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Histoory about nigeria markrting development
African Journal of Management and Administration, Volume 6, Number 1, 2013
Copyright©2013 Devon Science Company ISSN:2141-0143Website: africanjournalseries.com THE NIGERIAN MARKETING SYSTEM: ITS DEVELOPMENT, PROBLEMS AND PROSPECTS. Nwankwo Cosmas Anayochukwu and Ndubisi Emmanuel Chidozie Department of Marketing Anambra State University, Igbariam, Nigeria ABSTRACT This paper on the Nigerian marketing system explained the developmental processes in marketing profession in recent time as well as the problems and prospects. The marketing system of Nigeria cannot be studied without pre-examination of its economic system. This is why the country even till now is still undergoing some hard time. The problems facing Nigeria as a result of its negligence of marketing system includes; low marketing education, preferences for foreign products and low patronage for non-essential products, high cost of production, inadequate infrastructures, few competitive opportunities, excessive government regulations and interference, political instability and civil unrest and among others. Regardless of these problems, solutions are proffered to tackle and improve the situation in the nearest future. Such solutions are; Nigeria large unexplored markets should be harnessed, attractive government incentives, growing affluence, to mention but a few. In conclusion, all hands must be on deck in order to drive the marketing system of this country to a greater height so that standard of living can improve. Keyword: Marketing system, Nigeria Economy, problems, prospect INTRODUCTION The origin of Nigerian marketing system could be traced from the development of the Nigerian economy. This is to say that both sectors of the Nigeria history cannot be determined when one ignored. According to Uzoka (2008), Nigeria is an entity with landscape of about 941,849km, making it the most populous country in Africa and with the population of over 163million people (NPC, 2011). Nigeria is made up of 36 states, the Federal Capital Territory and with about 774 Local Governments. The country is agrarian in nature with a tropical climate and varieties of ecological belts ranging from the rain forests in the south to the sahel savannah in the North. It is also endowed with diverse natural resources including solid minerals, oil and gas. Nigeria is classified as one of the third world countries which mean that production and distribution of goods and services are still undergoing some developmental processes. Marketing System on the other hand is all about the exchanges that take place in a society along with the facilitating institutions (Ubanagu and Ndubisi, 2004). In other words, marketing system comprised of the core marketing system and public marketing system which are the local companies, the suppliers, intermediaries, competitors, customers, government regulatory agencies, credit commodity, independent press, financial institutions, etc (Kotler, 2003). Since the Marketing System works with the economic system, it is imperative to say that the Nigerian Marketing System has faced a lot of social and economic problems ranging from the country slow pace of development to its present state of both economic and political crises. It is pertinent to refer to the country’s oil boom in the early 70’s that resulted to the total aboundment of all the other sectors of the economy. Furthermore, the focus of Nigerians in politics gave the country marketing system another look, because those charged with the responsibility to represent the society’s interest in key decisions making misrepresented their people thus making citizens to forego those areas (agriculture, technical skills, education) that would have propelled the country to greater height. To fully buttress this, the researcher is determined to examine the developmental trends in Nigerian Marketing System alongside the challenges, and solutions. DEVELOPMENT OF NIGERIAN MARKETING SYSTEM The development of the Nigerian Marketing System started years ago, even before Nigeria had her independence. Nigeria according to Anyanwu (2000) was very much unlike her colonial masters because of her reluctance in developing her human and material resources. While British government was there developing her marketing system and economy, through research and scientific discoveries, Nigeria depended on her for eventual development. It must be noted that it was the course of history and little was done at that time to change the country’s destiny. The implication of this slim foundation of Nigeria was both favourable and unfavourable. Nigerians did not have to undergo the labourious processes involved in order to attain a reasonable measure of industrialization as was the case with Britain and
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Copyright©2013 Devon Science Company ISSN:2141-0143Website: africanjournalseries.com United States of America. But because she found her economy built on an un-solid structure the near collapse of the economy came much earlier than expected. The Nigeria Independence was achieved in October, 1960 and from that period to the late sixties, Nigeria was self sufficient in the production and distribution of most agricultural products and, in fact, had a favourable balance of payments. Anyanwu (2000) has it that Nigeria in 1970 had started realizing huge sum of money from oil which eventually led to the almost total abandonment of the agricultural sector. The revenue from oil was so astronomical that Nigerian’s external reserve rose remarkably. In December 1973, the nation’s reserve stood at N317.26million, by December 1974, they had reached N3, 398.14million and by May 1981, the reserves had stayed at N6.4billion (FGN, 1985). However, the periods 1973 to 1981 were enough to transfer Nigeria into an industrial giant but the effects of poor structural foundation of the economy took its bite on the management of the country’s revenue. The result of this experience was because of the acute financial problems. Today, Nigeria is facing series of hardship brought about by misappropriation of funds and bad management. A series of economic Structural Adjustment Programme was embarked upon and much depended on their implementation. All these adverse experiences on financial circles, the economy and the political games in Nigeria affected the Marketing System The Nigerian Marketing System cannot be discussed today in isolation of the Nigerian economy. According to Uzoka (2006), the Nigerian economy is divided into ten sectors of which nine of them are for public and one is private. Below are the analyses of the sectors. Agricultural Sector The agricultural sector which covers all the primary production activities as crops, livestock, forestry, wildlife and fisheries employed about 80% of the countries working population in 1960, and its contribution to GNP declined gradually from 63.4% in 1960 to 23.4% in 1975, both food and export crop production declined during this period. According to CBN (2010), the performance of agricultural sector improved in 2003. The provisional aggregate index of agricultural production increased by 5.7%, compared with the 6.8% increased in 2009. The growth was blow the national sector target of 8.0%. The increased agricultural production was propelled by the favorable wealth condition and the sustained implementation of various agricultural programmes initiated in 2009. Cash crop production contributed to the growth of output. The output of staples grew by 5.7%, compared with the 6.2% growth in 2009. Similarly, the output of cash crop increased by 7.2%, relative to the level in preceding year. The crops subsector sustained its impressive performance on account of the favourable wealth conditions in most part of the country and the continuation of various government programmes initiated in 2009. One of such initiative is the identification of, and targeted intervention in 13 strategic crops by the federal government (CBN, 2010). On the other hand, the livestock production increased by 6.4%, compared with the 6.8% increase in the preceding year. The development was as a result of the measures taken to control livestock disease, especially the deadly avian flu, and improved access to credit. Further analysis showed that poultry and beef production increased by 19.5% and 8.9% respectively. When compared with the growth rates in 2009. This was as a result of the support provided to expand the livestock value chain, including the establishment of modern abattoirs and sanitary sale outlets across the country. In addition, fish production increased by 7% from its level in 2009 to 759, 163 tonnes. This was, however, lower than the estimated national demand of 1.5million tones, but reflected the impact of the various efforts by government towards improving activities in the value chain of the sub-sector. Furthermore, forestry production increased by 4.9% as recorded in 2009. The increase was attributed to the sustained demand for wood products. The Forestry Research Institute of Nigeria (FRIN) continued to intensify efforts in the supply of improved breeder seedlings to replace the harvesting tree stocks in order to sustain wood production. The challenges faced by the sector in 2010 were inadequate and untimely distribution of Fertilizer, dearth of processing and storage facilities and an inefficient transportation infrastructure.
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Copyright©2013 Devon Science Company ISSN:2141-0143Website: africanjournalseries.com On the part of agricultural prices of most Nigeria’s export commodities, CBN (2010) said that the prices were higher in 2010 when compared to the previous year. The overall index computed in US dollar terms, stood at 727.7 (1990=100), representing an increase of 26.9% and 31.4% respectively over the level in 2009. The increase in the price of cocoa was attributed, largely to the relatively strong demand brought about by the cut in output, arising from bad weather conditions in some producing countries, the spread of crop diseases, smuggling activities in some producing countries, the fear of supply shortage in 2011, and currency fluctuations Coffee, soyabean, cotton and copra recorded price increases of 5.6, 6.2, 20.9 and 9.4 percent, respectively. In Naira terms, the all-commodities price index increased by 29.2% to 10347.7 (1990-100) in 2010. The price of cocoa, palm oil, coffee, copra and soyabeans recorded increase of 46.9, 20.9, 31.4, 5.6, 7.2 and 6 percent respectively. From the available data, domestic prices of most commodities increased from 1.6% to 72.3%. The increase in prices was attributed to high cost of firms inputs and increased demand from agro-procession industrial users. Industrial Sector The index of industrial production, estimated at 121.5 (1990=100) increased by 2.8% over the level in 2009. This was driven by the increase of 1.4% and 1.8% in the manufacturing production and mining indices, respectively (CBN, 2010). Industrial sector has contributed to the GNP and had consistently grown from 1960 to date. The components of this sector include alimentary industries (food, drinks, beverages, tobacco), agro-industries (textiles, apparels, leather and footwear, saw milling, paper, wooden furniture, wood products, rubber, plastic products, etc) petrochemical industries, construction industries, metal industries, transportation and equipments industries. The major constraints of this sector include inadequate capital, lack of indigenous entrepreneurship and scarcity of technical competence, administrative bottlenecks and restrictive industrial policy (Uzoka, 2008). Mineral Sector In the mineral sector, the main minerals of economic importance include tin, crude petroleum, columbite, iron ore, natural gas and small quantities of such trace elements as lead, zinc, gold etc. this sector has contributed to the GNP since 1960. However, according to the annual report and statement of CBN (2010), Nigeria’s aggregate crude oil production, including condensates and natural gas liquids, average 2.13million barrels per day (Mbd), or 777.45million barrels in 2010, compared with 1.82Mbd or 664.3Million barrels, in the preceding year. This represented a 17% increase relative to 2009. The development was attributed to the success of the Federal Government’s amnesty programme, which brought relative peace to the Niger-Delta and paved the way for improved oil production. In addition, the production of natural gas increased by 39.7% to 58,0005.96Million cubic meters (MMM3) above the level in 2009 of the total, 76.7% was utilized, while the balance was flared. About 48.9 percent was sold to industries, such as the PHCN, cement and steel companies, as against 36.4% in 2009. While 15.1% was sold to the Nigeria Liquefied Natural Gas (NLNG). Gas converted to natural gas liquid and gas lift accounted for 3.8 and 3.3 percent respectively, while the oil companies used 7.1% as fuel gas. Coal is another mineral component. Estimated aggregate coal consumption remained low at 500.5tonnes of coal equivalent. The stagnation in coal consumption according to the CBN report was a reflection of the shift of industrial consumers to more environmentally friendly sources of energy. Transportation and Communication Sector Olakunaori (2005) opined that the major transportation components include road for vehicles, traffic, railways for locomotives, airways for aeroplane and water ways for ships and boats. According to the CBN (2010), there was a remarkable improvement on domestic airline in 2010. The number of passengers airlifted increased by 12.8% from 9.5million in 2009 to 10.7Million. The aircraft movement increased by 8% from 188,649 in 2009 to 203,710 in 2010. The development reflected increased competition, improved government funding and greater public confidence in the sector. The performance of this sector was also enhanced through the intensified efforts of the rehabilitation and replacement of the obsolete infrastructure in the sector by the Federal government, in order to achieve full implementation of the international Civil Aviation Organisation’s standard.
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Copyright©2013 Devon Science Company ISSN:2141-0143Website: africanjournalseries.com On the other hand, the operation of foreign airline was not left out because there was a remarkable improvement in the sector in 2010. This was because of the increased numbers of passengers which increased by 7.1% to 3.2million, compared with 3.0million in 2009. International aircraft movement also increased by 7.9% from 32,643 in 2009 to 35,214 in 2010. The development could be attributed to political and economic stability in the country. Also, the performance of the Nigerian Railway Corporation (NRC) increased in 2010. The Federal Government of Nigeria determined to rehabilitate and upgrade major projects in these sectors. The rehabilitation projects include the upgrade of the outstanding 22km of the 257km Ajaokuta-Warri standard guage; Jebba-Kano axial line; the 221km Zaria-Kaura Namoda rail line; the culvert and drainage work at the Akerri-Minna, Kaduna-Kano and Kano-Challowa sections. Work on the 488km Lagos-Jebba track rehabilitation, contract to China Civil Engineering Construction Corporation (CCECC), also recorded significant progress. In the maritime sector, the sector recorded remarkable progress in 2010 when compared to the preceding year. This was attributed to the successful implementation of the Federal Government Port Reform Programme aimed at making Nigerian Ports favourably competitive, with other ports in the world. The Federal Government also pursued other key maritime programmes like the safety, security, marine environment protection and human development. With these improvements in the sector, the sector was reflected in the average turnaround time of vessels for all the ports, which declined to 5.9 days from 6.7days in 2009, while the average waiting time of vessels in all ports dropped to 27.4hours from 50.4hours in 2009. In the same, the revenue generated and collected at $592.2million and $457.8million respectively indicating a growth of 15.3 and 9.8 percent over 2009, respectively. Available data showed that the number of ocean going vessels completed in 2010 stood at 4.962, reflecting an increase of 79%. The total gross tonnage of the ocean going vessels rose by 20.1% to 108,621,872 compared with 97,796,560 in 2009. Coastal vessels that called at the ports in 2010 increased by 26.1% over 2009 to 21,950, while the gross tonnage of the coastal vessels grow by 18.6% to 6,818,827 in 2010. More also, the communication sector sustained laudable achievements through the Global System of Mobile Communications (GSM). As at December, 2010, the combined subscribers strength of the telecommunications sub-sector had increased by 18.5%, over its December, 2009 level, to a total of 88,348,026 active lines. Consequently, the tele-density increased from 53.23 lines per 100 inhabitants. This exceeded the International Telecommunication Union (ITU) minimum standard of 1:100. In addition, the output of the sub-sector grew by 34.9% in 2010 and accounted for 4.6% of the GNP. Other developments in the sub-sector include the launch of compulsory sim card registration in May 2010. Service Sector The social service sector whose major components are education, health, information, labour and social development and sports. These components provided services to the economy and their capital and recurrent expenditure are high. But in terms of output, their products are indirect in that they help to raise the productivity of people who enjoy their services in the country. The major problems are those of inadequate manpower energy, material equipment and capital. The Administrative and Development Sector The administrative development is also another key in the Nigeria economy. The major components of this sectorial urbanrural sub-sector, cooperative-community development sub-sector, defence-security sub-sector, finance sub-sector and general administration sub-sector. The problems facing this sector is that of excess capacity, bureaucratization capitalization, conflicting attitudinal human relation and inadequate information communication. Infrastructure Sector This sector comprises of water and electricity with rapid industrial and social economic development. According to CBN (2010), the total installed electricity generation capacity stood at 8815mega watts in 2010, an increase of 4.1% over the level in 2009. The composition of the electric power in particular had been a source of problem hence the declaration of state of emergency on power by the incumbent President. As at now, it is yet to improve. The Foreign Sector The component of this sector anchored on Standard Industrial Trade Classification. Classification of exports and imports include – food, beverages and tobacco, crude minerals, minerals, fuels, animals, and vegetable oils and fats. Chemicals,
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Copyright©2013 Devon Science Company ISSN:2141-0143Website: africanjournalseries.com manufactured goods and machinery and transport equipment and miscellaneous manufactured articles. The problems with their sector include: fluctuation in world commodity markets inflation, inadequate international economic, order power of multinational corporations, and the oligopolistic nature of exporting and importing institutions in developed countries. Private Sector The sector is a very dynamic sector and complementary to the other nine public sectors. Though the public sector operators are presently engaged in transportation, power supplies, while the private sector is a large operator in agriculture, mining and quarrying, manufacturing and crafting, small scale industries, hotel, distribution, residential accommodation, transport services, building and construction and consultancy services and recently communications. PROBLEMS In view of all these sectors that made up the Nigeria economy and the marketing system in general, we shall look at the general problems confronting the Nigeria Marketing System in recent times. They are; Low Marketing Education: A well informed and educated people tend to be prosperous investors and consumers. This is because they would imbibe the culture and tenets of marketing. But marketing education is still generally low in developing countries. Many decision makers and managers of multi-national do not know what marketing is all about. Even when some people acquire higher degrees in the field of marketing and business administration, they come out doing the contrary, instead of practicing the true marketing concept or relationship marketing for the benefit of the society as a whole. In situations like that, marketing will not contribute meaningfully to the development of these economies. Nigeria is an example of one of those countries suffering this fate. Most of the people, though educated, yet often compromise ethical marketing practices for worst alternatives such as sharp practices, unwholesome behaviour and smuggling that contribute less to gross total earnings of any country (Ewah and Ekeng, 2009) Preferences for Import Products: The inability of Nigeria to produce most goods thus making her citizens to prefer buying from the more industrialized countries made the development process of local industries and commercial life of the people more impoverished (Ewah and Ekeng, 2009). Developing countries like Nigeria constitute 71% of the world’s population, but only contribute about 12% of the world’s industrial production that often boost marketing in these economies. Why should this be the case, and who is to blame for the structural discrepancy and imbalance? What actions could these countries adopt to accelerate the pace of industrialization and development in order to boost the tempo of marketing (Mkpakan, 2004). It is generally felt that locally-made goods are only for the poor, uneducated, and those who are not fashionable, while the consumption of imported goods and services is taken as status symbol for the elite and affluent in developing countries, even when some country’s products are of less quality when compared to similar local brands. This situation makes the growth of marketing system and satisfaction of consumers locally difficult (Olakunori, 2002). Low Patronage for Non-essential Products and Services: Majority of the people in developing countries such as Nigerians is poor, and their per capita income is below average. This makes it imperatively difficult for them to buy luxurious goods and at the same time satisfy their basic needs for food, clothing, and accommodation. Non essential goods and services receive low patronage thus leading to low patronage for certain categories of goods do not present attractive marketing opportunities that would ginger investment overture. High Cost of Production: Marketing has gone through several hard times in most developing countries because virtually all production skills and equipment are imported from the developed world. The cost of acquiring equipment and other inputs used for production locally to boost the marketing system are sometimes extremely exorbitant for the poor developing countries like Nigeria to buy and finance. The heartfelt problem is that agricultural products that contribute less to GNP of the county’s economy have been abandoned. This is because these products are sold at lesser prices in the world market. The income generated from them could only buy little from all that are needed to encourage domestic production, in order to enhance marketing system. This reason strengthens consumer’s preference for imported products and results to low demand for locally made goods. This affects the marketing potentials of the home industries and equally has a adverse effect on both the micro and macro- marketing system of Nigeria. Poor Infrastructures: A well endowed country like Nigeria blessed with many mineral resources have little infrastructure that will boast its developmental activities via marketing system. The present situation where Power Holdings Company of Nigeria (PHCN) is fond of giving epileptic and erratic power supply made it difficult for businesses to function in Nigeria, coupled with the poor road network and transport facilities, poor communication, distressed banks, malfunctioning ports and trade zones, among others. Apart from the deliberate embezzlement by some top government officials, the government is yet to provide these infrastructures, and this has made it difficult for marketing activities to be performed effectively and efficiently. Moreover, the inadequacy and poor state of these infrastructures contributed to high cost of doing business in Nigeria. Low Competitive Opportunities: Competitive businesses are not much in Nigeria. The commonly found activities are peasant farmers, petty traders and negligible number of investors that are not engaged in multimillion businesses. In Nigeria one can find competitive businesses mostly in the service industry, which contribute less than two percent of GDP (CBN, 2010). But in
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Copyright©2013 Devon Science Company ISSN:2141-0143Website: africanjournalseries.com the manufacturing sector nothing can be said of this, because there is no competition. In most developed societies economic policies have long assumed that competition among businesses is the most efficient method of producing and marketing goods and services. Proponents of this philosophy contend that it results in maximum productivity and forces inefficient organizations and businesses to terminate their operations. It gives the consumer or buyer the opportunity to choose from several competing companies rather than buy from a monopolist. This stimulates creativity in seeking solutions to marketing problems especially in developing countries where such problems are more (CBN, 2000). But marketing in the true sense is usually at its best where and when there is real competition. Unfortunately, competition is at the lower ebb in developing countries, this might not be unconnected with the level of poverty and underdevelopment in the continent. But developed countries like USA, UK, Japan and emerging economies in Asia are competing amongst themselves in the manufacturing and supply of different types of products to newly found markets in sub-Saharan Africa. This is because they have the technology and financial backing. Over- Regulation of Business by Government: Another major problem that has be-deviled the performance of marketing system especially in Nigeria has been the issue of government regulations and interferences in the activities of businesses and corporate firms. For instance, the over regulation of the Nigeria economy especially between 1970-1985, including the enactment of the indigenization decree, which excludes foreign interest from certain investment activities as well as the existence of complex bureaucratic requirements for direct and portfolio investments were among the major constraints that hindered the development of marketing climate and foreign investment inflow (Balogun, 2003). According to Ewah and Ekeng (2009), Nigeria is one of those countries that have passed through one form of regulation or deregulation to another depending on the political class that is in power. Instead of allowing the market forces of demand and supply to operate and determine how much consumers are to pay for the consumption of the goods and services. The haste to get their economies developed and quickly catch up with advanced Nations often lead developing countries to over- regulate business activities and restrict the activities of free enterprise. This makes marketing difficult, since decisions could be taken from a purely economic perspective. Political Instability and Civil Unrest: Rapid economic growth and development of marketing techniques cannot be achieved or attained in an environment of political and social instability or hostility. Political stability implies an orderly system for positive change in governance and peaceful co- existence amongst the citizenry. That poses a great challenge to marketing. Therefore, marketing does not thrive where there is political instability and insecurity or civil disturbances like the case in Nigeria where no day passes without hearing crises like Boko Haram, Niger Delta militant attack and lot more. For Nigeria the issue in the Niger Delta and part of the north gives cause to worry because most of the foreign investors and multi-nationals have relocated to the neigbouring country because of the continuous molestation and threat by militants and Boko Haram terror, if nothing is done to salvage the situation. Recent studies show the conflict rating of Nigeria, Ghana, South Africa, Kenya and Egypt. Amongst the five countries Nigeria has the highest figures especially after 1998. The above Situation reinforces uncertainty, instability, and increases the risk of doing business in Nigeria. Thus investment overtures become difficult in such localities or geographical areas and this undermines the performance of marketing. PROSPECTS Despite the numerous problems confronting marketing system in developing countries, there exist prospects and opportunities for future growth and development of marketing as the pivot of developing economies. These prospects are explained as follows; Growing Population: Before multinational companies establish their plant in any country they expect to have ready market for their products and services. No business flourishes where people are not living or where it is not habitable by people. Developed countries with their small population and saturated domestic markets prefer marketing their products and services to emerging markets in developing countries. Nigeria being one of the most populous nations (about 163 million people) in Africa is a ready market for both domestic products and foreign brands. This is because marketing does not operate in a vacuum but requires a large population of people with the willingness to do business and patronize businesses. Therefore the high and growing population of developing countries is an attractive incentive, as they represent large potential markets. Absence of Competition and Large Unexplored Markets: By virtue of Nigeria large population, it is sad that they have large markets that are not yet served or are partially served. Thus they are not as saturated as those of developed countries. Hence, there is hardly any form of intensive competition especially amongst serious manufacturers like “ANAMCO” a motor manufacturing assembly in Nigeria. The economies of these nations hold great opportunities for innovators, investors and marketers to enjoy booms in their markets with much challenge from competitors within and outside. Attractive Government Incentives: Trade policies in Nigeria are becoming quite favourable to both local and foreign investors. These incentives include profit tax holidays, reduced or even free customs and excise duties, liberalization of immigration and profit repatriation laws for foreign investors. There are also improvements in infrastructural facilities that will ginger the performance of marketing in these economies. According to Pearce (1998) liberalization encourages the adoption of
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Copyright©2013 Devon Science Company ISSN:2141-0143Website: africanjournalseries.com policies that promote the greatest possible use of market forces and competition to coordinate both marketing and economic activities. Growing Affluence: Quite a large number of the consumers in developing countries are becoming affluent. This will enable them to have reasonable discretionary income and purchasing power. This means that a growing number of the consumers in many developing countries can now afford luxuries and other products they could not purchase in the time past. In Nigeria the business climate is expected to improve tremendously with the President Musa Yar Adua of blessed memory’s seven point agenda, the people will become more empowered and their purchasing power will be enhanced for both consumption and investment purposes. The government has equally taken the issue of workers/staff remuneration seriously, such that salaries now come as at when due and the take home package of most developing countries these days is quite commendable when compared to what it was few years back. Available data from the Nigeria living Standard survey conducted in 2003/2004 indicated that the incidence of poverty exhibited a downward trend. It declined from 70% in 2000 to 54.4% in 2004 and it is expected to decline more in the years ahead (CBN, 2005). This of course presents brighter prospects for marketing. Availability of Cheap Production Inputs: Most developing countries are endowed with abundant human and material resources that are yet untapped. For example, according to CBN (2000) Nigeria remains endowed with abundant natural resources, good weather conditions and a large population. These will be readily handy for companies and businesses to exploit. Despite the high level of poverty and low exchange values of the national currencies of developing countries, labour and raw materials or inputs are often found to be cheap and it is envisaged that in the nearest future it will be cheaper because of better opportunities and more goods will be produced for consumption. The absence of serious competition also makes it easy to source these production inputs and reach different market segments. This is why most multinationals are more marketable and profitable in developing countries than their industrialized countries. Rapid Economic Development: Olakunori (2002), the economies of developing nations are growing rapidly as a result of the efforts being made by their various governments and the developmental agencies of the United Nations towards this direction. These results to income re-distribution and increased purchasing power and discretionary income are also enhanced. Thus, it is expected that the demand for products to satisfy higher order needs will increase and the general atmosphere of business in the continent will become more conducive and all these mean well for marketing in sub-Saharan Africa and Nigeria in particular. CONCLUSION Despite the numerous problems facing marketing system in developing countries- Nigeria, there are good prospects for the future hence a good marketing system performance is the answer to the underdevelopment of developing countries. When adopted and practiced, marketing system will help to develop appropriate technologies as developing nations provide for the needs of the people and enhance their standard of living, create job opportunities for the unemployed, wealth for entrepreneurs, a means towards affording education and enjoyment of leisure. Therefore the government and individuals are encouraged to join hands and see to the development and appreciation of marketing in all the economies. REFERENCES Aigbiremolen, M. O. and Aigbiremolen, C. E. (2004). Marketing Banking Services in Nigeria.The CIBN Press Ltd Lagos, Nigeria. Anyanwu, A. (2000). Dimension of Marketing, Owerri, Avon Global Publisher. Baker M. J. (1985). Marketing: An Introductory Text. Macmillan Publishers Ltd. London. Balogun, E. D. (2003). In CBN. Foreign Private Investment in Nigeria. Proceedings of Cassel Ltd, London WCIR 4SG Macmillan Publishing Co. Inc. New York. Bigsten, Arne (2000). “Globalization and Income Inequality in Uganda” Paper presented at the Conference on ‘Poverty and Inequality in Developing countries: A Policy Birdsall, Nancy, and Amar Hamoudi (2002). “Commodity Dependence, Trade and Growth: When ‘Openness’ Is Not Enough”. Working Paper No. 7, Center for Global Development,Washington, DC. CBN. (2000). The Changing Structure of the Nigerian Economy and Implications for Development. Published by Realm Communications Ltd Lagos. CBN. (2003). Foreign Private Investment in Nigeria. Proceedings of the Twelfth Annual Conference of the Regional
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Copyright©2013 Devon Science Company ISSN:2141-0143Website: africanjournalseries.com Research Unit. Kaduna. CBN. (2005). Annual Report and Statement of Account for the Year Ended 31st December. CBN. (2010). Annual Report and Statement of Account for the Year Ended 31st December. Economy. Cassel Ltd. 35 Red Lion Square, London WCIR 4SG Macmillan Publishing Co. Inc. New York. Etuk, E. J. (1985). The Nigerian Business Environment. Macmillan International College Edition, Macmillan Publishers Ltd. London. Ewah, S. (2007). Foundation of Marketing Principles and Practice. Pafelly Printers and Publishers Ogoja, Nigeria. Reprint Edition Kinsey, J. (1988). Marketing in Developing Countries. Macmillan Publishers, London. kotler, P. and Armstrong, G. (2001). Principles of Marketing. Prentice Hall of India, Private Limited New Delhi- 110001, Ninth Edition. Kotler, P. (2000). Marketing Management, Prentice Hall of India, Private Limited New Delhi- 110001. Mkpakan, E. E. (2004). International Investment: Theory, Analysis and Case Study. University of Lagos Press. Nigeria. Ogunsanya, A. (1999). A Practical Guide to the Marketing of Financial Services. Richmind Books Ltd, Lagos. Okafor, A. I. (1995). Principles of Marketing. Onitsha Baset Printing Ltd. Nigeria Opara, B.C. (2004) “Impact of Government Incentives and Policies on Corporate Export Marketing Involvement: Nigerian manufacturing firms’ experience” Journal of Niger Delta Research. Port Harcourt. Institute of Foundation Studies, RSUST, 6(1), 109-120. Sunday O. E. Ewah & Alex B. Ekeng(2009); “Problems and Prospects of Marketing in Developing Economies”: The Nigerian Experience; International Journal of Business Management; vol 4. Ubanagu O. and E.C. Ndubisi (2004). Marketing Management Theory and Practice, Enugu, Optimal Publishers. Uzoka, L.O (2008). Dynamics of the Nigerian Economic and Marketing Systems, Onitsha: Osyora Publishing Company.
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Histoory about nigeria markrting development
African Journal of Management and Administration, Volume 6, Number 1, 2013
Copyright©2013 Devon Science Company ISSN:2141-0143Website: africanjournalseries.com THE NIGERIAN MARKETING SYSTEM: ITS DEVELOPMENT, PROBLEMS AND PROSPECTS. Nwankwo Cosmas Anayochukwu and Ndubisi Emmanuel Chidozie Department of Marketing Anambra State University, Igbariam, Nigeria ABSTRACT This paper on the Nigerian marketing system explained the developmental processes in marketing profession in recent time as well as the problems and prospects. The marketing system of Nigeria cannot be studied without pre-examination of its economic system. This is why the country even till now is still undergoing some hard time. The problems facing Nigeria as a result of its negligence of marketing system includes; low marketing education, preferences for foreign products and low patronage for non-essential products, high cost of production, inadequate infrastructures, few competitive opportunities, excessive government regulations and interference, political instability and civil unrest and among others. Regardless of these problems, solutions are proffered to tackle and improve the situation in the nearest future. Such solutions are; Nigeria large unexplored markets should be harnessed, attractive government incentives, growing affluence, to mention but a few. In conclusion, all hands must be on deck in order to drive the marketing system of this country to a greater height so that standard of living can improve. Keyword: Marketing system, Nigeria Economy, problems, prospect INTRODUCTION The origin of Nigerian marketing system could be traced from the development of the Nigerian economy. This is to say that both sectors of the Nigeria history cannot be determined when one ignored. According to Uzoka (2008), Nigeria is an entity with landscape of about 941,849km, making it the most populous country in Africa and with the population of over 163million people (NPC, 2011). Nigeria is made up of 36 states, the Federal Capital Territory and with about 774 Local Governments. The country is agrarian in nature with a tropical climate and varieties of ecological belts ranging from the rain forests in the south to the sahel savannah in the North. It is also endowed with diverse natural resources including solid minerals, oil and gas. Nigeria is classified as one of the third world countries which mean that production and distribution of goods and services are still undergoing some developmental processes. Marketing System on the other hand is all about the exchanges that take place in a society along with the facilitating institutions (Ubanagu and Ndubisi, 2004). In other words, marketing system comprised of the core marketing system and public marketing system which are the local companies, the suppliers, intermediaries, competitors, customers, government regulatory agencies, credit commodity, independent press, financial institutions, etc (Kotler, 2003). Since the Marketing System works with the economic system, it is imperative to say that the Nigerian Marketing System has faced a lot of social and economic problems ranging from the country slow pace of development to its present state of both economic and political crises. It is pertinent to refer to the country’s oil boom in the early 70’s that resulted to the total aboundment of all the other sectors of the economy. Furthermore, the focus of Nigerians in politics gave the country marketing system another look, because those charged with the responsibility to represent the society’s interest in key decisions making misrepresented their people thus making citizens to forego those areas (agriculture, technical skills, education) that would have propelled the country to greater height. To fully buttress this, the researcher is determined to examine the developmental trends in Nigerian Marketing System alongside the challenges, and solutions. DEVELOPMENT OF NIGERIAN MARKETING SYSTEM The development of the Nigerian Marketing System started years ago, even before Nigeria had her independence. Nigeria according to Anyanwu (2000) was very much unlike her colonial masters because of her reluctance in developing her human and material resources. While British government was there developing her marketing system and economy, through research and scientific discoveries, Nigeria depended on her for eventual development. It must be noted that it was the course of history and little was done at that time to change the country’s destiny. The implication of this slim foundation of Nigeria was both favourable and unfavourable. Nigerians did not have to undergo the labourious processes involved in order to attain a reasonable measure of industrialization as was the case with Britain and
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Copyright©2013 Devon Science Company ISSN:2141-0143Website: africanjournalseries.com United States of America. But because she found her economy built on an un-solid structure the near collapse of the economy came much earlier than expected. The Nigeria Independence was achieved in October, 1960 and from that period to the late sixties, Nigeria was self sufficient in the production and distribution of most agricultural products and, in fact, had a favourable balance of payments. Anyanwu (2000) has it that Nigeria in 1970 had started realizing huge sum of money from oil which eventually led to the almost total abandonment of the agricultural sector. The revenue from oil was so astronomical that Nigerian’s external reserve rose remarkably. In December 1973, the nation’s reserve stood at N317.26million, by December 1974, they had reached N3, 398.14million and by May 1981, the reserves had stayed at N6.4billion (FGN, 1985). However, the periods 1973 to 1981 were enough to transfer Nigeria into an industrial giant but the effects of poor structural foundation of the economy took its bite on the management of the country’s revenue. The result of this experience was because of the acute financial problems. Today, Nigeria is facing series of hardship brought about by misappropriation of funds and bad management. A series of economic Structural Adjustment Programme was embarked upon and much depended on their implementation. All these adverse experiences on financial circles, the economy and the political games in Nigeria affected the Marketing System The Nigerian Marketing System cannot be discussed today in isolation of the Nigerian economy. According to Uzoka (2006), the Nigerian economy is divided into ten sectors of which nine of them are for public and one is private. Below are the analyses of the sectors. Agricultural Sector The agricultural sector which covers all the primary production activities as crops, livestock, forestry, wildlife and fisheries employed about 80% of the countries working population in 1960, and its contribution to GNP declined gradually from 63.4% in 1960 to 23.4% in 1975, both food and export crop production declined during this period. According to CBN (2010), the performance of agricultural sector improved in 2003. The provisional aggregate index of agricultural production increased by 5.7%, compared with the 6.8% increased in 2009. The growth was blow the national sector target of 8.0%. The increased agricultural production was propelled by the favorable wealth condition and the sustained implementation of various agricultural programmes initiated in 2009. Cash crop production contributed to the growth of output. The output of staples grew by 5.7%, compared with the 6.2% growth in 2009. Similarly, the output of cash crop increased by 7.2%, relative to the level in preceding year. The crops subsector sustained its impressive performance on account of the favourable wealth conditions in most part of the country and the continuation of various government programmes initiated in 2009. One of such initiative is the identification of, and targeted intervention in 13 strategic crops by the federal government (CBN, 2010). On the other hand, the livestock production increased by 6.4%, compared with the 6.8% increase in the preceding year. The development was as a result of the measures taken to control livestock disease, especially the deadly avian flu, and improved access to credit. Further analysis showed that poultry and beef production increased by 19.5% and 8.9% respectively. When compared with the growth rates in 2009. This was as a result of the support provided to expand the livestock value chain, including the establishment of modern abattoirs and sanitary sale outlets across the country. In addition, fish production increased by 7% from its level in 2009 to 759, 163 tonnes. This was, however, lower than the estimated national demand of 1.5million tones, but reflected the impact of the various efforts by government towards improving activities in the value chain of the sub-sector. Furthermore, forestry production increased by 4.9% as recorded in 2009. The increase was attributed to the sustained demand for wood products. The Forestry Research Institute of Nigeria (FRIN) continued to intensify efforts in the supply of improved breeder seedlings to replace the harvesting tree stocks in order to sustain wood production. The challenges faced by the sector in 2010 were inadequate and untimely distribution of Fertilizer, dearth of processing and storage facilities and an inefficient transportation infrastructure.
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Copyright©2013 Devon Science Company ISSN:2141-0143Website: africanjournalseries.com On the part of agricultural prices of most Nigeria’s export commodities, CBN (2010) said that the prices were higher in 2010 when compared to the previous year. The overall index computed in US dollar terms, stood at 727.7 (1990=100), representing an increase of 26.9% and 31.4% respectively over the level in 2009. The increase in the price of cocoa was attributed, largely to the relatively strong demand brought about by the cut in output, arising from bad weather conditions in some producing countries, the spread of crop diseases, smuggling activities in some producing countries, the fear of supply shortage in 2011, and currency fluctuations Coffee, soyabean, cotton and copra recorded price increases of 5.6, 6.2, 20.9 and 9.4 percent, respectively. In Naira terms, the all-commodities price index increased by 29.2% to 10347.7 (1990-100) in 2010. The price of cocoa, palm oil, coffee, copra and soyabeans recorded increase of 46.9, 20.9, 31.4, 5.6, 7.2 and 6 percent respectively. From the available data, domestic prices of most commodities increased from 1.6% to 72.3%. The increase in prices was attributed to high cost of firms inputs and increased demand from agro-procession industrial users. Industrial Sector The index of industrial production, estimated at 121.5 (1990=100) increased by 2.8% over the level in 2009. This was driven by the increase of 1.4% and 1.8% in the manufacturing production and mining indices, respectively (CBN, 2010). Industrial sector has contributed to the GNP and had consistently grown from 1960 to date. The components of this sector include alimentary industries (food, drinks, beverages, tobacco), agro-industries (textiles, apparels, leather and footwear, saw milling, paper, wooden furniture, wood products, rubber, plastic products, etc) petrochemical industries, construction industries, metal industries, transportation and equipments industries. The major constraints of this sector include inadequate capital, lack of indigenous entrepreneurship and scarcity of technical competence, administrative bottlenecks and restrictive industrial policy (Uzoka, 2008). Mineral Sector In the mineral sector, the main minerals of economic importance include tin, crude petroleum, columbite, iron ore, natural gas and small quantities of such trace elements as lead, zinc, gold etc. this sector has contributed to the GNP since 1960. However, according to the annual report and statement of CBN (2010), Nigeria’s aggregate crude oil production, including condensates and natural gas liquids, average 2.13million barrels per day (Mbd), or 777.45million barrels in 2010, compared with 1.82Mbd or 664.3Million barrels, in the preceding year. This represented a 17% increase relative to 2009. The development was attributed to the success of the Federal Government’s amnesty programme, which brought relative peace to the Niger-Delta and paved the way for improved oil production. In addition, the production of natural gas increased by 39.7% to 58,0005.96Million cubic meters (MMM3) above the level in 2009 of the total, 76.7% was utilized, while the balance was flared. About 48.9 percent was sold to industries, such as the PHCN, cement and steel companies, as against 36.4% in 2009. While 15.1% was sold to the Nigeria Liquefied Natural Gas (NLNG). Gas converted to natural gas liquid and gas lift accounted for 3.8 and 3.3 percent respectively, while the oil companies used 7.1% as fuel gas. Coal is another mineral component. Estimated aggregate coal consumption remained low at 500.5tonnes of coal equivalent. The stagnation in coal consumption according to the CBN report was a reflection of the shift of industrial consumers to more environmentally friendly sources of energy. Transportation and Communication Sector Olakunaori (2005) opined that the major transportation components include road for vehicles, traffic, railways for locomotives, airways for aeroplane and water ways for ships and boats. According to the CBN (2010), there was a remarkable improvement on domestic airline in 2010. The number of passengers airlifted increased by 12.8% from 9.5million in 2009 to 10.7Million. The aircraft movement increased by 8% from 188,649 in 2009 to 203,710 in 2010. The development reflected increased competition, improved government funding and greater public confidence in the sector. The performance of this sector was also enhanced through the intensified efforts of the rehabilitation and replacement of the obsolete infrastructure in the sector by the Federal government, in order to achieve full implementation of the international Civil Aviation Organisation’s standard.
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Copyright©2013 Devon Science Company ISSN:2141-0143Website: africanjournalseries.com On the other hand, the operation of foreign airline was not left out because there was a remarkable improvement in the sector in 2010. This was because of the increased numbers of passengers which increased by 7.1% to 3.2million, compared with 3.0million in 2009. International aircraft movement also increased by 7.9% from 32,643 in 2009 to 35,214 in 2010. The development could be attributed to political and economic stability in the country. Also, the performance of the Nigerian Railway Corporation (NRC) increased in 2010. The Federal Government of Nigeria determined to rehabilitate and upgrade major projects in these sectors. The rehabilitation projects include the upgrade of the outstanding 22km of the 257km Ajaokuta-Warri standard guage; Jebba-Kano axial line; the 221km Zaria-Kaura Namoda rail line; the culvert and drainage work at the Akerri-Minna, Kaduna-Kano and Kano-Challowa sections. Work on the 488km Lagos-Jebba track rehabilitation, contract to China Civil Engineering Construction Corporation (CCECC), also recorded significant progress. In the maritime sector, the sector recorded remarkable progress in 2010 when compared to the preceding year. This was attributed to the successful implementation of the Federal Government Port Reform Programme aimed at making Nigerian Ports favourably competitive, with other ports in the world. The Federal Government also pursued other key maritime programmes like the safety, security, marine environment protection and human development. With these improvements in the sector, the sector was reflected in the average turnaround time of vessels for all the ports, which declined to 5.9 days from 6.7days in 2009, while the average waiting time of vessels in all ports dropped to 27.4hours from 50.4hours in 2009. In the same, the revenue generated and collected at $592.2million and $457.8million respectively indicating a growth of 15.3 and 9.8 percent over 2009, respectively. Available data showed that the number of ocean going vessels completed in 2010 stood at 4.962, reflecting an increase of 79%. The total gross tonnage of the ocean going vessels rose by 20.1% to 108,621,872 compared with 97,796,560 in 2009. Coastal vessels that called at the ports in 2010 increased by 26.1% over 2009 to 21,950, while the gross tonnage of the coastal vessels grow by 18.6% to 6,818,827 in 2010. More also, the communication sector sustained laudable achievements through the Global System of Mobile Communications (GSM). As at December, 2010, the combined subscribers strength of the telecommunications sub-sector had increased by 18.5%, over its December, 2009 level, to a total of 88,348,026 active lines. Consequently, the tele-density increased from 53.23 lines per 100 inhabitants. This exceeded the International Telecommunication Union (ITU) minimum standard of 1:100. In addition, the output of the sub-sector grew by 34.9% in 2010 and accounted for 4.6% of the GNP. Other developments in the sub-sector include the launch of compulsory sim card registration in May 2010. Service Sector The social service sector whose major components are education, health, information, labour and social development and sports. These components provided services to the economy and their capital and recurrent expenditure are high. But in terms of output, their products are indirect in that they help to raise the productivity of people who enjoy their services in the country. The major problems are those of inadequate manpower energy, material equipment and capital. The Administrative and Development Sector The administrative development is also another key in the Nigeria economy. The major components of this sectorial urbanrural sub-sector, cooperative-community development sub-sector, defence-security sub-sector, finance sub-sector and general administration sub-sector. The problems facing this sector is that of excess capacity, bureaucratization capitalization, conflicting attitudinal human relation and inadequate information communication. Infrastructure Sector This sector comprises of water and electricity with rapid industrial and social economic development. According to CBN (2010), the total installed electricity generation capacity stood at 8815mega watts in 2010, an increase of 4.1% over the level in 2009. The composition of the electric power in particular had been a source of problem hence the declaration of state of emergency on power by the incumbent President. As at now, it is yet to improve. The Foreign Sector The component of this sector anchored on Standard Industrial Trade Classification. Classification of exports and imports include – food, beverages and tobacco, crude minerals, minerals, fuels, animals, and vegetable oils and fats. Chemicals,
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Copyright©2013 Devon Science Company ISSN:2141-0143Website: africanjournalseries.com manufactured goods and machinery and transport equipment and miscellaneous manufactured articles. The problems with their sector include: fluctuation in world commodity markets inflation, inadequate international economic, order power of multinational corporations, and the oligopolistic nature of exporting and importing institutions in developed countries. Private Sector The sector is a very dynamic sector and complementary to the other nine public sectors. Though the public sector operators are presently engaged in transportation, power supplies, while the private sector is a large operator in agriculture, mining and quarrying, manufacturing and crafting, small scale industries, hotel, distribution, residential accommodation, transport services, building and construction and consultancy services and recently communications. PROBLEMS In view of all these sectors that made up the Nigeria economy and the marketing system in general, we shall look at the general problems confronting the Nigeria Marketing System in recent times. They are; Low Marketing Education: A well informed and educated people tend to be prosperous investors and consumers. This is because they would imbibe the culture and tenets of marketing. But marketing education is still generally low in developing countries. Many decision makers and managers of multi-national do not know what marketing is all about. Even when some people acquire higher degrees in the field of marketing and business administration, they come out doing the contrary, instead of practicing the true marketing concept or relationship marketing for the benefit of the society as a whole. In situations like that, marketing will not contribute meaningfully to the development of these economies. Nigeria is an example of one of those countries suffering this fate. Most of the people, though educated, yet often compromise ethical marketing practices for worst alternatives such as sharp practices, unwholesome behaviour and smuggling that contribute less to gross total earnings of any country (Ewah and Ekeng, 2009) Preferences for Import Products: The inability of Nigeria to produce most goods thus making her citizens to prefer buying from the more industrialized countries made the development process of local industries and commercial life of the people more impoverished (Ewah and Ekeng, 2009). Developing countries like Nigeria constitute 71% of the world’s population, but only contribute about 12% of the world’s industrial production that often boost marketing in these economies. Why should this be the case, and who is to blame for the structural discrepancy and imbalance? What actions could these countries adopt to accelerate the pace of industrialization and development in order to boost the tempo of marketing (Mkpakan, 2004). It is generally felt that locally-made goods are only for the poor, uneducated, and those who are not fashionable, while the consumption of imported goods and services is taken as status symbol for the elite and affluent in developing countries, even when some country’s products are of less quality when compared to similar local brands. This situation makes the growth of marketing system and satisfaction of consumers locally difficult (Olakunori, 2002). Low Patronage for Non-essential Products and Services: Majority of the people in developing countries such as Nigerians is poor, and their per capita income is below average. This makes it imperatively difficult for them to buy luxurious goods and at the same time satisfy their basic needs for food, clothing, and accommodation. Non essential goods and services receive low patronage thus leading to low patronage for certain categories of goods do not present attractive marketing opportunities that would ginger investment overture. High Cost of Production: Marketing has gone through several hard times in most developing countries because virtually all production skills and equipment are imported from the developed world. The cost of acquiring equipment and other inputs used for production locally to boost the marketing system are sometimes extremely exorbitant for the poor developing countries like Nigeria to buy and finance. The heartfelt problem is that agricultural products that contribute less to GNP of the county’s economy have been abandoned. This is because these products are sold at lesser prices in the world market. The income generated from them could only buy little from all that are needed to encourage domestic production, in order to enhance marketing system. This reason strengthens consumer’s preference for imported products and results to low demand for locally made goods. This affects the marketing potentials of the home industries and equally has a adverse effect on both the micro and macro- marketing system of Nigeria. Poor Infrastructures: A well endowed country like Nigeria blessed with many mineral resources have little infrastructure that will boast its developmental activities via marketing system. The present situation where Power Holdings Company of Nigeria (PHCN) is fond of giving epileptic and erratic power supply made it difficult for businesses to function in Nigeria, coupled with the poor road network and transport facilities, poor communication, distressed banks, malfunctioning ports and trade zones, among others. Apart from the deliberate embezzlement by some top government officials, the government is yet to provide these infrastructures, and this has made it difficult for marketing activities to be performed effectively and efficiently. Moreover, the inadequacy and poor state of these infrastructures contributed to high cost of doing business in Nigeria. Low Competitive Opportunities: Competitive businesses are not much in Nigeria. The commonly found activities are peasant farmers, petty traders and negligible number of investors that are not engaged in multimillion businesses. In Nigeria one can find competitive businesses mostly in the service industry, which contribute less than two percent of GDP (CBN, 2010). But in
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Copyright©2013 Devon Science Company ISSN:2141-0143Website: africanjournalseries.com the manufacturing sector nothing can be said of this, because there is no competition. In most developed societies economic policies have long assumed that competition among businesses is the most efficient method of producing and marketing goods and services. Proponents of this philosophy contend that it results in maximum productivity and forces inefficient organizations and businesses to terminate their operations. It gives the consumer or buyer the opportunity to choose from several competing companies rather than buy from a monopolist. This stimulates creativity in seeking solutions to marketing problems especially in developing countries where such problems are more (CBN, 2000). But marketing in the true sense is usually at its best where and when there is real competition. Unfortunately, competition is at the lower ebb in developing countries, this might not be unconnected with the level of poverty and underdevelopment in the continent. But developed countries like USA, UK, Japan and emerging economies in Asia are competing amongst themselves in the manufacturing and supply of different types of products to newly found markets in sub-Saharan Africa. This is because they have the technology and financial backing. Over- Regulation of Business by Government: Another major problem that has be-deviled the performance of marketing system especially in Nigeria has been the issue of government regulations and interferences in the activities of businesses and corporate firms. For instance, the over regulation of the Nigeria economy especially between 1970-1985, including the enactment of the indigenization decree, which excludes foreign interest from certain investment activities as well as the existence of complex bureaucratic requirements for direct and portfolio investments were among the major constraints that hindered the development of marketing climate and foreign investment inflow (Balogun, 2003). According to Ewah and Ekeng (2009), Nigeria is one of those countries that have passed through one form of regulation or deregulation to another depending on the political class that is in power. Instead of allowing the market forces of demand and supply to operate and determine how much consumers are to pay for the consumption of the goods and services. The haste to get their economies developed and quickly catch up with advanced Nations often lead developing countries to over- regulate business activities and restrict the activities of free enterprise. This makes marketing difficult, since decisions could be taken from a purely economic perspective. Political Instability and Civil Unrest: Rapid economic growth and development of marketing techniques cannot be achieved or attained in an environment of political and social instability or hostility. Political stability implies an orderly system for positive change in governance and peaceful co- existence amongst the citizenry. That poses a great challenge to marketing. Therefore, marketing does not thrive where there is political instability and insecurity or civil disturbances like the case in Nigeria where no day passes without hearing crises like Boko Haram, Niger Delta militant attack and lot more. For Nigeria the issue in the Niger Delta and part of the north gives cause to worry because most of the foreign investors and multi-nationals have relocated to the neigbouring country because of the continuous molestation and threat by militants and Boko Haram terror, if nothing is done to salvage the situation. Recent studies show the conflict rating of Nigeria, Ghana, South Africa, Kenya and Egypt. Amongst the five countries Nigeria has the highest figures especially after 1998. The above Situation reinforces uncertainty, instability, and increases the risk of doing business in Nigeria. Thus investment overtures become difficult in such localities or geographical areas and this undermines the performance of marketing. PROSPECTS Despite the numerous problems confronting marketing system in developing countries, there exist prospects and opportunities for future growth and development of marketing as the pivot of developing economies. These prospects are explained as follows; Growing Population: Before multinational companies establish their plant in any country they expect to have ready market for their products and services. No business flourishes where people are not living or where it is not habitable by people. Developed countries with their small population and saturated domestic markets prefer marketing their products and services to emerging markets in developing countries. Nigeria being one of the most populous nations (about 163 million people) in Africa is a ready market for both domestic products and foreign brands. This is because marketing does not operate in a vacuum but requires a large population of people with the willingness to do business and patronize businesses. Therefore the high and growing population of developing countries is an attractive incentive, as they represent large potential markets. Absence of Competition and Large Unexplored Markets: By virtue of Nigeria large population, it is sad that they have large markets that are not yet served or are partially served. Thus they are not as saturated as those of developed countries. Hence, there is hardly any form of intensive competition especially amongst serious manufacturers like “ANAMCO” a motor manufacturing assembly in Nigeria. The economies of these nations hold great opportunities for innovators, investors and marketers to enjoy booms in their markets with much challenge from competitors within and outside. Attractive Government Incentives: Trade policies in Nigeria are becoming quite favourable to both local and foreign investors. These incentives include profit tax holidays, reduced or even free customs and excise duties, liberalization of immigration and profit repatriation laws for foreign investors. There are also improvements in infrastructural facilities that will ginger the performance of marketing in these economies. According to Pearce (1998) liberalization encourages the adoption of
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Copyright©2013 Devon Science Company ISSN:2141-0143Website: africanjournalseries.com policies that promote the greatest possible use of market forces and competition to coordinate both marketing and economic activities. Growing Affluence: Quite a large number of the consumers in developing countries are becoming affluent. This will enable them to have reasonable discretionary income and purchasing power. This means that a growing number of the consumers in many developing countries can now afford luxuries and other products they could not purchase in the time past. In Nigeria the business climate is expected to improve tremendously with the President Musa Yar Adua of blessed memory’s seven point agenda, the people will become more empowered and their purchasing power will be enhanced for both consumption and investment purposes. The government has equally taken the issue of workers/staff remuneration seriously, such that salaries now come as at when due and the take home package of most developing countries these days is quite commendable when compared to what it was few years back. Available data from the Nigeria living Standard survey conducted in 2003/2004 indicated that the incidence of poverty exhibited a downward trend. It declined from 70% in 2000 to 54.4% in 2004 and it is expected to decline more in the years ahead (CBN, 2005). This of course presents brighter prospects for marketing. Availability of Cheap Production Inputs: Most developing countries are endowed with abundant human and material resources that are yet untapped. For example, according to CBN (2000) Nigeria remains endowed with abundant natural resources, good weather conditions and a large population. These will be readily handy for companies and businesses to exploit. Despite the high level of poverty and low exchange values of the national currencies of developing countries, labour and raw materials or inputs are often found to be cheap and it is envisaged that in the nearest future it will be cheaper because of better opportunities and more goods will be produced for consumption. The absence of serious competition also makes it easy to source these production inputs and reach different market segments. This is why most multinationals are more marketable and profitable in developing countries than their industrialized countries. Rapid Economic Development: Olakunori (2002), the economies of developing nations are growing rapidly as a result of the efforts being made by their various governments and the developmental agencies of the United Nations towards this direction. These results to income re-distribution and increased purchasing power and discretionary income are also enhanced. Thus, it is expected that the demand for products to satisfy higher order needs will increase and the general atmosphere of business in the continent will become more conducive and all these mean well for marketing in sub-Saharan Africa and Nigeria in particular. CONCLUSION Despite the numerous problems facing marketing system in developing countries- Nigeria, there are good prospects for the future hence a good marketing system performance is the answer to the underdevelopment of developing countries. When adopted and practiced, marketing system will help to develop appropriate technologies as developing nations provide for the needs of the people and enhance their standard of living, create job opportunities for the unemployed, wealth for entrepreneurs, a means towards affording education and enjoyment of leisure. Therefore the government and individuals are encouraged to join hands and see to the development and appreciation of marketing in all the economies. REFERENCES Aigbiremolen, M. O. and Aigbiremolen, C. E. (2004). Marketing Banking Services in Nigeria.The CIBN Press Ltd Lagos, Nigeria. Anyanwu, A. (2000). Dimension of Marketing, Owerri, Avon Global Publisher. Baker M. J. (1985). Marketing: An Introductory Text. Macmillan Publishers Ltd. London. Balogun, E. D. (2003). In CBN. Foreign Private Investment in Nigeria. Proceedings of Cassel Ltd, London WCIR 4SG Macmillan Publishing Co. Inc. New York. Bigsten, Arne (2000). “Globalization and Income Inequality in Uganda” Paper presented at the Conference on ‘Poverty and Inequality in Developing countries: A Policy Birdsall, Nancy, and Amar Hamoudi (2002). “Commodity Dependence, Trade and Growth: When ‘Openness’ Is Not Enough”. Working Paper No. 7, Center for Global Development,Washington, DC. CBN. (2000). The Changing Structure of the Nigerian Economy and Implications for Development. Published by Realm Communications Ltd Lagos. CBN. (2003). Foreign Private Investment in Nigeria. Proceedings of the Twelfth Annual Conference of the Regional
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Copyright©2013 Devon Science Company ISSN:2141-0143Website: africanjournalseries.com Research Unit. Kaduna. CBN. (2005). Annual Report and Statement of Account for the Year Ended 31st December. CBN. (2010). Annual Report and Statement of Account for the Year Ended 31st December. Economy. Cassel Ltd. 35 Red Lion Square, London WCIR 4SG Macmillan Publishing Co. Inc. New York. Etuk, E. J. (1985). The Nigerian Business Environment. Macmillan International College Edition, Macmillan Publishers Ltd. London. Ewah, S. (2007). Foundation of Marketing Principles and Practice. Pafelly Printers and Publishers Ogoja, Nigeria. Reprint Edition Kinsey, J. (1988). Marketing in Developing Countries. Macmillan Publishers, London. kotler, P. and Armstrong, G. (2001). Principles of Marketing. Prentice Hall of India, Private Limited New Delhi- 110001, Ninth Edition. Kotler, P. (2000). Marketing Management, Prentice Hall of India, Private Limited New Delhi- 110001. Mkpakan, E. E. (2004). International Investment: Theory, Analysis and Case Study. University of Lagos Press. Nigeria. Ogunsanya, A. (1999). A Practical Guide to the Marketing of Financial Services. Richmind Books Ltd, Lagos. Okafor, A. I. (1995). Principles of Marketing. Onitsha Baset Printing Ltd. Nigeria Opara, B.C. (2004) “Impact of Government Incentives and Policies on Corporate Export Marketing Involvement: Nigerian manufacturing firms’ experience” Journal of Niger Delta Research. Port Harcourt. Institute of Foundation Studies, RSUST, 6(1), 109-120. Sunday O. E. Ewah & Alex B. Ekeng(2009); “Problems and Prospects of Marketing in Developing Economies”: The Nigerian Experience; International Journal of Business Management; vol 4. Ubanagu O. and E.C. Ndubisi (2004). Marketing Management Theory and Practice, Enugu, Optimal Publishers. Uzoka, L.O (2008). Dynamics of the Nigerian Economic and Marketing Systems, Onitsha: Osyora Publishing Company.
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