A Comparative Analysis on Marketing Efficiency of Raphia and Oil Palm Wine in South East, Nigeria

Abstract

The study compared the marketing efficiency of oil palm wine (OPW) and raphia palm wine (RPW) in South East, Nigeria. The study specifically described the marketing channels of OPW and RPW, determined the market structure, and ascertained the profitability and efficiency of OPW and RPW marketing by the intermediaries. It also estimated the determinants of profit realized by OPW and RPW marketers; and identified the problems of palm wine marketing in the area. Multi-stage sampling method was used to select 240 respondents. Primary and time series data were collected using structured questionnaire administered to the respondents by personal interview. Descriptive and parametric statistics involving enterprise budgeting and multiple regression techniques were used for data analyses. Results identified five marketing channels for palm wine in the area. Gini coefficient analysis gave concentration ratios of 0.19 and 0.44 for OPW and RPW wholesalers; 0.48 and 0.08 for OPW and RPW retailers respectively, implying a fairly competitive market. Palm wine marketing was profitable in the area given the positive values of gross margin, net marketing income, mean net marketing income, and net return on investment of N5,025,872, N4,980,976.03, N41,508 and 0.37 for OPW; N3,640,020, N3,614,966.88, N30,124.72 and 0.96 for RPW. RPW was more profitable than OPW because it returned 96 kobo against the 37 kobo returned by OPW for every N1.00 investment. Purchase and selling prices, transportation cost, and marketing cost statistically and significantly influenced pooled OPW and RPW marketers' profit; marketing cost, purchase and selling prices were common significant determinants of profit realized by the wholesalers of OPW and RPW while selling price was the only common significant determinant of profit realized by the retailers of OPW and RPW. The constraints to palm wine marketing arranged in descending order of seriousness were high cost of transportation, scarcity of modern storage facilities, low shelf life of the product, seasonality of supply, poor patronage, high cost of palm wine, adulteration, and price instability. The establishment of small scale palm wine bottling industries through private initiatives would extend the products' shelf-life, and make it available all year round. Government in collaboration with private initiatives should provide modern transportation, and market infrastructural facilities as well as soft loans, to enable the marketers operate at minimal cost, earn more profit in conducive environment and good health.