IMPACT OF TRANSPORTATION COST ON CONSUMERS RETAIL GOODS PRICES
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IMPACT OF TRANSPORTATION COST ON CONSUMERS RETAIL GOODS PRICES
ABSTRACT
The effect of transportation costs on consumer retail product pricing (a case study of Gariki Market, Enugu South Local Government Area, Enugu State). The investigation was conducted with wholesalers and retailers.
Data were acquired using a questionnaire distributed to market wholesalers and retailers.
The generated data was analysed using a descriptive statistic tool, and the primary conclusions were the following:
i. Agricultural goods sellers are more affected by transportation costs than manufactured goods retailers.
ii. Profit maximisation was not always their goal, as most dealers enter into business to escape being idle.Chapter one
1.0 Introduction
1.2 Background of the Study
As life began, humans developed a need for fundamental necessities such as food, shelter, and protection, among other things.
At first, man attempted to offer the required goods to satisfy his requirements by engaging in hunting, fishing, and some selective cultivation and planting of food crops, as well as finding shelter among trees, shadows, and using plant leaves to conceal his nakedness.
Man discovered that he could not meet all of his own requirements as he advanced.
Then the exchange procedure came into existence. It began as an exchange of products for goods, sometimes known as trade by barter.
The individual who has a certain product in excess of his current need would hunt for someone who has a need for his product in order to swap it, hence the earliest trading or buying and selling procedures were carried out by retailers via the barter method.
When a common medium of exchange was reversed, commerce by barter became less important in the exchange process. When barter trade was in existence, buyers and sellers did not consider the cost and burden of transporting products in search of a market.
Because money is the unit of measurement, while calculating business expenses, the seller must include the cost of transporting items from the site of production to the point of consumption.
In ancient times, man relied mostly on beasts of burden to move his product from the site of production to the place of consumption; nevertheless, transportation has evolved to be more complex, convenient, and speedier.
Some modes of transit include railway transport, motor vehicles on the road, ships, boats, and aircraft, among others.
The mode of transportation used or employed will be determined by the nature of the product, the location of the market, and the type of market. Transportation is engaged in every stage of production and distribution unit for a product to reach the end users.
The industrial revolution occurred, resulting in an increase in production capacity among producers. Most producers and sellers seek to take advantage of the economic opportunities provided by large-scale production and distribution. They also want to enter major markets and operate in competitive environments.
They must manage costs and processes in order to function effectively and continue in business.
In Nigeria, distribution costs are sometimes seen as one of the factors contributing to rising commodity prices.
The purpose of this study “the impact of transportation cost on consumers retailer goods prices,” a case study of yam prices at the Garriki Market,
Awkunanaw Enugu South LGA, Enugu State, is to determine whether transportation costs constitute a significant proportion of the price of foods, particularly yams in the Garriki market.
1.2 Statement of Problem
For many years, Nigeria’s prices for products and services have been steadily rising. These price rises are said to be the result of rising costs for raw materials, transportation, rent, capital, and labour.
Among these variables, this study will help to assess the extent to which transportation costs affect consumer goods, in particular. This study aims to determine the following:
Consumers claim that rising prices reflect vendors’ profit-seeking behaviour. On the selling side, price rises are blamed on rising input material costs and facilitating intermediaries. It becomes difficult to evaluate which of the assertions is true regarding increases.
According to reports, rising prices continue to make it difficult for many families to afford three square meals per day.
The government, labour, and consumers have expressed alarm and attempted to bring the price surge under control without making any meaningful progress.
1.3 Objectives of the Study
Retailers’ activities in the market affect everyone in society, and most consumers are unsatisfied with the yam market.
i. Determine the effects of transportation costs on the prices of consumer items, specifically yam.
ii. Determine whether the drive for excessive profit influences retailers to set high pricing for goods.
iii. Determine what may be done to address the issue of rising market prices for goods.
1.4 RESEARCH QUESTIONS.
The following research questions are being considered:
1. Does the cost of transportation significantly affect the price of yams?
2. Is it the desire to make a large profit that is behind the rapid price growth of yams on the market?
3. Have government initiatives to reduce prices helped to alleviate the problem of continuous price increases?
4. Do transportation costs cause price increases in other categories of products and services?
5.
1.5 Significance of the Study
This study will be useful for economic analysts who want to trace the roots of inflation to the economy.
It will also be extremely beneficial to marketing and management professionals who may require proper answers to some of their marketing difficulties.
It will be an interesting source of material for academics conducting research on retail pricing for yams and other agricultural products, as well as personnel.
It will also be important information for the government’s regulatory policies on price control and transportation.
It will serve as a guide for business owners in the distribution sector since it will show them how to control expenses and build a competitive pricing strategy.
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