The Impact Of Full-Scale Culture Of ‘Pricing’ On The Quality Of Life Among Nigerians

The Impact Of Full-Scale Culture Of ‘Pricing’ On The Quality Of Life Among Nigerians

Introduction

“Wetin be the last price?”;

“You go fit comot money? I be your customer ooh”;

“Your market cost ooh, I go buy from your neighbor!”;

The above phrases and more are constantly used in Nigerian market space to influence the prices of goods and services.

To bargain in the context of this piece, means an advantageous purchase, especially one acquired at less than the usual cost. In Nigeria, this is known as ‘pricing’ or ‘price’.

It is worthy of note that negotiation or bargaining could be helpful  – who wants to spend more on a product they can get for less?

Some questions could be asked in relation to the original motive of bargaining or pricing in Nigeria as well as to what extent: could it be that pricing is now a total way of life in Nigeria? And at what price?

Therefore, this piece on the impact of full-scale culture of ‘pricing’ on the quality of life among Nigerians critically examines the factors behind Nigeria’s pricing culture; its impacts on the quality of life among Nigerians and possible solutions towards unhealthy pricing in Nigeria.

Life Among Nigerians

Reasons Why Nigerians ‘Price’

There are numerous reasons behind the need for advantageous purchases, especially one acquired at less than the usual cost by potential buyers.

In many instances, people make estimates before going to a market, store or sales stand to buy something and eventually, they find out that their estimates are not precise. This occurrence triggers the buyer to make possible bargains in his or her interest.

With over 37.07 million micro, small and medium scale business in Nigeria, buyers tend to showcase disbelief in the first instance towards a price offered to them by sellers. The following are some notable reasons for this:

  • Poverty

Presently, majority of Nigerians are living in multi-diimensional poverty all over the country.

Poor Nigerians especially, are basically looking to get more for less, not necessarily because it is what they want to do, but because their financial capacity has them stuck in such situation.

  • Inconsistent and flexibly market prices

In comparison to certain environments and instances with uniform price tags for the same valuables over a long period of time, Nigerian marketers tend to make frequent additions or reductions of the prices of goods and services.

Although there exist many factors that could influence such deductions or increments in prices, such as: increase in cost of raw materials, transportation, economic difficulties/recession, etc, it must be noted that these incessant fluctuations in prices, makes the buyer uncertain. Hence, it induces the habit of having to bargain or ‘price’ in a potential buyer (as well as even the seller).

  • Geographical location

Although geographical location is easily overlooked, it is indeed a primary factor behind pricing in Nigeria.

With 36 states and the Federal Capital Territory (FCT) in Nigeria, there exist various commodities, essentials and services that are peculiar to a particular community, state or zone. For instance, the following states are known for the  listed agricultural products: Cross River – Plantain, Benue – Yam, Kano – Wheat, Taraba – Maize, Ebonyi – Rice, Ondo – Palm Oil, etc.

One will reasonably expect the above listed products and more to be cheaper within their geographical area of production and perhaps, slightly costly outside such areas.

However, most Nigerians tend to undermine such expectations and insist on a consistent price within the two areas. For example, Mr. A buys a gallon of palm oil in Calabar at 6,500 only. He then travels to Bauchi a month later and prices a similar gallon of palm oil for 6,500. One thing is crystal from this instance: Mr. A insists on buying at 6,500 based on his previous transaction(s) in Calabar.

Thus, many people price in Nigeria because there exist a presumption in their minds that prices are/should be same irrespective of [their] location.

  • Ethnic and Religious sentiments

“Reduce price for me na, I be your brother oo”;

“You be Igbo man, una too like money na why your market cost”;

“I be hausa, E never tey since I enter Igbo land, abeg reduce price for me”.

In Nigeria, people naturally expect to buy goods at a cheaper rate from their tribal or ethnic relation/person or people they share the same religious faith with. This is most likely due to the thinking that that there is a ‘shared understanding’ as well as expected empathy between themselves while negotiating with common identity elements such as language even if the buyer and seller are from different ethnic regions.

  • Distrust

An average buyer feels the seller might be trying to overrate his/her products or services while the seller feels the buyer might be trying to underrate his/her finance, – both, to gain a possible edge.

An average Nigerian buyer sees every opportunity to buy as an equivalent opportunity to save extra cash.

The quality of such goods or services become immaterial for the prospective buyer because of two factors:

  • Lack of a uniform price structure in the market; and
  • Desperation to make sales by vendors experiencing slow turnover/loss.
  • Other factors include: Greed; saturated second-hand market; etc.
Impact of ‘Pricing’ on the Quality of Life among Nigerians

‘Pricing’ has massive impact on the quality of life among Nigerians.

Positive

Positively, ‘pricing’ helps the prospective buyer to know more about the product or service to be purchased because during pricing the two parties dialogue on the benefits of the products/services and reason for the said price.

Thus, more information could be revealed to the buyer on his/her choice of product (as well as possible alternatives).

Negative

  • Lack of trust

In Nigeria, we have repeatedly recognized factors such as tribalism, extreme religious views, nepotism, inferiority complex, incompetence, greed/selfishness, etc. as cardinal reasons why we do not trust one another. Lack of trust in these variations, no doubt, leads to several problems ranging from low productivity to lack of progress at all levels.

However, how about pricing?

We price almost everything in Nigeria with possible exceptions such as supermarkets and while this in itself is not entirely negative in certain cases but it has affected us a great deal in how we trust or believe in ourselves as well as one another.

We price almost everything in Nigeria because we do not want to be cheated on or scorned at as not smart enough – we are literally scared of each other. About to enter a taxi, we price; about to buy clothes, we price; fish, we price; house rent, we price; bride price, we even price that now.

  • Low value for goods and services

When we price nearly everything, we risk the grace danger of engaging in the constant devaluing of the worth of those things and do not appreciate the benefits of those things. This affects the quality of goods sold and services in the Nigerian local markets.

When a buyer ‘price’ a rubber of garri from 300 Naira to 150 Naira driven with the mentality or mindset that the efforts involved in such production and marketing are not worth it (even though greed could sometimes be a factor from the seller’s part).

This set of people/buyers believe that the value of the good or service is not worth the amount set on it. They go for quantity over quality and fail to recognize the cost, distribution channels and the skill level of the producer.

Similarly, when people find two similar products that perform the same function, they would most likely, choose the cheaper ones (which might be a less quality grade). This act could force some sellers to focus on cheaper products.

The salient thing to note is that if this goods/products and even services is particularly in the food sector, there arises a serious threat to life as the Nigerian markets would be flooded with substandard goods, which most of the time poses severe health and environmental risks.

  • Decrease in manufacturing or production capacity

The factor of low value of goods and services leads to another impact, which is increasing de-motivation and capacity for manufacturers or producers.

Some Nigerians ignore or overlook local products and, yet they rarely can afford first-hand foreign products, which makes their best alternative to be second-hand foreign goods.

A fitting question to capture this point: why should a cloth maker in Nigeria make quality new clothes when a significant share of the market is ready to ignore or overlook or price down the process involved in the production and place/price it at the same level with fairly used clothes coupled with the difficult business environment?

The cloth maker will most likely rationalize (and perhaps rightly) that going into ‘second-hand market’ instead of manufacturing is more profitable.

  • Loss of virtues (interest in being honest)

A market seller who is honest wants to sell her original fabrics at a reasonable price (with profit inclusive) for example, 500 Naira per yard but she finds it difficult to sell compared with those who sell same (of lower or same quality) at about 1000 Naira per same yard.

Some buyers feel the honest market seller is selling fake; some feel that she might be looking for a way to cover their destinies with the cloth for such a very too-good-to-be-true price; and some would still just want to price it down from 500 Naira to 250 Naira and still end up not buying from her and rather buy at even more expensive rates.

What motivation remains for the honest market seller to continue being honest?

In addition, when a seller is aware that a prospective buyer would price, the seller elevates the price but who or what sets such limits? Greed?!

  • Waste of time

Constant pricing of virtually everything leads to waste of valuable time, which could have been invested in other endeavors.

CONCLUSION and RECOMMENDATIONS

A full-scale culture of ‘pricing’ on the quality of life among Nigerians has few advantages. However, there is need to significantly, curb such habits for the betterment of Nigerian local products and sellers.

Hence, steps and measures should be adopted in order to promote business trust, sincerity, transparency and unity.

The following steps are highly recommended:

  1. Nigerians should believe and actually see realities of fellow Nigerians as being trustworthy, capable of doing good and excellent works (products/services).
  2. The economic realities of the country needs to improve both the living standards of Nigerians as well as to encourage local production and manufacturing capacities.
  3. There is need for proper and fair regulatory and standardization mechanisms to protect local products/services. In other words, price regulations should be more effective in such a way that both low income earners and high income earners and producers can all benefit from.
  4. Genuine and sustained public enlightenment campaigns should be organized by both the private and public sectors on the value and cost of Nigerian products/services.

 

 

*This article [The Impact Of Full-Scale Culture Of ‘Pricing’ On The Quality Of Life Among Nigerians] was first written by Toju Micheal Ogbe, Chukwu Micheal Ike, Fego Eunice Onowori and Chioma Ezeigbo on the 25th of August, 2020 and was last modified by Toju Micheal Ogbe on the 20th of September, 2020.

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