THE ROLE OF INTERMEDIARIES IN MARKETING OF YAM FLOUR (A CASE STUDY OF BARUTEN LOCAL GOVERNMENT AREA OF KWARA STATE)
BACKGROUND OF THE STUDY
The alleged increase in the consumption of yam flour “KINA-KUNNU” as it is called in Baruten Local Government Area of Kwara State and lack of good roads in the area has brought the importance of intermediaries for effective sales of agricultural product in Gwanara Market of Baruten Local Government Area.
Therefore, this project is aimed at showing the vital roles played by the intermediaries of this Agricultural product, yam flour.
Basically, intermediaries who are known as the BARANDA (MALE) TENKU-SUNO (FEMALE) intermediary in Baruten. They are the link between the producer and the buyers. These intermediaries take the possession of goods assigned to them by the owner who is known as the principal on commission bases. The agent can be classified into the following types.
i. The Declarer: This type of agent guarantees his principal that if the person he is recommending fails to pay the principal, this type of agent is given high rate of commission.
ii. The Factor: Deals with a particular goods in his own name, without disclosing it to the consumers and sells at his own price.
iii. The Broker: This is an agent who simply brings the third party into a contractual relationship with his principal. he has no possession of the physical goods and so handles over the customer to his principal after he has made a useful contact on behalf of his principal.
The commission house (sometimes called the commission merchant) they sell on behalf of their principal and receive a margin called the commission. Which is based on the volume of sales they are able to generate, they also have they physical power over the goods they sell. This type of agents also enjoy greater powers to price method and terms of sales.
The “Baranda and Tenku-suno” are typical examples of commission merchant of yam flour in Gwanara Market. The role of this intermediary is beneficial to both producer and consumer (buyers) they help the producer in creating awareness and making effective sales of their product.
And to the buyers, they help in reducing the cost of transportation, because most of the farmers or producers live in a remote area where they use canoes, motorcycles, and human carriage are the only means of transporting this product.
Due to lack of good transportation in the area, this goods are taken twice in a day or everyday depending on the distance (Kilometers) to the intermediaries (Baranda and Tenku-suno) before the market day.
The role of the intermediaries is also to send a means of getting this product from the various farmers to a particular place which is nearer and motorable for the buyers who come with big lorries to pack the products either on market days or ordinary days to their various towns where the products are needed. Thus, the effectiveness of intermediaries and its positive effect on the sales of Agricultural product has made the involvement of intermediaries indispensable.
1.2 STATEMENT OF THE PROBLEM
The intermediaries as a link between the producers and buyers have some activities that they carry out for either of the party. These activities qualify them to have their commission as consideration for the job done. In this local market, the commission charge and collect normally cause dissatisfaction to the consumers or customer. The customers and consume believe that the money paid to them as their commission is a cheat because it increases the price of product and also believe that the price is already inflated by these local intermediaries.
The intermediaries on their part always claimed that what they are getting as commission from buyer is right because they are the one who facilitate sales of the product.
Certain questions which attract much attention among others are:
i. Does it mean that without these intermediaries buying in that market cannot be possible?
ii. Do these intermediaries have job doing is buying transaction.
iii. Who assign them the job and who pay for the job.
So, the word satisfaction can be obtained when the buyers feel that what they pay for the product march the utility derived from the products.
1.3 AIMS AND OBJECTIVES OF THE STUDY
The main aim and objective is to examine the significant role of intermediaries especially those in the locally organized market. Another objective is to ascertain whether the role of intermediaries really influence the sales these agricultural products “yam flour” and to know the effect it has on the buyers.
Other objectives are:
i. To find solution to conflicts which normally arise between the buyers and the agents. (Baranda, Tenku-suno).
ii. To improve the marketing of yam flour through mutual understanding between the buyers and the agents.
iii To show the importance of the intermediaries.
1.4 SIGNIFICANCE OF THE STUDY
The major importance of the study is to the following benefit.
it is significant to me as it is a requirement is partial fulfillment for the award of HND in Business Administration.
ii. To add to existing knowledge on strategies for effective and efficient exchange process.
iii. To aid and improve the knowledge of the intermediaries around the geographical area (Baruten L.G.A). For effective distribution.
iv. Provides information on different and uses and modification of yam flour i.e. build and modify.
v. To enlighten the people (society) that intermediaries will make easy their business activities.
1.5 SCOPE OF THE STUDY
This research work is limited to the role of intermediaries in marketing of yam flour within Baruten Local Government Area of Kwara State.
It concentrates on Gwanara Market, this work covers a period of five years to area which is very far from the researcher.
⦁ Conceptual Scope:- The conceptual framework of this study is on the role of intermediaries in marketing of Agricultural product in locally arranged market. The areas visited were distribution, roles of intermediaries and commission of intermediaries.
⦁ Geographical Scope: The geographical scope of this study is Baruten Local Government Area of Kwara State with particular reference to Gwanara market and its environment. Data were collected from this Area for the project agriculture. How agricultural products were distributed in the area mentioned above.
⦁ Time Scope: The time scope is five years back i.e. information, collected were between 2004-2007.
1.6 LIMITATION AND CONSTRAINTS OF THE STUDY
The researcher comes across a lot of constraints on the of course study, some of these constraints can be enumerated below:
⦁ Financial Constraints: This is a major problem of the researcher, this comes on the side of money for transportation, feeding and the like of putting questionnaires. But with the contribution from friend, and relatives the researcher was able to complete the project work.
⦁ Time Constraint: The researcher found it very difficult to complete the project work within a short period of time i.e. it took much time than expected because of other pressing matters like school which give, the researcher only a free lecture day for project study.
⦁ Respondent Constraint: This is another aspect that made the researcher work a difficult task because the respondents at the beginning proved difficult to give necessary information. This is because both the intermediaries and the buyers think that it will leak some of their secrete, which is inflation of prices and other charges that usually bring conflict between the buyers and the agents.
1.7 DEFINITION OF RELATED TERMS
Many people have a vague idea that agriculture is concerned mainly on the cultivation of land. According to Akinyosoye’s textbooks he says, Agriculture is basically with husbandry of crops and animals for food and other purpose and it’s the foundation upon which the development of suitable human communities such villages and town have dependents in many parts of the world.
⦁ Crop Husbandry: This involves the raising of fields, garden and tree crops. There are two types of crops which are annual and perennial crops.
⦁ Animal Husbandry: This is the rising of animals and livestock for milk and for meat.
⦁ Marketing: Marketing on the other is a very broad term with mainly diverse definition. Marketing can be seen as a human activities directly towards satisfying needs and want through exchange. There are several types of market which are consumer market, reseller market, farm market, industrial market and international market.
⦁ Agriculture: - Agriculture can be broadly defined as the art and science of production of plants and animals that are useful to man.
⦁ Product: - this is anything that can be offered to a market for use or consumption with a profit in return.
1.8 PLAN OF THE STUDY
This project work has been divided into five main chapters:
The first chapter of this project work is the introduction chapter and it’s discussed the problems or investigated the problems of marketing of Agricultural product in Kwara State, objective of the study, scope of the study and the limitation of the study will be discussed.
Chapter two, which is the literature review, divided into the definitions of marketing of Agricultural product, the roles of marketing of Agricultural product and government contributions towards marketing of Agricultural product development
Where as chapter three, explains the researcher methodology, sampling procedure and made of data collection.
Moreso, chapter four presents the historical background of intermediaries, customers and consumers of yam flour in Gwanara market, analysis and interpretation of data including the organization structure of yam flour.
Chapter five, contains the suggestions and conclusion as well as the summary, recommendation and reference.
2.1 CONCEPT OF INTERMEDIARIES IN CONSUMER MARKET
Consumer market is a group of individuals and organizations who buy products for the sole reason of consumption. Therefore, goods bought in this market are meant for final consumption and to satisfy basic or psychological needs or wants.
Therefore, the basic concept on the roles played by the intermediaries of this kind of market (consumer market). Inspire of the various criticism given in the involvement of intermediaries in the channel of distribution some marketing professionals still saw the importance of this middlemen.
According to Philip Kotler (1991), he define intermediaries as the middlemen through which a seller market or consumer market make goods and services available and his products to the ultimate consumers. Consumer market intermediaries emerge as a result of the need for specialization and division of labour to carry out a set of marketing functions such as;
i. Contractual Functions: Searching out for buyers and sellers in the market.
ii. Merchandizing: Matching the goods to the market requirements. This involves sorting, grading, accumulating, bulking, allocating and bulk-breaking.
iii. Pricing: They determine the optimum price high enough to make production and distribution possible and low enough to induce buyers to accept the goods.
iv. Physical Distribution: Such as transporting and storage of goods or products.
v. Credit Financing: Such as extending long term credit to the small manufacturers or short term credit to buyers.
Giving the involvement of intermediaries in the channel of distribution, some marketing professionals still saw the importance of these middlemen while some criticize it.
Ewa and Agu, gave the definition of intermediaries as the link between the manufacturer and the consumer aim in breaking up the commodities in bulk and repackage them in smaller unit and also to stabilize the price through stock pilling in the warehouse. This definition best suits the intermediaries in the sense that it lays more emphasis on the benefits derived by both the consumers and the producers, thus showing the effectiveness of the intermediaries making their involvement in the distribution channel indispensable..