CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
Any developing nation like Nigeria that aims to have sustained economic growth and some level of independence must put structures in place in order to ensure that importation is reduced and local resources are effectively and efficiently utilised (Oladele & Arogundade, 2011). The trade globalization of the world has led to local markets being flooded with many foreign made goods and putting local markets at a greater risk and thus, bring about a wide in the range of alternatives of consumers and also increase the competition in local markets while great threats are posed to the acceptance and sales of locally made products (Oladele & Arogundade, 2011).
Producers and providers of services that have made in Nigeria label is thus, confronted with a condition where differentiated product or goods in line with customers’ needs and company capabilities, price, quality and quantity has never been more essential (Akingbola, 1999). This challenge is made all the more conspicuous and troubling as a result of the fact that occasions may thrive to equate the locally made products with the very many imported products obtainable in the marketplace (smuggled or otherwise) which are supposed to serve related intentions (Oladele, 2006).
Furthermore, the Nigeria’s producers have been afflicted with intermittent power supply, huge scale under-use of production capability and a poor and unhealthy customer patronage of locally products (Asaolu, Oladoyin & Oladele, 2005; Okechukwu & Onyemah, 1999). Coupled with all these problems is the resounding assertion of extant literature that after many years of exposure to high quality goods from foreign manufacturers and strong customer relationship, the Nigerian customer seems to have forged a strong relationship with some imported brands and seems reluctant to patronize Made-in-Nigeria alternatives (Okechukwu & Onyemah, 1999; Asen, Eke, & Kalejaye, 2011; Oladele & Arogundade, 2011). According to Gatawa, Aliyu, and Musa (2013) a host of difficulties are faced by local producers, with these difficulties extending from inadequate safeguard as epitomized by the heavy occurrence of smuggled products in local Nigerian marketplaces, huge amount of foreign exchange, escalating cost of assets in the money market and a constituted minutest remuneration structure that increases production cost due to the high costs of salaries for personnel. Low-quality of locally produced goods (cotton) resulting in importation of better quality good at a greater cost from the nearby countries for instance Cameroon and Chad are also notable issues with the Nigerian manufacturing industry (Gatawa, Aliyu, & Musa, 2013). As a result, the Nigerian producers are made to put up with low sales, and meager revenue and critically low profits; the flight of manufacturers also in search of more favorable conditions has also been a frequent phenomenon while the death of manufacturing firms as a whole has been more recurrent. Yet, foreign competitors continue to expand and grow at the expense of the Nigerian producer. Can the Nigerian manufacturer break the deadlock and achieve customer loyalty for their organizations and products? What knowledge, marketing strategies, and activities should the Nigerian manufacturer put in place to earn customer loyalty given the above scenario?
Meanwhile, foreign producers in the advanced Western Nations of Europe and America have embarked upon intense research towards understanding consumer buying behaviors that lead to customer loyalty and customer retention. The growth, development, sustainability and profitability of an organization depend to a large extent on the loyalty of its customers. Customer loyalty has remarkable influence on firms’ performance and is considered as an important source of competitive advantage. Repeat purchase can be attributed to the satisfaction customers perceived and received from both the product and the firm after purchase. Customer loyalty conveys more than repeat consumer patronage, as it likewise triggers favourable attitudes toward the company (Kumar, Sharma, Shah, & Rajan, 2013). These loyal customers become recruiters because they would inform friends, family members and others in their circle of influence about the company and its products and services via word of mouth (Iyiola, 2013). Customer loyalty implies implicit faith in the organization and its brands/products brought about by sustained satisfaction and a state of willingness to prefer and patronize the organization’s brands.
However, to build customer loyalty, organizations must ensure quality of service, trust, satisfaction of customer, strong, positive corporate image, effective and strong communication, commitment towards making the customer happy with satisfying and beneficial product features, demonstration of superior value, and after-sales support services (Kumar et al., 2013; Rai & Medha, 2013). Customer loyalty is a major determinant of the worth of an organization as a going concern. A successful organization must effectively manage customer loyalty; customer care and satisfaction develop strong customer relationships, positively project its image and ensure continuous quality service. Literature on customer loyalty seems to suggest that all these are essential ingredients towards building customer loyalty (Kumar et al, 2013; Khan, 2012; Rai & Medha, 2013). Customer loyalty has serious implications on the macro economy because the aggregate demand of a large cross section of the citizens of a country for brands made in a country reflected by customer loyalty, will impact positively on the suppliers operating in that country. Based on the above claims, this study looked into the attitude of consumers towards Nigerian made goods.
1.2 Statement of the Problem
One of the major challenges Nigeria is facing in her bid to move from a developing economy to developed economy is the apparent preference by Nigerians for foreign made goods. The most immediate manifestation of this challenge 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 most especially in the textile sector. Employment in this sector considerably decreased from 137,000 jobs in 1997 to 57,000 in or by almost 58 percent in a period of seven years. The figure has gone further that time to this present time. This problem is compounded by the wholesale and uncritical adoption of the world trade organization (WTO) rules by the despotic Abacha military dictatorship in 1997. The situation remained unchanged even during the regime of General ABUBAKAR Abdulsalam (Komolafe and Victor; 2004).
Poor quality of locally manufactured goods and snub appeals contribute to the problem of the textile industry in Nigeria. Many of the locally made goods are very inferior in quality when they are compared with the same goods that are produced in foreign lands.
No amount of persuasion about patronizing made in Nigeria goods has been able to correct this anomaly in Nigerian consumers. It has gone to the extent that many sellers in Nigeria now devise a means of using foreign labels as a selling tool especially in justifying high product prices. Discrimination by Nigerian consumers is at its highest peak in the country. Nigerians are finding it easy to ignore locally made goods in preference for foreign goods. This negative attitude of consumers towards Nigerian made goods contribute to the economic development and growth of advanced countries and put our cultural heritage in relegation in various fields of arts (Oloko; 1982).
1.3 Objectives of the Study
This study has both general and specific objectives. The general objective is to examine attitude of consumers towards Nigerian made goods. However, the specific objectives are:
1) To understand the relationship between customer satisfaction and made in Nigeria goods
2) To examine the effects of trust on Nigerian goods by the consumers
3) To investigate customers and consumers’ loyalty towards made in Nigeria goods
4) To find out the factors that are contributing to lack of patronage of the Nigerian goods by the consumers
1.4 Research Questions
The followings are the research questions that this study intends to provide answers to:
1) Is there any relationship between customer satisfaction and made in Nigeria goods?
2) What are the effects of trust on Nigerian goods by the consumers?
3) Are customers and consumers’ loyal to made in Nigeria goods?
4) What are the factors that are contributing to lack of patronage of the Nigerian goods by the consumers?
1.5 Research Hypotheses
With the knowledge of the observation of the business trend during the period, this investigation is carried out, it is hypothesized that;
1) There is no significant relationship between customer satisfaction and made in Nigeria goods
2) There is no significant correlation between trust and the consumers of Nigerian made goods
3) There is no significant relationship between customers’ loyalty and made in Nigeria goods
1.6 Significance of the Study
It is always right to do the most important thing first. This is exactly the case in marketing where marketers beings all they are doing with an understanding of the consumer. Why do marketers always start with trying to understand the consumer? Is it right or logical that they should pay such attention to the consumer? The answer to the last question is a big “Yes” the research for saying so is that all that the marketer does is aimed at giving satisfaction to the consumers. Marketers attached so much importance to the consumer because they know that everything they do in marketing and in business are done because of him. They realize that without the consumer there will be no business. They believe that business flourishes and grows if consumer patronage is retained through giving him satisfaction. The marketer elevates the consumer to the highest level or point by even calling him a “King”.
Locally made goods in Nigeria need to be revitalized if true that its quality is inferior in relation to foreign ones. But if it is not so, consumer will be made to understand that quality of Nigeria made goods is just the same as that of foreign. Also buyers will be made to understand whether the quality of foreign goods outweighs or matches the cost attributed to it.
1.7 Scope of the Study
The scope of this work will be limited to the attitude of consumers towards Nigerian made goods. The study will however be carried out among people (both buyers and sellers) in Yaba Market area of Lagos State, Nigeria.
1.8 Definition of Terms
Attitude: (Fishbein) defined it as the probability that an object does or does not have a particular attribute. Attitude can also be seen as a function of belief.
Marketing: Kotler (1980) defined marketing as human activity directed at satisfying needs and wants through exchange processes.
Price: the amount for which product, service or idea is exchanged for sake, regardless of its worth or value to potential purchases.
Consumer Behaviour: This can be referred to as the way in which consumers act or behave towards a product.
