to economic analysis who would want to trace the causes of inflation to their real sources.
It will be of immense use to marketing and management experts who could want some appropriate solutions to some of their marketing problems efficiency.
It will be an interesting source of material for academicians doing research in retail pricing for yams.
It will also be a useful piece of information for government in their regulatory policies of price control and transport management.
It will be a guiding tool for business people who are in the distribution service because this work wil teach them how to control costs and make a competitive pricing.
SCOPE AND LIMITAITON OF STUDY
For goods to reach the ultimate consumers or final users the seller be he the producer, wholesaler or retailer must get the appropriate transport to convey them from point of sale to the point of buyer. This study intends to limit itself to transportation of goods by retailers form their suppliers (producer or wholesalers) to the point of sales of the goods or to the final users in doing this, it will try to ascertain the effect of transportation cost on the prices the retailer fixed for the goods.
The commodity used for this study is “Yam”. The retail prices of yam study is studied to be how they vary with costs of transportation. The market located in Enugu South L.G.A Enugu State.