Abstract
The study was conducted to investigate the extent of utilization of marketing mix by palm oil investors in Bayelsa state, Nigeria. Four research questions were developed and answered by the study while four null hypotheses were formulated and tested at p ≤ 0.05 level of significance. The study adopted descriptive survey research design and was carried out in Bayelsa State. The population for the study consisted of 1078 palm oil investors comprising 406 staff of Bayelsa palm company, Elebele and 672 registered palm oil processors and marketers in the State. Multi-stage and random sampling technique was used to select 310 respondents; comprising 147 staff of Bayelsa palm oil company, Elebele and 163 registered private palm oil investors across the State. A structured Extent of Marketing Mix Utilization Questionnaire (EMMUQ) was used to obtain data from the respondents for the study. The questionnaire was validated by three experts; one from the Department of Vocational Teacher Education, University of Nigeria, Nsukka, one from Business Education section of the Department of Vocational/Industrial Education, Niger Delta University, Wilberforce Island, Bayelsa State while the other one was from Bayelsa palm limited, Elebele, Bayelsa State. The reliability of the instrument was achieved using Cronbach Alpha method in which reliability coefficients of 0.87 was obtained for product; 0.94 for price; 0.91 for place, 0.89 was obtained for promotion while the overall reliability coefficient of 0.90 was obtained for the instrument. The questionnaire was administered by the researcher with the help of three research assistants across the state. Mean and standard deviation were used in answering the research questions while t-test statistics and analysis of variance (ANOVA) was used for testing the hypotheses (Ho) at p ≤ 0.05 level of significance. Based on the data analyzed, the findings of the study revealed that palm oil investors in Bayelsa State were not adequately utilizing marketing mix in their palm oil investment in the State. The study also found out that there is significant difference in the mean ratings of the responses of staff of Government Palm Oil Company and private palm oil investors on the extent to which product (branding and packaging) are being utilized by palm oil investors in Bayelsa State. The findings on the hypotheses tested further showed that there is no significant difference in the mean ratings of the responses of the groups of respondents on the extent to which price, place and promotional activities are being utilized by palm oil investors in Bayelsa State. Based on these findings, the study recommended among others that palm oil processors and marketers should introduce better ways of handling the product from processing to the point of sales of palm oil to consumers in the market and that adequate information services should be introduced for effective distribution of the product.
CHAPTER ONE INTRODUCTION
Background of the Study
The production and marketing of palm oil constitute important economic activities in southern Nigeria. Palm oil is a form of edible vegetable oil obtained from the fruits of oil palm tree. The palm fruit is the source of both palm oil (extracted from the palm fruits) and palm kernel oil (extracted from the fruit seeds). In addition to being used as cooking oil and as a component of many processed foods, palm oil is used to make biodiesel. Palm oil is one of the few vegetable oils relatively high in saturated fat such as coconut oil. Palm oil has a sweet taste and an agreeable odour. It is liquid in the tropics, but hardens into ‘palm butter’ under cooler temperatures (Crosby, 2009). The processing of palm oil provide job for majority of people in Nigeria. Olagunju (2008) confirmed that palm oil processing is a major source of income and employment to a large proportion of the resource poor rural population in Nigeria especially in the southern part of the country. Nwachukwu (2009) submitted that in Nigeria, as in most other West African countries, palm oil has always been processed by women using the traditional primitive rural technique of cooking the palm fruits in a pot and pounding the cooked fruits in a
wooden mortar or mashing it using a vessel that resembles a canoe.
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The mash is then squeezed either by hand or any other method to get the oil. The processing adds value and quality to palm oil which enhance its domestic use for food, and industrial use for the production of other derived products. According to Parker (2009) palm oil is mostly used for both food and industrial purposes. Mounts (1983) submitted that palm oil provides the dietary supply of calories that can assure proper utilization of protein consumed. Industrially, Crosby (2009) stated that palm oil is important in the manufacture of soap, candles, liniments and ointments after it has been well processed for quality palm oil. On the quality, Orji and Mbata (2008) stated that the acceptability of palm oil in the market is largely dependent on the physiochemical properties of the oil at the time of purchase. Some of the properties or parameters usually considered include free fatty acids (ffa), iodine value (iv), peroxide value (pv), moisture, impurities content, colour, taste, aroma, melting point, tocophenol and tocotrienol contents (Purseglove, 1995; and Edem,
2002).
The distribution of processed palm oil from the point of production to the final consumers has provided an array of economic opportunities to majority of people in the producing areas, particularly Bayelsa State. For instance, Olagunju (2008) reported that palm oil processing and marketing are major sources of income
and employment to a large proportion of the rural population in Nigeria especially in the southern part of the country. These groups of people invest their money into the processing, packaging, branding and marketing of palm oil and are thereby regarded as palm oil investors.
In the view of Hornby (2003) an investor is an individual or organisation who puts money in a business in order to make profit. An investment could either be controlled by the government or private individual. In the context of this study, government owned palm oil producing investment is a public palm oil processing and marketing firm that is being funded and managed by the government. On the other hand, the private investors in palm oil industry are the individual enterprise owners who acquire the necessary assets as processors, wholesalers and retailers of palm oil for the purpose of profit making. The processors acquire ripped palm fruits, process and package it for sale to assemblers, wholesalers or retailers. Wholesalers are one of the important middlemen in the channel of distribution who deals with the goods in bulk quantity (Kobayashi and Vining, 2004). These wholesalers buy palm oil in bulk from the palm oil processors and sell in relatively smaller quantities to the retailers. Retailers are the traders who buy goods from wholesalers or sometimes directly from producers and sell them to the consumers
(Kassidi, 2003). The retailers usually operate through a retail shop and carry out marketing activities in small quantities.
Marketing constitutes an important aspect of any production investment. Thus, Food and Agriculture Organisation (2009) reported that effective marketing is an essential component of activities to improve food security. Marketing according to Arene (2003) involve all those legal, physical and economic services that make it possible for products from producers to get to consumers in a form desired at the price agreeable to both producers and consumers for effecting a change of ownership of possessions. In the view of Kotler and Keller (2006) marketing is all about getting the right goods and services to the right people at the right place, right time, right price, with the right communication and promotion. This clearly indicates the significance of the application of marketing mix in effective distribution of products.
Marketing mix are factors that help a company or firm to sell its products. Four elements are normally distinguished: getting the right product to the market; selling the product at the right price; ensuring that the promotion is right—that is, advertising and marketing for the product; and ensuring that the product is distributed to the most convenient place for customers to buy it (Encarta, 2009). The elements are the marketing ‘tactics’, also known as the four Ps (Odi,
2009). The variables of the marketing mix otherwise known as the four Ps include: product, price, place and promotion. Marketing mix are four decision making variables that help producers in effective marketing of their products (Arene, 2003).
Product refers to the goods and services that are offered to customers. Apart from the physical product itself, there are elements associated with product that customers may be attracted to, such as the way it is packaged (Ehmke, Fulton and Lusk, 2008). Apart from packaging, other product attributes that palm oil investors can use to facilitate the marketing of their products include quality, features, options, services, warranties and palm oil brand name. Price as a variable in marketing mix refers to how much is being charged for service. Price is perhaps the most important reason why buyers regularly patronize a particular product or a store. Traditionally, price is seen as the major determinant to buyers’ choice (Kotler and Keller
2006). The pricing approach of an investor according to Ehmke, Fulton and Lusk (2008) should reflect the appropriate positioning of the product in the market and result in a price that covers the investors cost per item and includes a profit margin.
Place refers to the channels of distribution used to get the product to the customers. In marketing mix, Farrall and Lindsley (2010) describe place as the location of shop, outlet, marketing
channels or the accessibility of the products or services by the prospective customers through effective distribution. Ibekwe (2001) explained that distribution is that aspect of marketing concerned with moving goods from the producers to the consumers. This is done through distribution channels, which involves the use of intermediaries such as producer, wholesaler, retailer and finally the consumer. The “promotion” refers to the advertising and selling part of marketing. The purpose of promotion is to get people to understand what the product is, what they can use it for, and why customers should want it (Ehmke, Fulton and Lusk, 2008). In the submission of Arene (2003), promotional activities include advertisement and sales promotion. Osuala (1998) defined advertising as any form of non- personal presentation and promotion of ideas, goods, or services by an identified sponsor which can be undertaken by the use of any of the following media: magazine, newspaper, radio, television, billboards, and internet. Kotler and Keller (2006) added that promotional activities such as advertising and branding influence intended target market and provides services because it gives information about products and the job of selling. To be effective, the promotional efforts should contain a clear message targeted to a specific audience reached via an appropriate channel.
The aforementioned variables of marketing mix are of great economic significance to the success of any business such as palm oil enterprise. Palm oil is a very important produce in the Niger Delta region, and Bayelsa State in particular (Bayelsa State Government,
2010). It is imperative to state that the processing, packaging, handling and distribution of palm oil in Bayelsa State like other parts of the country as noted by Nwachukwu (2009) could be responsible for the purest quality of Nigerian palm oil in the market resulting into low profit of the investors. This unfavourable trend in Nigerian palm oil industry could be as a result of so many factors of which the suspected poor application of marketing mix in investment promotion is likely to be one. Consequently, if the extent of the utilization of marketing mix by palm oil investors is assessed, it will reveal the present level of application of marketing mix by the investors. Therefore, this study aims at determining the extent of utilization of marketing mix by palm oil investors in Bayelsa State.
Statement of the Problem
Palm oil is widely used for both food and industrial purposes all over the world. Effective processing and distribution activities of palm oil involve the application and utilization of marketing mix. The marketing mix in the palm oil industry includes: products (packaging
and branding), price (fixing appropriate prices and charges on the product), place (channels of distribution), and promotion (advertising and personal selling).
It is imperative to state that marketing mix had not been well utilised in the palm oil industry in Nigeria and the case of Bayelsa State is not an exemption. This makes the majority of the palm oil produced in Nigeria having the poorest quality and patronage in the international market (Orji and Mbata, 2008). The processing and distribution methods in the palm oil industry result in limited production capacity, poor quality palm oil products and consequently the expected profit by the processors and marketers are not realised due to low market value of their product. This is evident in Alemma- Ozioruva (2010) who blamed the failure to produce palm oil in commercial quantity on the neglect of the agricultural sector by government following the discovery of crude oil.
This was corroborated mostly by the ineffective utilization of marketing mix in packaging, pricing, place (distribution) and promotion both in the local and international markets. Therefore, if the extent of the utilization of marketing mix is determined, it will reveal the level at which the palm oil processors and marketers are utilizing it in the palm oil industry. Hence, this instigated the
researcher to determine the extent of utilization of marketing mix by palm oil investors using Bayelsa State Nigeria as case study.
Purpose of the Study
The major purpose of this study was to determine the extent of utilization of marketing mix by Palm oil investors in Bayelsa State.
Specifically, the study sought to determine:
1. the extent to which product (packaging and branding) is utilized by palm oil investors in Bayelsa State.
2. the extent to which price is utilized by palm oil investors in
Bayelsa State.
3. the extent to which place (channel of distribution) is utilized by palm oil investors in Bayelsa State.
4. the extent to which promotion is utilized by palm oil investors for in Bayelsa State.
Significance of the Study
The findings of this study will be of great benefit to business education students and graduates, Business education lecturers, palm oil investors in the State, skill acquisition centres Bayelsa State Ministry of Commerce and Industry, curriculum planners and fellow
researchers with research interest in utilization of marketing mix by entrepreneurs.
The findings of this study will help business education students and graduates a great deal in acquiring the required saleable skills in effective application of market mix. On the other hand, the findings of this study will provide the required information to the Business education lecturers for effective teaching of the application of marketing mix. The lecturers could use the findings that will emerge from this study as a manual or guide to teach the students and to equip them for self or paid employment on graduation.
The findings of the study will serve as eye opener to the present palm oil investors in the state to help identify their short falls and potentials in the business. The findings will also help to encourage future investors in palm oil enterprise in the State. The findings will also be beneficial to existing skill acquisition centres in the state by packaging the identified marketing mix items into teachable scheme for training the trainees in the centre for efficient application of marketing mix in the day-to-day business operations. The associations of palm oil investors in the state will expand and can form functional cooperatives since new members may be willing to join them making it more relevant in alleviating poverty in Bayelsa State.
The findings would be useful to Bayelsa State Ministry of Commerce and Industry as it would provide a solid base for the control of palm oil investors in the effective and efficient application of marketing mix in their business transactions. The State Government will benefit through income tax accruing from the investors. This will invariably increase internally generated revenue of the State. Curriculum planners will benefit from the findings of this study through its provision of relevant information for curriculum review and update to meet societal needs.
Finally, the findings will help to provide useful research information to fellow researchers with keen research interest in application of marketing mix for reliable production of goods and services.
Research Questions
Based on the specific purposes of the study, the following research questions were answered by the study:
1. to what extent is product (packaging and branding) being utilized by palm oil investors in Bayelsa State?
2. to what extent is price being utilized by palm oil investors in
Bayelsa State?
3. to what extent is place (distribution channel) being utilized by palm oil investors in Bayelsa State?
4. to what extent is promotion being utilized by palm oil investors in Bayelsa State?
Research Hypotheses
Based on the research questions to be answered by this study, the following null hypotheses are formulated to guide the study and were tested at 0.05 level of significance:
HO1: There is no significant difference on the mean ratings of the responses of staff of Government Palm Oil Company and private palm oil investors on the extent to which product is being utilized in Bayelsa State.
HO2: There is no significant difference on the mean ratings of the responses of processors, wholesalers and retailers on the extent to which price is being utilized by palm oil investors in Bayelsa State.
HO3: There is no significant difference on the mean ratings of the responses of staff of government palm oil Company and private palm oil investors on the extent to which place is being utilized in Bayelsa State.
HO4: There is no significant difference on the mean ratings of the responses of staff of Government Palm Oil Company and private palm oil investors on the extent to which promotion is being utilized in Bayelsa State.
Delimitation of the Study
This study is delimited to the determination of the extent of utilization of marketing mix by palm oil investors in Bayelsa State. The assessment is made to cover the extent to which four major variables of marketing mix (product, price, place and promotion) are utilized by palm oil investors in the study area. According to Odi (2009); Farrall and Lindsley (2010) marketing mix goes beyond the four Ps to include: people, physical evidence and process. In this study, the marketing mix was limited to the conventional four Ps.
This material content is developed to serve as a GUIDE for students to conduct academic research
EXTENT OF UTILIZATION OF MARKETING MIX BY PALM OIL INVESTORS IN BAYELSA STATE NIGERIA
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