Description
This research paper is concerned with the examination of Nigerian consumers 'attitudes towards foreign and Nigerian-made shoes and wristwatches. Nigeria is one of the biggest consumers offoreign goods with a per capita gross national product surpassing many West African countries.
NIGERIAN CONSUMERS' PREFERENCES FOR FOREIGN
AND DOMESTIC PRODUCTS: EXAMPLES OF FOOTWEAR
AND WlUSTWATCHES
Dr. Omar Ogenyi
Faculty ofBusiness, Computing & Information Management (BCIM)
London South Bank University
ABSTRACT
This research paper is concerned with the examination of Nigerian consumers 'attitudes towards
foreign and Nigerian-made shoes and wristwatches. Nigeria is one of the biggest consumers offoreign
goods with a per capita gross national product surpassing many West African countries. The study
compares Nigerian consumerpreferences for foreign and domestic produced goods. A number ofgeneral
product attributes, marketing activities and buying habits were used aspreference indicators to explain
the general attitudes of Nigerian consumers towards shoes and wristwatches made in Nigeria and in
the UK. Thejndings indicate thaf Nigerian consumers show positive perception of UK manufactured
goods. It concludes that Nigerian consumers are willing to pay a higher price for wholly Nigerian-made
products; and are only willing to pay a higher price for foreign made goods ifthe goods are relatively
and of signzjcantly superior quality.
INTRODUCTION
Imports of goods and services have played a
major role in the economic development of sub-
Saharanmcan countries. The capacity ofNigeria to
produce capital and consumer goods is limited and
so there is heavy dependence on imports from the
developed countries. Presently the economic indices
ofNigeria are indicating critical signs of distress with
idation running at 14.8 percent and i n d h a l utilisation
at 41 per cent. Also the foreign reserve has declined
&m $74529.4 million in 2001 to $5 1470.6 million in
December 2002 (Central Bank of Nigeria (CBN),
2002). Although interest rate has been brought down
by a flat rate at 22.5 per cent, the economy is clearly
unsustainable because this slight decline has not arisen
fi-om strong micro-economic fundamentals. For
example, the effective exchange rate is about N136
to $1 and the per capita income (Anakwe, 2002) is
less than $300. It is under this economic backgromd
that Nigerians have to transact business with other
countries.
The purpose of this study was to examine
empirically Nigerian consumers' perceptions of foreign
and domestic products and the associated marketing
tactics practised by major international companies in
the Nigerian market. The background to Nigerian
economic development was first reviewed and m n s
why Nigerian consumers are particularly suitable for
this study were identified. The pertinent literature is
then reviewed in the light of the research issues being
investigated. The research design and methodology
were structured to test the hypotheses developed for
evaluating the consumer preferences for selected
foreign and domestic products. Finally the findings are
discussed and managerial implications suggested for
practising marketing managers. The study is useful to
the marketers ofboth industrial and consumer goods
and especially for multinational companies who have
connections with the Nigerian market. The findings of
this research will also enable multinational corporations
to structure and develop a sustainable marketing
strategy for the Nigerian market.
RSEARCH AIMS AND OBJECTIVES
The aim of this study was to identify any
significant differences andlor similarities so that
recommendations could be made which assist the local
and foreign marketers operating in Nigeria. The
objectives are therefore threefold: 1) to investigate
aspects ofproduct attributes that Nigerian consumers
may use in evaluating and differentiating between
foreign and domestic products available in the
Nigerian marketplace; 2) to assess the country-of-
origin of selected products fiom key trading partners
of Nigeria using country of origin, price, and product
quality as determining independent variables; and 3)
. .
to examine the bases for d i s c n d o n , ifany, between
national origins of the product to enable the evaluation
of attitudes towards Nigerian and foreign-made
goods.
LTERATURE AND THEORETICAL
UNDERPINNING
Nigeria is one of the developing countries of
sub-Saharan Afkica whose rich natural resources
(crude oil, iron ore, lead, coal, columbite, limestone,
zinc, tin and natural gas) and estimated population of
120 million people have attracted much foreign interest
over the years (Anakwe, 2002).
The interest in conducting the present study was
prompted by the proliferation of foreign-made goods
in Nigeria and the confusion surrounding the Nigerian
1
consumers' perceptions of the importance ofwhether
1
a given product is manufactured in Nigeria or
overseas. As Okechuku and Onyemah (1999)
I observed, the debate on this issue has been particularly
I
acute because many Nigerians are believed to relatively
prefer foreign made goods to goods made in Nigeria.
The variety of imported goods available for sale
in Nigeria is considerable and this is due to trade
liberalization (Anakwe, 2002). With ongoing trade
liberalization, the globalization ofmarkets, advances
in cornrnunications and transportation technologies,
Nigerian consumers are increasingly exposed to a wide
array of imported goods (Dadzie, et al., 2002).
Previous studies have suggested that consumers tend
to stereotype products manufactured in foreign
countries, and that, owing to negative stereotypes
about some foreign goods and patriotic feelings about
goods made in the home country, consumers are more
likely to prefer domestically-made goods (Bhuian,
1997; Knight, 1999).
Effect of country-of-origin
Country of origin (COO) refers to information
pertaining to where aproduct is made. Marketers are
particularly interested in the perceived image
associated with the COO (Ahmed, et al., 2001). COO
image has been defined as "the overall perception
consumers form of products f km a particular country,
based on their prior perceptions of the country's
production and marketing strengths and weaknesses"
(Roth and Romeo, 1992). As Iyer and Kalita
highlighted, many studies have acknowledged that
consumers have significantly different perceptions
about products made in different countries, and that
these general perceptions have important effects on
consumers' evaluation of the products manufactured
in a particular country (Iyer and Kalita, 1997).
Iyer and Kalita (1 997) also found that consumers
display a preference for products made in some
countries more than others. Other researchers (Ede
and Panigrahl, 2000;Ahmed et al., 2001) have found
various other sources of biases that can influence
consumers' preference for products made in different
countries, including ethnocentric bias, patriotic
sentiments, different demographic characteristics of
consumers, product type, and product familiarity.
Country image perception
One of the first concepts of the country-of-origin
phenomenon was that of Nagashima (1 970, p. 68)
country image perception. He defined the image that
consumers associate with a given country-of-origin
as "the picture, the reputation, the stereotype that
consumers attach to products of a specific country.
This image is created by such variables as
representative products, national characteristics,
economic and political background, history, and
traditions". Others view this country image as reflecting
consumers' general perceptions about the quality of
products made in a particular country and the nature
of people fiom that country (Johansson et al, 1994).
Kaynak and Cavusgil(1983) studied consumers'
perceptions of different classes of products fiom 25
countries. They found that respondents held positive
attitudes towards products made in their own country
but the same respondents could be swayed to choose
foreign products if quality and price considerations
were sufficiently favourable. Specifically, they
observed that consumers might not accept inferior-
quality domestic products when superior foreign
products are available. They concluded that consumer
attitudes toward products of foreign origin vary
significantly across product classes. Linking Kaynak
and Cavusgil's conclusions to the Nigerian market
environment, it is likely that emotion ofpatriotism may
play a sigdicant role in Nigerians' choice of products.
But the cognitive attitude toward products made in
different countries (country image) may also play a
limited role.
Study assumptions
There are four underlying dimensions that govern
consumer evaluations ofproducts hmvarious origins:
product integrity, price-value, market presence, and
market response. Shimp et aI., (1993) found that
pricing and product quality are two ofthe most salient
dimensions evoked by consumers when thinking about
imported goods. The above review of literature led
to the following four hypotheses:
H1: Nigerians will not show any difference
between products made in Nigeria by a
Nigerian firm and those made in UK by a
U K h .
H2:All things being equal, compared to a
product made in overseas by a foreign firm,
Nigerians are more likely to pay a price
premium to purchase a product made in
Nigeria by aNigerian firm.
H3: The willingness ofNigerians to pay a price
premium for products manufactured in
Nigeria by a Nigerian firm is a function of
the consumer's perception regarding the
product's importance to Nigeria's
manufacturing base.
H4:Nigerians will prefer a product
manufactured overseas by a foreign-firm if
the product's pricdquality mix is perceived
to be significantly superior to that of a similar
product manufactured in Nigeria by a
Nigerian h.
RESEARCH DESIGN AND DATA COLLEC-
TION METHOD
A non-probability cross-section of consumers
in Nigeria was surveyed to find their purchase
intentions regarding wristwatches and foot wear. The
study employed conjoint techniques and considered
products from overseas to test the above hypotheses.
Conjoint analysis is a method for predicting choice.
The conjoint method employs survey techniques in
which selected Nigerian consumers of shoes and
wristwatches were asked to make choices relating to
their preferences. Each product has a fixed number
of attributes and an attribute-level mix that differ
slightly h m product to product. In this study, Nigerian
consumers were asked to select their favourites from
among several product features and imaginary, multi-
attribute products. These products differed rnainlywith
respect to the country-of-origin, product pricing and
quality indicators. Based on responses received,
predictions were made regarding consumer
preferences and purchase intentions for shoes and
wristwatches produced andlor originated in Nigeria
and the UK, including whether Nigerians will pay a
higher price for the Nigerian-made products.
Pre-Testing Technique
The first step in the research was to select
products for use in the conjoint study. To select the
products, shoppers were surveyed for their
impressions of various consumer products regarding
how important it is to the competitiveness ofNigerian
manufacturing to maintain a Nigerian manufacturing
capability for the product (see also Knight, 1999).
Respondents were asked to rate each product on
perceived importance in this respect. Based on the
results of this initial survey, the two products selected
for use in the conjoint study were shoes (foot-wear)
and wristwatches. Footwear was perceived as being
very important and wristwatch were perceived to be
less important. These two products offered a contrast
in terms of perceived importance to the
competitiveness ofNigerian manufacturers. Finally,
actual brand names were used in conjunction with the
other attributes to enhance respondents' perception
of the realism of the products being studied. Thus, for
each product, two familiar brand names were used;
one is the brand of a Nigeria-owned company, the
other of a UK -owned company.
A total of 120 respondents were interviewed
(67 men and 53 women) in a non-probability random
sample among shoppers at a shopping centre in
Lagos. Lagos is the commercial city ofNigeria and is
therefore representative of Nigerian consumer
shopping behaviour for shoes and wristwatches
(Osuagwu, 2002). Thenumber contacted inthis study
is sufficient to produce statistically significant results.
The researcher employed computer-aided personal
interview approach because it reduces the
respondent's workload and imposes internal
consistency.
The attributes used in the study are those most
salient to the purposes of this study and include brand
name, country of origin, brand price, and perceived
quality. For example 1) country-of-origin for shoes
and wristwatches include product's country of
manufacture and the manufacturing company's
countqwf-origin; 2) product quality for footwear and
wristwatch was measured by the manufacturer'
w m t y (expressed in terms of product durability);
and 3) product price, consisting of two levels for
footwear and wristwatch was denoted simply as
relatively high and relatively low and expressed in
Nigerian currency (the Naira).
The product's country of manufacture and the
manufacturing company's country of origin were
indicated as one of the product's attributes. For both
wristwatches and shoes, respondents were given a
choice between a brand manufactured by a Nigeria-
owned company, and a brand manufactured by a UK
company. On this instance, respondents were made
aware of the company's country of origin each time a
choice was offered.
In addition, a choice was given between a
product manufactured in Nigeria and one
manufactured in the UK. When combined with the
company's country of origin, the two-by-two matrix
yielded four products: 1) made by a UK company
and manufactured in the UK; 2) made by the UK
Company and manufactured in Nigeria; 3) made by a
Nigeria-owned company and manufactured in the UK;
and 4) made by the Nigerian-owned company and
manufactured in Nigeria.
In the study of each product, the respondent
was asked to rank the four combinations based on
their preferences for buying a product given this
attribute. In order to test hypotheses related to
consumer willingness to pay a higher price for products
manufactured in Nigeria, two price levels were
included as an attribute for each product. Respondents
also ranked the price levels according to their buying
preferences (relatively high or low price). Price is used
here as surrogate to perceived product durability.
Similarly, in order to test the hypothesis that
consumers will select UK manufactured products
when given a favourable price andlor quality trade-
off relative to Nigeria-made products; a quality proxy
was included as an attribute. For wristwatches, the
choice given was one-year warranty. For shoes, the
choices were good material, and casual wear.
Respondents were asked to rank their preferences
for these attribute levels.
Imaginary Products
The respondents were presented, on a computer
screen, with imaginaryproducts comprising di f f mt
combinations of the attributes shown,above. They
were asked to rank the various products based on
their relative preferences for each. Each respondent
was then required to make choices regarding up to
five different products. At each stage of the survey,
the conjoint approach increased the number of
product attributes and gradually, the level of difficulty
of choices increased.
Finally, to confirm the validity of responses,
respondents were presented with four final multi-
attribute products in increasing order of preference
as calculated by the application, based on the rankings
and ratings made in the earlier part of the survey.
Respondents were asked to rate each on a scale h m
0 per cent to 100 per cent, indicating probability of
purchasing aproduct with the attributes presented.
ANALYSIS AND RESULTS
A two-way analysis of variance (MANOVA)
was conducted on the four measures representing
respondent preferences for products made in Nigeria
or in the UK by either a UK company or a Nigerian-
owned company (see Table 1). As reflected in Table
1, the country of manufacture shows a significant
difference ( p < 0.04) in determining respondents'
purchase intentions, supporting hypothesis HI - that
is, 'Nigerian consumers show no differences between
Nigeria-made products ofNigeria-owned companies
and UK-made products of UK-owned companies".
Additionally, although neither the company's country
of origin nor the interaction between country of
ownership and manufacture are strong, they are in
the expected direction.
The significance of the main effect of country of
manufacture in determining responses may indicate
that Nigerian consumers are aware ofthe benefits that
Nigeria gains h m locating a manufacturing facility in
the country. The spill over effects fiom stimulating the
local economywith jobs, techcal knowledge, local
sourcing and contributions to the tax base, may seem
more tangible than the benefits to the home country
of a multinational corporation.
Table 1: Effects of country of ownership and country of Manufacture on purchase intentions
Sourceof Sumof Degrees of Mean square F-value Si@cance
variation :S wo m( d f )
Shoes (Footwear)
Countryof 1.29 1 1.29 1.3 1 0.198
origin (0)
Countryof 3.88 1 3.88 5.99 0.026
manufacture
,o
O x M 0.02 1 0.02 0.19 0.049
Wristwatches
Countryof 1.30 1 1.30 1.58 0.157
origin (0)
Countryof 3.84 1 3.84 6.98 0.007
Manufkcture
.o
O x M 0.04 1 0.04 0.69 0.040
DISCUSSION OF THE MAIN FINDINGS
The purchase probability evidence in support of the
hypothesis, that Nigerian consumers will pay a higher
price in order to purchase a wholly Nigeria-made
product over other products, was stronger than
expected. The totally Nigerian product was preferred
not only at all price levels, but respondents were willing
to pay a higher price for Nigeria products equal in
quality to those of UK manufacture. Respondents
were willing to pay a higher price for products ofboth
Nigeria ownership and manufacture than for pmducts
made in the UK. However, respondents were
unwilling to pay a higher price for the same quality
product if a UK company manufactured it in Nigeria.
In general, they preferred Nigeria-made products to
foreign-made products, regardless of the company's
ownership. But, while respondents preferred Nigeria-
madelforeign-owned products to foreign-made1
Nigeria-owned products, they were unwilling to pay
a higher price for them. Hypothesis H2 is therefore
largely supported.
An interesting finding is that respondents
generally attached lower usage to wristwatches than
to shoes. As revealed in Table 2 there is a difference
in mean usage values for wristwatches, which was
approximately twice the magnitude of the difference
in mean values for shoes. This finding is the opposite
ofwhat was expected. Maintaining a manufacturing
capability in shoes was perceived to be more important
than for wristwatches. It was therefore expected that
infomation about the country would play a larger role
in determining choices for shoes. Specifically,
domestically produced or originated shoes were
expected to outperform UK wristwatches. Hence,
hypothesis H3, that the willingness of consumers to
pay a higher price for a product manufactured in
Nigeria by Nigerian-owned firm is a function of the
Table 2: Mean Respondent Usage Preference
Product 1: Shoes (Footwear)
Country of ownership
Nigeria
UK
Country of manufacture
Nigeria
0.099
0.249
Product 2: Wristwatches
UK
- 0.235
- 0.038
Nigeria
UK
0.047
0.373
- 0.579
- 0.221
consumer's perception regarding the product's
importance to Nigerian manufacturing base, is not
supported.
Differences in Respondents' Scores
Given a complex and higher involvement choice
decision, respondents may have relied more heavily
on the brand cue. This is consistent with interviewers'
observations of respondent comments during the
interview process. Respondents to the footwear
questionnaire tended to comment they generally make
such choices based on the footwear types rather than
brand name. In contrast, respondents to the wristwatch
questionnaire were more likely to comment that they
based their decisions solely on brand name and
disregarded the country information.
The results generally support hypothesis H4, that
is, "respondents preferred a product manufactured in
the UK by a UK company if the product's price andl
or qualitymix was perceived to be superior". Evidence
revealed that the product's quality level had to be twice
as higher before the respondent was willing to trade
up to the next price level. The conjoint method proved
usekl in exploring respondents' decision rules and
predicting purchase probabilities.
The results of this study could be summarised
as: i) Nigerian consumer purchase preferences as
reported are more likely to be influenced by the
country in which the product is made than by the
manufacturing company's national origin; ii) Nigerian
consumers are willing to pay a higher price for wholly
Nigerian products, although this is a finding that may
require M e r research into actual purchase behavior,
rather than predicted purchase probabilities based on
self-reported preferences. This is even more so when
market evidence suggests that many Nigerians
perceived Nigerian made goods as inferior in quality;
iii) the willingness of Nigerian consumers to pay a
higher price for Nigerian products is not a function of
the product's perceived importance to the Nigerian
manufacturing base; and iv) Nigerians are onlywilling
to pay a higher price for UK goods if the goods are
of significantly superior quality relative to similar
Nigerian products.
IMPLICATIONS FOR MARKETING
MANAGERS
While most of the efforts have concentrated on
the economic and industry conditions that influence
investment and business decisions in Nigeria, little
research has focused on Nigerian consumers. As a
consequence, knowledge about Nigerian consumers
still remains quite scarce. In particular, few research
efforts have explored Nigerian consumers' attitudes
towards foreign-sourced products. This study
a d d this deficiency by investigating how Nigerian
consumers evaluate foreign made products compared
to products produced in Nigeria. Specifically, the
study tries to find out what images certain foreign
products have in the minds ofthe Nigerian consumers
and how such images may influence their product
evaluation and purchase decisions. The findings ofthis
research, although based on small sample, reveal some
insights into consumer behaviour in Nigeria. This is
likely to assist foreign businesses to develop suitable
marketing strategies for marketing their products in
this increasingly prosperous market.
LIMITATIONS AND RESEARCH
DIRECTION
Respondents were randomly chosen shoppers
at Lagos and may not be representative of the greater
population in Nigeria. Future research that draws on
samples from various parts of Nigeria would
strengthen the external validity ofresults. The use of
actual brand names may also have had an unforeseen
effect on respondents' choices. The brand names may
have weakened or artificially strengthened the
preference for various products. Any future studies
relating to this area should account for this potential
weakness in the research design. Finally, given the
limitations highlighted, fiuther research is necessary
before detailed recommendations can be made to
specific firms facing both vertical and horizontal
competition in the Nigerian market environment.
REFERENCES
Ahrned, Z.U., Johnson, J.P., Ling, C.P., Fang, T.W., and Hui,A.K. (2001), 'Country-of-origin and brand
effects on consumers' evaluations of cruise lines', International Marketing Review, Vol. 19, No. 3, pp.
279-302.
Anakwe, U.P. (2002), 'Human resome management practices in Nigeria: challenges and insights', International
Journal of Human Resources, Vol. 13, No. 7, pp. 1042- 1059.
Bhuian, S.N. (1 997), 'Saudi consumers' attitudes towards European, US and Japanese products and marketing
practices', European Journal of Marketing, Vol. 3 1, No. 7, pp. 467-486.
Central Bank ofNigeria (2002), Annual Review ofNigerian Economy, Central Bank ofNigeria, Lagos, October.
Ede, F.O. and Panigrahi, B. (2000), 'African-American consumer attitudes towards domestic and foreign-
made automobiles', Management Research News, Vo1.23, No. 516, pp. 1-1 9.
Haubl, G (1 996), 'Across-national investigation of country of origin and brand name on the evaluation of a
new car', International Marketing Review, 13,5., pp. 76-97.
Iyer, G and Kalita, J. (1 997), 'The impact of country-of-origin and country-of-manufacture cues on consumer
perceptions of quality and value', Journal of Global Marketing, Vol. 11 No. 1, pp. 7-28.
Johansson, J.K. Douglas, S.P. and Nonaka, I. (1 994), 'Assessing the impact of country of origin on product
evaluations: a new methodological perspective', Journal of Marketing Research, Vol. 22, (November),
pp. 388-96.
Kaynak, E. and Cavusgil, S. (1 983), 'Consumer attitudes towards products of foreign origin: do they vary
across product classes?', International Journal ofAdvertising, Vol. 2, pp. 147-157.
Knight, GA. (1 999), 'Consumer preferences for foreign and domestic products', Journal of Consumer
Marketing,Vol. 16,No.2,pp. 151-162.
Nagashima, A. (1 970), 'Acomparison of Japanese and US attitudes toward foreign products', Journal of
Marketing, Vol. 34, January, pp. 68-74.
Okechuku, C. and Onyemah, V. (1 999), 'Nigerian consumer attitudes toward foreign and domestic products',
Journal of International Business Studies, Vol. 30, No. 3, pp. 61 1-622.
Osuagwu, L. (2002), 'TQM strategies in a developing economy: empirical evidence fiom Nigerian companies',
Business Process Management Journal, Vol. 8, No.2, pp. 140-1 60.
Roth, M.S. and Romeo, J.B. (1 992), 'Matching product category and country image perceptions: a Mewor k
for managing country-of-origin effects', Journal of International Business Studies, 3"' quarter, pp. 477-
97.
Sarniee, S. (1 994), 'Customer evaluation of products in a global market', Journal of International Business
Studies, Vo1.25, No.3, pp. 579-604.
Shimp, T., Samiee, S., and Madden, T. (1 993), 'Country and their products: a coginitive structure perspective',
Journal of the Academy of Marketing Science, 21,4, pp. 323-330.
doc_121517161.pdf
This research paper is concerned with the examination of Nigerian consumers 'attitudes towards foreign and Nigerian-made shoes and wristwatches. Nigeria is one of the biggest consumers offoreign goods with a per capita gross national product surpassing many West African countries.
NIGERIAN CONSUMERS' PREFERENCES FOR FOREIGN
AND DOMESTIC PRODUCTS: EXAMPLES OF FOOTWEAR
AND WlUSTWATCHES
Dr. Omar Ogenyi
Faculty ofBusiness, Computing & Information Management (BCIM)
London South Bank University
ABSTRACT
This research paper is concerned with the examination of Nigerian consumers 'attitudes towards
foreign and Nigerian-made shoes and wristwatches. Nigeria is one of the biggest consumers offoreign
goods with a per capita gross national product surpassing many West African countries. The study
compares Nigerian consumerpreferences for foreign and domestic produced goods. A number ofgeneral
product attributes, marketing activities and buying habits were used aspreference indicators to explain
the general attitudes of Nigerian consumers towards shoes and wristwatches made in Nigeria and in
the UK. Thejndings indicate thaf Nigerian consumers show positive perception of UK manufactured
goods. It concludes that Nigerian consumers are willing to pay a higher price for wholly Nigerian-made
products; and are only willing to pay a higher price for foreign made goods ifthe goods are relatively
and of signzjcantly superior quality.
INTRODUCTION
Imports of goods and services have played a
major role in the economic development of sub-
Saharanmcan countries. The capacity ofNigeria to
produce capital and consumer goods is limited and
so there is heavy dependence on imports from the
developed countries. Presently the economic indices
ofNigeria are indicating critical signs of distress with
idation running at 14.8 percent and i n d h a l utilisation
at 41 per cent. Also the foreign reserve has declined
&m $74529.4 million in 2001 to $5 1470.6 million in
December 2002 (Central Bank of Nigeria (CBN),
2002). Although interest rate has been brought down
by a flat rate at 22.5 per cent, the economy is clearly
unsustainable because this slight decline has not arisen
fi-om strong micro-economic fundamentals. For
example, the effective exchange rate is about N136
to $1 and the per capita income (Anakwe, 2002) is
less than $300. It is under this economic backgromd
that Nigerians have to transact business with other
countries.
The purpose of this study was to examine
empirically Nigerian consumers' perceptions of foreign
and domestic products and the associated marketing
tactics practised by major international companies in
the Nigerian market. The background to Nigerian
economic development was first reviewed and m n s
why Nigerian consumers are particularly suitable for
this study were identified. The pertinent literature is
then reviewed in the light of the research issues being
investigated. The research design and methodology
were structured to test the hypotheses developed for
evaluating the consumer preferences for selected
foreign and domestic products. Finally the findings are
discussed and managerial implications suggested for
practising marketing managers. The study is useful to
the marketers ofboth industrial and consumer goods
and especially for multinational companies who have
connections with the Nigerian market. The findings of
this research will also enable multinational corporations
to structure and develop a sustainable marketing
strategy for the Nigerian market.
RSEARCH AIMS AND OBJECTIVES
The aim of this study was to identify any
significant differences andlor similarities so that
recommendations could be made which assist the local
and foreign marketers operating in Nigeria. The
objectives are therefore threefold: 1) to investigate
aspects ofproduct attributes that Nigerian consumers
may use in evaluating and differentiating between
foreign and domestic products available in the
Nigerian marketplace; 2) to assess the country-of-
origin of selected products fiom key trading partners
of Nigeria using country of origin, price, and product
quality as determining independent variables; and 3)
. .
to examine the bases for d i s c n d o n , ifany, between
national origins of the product to enable the evaluation
of attitudes towards Nigerian and foreign-made
goods.
LTERATURE AND THEORETICAL
UNDERPINNING
Nigeria is one of the developing countries of
sub-Saharan Afkica whose rich natural resources
(crude oil, iron ore, lead, coal, columbite, limestone,
zinc, tin and natural gas) and estimated population of
120 million people have attracted much foreign interest
over the years (Anakwe, 2002).
The interest in conducting the present study was
prompted by the proliferation of foreign-made goods
in Nigeria and the confusion surrounding the Nigerian
1
consumers' perceptions of the importance ofwhether
1
a given product is manufactured in Nigeria or
overseas. As Okechuku and Onyemah (1999)
I observed, the debate on this issue has been particularly
I
acute because many Nigerians are believed to relatively
prefer foreign made goods to goods made in Nigeria.
The variety of imported goods available for sale
in Nigeria is considerable and this is due to trade
liberalization (Anakwe, 2002). With ongoing trade
liberalization, the globalization ofmarkets, advances
in cornrnunications and transportation technologies,
Nigerian consumers are increasingly exposed to a wide
array of imported goods (Dadzie, et al., 2002).
Previous studies have suggested that consumers tend
to stereotype products manufactured in foreign
countries, and that, owing to negative stereotypes
about some foreign goods and patriotic feelings about
goods made in the home country, consumers are more
likely to prefer domestically-made goods (Bhuian,
1997; Knight, 1999).
Effect of country-of-origin
Country of origin (COO) refers to information
pertaining to where aproduct is made. Marketers are
particularly interested in the perceived image
associated with the COO (Ahmed, et al., 2001). COO
image has been defined as "the overall perception
consumers form of products f km a particular country,
based on their prior perceptions of the country's
production and marketing strengths and weaknesses"
(Roth and Romeo, 1992). As Iyer and Kalita
highlighted, many studies have acknowledged that
consumers have significantly different perceptions
about products made in different countries, and that
these general perceptions have important effects on
consumers' evaluation of the products manufactured
in a particular country (Iyer and Kalita, 1997).
Iyer and Kalita (1 997) also found that consumers
display a preference for products made in some
countries more than others. Other researchers (Ede
and Panigrahl, 2000;Ahmed et al., 2001) have found
various other sources of biases that can influence
consumers' preference for products made in different
countries, including ethnocentric bias, patriotic
sentiments, different demographic characteristics of
consumers, product type, and product familiarity.
Country image perception
One of the first concepts of the country-of-origin
phenomenon was that of Nagashima (1 970, p. 68)
country image perception. He defined the image that
consumers associate with a given country-of-origin
as "the picture, the reputation, the stereotype that
consumers attach to products of a specific country.
This image is created by such variables as
representative products, national characteristics,
economic and political background, history, and
traditions". Others view this country image as reflecting
consumers' general perceptions about the quality of
products made in a particular country and the nature
of people fiom that country (Johansson et al, 1994).
Kaynak and Cavusgil(1983) studied consumers'
perceptions of different classes of products fiom 25
countries. They found that respondents held positive
attitudes towards products made in their own country
but the same respondents could be swayed to choose
foreign products if quality and price considerations
were sufficiently favourable. Specifically, they
observed that consumers might not accept inferior-
quality domestic products when superior foreign
products are available. They concluded that consumer
attitudes toward products of foreign origin vary
significantly across product classes. Linking Kaynak
and Cavusgil's conclusions to the Nigerian market
environment, it is likely that emotion ofpatriotism may
play a sigdicant role in Nigerians' choice of products.
But the cognitive attitude toward products made in
different countries (country image) may also play a
limited role.
Study assumptions
There are four underlying dimensions that govern
consumer evaluations ofproducts hmvarious origins:
product integrity, price-value, market presence, and
market response. Shimp et aI., (1993) found that
pricing and product quality are two ofthe most salient
dimensions evoked by consumers when thinking about
imported goods. The above review of literature led
to the following four hypotheses:
H1: Nigerians will not show any difference
between products made in Nigeria by a
Nigerian firm and those made in UK by a
U K h .
H2:All things being equal, compared to a
product made in overseas by a foreign firm,
Nigerians are more likely to pay a price
premium to purchase a product made in
Nigeria by aNigerian firm.
H3: The willingness ofNigerians to pay a price
premium for products manufactured in
Nigeria by a Nigerian firm is a function of
the consumer's perception regarding the
product's importance to Nigeria's
manufacturing base.
H4:Nigerians will prefer a product
manufactured overseas by a foreign-firm if
the product's pricdquality mix is perceived
to be significantly superior to that of a similar
product manufactured in Nigeria by a
Nigerian h.
RESEARCH DESIGN AND DATA COLLEC-
TION METHOD
A non-probability cross-section of consumers
in Nigeria was surveyed to find their purchase
intentions regarding wristwatches and foot wear. The
study employed conjoint techniques and considered
products from overseas to test the above hypotheses.
Conjoint analysis is a method for predicting choice.
The conjoint method employs survey techniques in
which selected Nigerian consumers of shoes and
wristwatches were asked to make choices relating to
their preferences. Each product has a fixed number
of attributes and an attribute-level mix that differ
slightly h m product to product. In this study, Nigerian
consumers were asked to select their favourites from
among several product features and imaginary, multi-
attribute products. These products differed rnainlywith
respect to the country-of-origin, product pricing and
quality indicators. Based on responses received,
predictions were made regarding consumer
preferences and purchase intentions for shoes and
wristwatches produced andlor originated in Nigeria
and the UK, including whether Nigerians will pay a
higher price for the Nigerian-made products.
Pre-Testing Technique
The first step in the research was to select
products for use in the conjoint study. To select the
products, shoppers were surveyed for their
impressions of various consumer products regarding
how important it is to the competitiveness ofNigerian
manufacturing to maintain a Nigerian manufacturing
capability for the product (see also Knight, 1999).
Respondents were asked to rate each product on
perceived importance in this respect. Based on the
results of this initial survey, the two products selected
for use in the conjoint study were shoes (foot-wear)
and wristwatches. Footwear was perceived as being
very important and wristwatch were perceived to be
less important. These two products offered a contrast
in terms of perceived importance to the
competitiveness ofNigerian manufacturers. Finally,
actual brand names were used in conjunction with the
other attributes to enhance respondents' perception
of the realism of the products being studied. Thus, for
each product, two familiar brand names were used;
one is the brand of a Nigeria-owned company, the
other of a UK -owned company.
A total of 120 respondents were interviewed
(67 men and 53 women) in a non-probability random
sample among shoppers at a shopping centre in
Lagos. Lagos is the commercial city ofNigeria and is
therefore representative of Nigerian consumer
shopping behaviour for shoes and wristwatches
(Osuagwu, 2002). Thenumber contacted inthis study
is sufficient to produce statistically significant results.
The researcher employed computer-aided personal
interview approach because it reduces the
respondent's workload and imposes internal
consistency.
The attributes used in the study are those most
salient to the purposes of this study and include brand
name, country of origin, brand price, and perceived
quality. For example 1) country-of-origin for shoes
and wristwatches include product's country of
manufacture and the manufacturing company's
countqwf-origin; 2) product quality for footwear and
wristwatch was measured by the manufacturer'
w m t y (expressed in terms of product durability);
and 3) product price, consisting of two levels for
footwear and wristwatch was denoted simply as
relatively high and relatively low and expressed in
Nigerian currency (the Naira).
The product's country of manufacture and the
manufacturing company's country of origin were
indicated as one of the product's attributes. For both
wristwatches and shoes, respondents were given a
choice between a brand manufactured by a Nigeria-
owned company, and a brand manufactured by a UK
company. On this instance, respondents were made
aware of the company's country of origin each time a
choice was offered.
In addition, a choice was given between a
product manufactured in Nigeria and one
manufactured in the UK. When combined with the
company's country of origin, the two-by-two matrix
yielded four products: 1) made by a UK company
and manufactured in the UK; 2) made by the UK
Company and manufactured in Nigeria; 3) made by a
Nigeria-owned company and manufactured in the UK;
and 4) made by the Nigerian-owned company and
manufactured in Nigeria.
In the study of each product, the respondent
was asked to rank the four combinations based on
their preferences for buying a product given this
attribute. In order to test hypotheses related to
consumer willingness to pay a higher price for products
manufactured in Nigeria, two price levels were
included as an attribute for each product. Respondents
also ranked the price levels according to their buying
preferences (relatively high or low price). Price is used
here as surrogate to perceived product durability.
Similarly, in order to test the hypothesis that
consumers will select UK manufactured products
when given a favourable price andlor quality trade-
off relative to Nigeria-made products; a quality proxy
was included as an attribute. For wristwatches, the
choice given was one-year warranty. For shoes, the
choices were good material, and casual wear.
Respondents were asked to rank their preferences
for these attribute levels.
Imaginary Products
The respondents were presented, on a computer
screen, with imaginaryproducts comprising di f f mt
combinations of the attributes shown,above. They
were asked to rank the various products based on
their relative preferences for each. Each respondent
was then required to make choices regarding up to
five different products. At each stage of the survey,
the conjoint approach increased the number of
product attributes and gradually, the level of difficulty
of choices increased.
Finally, to confirm the validity of responses,
respondents were presented with four final multi-
attribute products in increasing order of preference
as calculated by the application, based on the rankings
and ratings made in the earlier part of the survey.
Respondents were asked to rate each on a scale h m
0 per cent to 100 per cent, indicating probability of
purchasing aproduct with the attributes presented.
ANALYSIS AND RESULTS
A two-way analysis of variance (MANOVA)
was conducted on the four measures representing
respondent preferences for products made in Nigeria
or in the UK by either a UK company or a Nigerian-
owned company (see Table 1). As reflected in Table
1, the country of manufacture shows a significant
difference ( p < 0.04) in determining respondents'
purchase intentions, supporting hypothesis HI - that
is, 'Nigerian consumers show no differences between
Nigeria-made products ofNigeria-owned companies
and UK-made products of UK-owned companies".
Additionally, although neither the company's country
of origin nor the interaction between country of
ownership and manufacture are strong, they are in
the expected direction.
The significance of the main effect of country of
manufacture in determining responses may indicate
that Nigerian consumers are aware ofthe benefits that
Nigeria gains h m locating a manufacturing facility in
the country. The spill over effects fiom stimulating the
local economywith jobs, techcal knowledge, local
sourcing and contributions to the tax base, may seem
more tangible than the benefits to the home country
of a multinational corporation.
Table 1: Effects of country of ownership and country of Manufacture on purchase intentions
Sourceof Sumof Degrees of Mean square F-value Si@cance
variation :S wo m( d f )
Shoes (Footwear)
Countryof 1.29 1 1.29 1.3 1 0.198
origin (0)
Countryof 3.88 1 3.88 5.99 0.026
manufacture
,o
O x M 0.02 1 0.02 0.19 0.049
Wristwatches
Countryof 1.30 1 1.30 1.58 0.157
origin (0)
Countryof 3.84 1 3.84 6.98 0.007
Manufkcture
.o
O x M 0.04 1 0.04 0.69 0.040
DISCUSSION OF THE MAIN FINDINGS
The purchase probability evidence in support of the
hypothesis, that Nigerian consumers will pay a higher
price in order to purchase a wholly Nigeria-made
product over other products, was stronger than
expected. The totally Nigerian product was preferred
not only at all price levels, but respondents were willing
to pay a higher price for Nigeria products equal in
quality to those of UK manufacture. Respondents
were willing to pay a higher price for products ofboth
Nigeria ownership and manufacture than for pmducts
made in the UK. However, respondents were
unwilling to pay a higher price for the same quality
product if a UK company manufactured it in Nigeria.
In general, they preferred Nigeria-made products to
foreign-made products, regardless of the company's
ownership. But, while respondents preferred Nigeria-
madelforeign-owned products to foreign-made1
Nigeria-owned products, they were unwilling to pay
a higher price for them. Hypothesis H2 is therefore
largely supported.
An interesting finding is that respondents
generally attached lower usage to wristwatches than
to shoes. As revealed in Table 2 there is a difference
in mean usage values for wristwatches, which was
approximately twice the magnitude of the difference
in mean values for shoes. This finding is the opposite
ofwhat was expected. Maintaining a manufacturing
capability in shoes was perceived to be more important
than for wristwatches. It was therefore expected that
infomation about the country would play a larger role
in determining choices for shoes. Specifically,
domestically produced or originated shoes were
expected to outperform UK wristwatches. Hence,
hypothesis H3, that the willingness of consumers to
pay a higher price for a product manufactured in
Nigeria by Nigerian-owned firm is a function of the
Table 2: Mean Respondent Usage Preference
Product 1: Shoes (Footwear)
Country of ownership
Nigeria
UK
Country of manufacture
Nigeria
0.099
0.249
Product 2: Wristwatches
UK
- 0.235
- 0.038
Nigeria
UK
0.047
0.373
- 0.579
- 0.221
consumer's perception regarding the product's
importance to Nigerian manufacturing base, is not
supported.
Differences in Respondents' Scores
Given a complex and higher involvement choice
decision, respondents may have relied more heavily
on the brand cue. This is consistent with interviewers'
observations of respondent comments during the
interview process. Respondents to the footwear
questionnaire tended to comment they generally make
such choices based on the footwear types rather than
brand name. In contrast, respondents to the wristwatch
questionnaire were more likely to comment that they
based their decisions solely on brand name and
disregarded the country information.
The results generally support hypothesis H4, that
is, "respondents preferred a product manufactured in
the UK by a UK company if the product's price andl
or qualitymix was perceived to be superior". Evidence
revealed that the product's quality level had to be twice
as higher before the respondent was willing to trade
up to the next price level. The conjoint method proved
usekl in exploring respondents' decision rules and
predicting purchase probabilities.
The results of this study could be summarised
as: i) Nigerian consumer purchase preferences as
reported are more likely to be influenced by the
country in which the product is made than by the
manufacturing company's national origin; ii) Nigerian
consumers are willing to pay a higher price for wholly
Nigerian products, although this is a finding that may
require M e r research into actual purchase behavior,
rather than predicted purchase probabilities based on
self-reported preferences. This is even more so when
market evidence suggests that many Nigerians
perceived Nigerian made goods as inferior in quality;
iii) the willingness of Nigerian consumers to pay a
higher price for Nigerian products is not a function of
the product's perceived importance to the Nigerian
manufacturing base; and iv) Nigerians are onlywilling
to pay a higher price for UK goods if the goods are
of significantly superior quality relative to similar
Nigerian products.
IMPLICATIONS FOR MARKETING
MANAGERS
While most of the efforts have concentrated on
the economic and industry conditions that influence
investment and business decisions in Nigeria, little
research has focused on Nigerian consumers. As a
consequence, knowledge about Nigerian consumers
still remains quite scarce. In particular, few research
efforts have explored Nigerian consumers' attitudes
towards foreign-sourced products. This study
a d d this deficiency by investigating how Nigerian
consumers evaluate foreign made products compared
to products produced in Nigeria. Specifically, the
study tries to find out what images certain foreign
products have in the minds ofthe Nigerian consumers
and how such images may influence their product
evaluation and purchase decisions. The findings ofthis
research, although based on small sample, reveal some
insights into consumer behaviour in Nigeria. This is
likely to assist foreign businesses to develop suitable
marketing strategies for marketing their products in
this increasingly prosperous market.
LIMITATIONS AND RESEARCH
DIRECTION
Respondents were randomly chosen shoppers
at Lagos and may not be representative of the greater
population in Nigeria. Future research that draws on
samples from various parts of Nigeria would
strengthen the external validity ofresults. The use of
actual brand names may also have had an unforeseen
effect on respondents' choices. The brand names may
have weakened or artificially strengthened the
preference for various products. Any future studies
relating to this area should account for this potential
weakness in the research design. Finally, given the
limitations highlighted, fiuther research is necessary
before detailed recommendations can be made to
specific firms facing both vertical and horizontal
competition in the Nigerian market environment.
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