COMPLETE SCHOOL PROJECT TOPICS & MATERIALS :
CHAPTERS: Chapter 1-5 | DOC FORMAT: MS WORD/PDF | PRICE: ₦5,000

GET COMPLETE WORK

CHAPTER ONE

Introduction

1.1 Background of the Study

Over the past century, continued world population increases have raised concerns about food security. World Bank (1986), defined food security as access by all people to food of adequate quantity and quality consistent with decent existence at all times. The World Food summit in 1996, described food security to exist when people have physical and economic access at all times to food in sufficient quantity and quality needed for their daily activities (World Bank, 1996). The challenges of food security can be at national, regional, local or household levels. At the national level for example, a nation is food secure when the majority of the population have access to food of adequate quantity and quality consistent with decent existence at all times. A region within a country is food secure when the majority of the population in that geo-political region has access to food of adequate quantity and quality consistent with decent existence at all times. A locality is food secure when the majority of the population in that locality has access to food of adequate quantity and quality consistent with decent existence at all times. At the household level, food security exists when all members of the family have access to food of adequate quantity and quality consistent with decent existence at all times. Food security is jointly determined by availability of food and accessibility to the food. Availability of food is a function of food production, stock holding and food marketing (Von Braun, Bouis; Kumar and Pandya-Lorch, 1992). Certainly by raising agricultural productivity, that is, increase the land area planted and increase yield per hectare, food availability could be increased. However, availability is not enough. The food produced must be distributed efficiently at minimum costs in-order to guarantee continuous availability of the food. This is the subject of food stuff marketing. Food stuff marketing plays a vital role in addressing the concern of food security and distribution.

Olayemi (1982), observed that food stuff marketing is a very important but rather neglected aspect of agricultural and national development in Nigeria. More emphasis is usually placed, by government on policies to increase food production with little or no consideration on how to distribute the food produced efficiently and in a manner that will enhance increased productivity. In other words, food stuff marketing in the country, mostly in the immediate post-harvest period usually involves a lot of costs and these costs are so high that lowering the costs through efficient marketing and supply chain management may be as important as increasing agricultural production (Ahmed and Rustagi, 1987).

A good and well-coordinated national food marketing system can affect food production. Availability of food at the household level requires that food must be available either through their own-farm operations or by purchasing the food from the market. The latter is often the case in cities like Enugu where majority of the households must obtain food from the markets, particularly the Ogbete market.

In most cases, the food produced from own-farm operation is inadequate and this makes a good marketing system very important to ensure food availability. FAO (1997), submitted that if available food could be evenly distributed (through efficient national and international markets), each person would be assured of 2,700 calories a day, which is the recommended daily calorie intake. However, since available food is not evenly distributed (due to marketing inefficiencies and other problems), there are shortages of food in some regions but excess in some other regions.

In Nigeria, agricultural produce are enormous; some of them are cash crops, which need to be exported to the countries to provide foreign earnings for the Nigeria Akinbode (1979). Others are staple foodstuffs, which are needed to feed the population. However, the size of Nigeria’s population inevitably makes it critical to ensure efficient supply and distribution of foodstuffs to safeguard food security in the country. Indeed, foodstuffs dealers play important roles in this regard. They not only ensure the supply and distribution of food to the markets, but also promote the production of food in the country since they bridge the gap between the producers and the farmers.

But, because of the spatial differential in the locations of production and consumption, that is, the farm and the market, the produce have to be effectively distributed to reach the target markets and consumers. This reason creates the need for an organized market for the farmers and other stakeholders. It is important to understand that within the socio-economic landscape in Nigeria, there are places of surpluses on one hand and places of deficit on the other. This spatial differentiation generates a system of marketing along the landscape. According to Adelemo (1979), the market for food produce in Nigeria can be classified into two categories namely an internal market for domestically consumed commodities and the market for exported commodities. The market for exported commodities is a formal and well documented system while the market for domestically consumed commodities is largely an informal system where transactions are hardly ever documented. Beside this, the internal distribution system is characterized by market locations that are distributed widely and densely in space, although the trading activity at such locations is only at periodically predetermined intervals in the rural areas. However, the market situation is remarkably different in urban areas where the markets have to carter for the needs of the consumers on daily basis.

The food stuff marketing system in Nigeria consists of numerous sellers and buyers with different orientations and demand patterns. According to Jones, (1968), this market is often congested, compact and consists of many distributive channels. However, Abbot (1962) in his analysis of the importance of agricultural marketing, frowned at congested and multiple distributive channels. He argued that an increased agricultural production is of little consequence for the welfare of either producers or consumers if the distribution channels remained ineffective and lacks cohesion. According to him, if distribution means life to agricultural producers in modern economies, then with the growing concentration of the population in urban centers where they have no food supplies of their own, marketing system means survival to food stuff dealers and consumers. In the light of this, food stuff marketing assumes more significance.

The food stuff sector has been growing by leaps and bounds over the years. Every day, numerous dealers enter the now increasingly competitive food market. As a result of increasing consumer demands, foodstuff businesses in Nigeria are expected to provide tremendous volumes of variety of food stuffs including items such as rice, beans, tomatoes, onions, crayfish, onions, pepper, garri among. These products are not released to the market in one instance. They are sourced from many different locations, most times from remote rural communities several kilometres from the markets. There is need to store some products to cater for unprecedented situations such as a sudden increase in demand and in the process save cost. In a similar vein, foodstuffs businesses have to store large volume of produces in order to mitigate any adverse effects that may arise from lapses in the supply side, which may arise due to natural disasters or other logistics issues including disruption in transportation as often witnessed in Nigeria.

Nevertheless, while food stuff marketing in Nigeria today are faced with many challenges, yet they also strive to increase their marketing profitability and survive to sustain growth. More so, these businesses are also expected to ensure the profitability while meeting customers’ demands and defend against competitors. The challenge, therefore, is how to ensure business profitability and distribution network, satisfy customers’ needs in timely and efficient manner, and ultimately maintain a healthy market share. To achieve these, Domenica (2002:8) claims that supply and

distribution network should actually be efficient and effective. In this case, efficient means to minimize resource use to accomplish specific outcomes; and effective, in terms of designing distribution channels. Efficiency is measured by delivery performance, product quality, backorders and inventory level, whereas effectiveness is measured by service quality and the service needs.

On the other hand, it appears that several food stuff businesses in Nigeria have been losing out on potential profits owing to poor management practices such supply and distribution strategies and other marketing logistics. Management is a critical component of any organization because it is at the centre of decision making relating to the distribution and marketing of goods to customers while simultaneously maintaining efficient and effective use of resources. Indeed the survival of food stuff businesses in Enugu and its profitability therefore, hinges on how well the business establishments meet customers’ preferences in terms of service, cost, quality, and flexibility, by designing the supply and distribution networks, which will be more effective and efficient than other competitors’. Optimisation of this equilibrium is a constant challenge for the businesses which are part of food stuff market. According to Lambert and Cooper (2000) management of relationships across the supply and distribution is called supply chain management. Ericsson (2011) state that supply chain management is one of the newer concepts dealing with the evolving complexity within businesses and with logistics as the backbone of supply and marketing orientation. Since the concept of supply chain management emerged in the 1980s it has transformed how markets are best served and how a significant competitive advantage can be gained but also lost if not well managed (Christopher and Holweg, 2011). Rouwenhorst et al. (2000) emphasises how distribution decisions influence all stages of distribution processes from production to end customer making logistics one of the most important functions within a company. The design of a distribution network will affect the structure of the supply chain for several years. Distribution network decisions must also support the strategic objectives of the company in order to ensure the highest possible profitability (Chopra and Meindl, 2013).

The key objective of supply chain management entails integrating the components of supply, distribution and warehousing to minimize system costs and maximize consumer satisfaction through quality service levels (Brewer, 2001). The only means of survival and commercial success in the current competitive market is to maintain a competitive advantage in terms of an efficient supply and distribution. This can only be achieved by figuring out the components of the supply chain that can be created, eliminated or improved. In the end, the battle for market turnover and profitability lies in focusing on the core competencies of a dealer and the management of the distribution and storage processes of the business. As such, warehousing becomes a critical unit of the marketing and profitability of foodstuffs businesses in Nigerian markets, particularly in urban areas like Enugu which depend of foodstuff dealers for household foods. Although distribution and warehousing theory have been extensively studied in terms of optimisation and functional excellence the extension of these concepts into supply chain management has not been fully explored. In addition information at which decision level warehousing strategies are formed is limited.

The central theme of this research it is important to investigate warehousing and marketing profitability of food stuff in Ogbete market. First the food stuff sector play an especially important role in Nigeria as staples in many homes, and secondly, the structure and conduct of the food stuff marketing can affect the economy of the people in the communities and the nation’s economy in significant ways. The study examines warehousing and the marketing profitability of food stuff in Ogbete market to determine factors that influence warehousing strategies and its implications for marketing profitability of food stuffs in the market as well as factors that can impede warehousing of food stuff in the market.

1.2 Statement of the Problem

There is a growing realization that food distributional arrangements can affect the pace of economic development in general and that of food stuff sector in particular. One vital function of the marketing system is to satisfy customer/consumer needs and increase the growth and profitability of the business, thus rationing supplies among consumers and affecting the allocation of profits. According to Daly (1993) many firms fail to recognise the importance of incorporating warehousing in the business strategy. The physical part of customer service can be found in warehouses as this is the last outpost from where goods are distributed, an aspect vital for customer satisfaction. Inadequate utilization of the warehouse in the marketing strategy can therefore hinder companies from successfully serving the customer, thereby undermining profitability. Yavuz (2012) states that warehousing has transformed from being a cost centre and a back office operation adding little value to become a critical component in today’s business world with major impact on profits and other business objectives. The added complexity of increased product profilation, globalisation and consolidation among retailers and manufacturers put pressure on warehouses to be both responsive and cost effective (Maltz and DeHoratius, 2005).

The popular view about the food stuff marketing systems in developing countries in general and those of Nigeria in particular is that the marketing arrangements do not operate efficiently in performing this function (Jones, 1972, p. 2). Several studies that examined the marketing system conduct of the food stuff marketing system and identified of various agricultural commodities and its implications for economic development in Nigeria. However, the impacts of warehousing and marketing profitability of food stuff in urban markets in the country is largely under-researched. The vacuum is little or no empirical knowledge on food stuff warehousing and warehouse strategies of the food stuff sector of Nigerian markets, the behaviour of the various actors in the marketing system and the constraints they face that impact on profitability and impede further innovation and productivity. This study, therefore, examines warehousing and marketing profitability of food stuff in Ogbete Market, Enugu.

1.3 Objectives of the Study

The main objective of the study is to investigate the economic analysis of warehousing and marketing profitability of food stuff in Ogbete Market, Enugu warehousing and marketing profitability of food stuff in Ogbete Market, Enugu. However, the specific objectives are to:

1. Determine the factors that account for the use of warehouse by food stuff businesses in Ogbete Market, Enugu;

2. Establish if the use of warehouse by food stuff businesses increase sales turnover in Ogete Market;

3. Show if warehousing is a significant factor in marketing profitability of food stuff businesses in Ogbete market; and

4. Find out if the lack of capital undermine warehousing of food stuffs in Ogbete market.

1.4 Research Questions

The study is based on the following research questions:

1. What factors account for the use of warehouse by food stuff businesses in Ogbete Market, Enugu?

2. Does the use of warehouse by food stuff businesses increase sales turnover in Ogete Market?

3. Is warehousing is a significant factor in marketing profitability of food stuff businesses in Ogbete market; and

4. Can the lack of capital undermine warehousing of food stuffs in Ogbete market?

1.5 Research Hypotheses

1. H1: Use of warehouse by food stuff businesses significantly increase sales turnover in Ogbete market in Enugu;

H0 Use of warehouse by food stuff businesses does not significantly increase sales turnover in Ogbete market in Enugu;

1. H1: Warehousing is a significant factor in marketing profitability of food stuff businesses in Ogbete market;

H0 Warehousing is not a significant factor in marketing profitability of food stuff businesses in Ogbete market;

1. H1: The lack of capital can undermine warehousing of food stuffs in Ogbete market;

H0 The lack of capital cannot undermine warehousing of food stuffs in Ogbete market