AN INVESTIGATION OF THE PURCHASING CHOICE/SATISFACTION OF THE NIGERIAN CONSUMERS BETWEEN FOREIGN PRODUCTS, COMPANIES AND SERVICES AND LOCAL PRODUCTS, COMPANIES AND SERVICES

JENNIFER ONOSE

PAU/SMC/PT2/034

PAN-AFRICAN UNIVERSITY SCHOOL OF MEDIA AND COMMUNICATIONS LAGOS – NIGERIA.

STREAM: MARKETING COMMUNICATIONS

NOVEMBER, 2010.

ABSTRACT

According to Black (1992:2), it is human nature to try to explain what we observe occurring

around us, a process that people engaged in long before physical, biological or social sciences

were established as a discipline.

PURPOSE

The purpose of this paper is to study the purchasing choice of the Nigerian consumers between

foreign brands, products, services and companies and local products, services and companies.

This paper has two aims:

i. To find out if the target group of this research associates local products, services and

companies as brands.

ii. To find out if Nigerians within the target group of this research who possess the

purchasing power derives satisfaction when making purchasing decisions between local

products and foreign products.

DESIGN/METHOD/APPROACH

This study was conducted as a quantitative research, using the deductive approach. The research

materials was gathered in personal interviews, by face to face, internet and by phone. The target

group of this research included adults from the age of 30-50, both men and women from

different backgrounds. 1000 persons lose interviewed and it was longitudinal based, using trend.

FINDINGS

On the basis of the results I got, I conclude that, the images of local products, services and

companies in Niger4ia are in positive and respected for their tenancity in business despite the

local power and infrastructural challenges. But are not associated as brands, products and

services, they will purchase, because of the lack in quality, packaging, durability, wider

knowledge and recognition of local products. The banking services, some airline services,

consulting services and entertainment companies are excluded and viewed as brands.

Nigerian adults (30 – 50 years of age) who possess the purchasing power are more likely to

choose foreign products/services and companies and derive immense satisfaction, than a local

made in Nigeria products, services and companies.

Some future suggestions were also given by the interviewees. The most common one was

increasing the quality/longevity/durability and trust in local products, services and companies, to

make it more acceptable.

SIGNIFICANCE OF THE STUDY

i. Theoretical Implication:

ii. Practical Implications

This study provides an insight on how local products/ companies/services are perceived by the

consumers for whom they were made, it also gives an insight on how sophisticated and

discerning, the consumers have become.

This will provide a basis for local manufacturers, brand managers, production managers,

principal consultants and chief executive officers on managerial decisions as regards quality of

production, brand building, brand image, durability and longevity of products and services.

Purchasing decisions are not just made on advert campaigns alone, which can generate a

purchase, but can it sustain and generate more purchases and customer loyalty?

LIMITATION OF STUDY

This study is limited to the views and perceptions of adults (30 – 50 year of age) who live in

Lagos, just one state out of 36 states in Nigeria.

It fails to account for young adults (18 – 29 years of age), teenagers (13 – 19 years of age).

KEY WORDS

Brand image, consumers, foreign products, local products, Nigerian adults, purchasing power,

satisfaction.

RESEARCH QUESTIONS

Do Nigerians between the target group of 30 – 50 years of age, who posses the purchasing

power, associate local made in Nigeria products and services as brands? What is the Nigerian

buyer satisfaction when purchasing foreign products/services and made in Nigeria

products/services?

HYPOTHESIS

Nigeria who possess the purchasing power derives satisfaction from purchasing foreign

products/services, even if they regard local made in Nigeria products/services with high esteem.

DATA

A sample of 1000 (30 – 50 years old) women and men were asked if they considered local made

in Nigeria products/services as brands? What is their satisfaction when making purchasing

decisions between local products/services and foreign products and services.

EMPIRICAL GENERALIZATIONS

Nigerian adults (30 – 50 years old) who possess purchasing power are more likely to derive

satisfaction when purchasing foreign products/services than made in Nigeria local

product/services, even when they agree that local products/services can be called brands.

INTRODUCTION

According to the social exchange theory, “people will rationally choose behaviours that

maximize rewards”.

In an increasingly complex world, individuals and businesses are faced with more and more

choices, cities, regions and countries all over the world are faced with the effect of bilateral

commerce, economic and cultural globalization.

The markets have become more competitive and the importance of branding has gown. It has

become important for producers to distinguish their products in order to develop brand loyalty.

(Milla Loukusa and Sussana Suutari, 2009). The concept that consumer’s decisions are

influenced by personal and cultural values is central to consumer behaviour theory (e.g.

Reynolds and Gutman, 1988; Engel et al, 1993).

Clank (1987), remarks that consumers find value in the brand, in its heritage, in their personal

experience with it, and how it reflects what the individual stands for.

Over the years, foreign international companies and services have added African and middle east

operations to their business as a way of expanding, Nigeria as a country in West Africa is not an

exception, influx of foreign products and services such as coca – cola, British Airways, Turkish

Airline, Procter ‘N’ Gamble with a range of household goods such as crest toothpaste, always

pad, Ariel, Duracell, Gillette, pampers, etc. Foreign banks and consulting firms are also no

exception with Citi Bank, Standard Chartered, Accenture and KPMG plying their trades with a

good share number of local stake-holders and consumers.

Nigerians, no doubt have high taste, they can go to any length to acquire goods/services

considered to be of high quality and standard known brands.

For a company to be considered as a brand it must reach a prestigious position in consumer’s

minds and this can be very beneficial for the company.

Ambler (1992), defines a brand as the promise of the bundles of attributes that someone buys and

derives satisfaction… The attributes maybe real, illusory, rational, emotional, tangible or

invisible.

The research problem of this study is what is the Nigerian buyer’s satisfaction when purchasing

foreign products/services and made in Nigeria products/services? Do Nigerians consider local

products/services as brands?

The question is emphasized to give a clean understandably general over-view about the topic for

the reader.

LITERATURE REVIEW

There are myriads of reasons on why the Nigerian consumer is obsessed with the foreign made

goods, and several tests in literature addresses this issue, while some texts address this subject

fully and comprehensively, others approach it passively or as an introduction to their work.

It was found that the country of manufacture is significantly more important than price and other

product attributes…’ Nigerian consumers have a negative image of the “made in Nigeria” label,

rating it lower than labels from more economically developed countries (Chike Okechukwu,

1999).

According to Ogunnaike Olaleke (200). The causes of consumer preference for foreign products

are many but can be grouped under five broad headings, economic factors, historical forces,

psychological forces, poor marketing and poor governmental control.

But the most important variable affecting the perception of the Nigerian consumers towards

locally made goods are trust, durability, package aesthetics and quality, if these issues are

addressed, there might be prospects for Nigerians looking inwards.

There is a popular belief that the qualities of local products are lower than those of their foreign

counterparts, there is evidence in the literature to substantiate this view. In a survey of 171

consumers in Kano metropolis, Agbonifoh (1995) found out that 93 percent of the respondents

considered locally produced textiles inferior to the imported ones.

The abundance of foreign brands of many kinds of products in our local markets makes it easy

for consumers to satisfy their yearnings for these imported items (Olaleke, 2000).

Aire, (1983) sees it from a different perspective; habits and previous experiences have

considerable influences on consumer perception and choice.

While Alego, (1997), pointed out that effective marketing management is essential in the process

of building up a favorable image for any product, the essence of consumer orientation on the part

of producers appears to have contributed to the alienation of the Nigerian consumer and the

resulting consumer preference for imports.

DISCUSSION

Lagos is the biggest and most important city in Nigeria. It is estimated to count for over 60% of

the nation’s industrial and commercial establishment.

Foreign trade contributes about 90% and 80% of the total value of imports in the country

Nigeria, is controlled by Lagos. About 70% of national industrial investments are in the

metropolitan city, Lagos. Aina (1994); UN (1995); MCNULTY (1988).

It is also the biggest city in West Africa. The population growth in the last ten years has been the

highest ever and the growth in the future is estimated to be even higher (UN [1995]).

This makes Lagos a viable city for production, sales and consumerism for all sorts of products

and services. Some local products have stood themselves out in quality and consistency and also

have commanded shares of the market.

LOCALLY MADE GOODS/SERVICES PRODUCTS

Dangote group Spaghetti Noodle, Flour, Juice, Salt and

Cement.

Honey well group Spaghetti, Noodles, Flour.

Orange drugs group And Drugs, Soaps and Disinfectants.

Chi vita group Tomatoes paste, Juice, Snacks and Capri-

sonne Franchise from Belgium.

Zenith bank, GTB bank, Access bank, Services

UBA bank, etc.

Philips Consulting, Alder’s Consulting Services

Arik Airline, Aero contractors, Air Nigeria. Services

Next group, Guardian, This day, Ovation magazine, All major print medias.

Genevieve & Daily independent

Globacom, mobile company Mobile 3G company Major TV Stations and Cinema houses.

HITV, NTA, AIT, STV of the Silver bird’s group.

Onward printing press A major printing press

Bill boards with advertorials promoting made in Nigeria goods are a common place in Lagos, the

preference of Nigerians for foreign made goods is both alarming and disturbing, especially when

considered in the light of its effect on local industries.

From my research target group the general notion is that locally made goods are interior to

imported and foreign made goods in terms of quality and performance.

To check this foreign trend, the federal government of Nigerian, recently launched a “buy-made

in Nigeria” campaign to encourage Nigerians to consume locally produced goods and services.

The Manufacturers Association of Nigeria (MAN) has written an “Ode to the funeral of locally

made goods”, they complain about the challenges of operating in Nigeria listing epileptic power

supply, no tax relief, high cost of importation of raw materials as some cannot be sources locally,

high cost of diesel and generator maintenance, lack of basic infrastructures such as train, road

and water which has made production very cumbersome.

In conclusion, in line with my research, the social exchange theory, which states “people will

rationally choose behaviours that maximize rewards”, today’s world is highly consumer led.

People tend to define themselves by what they value and what they possess, so they are more

likely to buy goods and services that represents what they value. Goods, products and services

are about perceptions, Nigerians within the target group of (30 – 50 years old), living in Lagos

derives satisfaction from purchasing foreign made goods and services.

REFERENCES

1. Aaker, David (1997), “should you take your Band to where the action is?” Harvard

Business Review, September – October, 135 – 143.

2. Brown, Stephen (1995), Post Modern Marketing London, Roueledge.

3. MC Auley, A. (2001). International Marketing: Consuming Globally, Thinking Locally

Chi Chester John Wiley and Sons.

4. Miles, M.B. & Huberman, A.M (1994). Quali tatike Data Analysis. An expanded Source

Book. London Sage Publications Inc.

5. Olaleke, Ogunnaike (2000), Dearth of the Nigerian Textile Mills. Convention University,

Ota, Ogun State, B.Sc Thesis.

6. Olutayo Otubanjo and Melewar R.C. (2008) “Corporate Identity. A Paradigmatic Shift in

the Theoretical Construction of its meaning.

7. Susanna Suutari and Milla Loukusa (2006), Brands and Branding – Brand Images in

Kainuu . Kajaani University of Applied Sciences, Business and Administration,

International Business Department M.Sc Thesis.

INTERNET REFERENCES

Interbrand 2010 Brand Careers – http://www.brandchannel.com /education_glossary.asp.

W.W.W.UnitedNations-City of Lagos Nigeria.

ARTICLES

Hartnett, M. (1999). The future of Brands Advertising Age. 11/08149. issue 46.

CONFERENCE PAPERS

National Institute of Marketing Nigeria (NIMN) “Creative strategies for Actualizing Nigeria’s

Golden Dream, Conference held on 14-16 September, 2010.

Paper 4

Brand Building and National Development

- Chief Sofoluke Solanke, Fnimn former MD, UAC Foods.

Paper 7: Developing the Marketing Skills of the Golden age – MNO Ukoh, fnimn

- Marketing Director, Nestle Plc.

APPENDIX I

Questions for the interview.

1. Age, sex, occupation?

2. Mention some foreign made products?

3. Mention some local made products?

4. What products do you prefer buying and why?

5. Would you associate local products as brands?

6. In your opinion, what should be done to make local products retain customer loyalty.

APPENDIX II

Foreign products mentioned by interviewees, listed according to their frequency of been

mentioned.

1. Coke 11. Duracell battery

2. Gucci 12. Nestlé’s maggi

3. Pampers 13. Uni-lever’s knorr cube maggi

4. Gillette 14. Nestlé’s Milo drink

5. Toyota 15. Cadbury’s Tom-Tom, Bourvita beverage

6. Honda 16. Ghana’s woodin wax

7. Nokia 17. Holland’s Hollandia’s wax

8. I – phone 18. British Airways.

9. Aqua-fresh tooth paste 19. Virgin Airways

10. Duracell battery

APPENDIX III

Local products/services considered as brands by interviewees

1. Zenith Bank

2. UBA Bank

3. Arik Airline

4. Silverbird Cinema/Malls

5. Zinox Computers

6. Chivita Juice

7. Indomie Noodles

8. Darbur Herbal Toothpaste

9. Dangote Spaghetti

10. Golden Penny’s Spaghetti

APPENDIX IV

Various brand definitions (adapted from de Chernatony and Dall’olmo Riley 1998 work).

BRAND DEFINITION PERSPECTIVE AND FUNCTION OF BRANDS

Brand as a legal instrument This is viewed from firm’s perspective. The brand is used by

the company as a mark of ownership and legal protection

from imitation by it’s competitors.

Brand as a logo From firm’s perspective the brand is used as a name, or

symbol to differentiate one company’s product from

another.

Brand as a company The advantage of considering brand this way, is that it

achieves a coherent focus and conveys consistent messages

to all stakeholders.

Brand as shorthand For consumers, brands act as a shorthand device of

functional and emotional characteristics, it makes processing

easier and this is from the consumer’s perspective.

Brand as a risk reducer An understanding of the dimensions of perceived risk

enables marketers to instill consumer confidence.

Brand as an identity system. A carefully managed identity system helps managers re-

enforce a meaning behind a brand for consumers. It

communicates the essence of the brand to other stake

holders.

Brand as an image in The brand is what consumers perceives it to be. It balances

consumer’s minds identity and image.

Brand as a value system The concept that consumers decisions are influenced by

personal and cultural values consumers find value in brand,

its heritage, personal experience with it, and how it reflects

what the individual stands for.

Brand as a personality (Aaker, 1990) describes this theme as brand strategies