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Abstract
The main objective of the study is to examine the impact of transportation cost on retail goods prices in Rivers State. The population of this study constitutes management and staffs of Next Time Super Market, Bori in Khana LGA, Rivers State which was 13. A self-designed questionnaire on the effect of transportation cost on consumer retail goods price was used and administered for the collection of data from the respondents. The data collected were processed electronically with Statistical Packages for Social Sciences (SPSS) using Chi-Square statistical tools. From the analysis, it was observed that transportation cost influences retail goods prices in Rivers State. Based on the above, the following recommendations were made among others: that retail organization should employ engineers as a way of reducing operation cost and its ravaging effect on the price of their goods, that government should ensure the construction of good roads to reduce traffic congestion as this has adverse effect on retail goods prices in the area, ant that government and corporate organizations should ensure the provision of electricity, waste management costs and other social amenities to reduce the maintenance cost of retail goods among others.
Table of Contents
Title Page i
Cover Page ii
Declaration iii
Certification iv
Dedication v
Acknowledgements vi
Abstract vii
Table of Contents viii
CHAPTER ONE 1
INTRODUCTION 1
1.1 Background of the Study 1
1.2 Statement of Problem 2
1.3 Objectives of the Study 3
1.4 Research Questions 4
1.5 Statement of Hypotheses 4
1.6 Significance of the Study 5
1.7 Scope of Study 5
1.8 Limitation of the Study 6
1.9 Definition of Terms 7
CHAPTER TWO 8
REVIEW OF RELATED LITERATURE 8
2.1 Conceptual Framework 8
2.1.1 Concept of Transportation Cost 8
2.1.2 Dimensions of Transportation Cost 11
2.1.3 Concept of Retail Goods Prices 15
2.1.4 Dimensions of Retail Goods Price 16
2.1.5 The Impact of Transport Costs on Consumer Retail Goods Prices 20
2.2 Theoretical Framework 22
2.2.1 Arbitrage Pricing Theory 22
2.3 Review of Related Empirical Studies 22
2.4 Summary of Literature Review 24
CHAPTER 3 25
RESEARCH METHODOLOGY 25
3.1 Introduction 25
3.2 Research Design 25
3.3 Population of the Study 25
3.4 Sampling Techniques Used 26
3.5 Sample Size 26
3.6 Source of Data 26
3.6.1 Primary Source (s) of Data 26
3.6.2 Secondary Source of Data 26
3.7 Research Instrument for Data Collection 27
3.8 Validity and Reliability of Instrument 27
3.9 Techniques for Data Analysis 28
CHAPTER FOUR 29
DATA PRESENTATION AND ANALYSIS 29
4.1 Introduction 29
4.1 Questionnaire Distribution and Retrieval: 29
4.2 Data Analysis and Interpretation 30
4.3 Testing of Hypotheses 36
4.4 Discussion Findings 40
CHAPTER FIVE 42
SUMMARY, CONCLUSION AND RECOMMENDATIONS 42
5.1 Summary 42
5.2 Conclusion 43
5.3 Recommendation 43
References 45
Appendix I 47
Appendix II 48
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
As life started mankind began to nurse the need for basic necessities of life for physiological satisfaction as food, shelter, safety, among other things.
At first man tried to provide the necessary things to satisfy his needs engaging in hunting, fetching some selected plants for food and finding shelter among tree shades as well as applying plant leaves to cover his nakedness (Gerber and Martin, 2012).
In the process of advancement man learnt that he could not provide all his needs by himself. Then the exchange process started. This began as an exchange of goods for goods otherwise called trade by barter. The person who has a particular product in excess of his need of that particular moment would look for the person that has a need for his excess. Product and at the same time has the product he lacked so that an exchange could take place (Rizet, C and J Hine (1993).
So the earliest trading or buying and selling practices were done on retail basis through the barter process.
Price has to be put on every commodity using money as the standard of measurement. The seller in calculating the expenses of this business has to add the cost of transporting product from the point of production to the point of consumption.
In the ancient times, man used mostly the beast of burden to carry his goods from the point of production to the point of consumption. Transportation nowadays has become more sophisticated, convenient, and faster (Lee and Lu, 2016).
Some of the mode of transportation include transport on railway, motor vehicles on road, ship, boats, canoes paddling though water and the airplanes flying the airway. The nature of production items of the order as well as the location of the market and the type of the market will determine the mode of transportation to employ (Riverson and S Carapetis 1991).
As money is the standard of measurement, the seller when calculating the expenses of their business has to add the cost of transportation of goods from the point of production to the point of consumption (Lee and Lu, 2016).
Some of the mode of transportation include transport on railway, motor – vehicles on road ship, boats, aircraft and others.
Transportation is involved in every level of production and distribution until the product reaches the final users. Industrial revolution came into place and led to increasing productive capacity.
Most manufacturers and sellers want to enjoy the benefit of the economy offered by large-scale production and distribution. They also aspire to explore large markets and operate at competitive levels. They have to manage costs and process to be able to operate with efficiency and remain a float. In the Nigerian case, these distribution cost specifically transportation costs are sometimes viewed as some of the factors that account for increasing prices of goods (Sieber, 1999). The study is determined to examine the role of transportation cost on retail goods prices in Khana LGA, Rivers State.
1.2 Statement of Problem
There has been a continuous increase in the price of consumer’s goods in Nigeria for many years now. These price increases have been alleged to be as a result of increase in the cost of raw materials, transportation, rent, capital and labour. Among these variable, this study will attempt to determine the degree to which cost of transportation affects the price of retail goods, particularly this study tries to find out the following:
The consumers allege that the increasing prices of retail goods are indication of the profiting attitude of sellers (Collier and Barnes, 2015). On their own side, the seller put the blame of increasing prices on the increasing cost of transportation, input materials and facilitating agents. The difficulty now becomes how to determine which of the claims is the truth about increasing prices of retail goods.
It has been reported that the increasing price have confirmed to make many families unable to fetch their three square meals daily. The government, labour and consumers have show concern and make some efforts to bring the price increase under control without making any tangible headway. It is based on the foregoing, that the researcher seeks to examine the effect of transportation cost on consumer-retail good prices in Khana LGA, Rivers State.
1.3 Objectives of the Study
The main objective of the study is to examine the effect of transportation cost on consumer retail goods prices in Khana LGA, Rivers State. The specific objectives are as follows:
- To examine the extent to which vehicle operation cost associate with consumer retail goods prices in Khana LGA, Rivers State.
- To examine the extent to which cost of travel time associate with consumer retail goods prices in Khana LGA, Rivers State.
- To examine the extent to which traffic congestion cost associate with consumer retail goods prices in Khana LGA, Rivers State.
- To examine the extent to which Maintenance cost associate with consumer retail goods prices in Khana LGA, Rivers State.
1.4 Research Questions
The following research question is considered: –
- Does vehicle operation cost associate with r consumer etail goods prices in Khana LGA, Rivers State?
- Does cost of travel time associate with consumer retail goods prices in Khana LGA, Rivers State?
- Does traffic congestion cost and restrain cost associate with consumer retail goods prices in Khana LGA, Rivers State?
- Does maintenance cost associate with consumer retail goods prices in Khana LGA, Rivers State?
1.5 Statement of Hypotheses
The following hypotheses were formulated to guide the researchers
HO1: There is no significant relationship between vehicle operation cost and consumer retail goods prices in Khana LGA, Rivers State.
HO2: There is no significant relationship between costs of travel time and consumer retail goods prices in Khana LGA, Rivers State.
HO3: There is no significant relationship between traffic congestion cost and consumer retail goods prices in Khana LGA, Rivers State.
HO4: There is no significant relationship between maintenance cost and consumer retail goods prices in Khana LGA, Rivers State.
1.6 Significance of the Study
This study will be of benefit to economic analysis who would want to trace the causes of inflation to their real sources.
It will be of immense use to marketing and management experts who would want some appropriate solutions to some of their marketing problems efficiency.
It will be an interesting source of material for academicians doing research in retail pricing for retail goods.
It will also be a useful piece of information for government in their regulatory policies of price control and transport management.
It will be a guiding tool for business people who are in the distribution service because this work will teach them how to control costs and make a competitive pricing.
1.7 Scope of Study
The study is delimited under the following heading: content scope, geographical scope and unit of analysis.
Content Scope: The content scope of this study involves an investigation to ascertain the relationship between transportation cost and retail goods prices in Khana LGA, Rivers State, the study limits scope to next time super market and consumers that patronize the supermarket. The dependent variable is retail goods prices, measured by inflation, consumer price index and producer price index. While independent variable is transportation cost measured by vehicle operation cost, costs of travel time, traffic congestion cost and maintenance cost.
Geographical Scope: This study is delimited in Khana L.G.A Rivers State with reference Next Time Super Market, Bori in Khana LGA, Rivers State, including next time super market and consumers that patronize the supermarket.
Unit of Analysis: The unit of analysis in this research involves both next time super market staff and consumers that patronize the supermarket.
1.8 Limitation of the Study
Every research study has certain limitation which fall short of ideas which the researcher has established or recognized given the critical and sensitive nature of the topic under this study the researcher encountered a number of problems which hindered the research work paramount among these constraints is the time frame within which the work was expected to be completed. The time period of completion for the work was too small considering the fact that topic covered the whole transportation sector, beside the cost of embarking on this project work considering the volume of work involve also give its own constraints on the research work as the researcher was not financially buoyant enough to carry out all the investigation furthermore, their own limitation as most, information sought for were mainly from the management and staffs of the organization in Port Harcourt Rivers State. Finally the availability material for the work also give it own hindrance as the subject matter have been matter of public discussion without proper literature put on ground in books for academic purpose its worthy to mention that the major source of this work was on few textbook.
1.9 Definition of Terms
Transport: Take or carry (people or goods) from one place to another by means of a vehicle, aircraft, or ship.
Transportation: It is the movement of people, animals and goods from one location to another. Modes of transport include air, rail, road, water, cable, pipeline and space. The field can be divided into infrastructure, vehicles and operations.
Consumer: A person who purchases goods and services for personal use.
Retail: Services to customers through multiple channels of distribution to earn a profit. Demand is identified and then satisfied through a supply chain.
Marketing: It is a form of communication between you and your customers with the goal of selling your product or service to them. Communicating the value of your product or service is a key aspect of marketing.
Prices: The amount of money expected, required, or given in payment for something.