Transportation cost and prices of goods and services in Nigeria

Abstract

This study was transportation cost and prices of goods and services in Nigeria. The total population for the study is 200 retailers, uyo main market. The researcher used questionnaires as the instrument for the data collection. Descriptive Survey research design was adopted for this study. A total of 133 respondents made men, women, buyers and drivers were used for the study. The data collected were presented in tables and analyzed using simple percentages and frequencies.

Chapter one

Introduction

As life started mankind begin 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 to engaging in hunting, fetching some selected plants for food and find shelter among tree shades as well as applying plants leaves to cover his nakedness.
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. Produce and at the same time has the produce he lacked so that an exchange could take place.
So the earliest trading or buying and selling practices were done on retail basis through the barter process.

When a common medium of exchange could monthly was inverted the practices of trade by barter became less relevant in the exchange process. When barter was in vogue buyers and sellers did not take a conscious account of the cost and burden of carrying the goods around in search of a market. As money became the means of payment even the service of carrying marketable commodities tot eh market was paid for.
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 bests 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. Some of the mode of transportation include transport on railway, motor vehicles on road, ship, boats, canoes paddling though water and the airoplane flying I 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. (Onyebunagu 1995).

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 remains a float. In the Nigerian case, these distributions cost specifically transportation costs are sometimes viewed as some of the factors that account for increasing prices of goods.

This study “the impact of transportation cost and prices of goods and services in Nigeria, will discover whether cost of transportation constitute significance proportion of the price of consumer foods in Nigeria

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 process of consumer goods, particularly this study tries to find out the following:
The consumers allege that the increasing price are indication of the profiting attitude of sellers. On their own side, the seller level the blame of increasing prices on the increasing cost of input materials and facilitating agents. The difficulty now becomes how to determine which of the claims is the truth about increasing prices.

It has been reported that the increasing price have confirmed to make many families unable to fetch their three sauce meals daily. The government, labour and consumerists have show concern and made some efforts to bring the price increase under control without making any tangible headway.

OBJECTIVES OF THE STUDY

The objectives of the study are;

1. To  determine the effects of transportation cost on the prices of consumer goods.
2. To ascertain, if it is the desire for excessive gains that influence retailers infixing prices of goods.
3. To Find out what can be done to alleviate the problems of increase prices of consumer goods in the market.

RESEARCH HYPOTHESES

For the successful completion of the study, the following research hypotheses were formulated by the researcher;

H₀:  There are no effects of transportation cost on the prices of consumer goods

H₁:  There are effects of transportation cost on the prices of consumer goods

H₀²:  something can be done to alleviate the problems of increase prices of consumer goods in the market

 H₂:  nothing can be done to alleviate the problems of increase prices of consumer goods in the market

 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 could 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. 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.

SCOPE AND LIMITATION OF THE STUDY

The scope of the study covers transportation cost and prices of goods and services in Nigeria. The researcher encounters some constrain which limited the scope of the study;

1. a) AVAILABILITY OF RESEARCH MATERIAL: The research material available to the researcher is insufficient, thereby limiting the study
2. b) TIME: The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.

Operational Definitions of Terms

TRANSPORTATION COST: transportation cost. The expenses involved in moving products or assets to a different place, which are often passed on to consumers. For example, a business would generally incur a transportation cost if it needs to bring its products to retailers in order to have them offered for sale to consumers

PRICE: A price is the quantity of payment or compensation given by one party to another in return for one unit of goods or services. A price is influenced by both production costs and demand for the product. A price may be determined by a monopolist or may be imposed on the firm by market conditions.

GOOD AND SERVICES: Goods are items that are usually tangible, such as pens, salt, apples, and hats. Services are activities provided by other people, who include doctors, lawn care workers, dentists, barbers, waiters, or online servers, a book, a digital videogame or a digital movie

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