ABSTRACT
This study investigated consumer preferences and demand for livestock products in Kano Metropolis, Nigeria, specifically the demand and preference rankings for different attributes of milk and meat products. The survey was conducted among 384 consumer households from eight local government areas of Kano Metropolis. Factor analysis and cluster analysis were used to identify market segments based on consumer preferences, behaviour and lifestyles. Differences between segments were analyzed. Preference ranking for different brands of milk from the study showed that, other things being equal, the most preferred and regularly consumed milk was powdered full cream which was considered the most tasty and nutritious. The socio-economic characteristics of the consumers, such as, gender, marital status, education, occupation and ethnic background were statistically significant at less than 5% level in attributes of milk such as taste, nutritive value, health risk, shelf-life, handling convenience, and product hygiene. The ranking result for preferences of beef, chevon and mutton, according to selected criteria and indicators of quality, showed that local breed of cattle was most preferred (84.7%) by all the sex and age groups, matured bull was strongly preferred (32%) and meat from naturally fed animals was strongly preferred (85.6%) to meat from artificially fattened animal. In the case of chevon, meat from male animals fed naturally and with medium fat content was most preferred. The attributes of breed of animal, fat content, meat appearance, sex and age of animal and feeding system had significant effects on consumer willingness to pay for meat products. The demand for eggs, meat, fish, milk and fruit were highly price elastic. The demand for cereals, vegetables and legumes were inelastic with respect to their own price. The demands for meat, milk and fish were highly insensitive to change in prices of cereal- a one percent increase in the price of cereal, increased demand for fish by 0.36% and demand for milk by 0.48%. One percent increase in the price of cereals decreased demand for meat by 0.51%. In general, most of the other cross-price elasticities were less than unity with either negative or positive sign, indicating substitution and complementary relationship (respectively) between items concerned. Inadequate storage capacity and warehousing facilities (18 8%) have been identified as the major problem of livestock product preferences in the study area. The result of this study was able to link consumer’s socio-demographic, psychosocial and environmental factors with their preferences for taste, nutritive value, health risk, product hygiene, shelf-life, availability and price of livestock products. It was therefore recommended that producers and marketers should use these relationships among consumers to segment its market based on lifestyle and behaviours of their target consumers, and also, all stakeholders responsible for enforcement of standards should be provided with the necessary technical skills and regulatory support to enforce those standards.
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
Livestock production contributes significantly to economic growth and development of industrializing countries. It provides food, income, employment and valuable foreign exchange. Hence, it is a major component of agricultural economy of developing countries and goes beyond food production. In Nigeria, cattle are predominantly produced in the northern part, where the bulk of the population are pastoral, and extensively consumed in the southern part (Rim, 1992). The Nigerian livestock resources consist of 14 million cattle, 34 million goats, 22 million sheep, 100 million poultry, one million horses and donkeys as well as negligible number of camels (Umar, 2007).
Global meat production increased from 69 million tonnes in 1990 to about 105 million tonnes by the year 2003 while meat consumption increased from 5 – 6 percent per year (FAO, 2006). Accordingly, bovine meat output was projected at 69 million tonnes in 2007 due to large production in developing countries set to expand by 3.25 – 3.75 million tonnes. This shows that developing countries contributed almost half of the world’s meat production. The food industry does work in providing incentive and in allocating labour to its various users as herdsmen, retailers, butchers, cold room owners, slaughterers, and animal processors (Hansen, 2001).
Therefore, socio – economic growth and development cannot ignore development of meat industry and efficient meat marketing system in Nigeria. Moreover, the rapidly growing demand for milk and meat in the developing world present a great opportunity for millions of livestock holders. The international community seeks ways to meet the millennium development goals and to reduce levels of extreme poverty. Greater attention to this important sector and particularly to the significance of improved livestock services with improved access to productive breeds, veterinary care, tools, feeds, credit system, training, technologies and markets, must therefore be encouraged (Word Bank, 2004).
FAO (2007) maintained that 600 million small farmers and herders in rural areas around the world keep nearly one billion livestock. Livestock keeping can help alleviate poverty in many developing countries especially as the demand for animal products, such as milk and meat, continues to rise. Still, most livestock keepers in the world (about 95%) live well below the poverty line, and cannot even afford to buy their own livestock products (FAO, 2007) The world community has agreed to cut global poverty by half by 2015. An estimated 75% of the poor live in rural areas, these people practice cattle fattening and livestock keeping in general (FAO, 2009). The global livestock sector is undergoing rapid transformation. Growing urbanization and rising incomes are creating a dramatic increase in the demand for milk and meat in the developing world (FAO, 2004).
Report has shown that Nigeria is one of the four leading livestock producers in sub-Sahara Africa. In 1990, livestock population comprised about 14 million cattle, 23 million goats and 23 million sheep (Rim, 1992). However, these figures have since increased to 15.2 million cattle, 28 million goats and 23 million sheep (FAO, 2006), while live animal imports and milk/milk product imports rose from 100.9 metric tonnes to 739.1 metric tonnes in 2004.
Accurate statistics on livestock production and marketing are not available and therefore, detailed projections of supply and demand of the livestock sub sector cannot be realistically made (FAO, 2006). It is clear, however, that over the last decade the supply of meat, milk and eggs has failed to keep pace with the increasing population. Somehow, the price elasticity of dairy products has not effectively affected demand. The supply of animal products has been declining over the past two decades, while demand has been increasing, as a result of increases in population and urbanization. Consequently, Nigeria has remained a net importer of livestock and livestock products. Restrictions placed on imports of animal products and foodstuffs in the 1980s coupled with the introduction of the Structural Adjustment Programme (SAP), which saw a massive devaluation of the Nigerian currency, initially reduced the importation of meat and dairy products. Recent statistics on the importation of dairy products in Nigeria are not easy to come by. However, devaluation of the local currency has significantly reduced the importation of milk powder and butter oil on which the local dairy plants depended. The large number of closed dairy plants throughout the country provides evidence of this problem (CBN, 1999).
In addition to the supply of milk from the national herd, an insignificant quantity of milk is supplied by the commercial dairy farms. Several processed dairy products are imported into Nigeria. These include evaporated milk, powdered milk, butter, cheese and cream. Condensed milk and dry powdered milk have dominated the Nigerian milk import trade for a long time (FAO, 2006).
In market offering, a product is the key element that brings value to the customer. Products are more than just tangible objects but also inclusive of service features, design, performance quality, brand name and packaging. A product’s quality has a significant impact towards the product’s or service’s performance. Thus, it is linked to a customer’s value and satisfaction (Kotler and Armstrong, 2010). It is also vital for a marketer’s product positioning tools. Consumers today are demanding high quality goods that save time, energy and often calories.
Consumer preference for food products is constantly changing especially that of livestock products. Consumer demand for new products is also increasing in Nigeria due to urbanization and increases in per capita income. There are rudimentary indications that demand for improved food quality and safety has also been increasing and that consumers are willing to pay higher prices for such attributes of products( Hossain and Deb .2009). Therefore, there is the need to understand and deliver to the consumer the right quality, variety and safe product that the consumer requires, through effective marketing system (Verbeke, 2006).
The overall ruler and coordinator of marketing activities in any private enterprise is the consumer. The goal of the food system is to satisfy consumers. Food marketing firms serve as means to this ultimate goal. Failure to recognize the primacy of consumer preferences in the economic system has resulted in the downfall of many firms, and even entire industries (Grunert, 2005). The notion that all business and marketing activities are directed toward the satisfaction of consumers is called the doctrine of consumer sovereignty. The statement, “the consumer is king”, illustrates this doctrine. Consumers exercise their sovereignty over the food industry by their Naira voting, rewarding firms and activities that please them and withholding approval from others. The doctrine of consumer sovereignty is, simultaneously, a partial description and an economic prescription for the food industry. Consumer preferences and naira votes exert powerful influence on food producers and marketing firms (Kingsley 2001).
