THE EFFECT OF CONSUMER PROTECTION ON BRAND LOYALTY OF FAST MOVING CONSUMER GOODS IN IKEJA, LAGOS STATE.

ABSTRACT

The study examined the effect of consumer protection on brand loyalty of fast moving consumer goods.

More specifically, the study sought to assess the consumer protection and brand loyalty in ikeja.

The study consist of consumers in Ikeja axis of Lagos State, the sample frame of the study was made up of consumers of fast moving consumer goods resident in Ikeja, Lagos State Nigeria, and the research was limited to age of 20 and above,

The simple random sampling technique method was use to pick the respondents and 400 consumers in Ikeja axis of Lagos State were selected, and a well- developed questionnaire was designed to elicit information from the respondents.

The data collected were analyzed using the descriptive statistics technique and the linear regression analysis was adopted to test the stated hypotheses at .05 significance level.

Result from the study indicated that there is strong relationship between consumer protection and brand loyalty, there is strong relationship between improvement in production process of FMCGs and consumer referrals, and there is strong relationship between health labelling and consumers’ patronage.

Base on this, the study advised that consumers should ensure that they meticulously check the expiry date of every product they want to buy, secondly consumers should make complains about dissatisfactory product that are made from fake and substandard quality, and lastly Consumers should make proper use of products they purchase.

 

 

CHAPTER ONE

INTRODUCTION

1.1       Background To The Study

            In 2002, World Health Organization stated that about 70 percent (%) of the drugs available in Nigeria were fake or substandard. Also, National Agency for Food and Drug Administration and Control (NAFDAC) states that 41 percent (%) of drugs alone were counterfeit. (Yankus 2006 and Akunyili 2007)

            We can see there is a problem which is reoccurring with developing countries in respect to lack of protection to consumers, which shows that consumers are not loyal to their brands which they continually repeat purchase. Even in the view of the fact that Consumer are sovereignty which can be seen as the moral basis of Marketing theory. (Kelly 2005) Consumers right are not respected and protected which leads to the lack of brand loyalty in Nigeria even in fast moving consumer goods. Consumers have become so tired of the lack of respect shown by producer that make fake product and change the quality of their product and brought forth the term consumerism to protect the interest of consumer’s right. (Arnt, Barksdale and Perreault, 1980)

            The protection of consumer has brought about consumer orientation, consumer focus and consumer driven strategies which is strongly incorporated into marketing terminology. (Kelly 2005).  Consumerism has been defined as a social movement which seeks to improve the rights as well as power which consumers have. (Kotler 1972, Perreault and McCarthy 2002)

            In Nigeria business are driven by the need to make profit. This makes them do things which are unethical and immoral, which have come to make the lives of consumers endangered. This has led them to complain and show lack of patronage to their product. In Nigeria and most developing countries there are lack of movement to support and help protect consumers. (Bello, Suleiman and Danjuma 2012) Consumerism is a missing factor in Nigeria that has brought about government policy through legislation and efficient way of enforcing their laws rather than supporting consumers of their interest and feelings. (Keynak 1985) The different democratic government have been successful by implementing agencies aimed at protecting consumers from fake and substandard product. Some of these agencies are; Nation Agency for Drug and Administration and Control (NAFDAC), Standards Organization of Nigeria (SON), Consumer Protection Council of Nigeria and Consumer Protection Council Act which look to protect consumer from harmful conducts of suppliers as well as producer. (Bello, Suleiman and Danjuma 2012)

            Once consumers get protected from some of the harmful effect which make them switch between brands, they will show more patronage, satisfaction and referral to such brands whom takes into cognizance their rights and interest. This will lead to repeat purchase of the brand which meet and supersede their expectation as well as keeping their interest of being protected especially in fast moving consumer goods which are used every day as a household item. Consumers are the heartbeat of companies because they produce goods and services to meet their need. Once consumers are not protected and do not patronize such business their production would slowly go down to a halt.

            Barksdale and Darden 1971, states that consumers are the center of all Marketing activities as well as business activities which makes them highly important to the sustainability of the business. There is a paradoxical feeling to this where business paramount focus is in the advertising of their product to consumer more than their welfare which can be seen as a servant or slave treatment. (Vetrivel and Mohanasvndari 2011). Nigeria as a nation have shown numerous factors which proves there is a need for a strong consumer protection law that will protect their interest that can make them undividedly loyal to their brand. But with the lack of consumer protection this has led consumers to make continuous purchase of products from road side hawkers and retailers with no brand names or unrecognized brand names with little reputation. (Bello, Suleiman and Danjuma 2012) Consumers are faced with the difficulty in having the opportunity to reach out to manufacturers or dealers of product that are properly made with recognizable and highly reputable brands. This makes them acquire substandard products which they are not adequately protected from.  This has made a lot of Nigerian consumer show unstable loyalty to different brands by making purchase of any product with the cheapest price that fills the need depending on their income levels.

            Bello, Suleiman and Danjuma 2012, argues that consumers of Nigerian market can be  complacent. Taking the statistics from Mercy 2008 which proves that Nigerian complacency comes from the fact that they make the wrong choice to the purchase especially from electronics. The consumers tend to purchase from dealers with no reputation or are not major importers which do not offer them warranty or refunds for their money along with post purchase services. Nigerian consumers need to grasp the idea they are very important, or they are the main source of income which flow into companies. Once they understand that then, they will be more interested in ensuring that they are protected in their rights as consumers. This will make consumers show more undivided and patronage to reputable brands which will in turn give them satisfaction and they will make referrals of the brand which they use as household product. The fact that, there are no policies or proper law put in place to check the authenticity of manufacturers and their advertisement claims about their product: And the fact that consumer pay for packaged product without the ability to monitor the quality and quantity in some cases has led to challenges faced by consumers in Nigeria which led to the establishment of laws to protect consumers. (Uche 1990)

In a market, which has little or no competition give rise to defective goods and services, (Kanyip, 2005) However, if there are competition in the market for goods and service, consumers will express their preference for better judgement of their choice which will drive away undesired suppliers of goods and services in the market. According to (Kanyip, (2005)) Nigeria today with its sharp recession and sky rocketing prices of good brand name and goodwill, and those cheaper product lack warranty and services to repair when damaged. Umenyin 2007, states that a market with imperfection and lack of proper information as well as misleading information through deceptive advertisement has encouraged the increase of fake and substandard goods. In Nigeria and other countries around the world, consumer protection is the idea designed to ensure consumers right and interest are protected from bad practices of businesses, unscrupulous producers and services providers. (Bello, Suleiman and Danjuma 2012). This shows that government has made an attempt to make provision for regulatory policies to protect and enforce right of consumers who pay for the goods and services rendered to them. Consumer protection law has two part to it which details out the need to protect the interest, right and safety of end users of products and services. On the other hand, to monitor and regulate the contractual transactions and private laws of relationship are regulated for consumer’s protection. (Oko and Anyanwu, 2015)

            It is highly important that Nigerian consumers are protected from companies, wholesalers, retailers, manufacturers and suppliers of unscrupulous product that is not only harmful to their health. This will show there is an interest that the money they pay for goods and services are properly monitored. Consumers that are protected as well as given good services will show an undivided loyalty to such product. However, when these consumers are not protected and they begin to lose patience for producers of unethical product they will show divided, unstable loyalty. Their loyalty will lead to lack of patronage and satisfaction to the brand. Such brands will not be able to have good referrals from loyal customers that have made repeat purchase of their product for years due to lack of knowledge of their right and interest which have not been valued. In a nut shell Nigerian consumers need to be protected and they need to be able to ascertain the product they buy are of good standard and quality which meet their wants and needs these consumers will remain loyal to these brands especially in fast moving consumer goods in Nigeria.

1.2 Statement of The Problem

            In developed countries, there are laws which protect consumers from unscrupulous, fake and substandard product. In developing countries like Nigeria however seems to be a situation where there existing laws are not enough to which protect consumers from fake and substandard product which make consumers show lack of patronage, customer satisfaction and referral to the different brands in Nigeria. Consumer show unstable loyalty to the different brands in Nigeria. Most consumers change brands once they feel that the quality of that product has dropped as well as the quality has been contested by the government bodies put in charge to make checks on practices of manufacturers. Okeke 1981 states, “business exist to firstly satisfy the interest of their owners, shareholders, the management, employee and secondly meeting the needs and demands of their consumers”.

            In Nigeria, protection of the consumer has taken backstage which is seen as not paramount to business and manufacturers. Oko and Linus 2013, buttress this point by stating that in Nigeria as well as other developing countries, the interest of consumers especially in fast moving consumer goods, and those industries in that category exploit their different target market with the aim to actualize high margin of profit. This has led to the desire and the need for consumers right to be protected, as brands who put the health and wealth of their consumer first will experience more satisfaction, referrals as well as patronage from consumer, and they will have undivided loyalty to those brands.

            Consumer protection have been inactive in Nigeria from the perceptive of various marketers since 1970s in the view of Onah 1979, Agbonifo, Ogwo, Nnolim and Nkamnebe 2007 and Ayozie 2013. They all have stated that the business environment has not made adequate attempt to ensure that consumers are properly protected in Nigeria which is a huge issue as users of product. If products which are easily consumed by large numbers of Nigeria are not checked to be sure that they are not up to standard this leaves them open and exposed to different illness which could mean that the interest of the consumers are not protected. Consumers are the reason for which business exist. Their lack of opportunity to go directly to the manufacturer has denied the need for more protection to consumer so that they remain loyal to the brand in which they put so much trust in.

            Consumers perception influence consumer behavior to remain loyal to a brand or to switch to better brands that protect their right as well as their interest. This point emphasized by Hawkins, Best and Coney (2001) states, “perception influences the behavior of consumers in which they determine the rate and level of accepting public and private view of market offers”. Consumer knowledge about the best-in-class product with superior quality, best standard, good quantity and have been certified authentic by National Agency for Food and Drug Administration and Control, and Standards Organization of Nigeria. The protection of consumers should be brands number one priority rather than making profit only. This will lead to the perception of consumers that these brands are actually protecting them from unscrupulous practices and fake product they will continually patronize them once certified by the different governmental bodies.

            Lack of consumer protection therefore in developing countries especially Nigeria has led to unstable loyalty to the different brands which has made consumers to change brands frequently to satisfy their needs. From the forgoing therefore, the problem that this study seeks to address is to find out the extent to which the available consumer protection laws and activities would have effect on loyalty of consumers on different brands of goods in Nigeria. What is the extent to which government, the society, organization and manufacturers have striven to protect consumer rights especially in fast moving consumer goods in Nigeria? There is need to know if manufacturers had looked beyond making profit but adapting societal marketing concept as well as consumer-oriented marketing to improve their credibility to consumer to satisfy them, get referral from them, and have large number of patronage so their brands remain market niche in Nigeria.

 

 

1.3 Objectives of the Study

The main objective of this project is to study the effect of consumer protection, and the impact it has on brand loyalty in respect to fast moving consumer goods of Nigeria.

            Other objectives of this study include:

  • To find out how to improve on production process as a means of referral from consumer in their various brands especially in fast moving consumer goods in Nigeria.
  •  To investigate the impact of health labelling on consumer patronage in fast moving consumer goods.
  • To examine the influence of expiration date on consumer Satisfaction in fast moving consumer goods of Nigeria.

 

 

1.4 Research Questions

  • What are the impacts of consumer protection on brand loyalty in respect to fast moving consumer goods in Nigeria?
  • What improvement in production process on fast moving consumable goods in Nigeria to gain referral from consumer in their brands?
  • Can health labelling on fast moving consumer goods in Nigeria impact consumer patronage?
  • How can the knowledge of expiration date on fast moving consumable goods in Nigeria improve consumer satisfaction?

1.5 Research Hypothesis

H0(1): There is no significant impact of consumer protection on brand loyalty in fast moving consumer good of Nigeria.

H0(2): There is no significant impact on the improvement on production process as a means of referral from consumer in their various brands especially in fast moving consumer goods in Nigeria.

H0(3): There is no significant impact of health labelling on consumer patronage in fast moving consumer good in Nigeria.

H0(4): There is no significant impact on the influence of expiration date on consumer satisfaction in fast moving consumer goods in Nigeria.

 

 

1.6 Rationale for The Hypothesis

            The thought process behind the various hypothesis are that there is a correlation between consumer protection and brand loyalty especially in fast moving consumer goods in Nigeria. Consumers once they become protected by companies through emphasis on health labelling, indication of expiration date and ensuring their production process are properly and adequately clean with the best equipment to ensure that their product of high standard will also show consumer patronage, satisfaction and referral to their different brands in fast moving consumer goods especially in Nigeria.

1.7 Operationalization of The Variables

            The variables for this research will therefore be operationalized here

Y = f(X)

Y = Brand loyalty

X = Consumer protection

where Y = Dependent variable

            X = Independent variable

Y = f (X1, X2, X3…Xn)

X1 = Production Process

X2 = Health Labelling

X3 = Expiration Date

Y = f (Y1, Y2, Y3…Yn)

Y1 = Consumer Patronage

Y2 = Consumer Satisfaction

Y3 = Consumer Referral

Y = f(X1) __________________ (1)

Y = f(X2) __________________ (2)

Y = f(X3) __________________ (3)

Y = f(X1, X2, X3 +μ ) _________(4)

            The study will focus on equation (4) above.

            Based on regression, we have

Y1 = a0 + β1X1 + μ…. (1)

Y2 = a0 + β2X2 + μ…. (2)

Y3 = a0 + β3X3 + μ…. (3)

Yn = a0 + βnXn + μ…. (n)

Where, a is the constant of the equation, β is the coefficient of X the independent variable where μ is the error or stochastre term in the equation.

1.8 Scope and Delimitation of the Study

            The study will focus mainly to investigate, the impact of consumer protection on brand loyalty in Fast moving consumable goods in Nigeria. The target population of Lagos state are about 8,048,430 people based on the 2006 census. However, the sample size will be 560 which are made up of students, domestic mothers, lecturers, doctors and retailers. Simple random sampling technique was used to pick the respondents of the questionnaires. The survey will be done within two weeks between Ikeja and Berger axis of Lagos State Nigeria.

1.9 Significance of the Study

            This research aims at improving the general knowledge about consumer protection so that they become more loyal to the different brands in fast moving consumer goods in Nigeria. Once consumer interest and right are protected by the regulatory bodies it will have an impact on loyalty of brands in fast moving consumer goods.

 

1.9.1 Management Practices

            Management of organization will begin to see the importance of ensuring that thy produce quality product not just focus on quantities aiming at making profit only. They will begin to respect consumer whom play a pivotal role in the success of the company. Management should integrate safe practices by using good quality substance, increase the quantity of the product as well as protecting their consumer which will increase profitability and loyalty to the brands in fast moving consumer goods in Nigeria.

 

1.9.2 Industry

            Industries in fast moving consumer goods of Nigeria will enjoy profitability as well as brand loyalty once they begin to protect their consumers by cutting out some of the unethical and unscrupulous activities which they perform. Industries should also adapt marketing philosophies by ensuring that they meet the needs of their consumer. This research will impact industries by allowing them to understand by protecting their consumer in turn would increase brand loyalty as well as increase profit.

1.9.3 Government

            Government play a vital role in ensuring that their citizens are protected from unscrupulous and immoral activities of business practices. This research will help the government to take a deeper look at the regulatory bodies whom should continually check Organization’s practices for unethical behaviors. The government will also take a look at the activities of National Agency for Food and Drug Administration and Control, Standard Organizations of Nigeria as well as amend the Consumer Protection Council Act to ensure their citizens are properly and efficiently protected from different brands in fast moving consumer goods in Nigeria. This research would help the government to address issues of substandard, fake and adulterated products which are in the marketplace consumed by Nigerian Consumer as well as meeting and satisfying the needs of all Nigerians no matter their religious belief they need to be protected. Especially the Muslim whom the government should make provision of Halal products both in fast moving consumer good as well as pharmaceutical products.

1.9.4 Society

            This research looks to impact and educate the Nigerians that as consumers their rights should be protected from bad practices of organizations only looking to make profit. Consumers and citizens of Nigerian should be educated enough so that they know they should be able to complain when organizations give them adulterated products which are harmful to their health. Consumers should be able to fight for their right hence the marketing concept called consumerism aimed at shielding consumers from the unethical and unscrupulous practices of businesses. This research makes them also know that organizations that protect their interest are worth been loyal to and should continuously purchase such products. The research will open the minds of consumers that they should not be silent, take fake products from fast moving consumer goods as well as call out the government to make adequate policies to protect them.

1.10 Definition of Operational Term

            Consumerism: an organized movement of citizens and government agencies to improve the rights and power of buyers in relation to seller.  It can also be said to be an organized effort of consumers aimed at promoting, protecting and enforcing the rights of consumers in their exchange relationships with all organization and individuals. Consumerism is an organized effort of concerned citizens, business and government to equate the balance of power between parties to an exchange and redress and remedy injustices done to the consumers in the pursuit of a standard living.

            Consumer products: a product or service bought by final consumers for personal consumption.

            Brand: A name, term, sign, symbol, or design, or a combination of these, that identifies the products or services of one seller or group of sellers and differentiates them from those of competitors.

            Consumer-oriented marketing: A principle of sustainable marketing that holds that a company should view and organize its marketing activities from the consumer’s point of view.

            Consumers: Consumer are people who buy products and services provided by the producers.

            Consumer Loyalty: is a positive attitude and behavior related to the level of future re-purchasing commitment among consumers. Consumer Loyalty is a commitment of customers to do dealing with particular firm, buy their product and services and refers it to colleagues.

            Consumer Protection; the protection of buyers of goods and services against low quality or dangerous products and advertisement that deceive people. Consumer Protection can also be defined as a means of safeguarding the interest and rights of consumers from unscrupulous and unethical malpractices by the business and to provide them speedy redressal of their grievances.

            Brand Loyalty: is a pattern of consumer behavior where consumers become committed to brands and make repeat purchases from the same brand over time. Loyal customers consistently purchase product from their preferred brands, regardless of convenience or price. Brand Loyalty can also be defined as the extent of the faithfulness of consumer to a particular brand, expressed through their repeated purchases irrespective of the marketing pressure generated by the competing brand.

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