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CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
The aim of marketing is to meet and satisfy target customers’needs and wants better than
competitors. Successful marketing requires that companies fully connect with their
customers. This calls for adopting a holistic marketing orientation which means
understanding customers and gaining a full turn-around view of both their daily lives and the
changes that occur during their lifetimes so that the right products are marketed to the right
customers in the right way. These consumers have varied influences that affect their buying
decisions and among these are the pricing tactics and strategies of the marketing firm (Kotler
and Armstrong 2007:5).
Brassington and Pettitt (2003:392) defined price as the value that is placed on something.
Usually, the price is measured in money, as a convenient medium of exchange that allows
price to be set quite precisely. This is not necessarily always the case.However, goods and
services may be bartered, or there may be circumstances where monetary exchanges are not
appropriate.
Zeithaml (1998:17) noted that from the buyer’s perspective, price represents the value they
attach to whatever is being exchanged. Up to the point of purchase, the marketer has been
making promises to the potential buyer about what this product is and what it can do for that
customer. The customer is going to weigh up those promises against the price and decide,
whether it is worth paying.
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There is much competition for consumers’ disposable income. This is reflected in both the
range of different product markets available for them to spend in and the variety of products
competing in any one market. Consumers also have a great deal of discretion over whether
they spend or not. There are very few real necessities and, on many occasions consumers buy
because they want to, rather than because they need to (Achumba 2001:17).
Also, as a result of the fact that consumers are largely buying to please themselves, their
assessments of competing products in most markets is often informal, non-rational or
emotional or even none existent. McCarthy and Perrault (2005:172) stated that psychological
factors can play a much greater role than analytical skills. Even where hard product
information is provided, the consumer does not necessarily make the effort to digest it
properly or retain it. Price too, as has already been pointed out, may be interpreted variously,
depending on the individual customer.
Most consumers are utility maximizers; many of them always look for value-to-cost when
they make buying decisions. In some situations, consumers are extensively involved in
haggling in order to justify economic value for their purchase. Stanton and Sommers
(1985:17) opined that in Business to Business (B2B) markets and major open markets in
consumer buying situations where high-value purchases are involved, haggling usually takes
place. This determines the final price agreed between the parties and the nature of the offer
package that will be provided for that price. Price haggling, according to Lysons (1993:215),
is concerned with communication processes that take place between the two parties to arrive
at a mutually acceptable bargain.
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Baily (1987:101) stated that price haggling is also known as negotiation. In marketing
parlance, negotiation is usually used. Baily (1987:101) further defined negotiation as any
form of verbal communications in which the participants seek to exploit the relative strengths
of their bargaining positions to achieve explicit or implicit objectives within the overall
purpose of seeking to resolve the identified areas of disagreement.
Many price haggling issues revolve around price and/or cost trade-offs with the rest of the
commercial packages offered. Thus, a buyer may agree to pay a slightly higher price than
he/she had intended, if the seller agrees to deliver more quickly than originally suggested. It
must be noted that price haggling (or negotiation) is not only limited to the purchases of
expensive, highly complex products. Also, in the Nigerian contemporary open markets, the
issue of “hagglling” has become the most fundamental. It is only in selected departmental
stores and large-scale retail outlets that price haggling may seem not to be effective (Kotler
&Armstrong 2010:396).
Basing the discussions on the open markets, price haggling (or negotiation pricing) can never
be overemphasized in this area of marketing. Olakunori (2009:162) asserted that haggling in
Nigeria markets is a fundamental phenomenon that did not start yesterday or today. He
pointed out that this can be traced back to the early 1860s when market structure started
developing in Nigeria.
Olakunori (2009:172) defined haggling as a type of negotiation in which the buyer and seller
of a good or service dispute the price which will be paid, and the exact nature of the
transaction that will take place, and eventually come to an agreement. Haggling or
bargaining is an alternative pricing strategy to fixed prices. Optimally, if it costs the retailer
3
nothing to engage and allow bargaining, the retailer can define the buyer’s willingness to
spend. It allows for capturing more consumer surplus as price discriminationwhich is a
process whereby a seller can charge a higher price to one buyer who is more eager or
desperate.
This research work therefore examines the effects of price haggling as a strategy on consumer
buying decisions in selected traditional markets in Ibadan, Oyo State, Nigeria. It must be
realised that decision making, according to Kotler and Keller (2013:163), consists of how
individuals, groups, and organizations select, buy, use and dispose goods and services, ideas
or experiences to satisfy their needs and wants.
1.2 Statement of Research Problem
One major phenomenon that is a driving force in many Nigerian open markets is haggling.
This has to do with what should be the established product price between sellers and buyers.
Some of our open markets are being despised especially in the large cities mainly because of
haggling problem. Some
Consumers have tended to shift their buying outlet to departmental stores and
supermarketswhere prices most times are fixed. In addition, some traders in selected markets
in Ibadan complained severally on delay in time and purchase decision which frequently
occurs during haggling or negotiation process. This, sometimes to them, may eventually lead
to consumer not finally buying the product or even using reference psychological price.
Many buying decisions are predominantly determined by haggling outcomes. Some
consumers widely articulated that when making purchases in open markets, such as that of
selected traditional markets, the haggling price arrived at sometimes may determine their
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repeat purchases and selected retail traders in the subsequent purchases. Furthermore, in
recent times, it has not been ascertained whether the issue of price haggling or negotiation is
effective. This is so because many consumers, especially those who are not price sensitive
and purchasing experts, are usually exploited. Haggling could result in permanent
relationship that may even give rise to price waivers, and may result in crises that leads to
boycott of trading outlets and most often these may strengthen or weaken the system. Both
traders or marketers and consumers in these open markets have positioned their interests in
favour of haggling as a way of enriching the system. Both may end up satisfied or
dissatisfied.
In the long-run, their purchases in the open markets are affected negatively and this is
supported by the fact that many consumers usually use unfavourable expressions and
critically criticize the operations of the open market such as in selected traditional markets. It
is in the light of the above problems that the researcher seeks to determine the effects of price
haggling as a strategy for consumer decisions in buying products at selected traditional
markets in Ibadan. Thus, this research will assess the degree of adequacy and continuous use
of price haggling as an instrument of negotiation in traditional markets in Ibadan, in spite of
the likely implications of time wasting, lack of trust and false pricing embedded in the
transactions.
1.3 Objectives of the Study
The broad objective of this study is to evaluate the effects of price haggling as a strategy for
consumer buying at selected traditional markets in Ibadan. In the course of achieving this
broad objective, the following specific objectives are formulated:
1. To assess the effects of price haggling on consumers’ buying decision making.
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2. To determine the effects of price haggling on consumers’ repeat patronage.
3. To ascertain the effects of price haggling on open market operation.
4. To examine the effects of price haggling on consumer/seller relationship.
1.4 Research Questions
To achieve the above objectives, the following questions are raised for the study:
1. What is the effect of price haggling on consumers’ buying decision making?
2. What is the effect of price haggling on consumers’ repeat patronage?
3. What is the effect of price haggling on open market operations?
4. What is the effect of price haggling on consumer/seller relationship?
1.5 Research Hypotheses
In addition to the research questions, four (4) hypotheses are formulated as follows:
1. Price haggling does not have significant effect on consumers’ buying decision
making.
2. Price haggling does not have significant effect on consumers’ repeat patronage.
3. Price haggling does not affect open market operation.
4. Price haggling has no significant effects on consumer/seller relationship
1.6 Significance of the Study
This study is aimed at contributing to the knowledge in the area of Marketing, Marketing
Planning and Control, and Marketing Management. It would help marketing managers in
decision making, customer relationship management, as well as marketing research and
consumers’ survey.
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Johnson (1986:16), the anthropologist said “the only way a scientist can start to understand
something is to describe it, to measure it and name it”. Therefore this work attempts to
evaluate the effects of price haggling as a strategy for consumers’ buying decision making,
and this involves examining the practices, relating these to the theoretical norms, and making
inferences from observed differences.
1.7 Scope of the Study
The scope of this study is the effects of price haggling as a strategy for consumers’ buying
decision making in the selected traditional markets in Ibadan. Thespecific markets are Dugbe,
Mokola, Bodija, Alesinloye, and Ojoo, being among the biggest local markets in West Africa.
Ibadan is the biggest city in West Africa (Laolu 2009:16). This study limits its scope to price
haggling.
The work analyses and presents the methodological approaches for utilizing and employing
haggling pricing strategies. The effects of this on the consumers’ buying decision will be
sought. Consumer buying decision making is the major concern of the work and open
markets, which are Dugbe, Mokola, Bodija, Aleshinloye and Ojoo in Ibadan serve as the
coverage areas. This research work is therefore limited to consumer goods and how price
haggling affects the buying decision making.
1.8 Limitations of the Study
The task of getting all necessary information is not very easy. There are limits to the amount
of information as well as the quality of information. These are the problems that the
researcherfaced in the course of gathering and processing necessary data.
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These problems include the un-cooperative attitudes of the respondents; i.e. market traders
and consumers; the paucity of research literature which are relevant to the topic in Libraries.
These challenges serve as constraints to the researcher in carrying out a more elaborate
research work, thereby affecting the scope and quality of the study.
8
REFERENCES
Achumba, I.C. (2001) Consumer Behaviour. Lagos: Macmillian Publishers Ltd.
Baily, P.J.H. (1987) Purchasing and Supply Management. London: Chapman and Hall.
Brassington, S. and Pettitt, F. (2003) Principles of Marketing. London: Prentice Hall Inc.
Johnson, D. (1986) Roles of Research. Lagos: Lifeline Printing Press.
Kotler, P. and Armstrong, G. (2007) Principles of Marketing. USA: Prentice Hall Inc.
Kotler, P. and Armstrong, G. (2010) Principles of Marketing. USA: Prentice Hall Inc.
Kotler, P. and Keller, K. (2013) Marketing Management. India: Pearson Publisher Ltd.
Laolu, M.I. (2009) “Traditional Markets in Ibadan City.” Journal of Sociological
Development. Vol. 23 (May)
Lysons, C.K. (1993) Purchasing. M&E Handbooks. London: Pitman Publishing.
McCarthy, E.J. and Perrault, M. (2005) Basic Marketing; A Global Managerial Approach.
USA: McGraw-Hill Inc.
Olakunori, S. (2009) Marketing in Nigeria. Ibadan: Spectrum Books Ltd.
Stanton, W. J. and Sommers, M.S. (1985) Fundamentals of Marketing. Canada: McGrawHill
Inc.
Zeithaml, V.A. (1998) ‘Consumer Perceptions of Price, Quality and Value’. London: Journal
of Marketing 52 (July).
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CHAPTER TWO
REVIEW OF RELATED LITERATURE
2.1 Introduction
This chapter attempts to review the related literature on the effects of price haggling as
strategy for consumer decision making. The following issues are reviewed in this chapter,
the concept of marketing, marketing mix and market budget, price as an element of marketing
variables, meaning of price, price haggling, haggling theories, price haggling strategies, rules
of price haggling, buying decision making and consumer markets.
2.1.1 Operational Definition of Terms
Notable operational terminologies are used in the work. The simple meanings are defined
below:
Buyers – generally, the buyers are the consumers or individuals that purchase product
(goods/services) to satisfy needs and wants.
Consumer Decision – Consumer decision is the behaviour that consumers put up or exhibit
when buying and using product that satisfy their wants and needs.Decision making is the
process of buying, using and consuming products that satisfy needs and wants.
Consumer Products – Consumer products are those goods/services that are purchased for
personal consumption and not for resale or reproduction. They are want satisfying offer.
CRM – This means Customer Relationship Management. It entails all functions and tasks
performed in order to retain consumers for future business transactions.
Price Haggling – It is any type of price negotiation or a verbal contest for agreeable and
payable price for a product between the price offered by the seller and the price acceptable to
be paid by the buyer.
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Traditional Market – This is a city square where traders set up stalls and buyers browse the
merchandise. Contextually it is a collection of stalls and/or lock-up shops that are provided
where various goods are sold at bargain able prices, with the local language being popularly
used as the medium of transaction.
2.2 Conceptual Framework
2.2.1 The Price as an Element of Marketing Variables
Adeoti (2004:344) argued considerably that price is not just a thing on a tag. Prices go by
many names. Price is all around us. We pay rent for our apartment, tuition for the education,
and a fee to the physician or dentist. The airline, railway, taxi and bus companies charge
fares; the local utilities call their price a rate; and the local bank charges interest for the
money that is borrowed. The price for driving a car from one place to another is a toll, and
the company that insures a car charges a premium. The guest lecturer charges an honorarium
to tell a story about a government official who took a bribe to help a shady character who
stole dues collected by a trade association. Clubs and societies to which a person belongs
may make a special assessment to pay unusual expenses. The “price” for an executive is a
salary, the price of a sales person may be a commission, and the price of a worker is a wage.
Finally, although economists would disagree, many of us feel that income taxes are the price
we pay for the privilege of making money. If all these are prices, what then is the meaning of
price?
Price is one of the major elements of the marketing mix. Brassington and Pettit (2003:87)
stated that price is the one element of the marketing mix that produces revenue; the other
elements produce costs. Prices are perhaps the easiest element of the marketing programmed
to adjust (Kotler and Keller 2013:516). Product features, channels and even communications
11
take more time. Price also communicates to the market the company’s intended value
positioning of its product or brand.
2.2.2 Meaning and Definition of Price
Kotler and Amstrong (2011:396) stated that in the narrowest sense, price is the amount of
money charged for a product or service, but more broadly, they see price as the sum of all the
values that consumers exchange for the benefits of having or using the product or services.
Historically, price has been the factor affecting buyer choice. This is still true in poorer
nations, among poorer groups and with commodity products.
Baker (1985:124-142) argued that price is the value that is placed on something. Usually, it
is measured in money, as a convenient medium of exchange that allows prices to be set quite
precisely. This is not necessarily always the case, however. Goods and services may be
battered, or there may be circumstances where monetary exchange is not appropriate.
Agbonifoh et al, (1998:312) opined that the price we paid for a product is not the monetary
worth of the physical products or service done. The price covers the volume of the physical
product or service plus the value of the accompanying services such as installation, branding,
packaging, servicing, guarantee, delivery, after sales services etc. In fact, price is taken by
consumers to be a combination of some or all of these. Price therefore is something of value
exchanged for satisfaction or utility. Farayola and Adeyanju (2008:84) defined price as the
amount of money needed to acquire a given quantity of goods or services. It is the money or
consideration exchanged for the ownership or use of a good or service.
12
The importance of price cannot be over-emphasized as it offers many benefits to an
organization as well as consumers. Zeithaml (2004:211) identified the benefits that price
offers to the seller/organization.
To the seller, price is important in so many related ways (Zeithaml, 2004:211-225):
(i) The price of a product determines along with others, the quantity that can be
sold in a given period.
(ii) Price has an impact on the profit or loss margin of the seller. Profit is simply
the positive amount by which price per unit exceeds cost per unit.
(iii) Price has some impacts on the seller’s overall public image.
To the consumers, product prices are also important elements. Adeoti (2004:278-279)
discussed the roles of prices to buyers and consumers:
(i) The higher the price of commodities, the lower the quantities which the buyer
can afford. Thus, the standard of living of a buyer or consumer is closely tied
to the reigning prices of goods and service, for instance, the increase in
petroleum product has adversely affected the living standard of many
Nigerians.
(ii) The price of a commodity may confer some prestige or feeling of importance
or superiority on the buyer or consumer of the product. Some goods become a
status symbol since their use, ownership or consumption tells some things
about the social – economic status of the owner.
From the above viewpoints, McCarthy and Perrault (2005:341 – 346) stated that it is a vital
thing for every marketer to give pricing an adequate attention. This attention is particularly
needed when:
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(a) New products are being priced
(b) The company seeks to charge its price whether in reaction to other company’s
actions or on its own initiative.
(c) Middlemen or consumers are dissatisfied with the current price.
(d) The government, for whatever reason, intervenes or seeks to intervene in the
market by fixing or regulating price e.g. petroleum products.
(e) Suppliers of the company’s input change their prices.
2.2.3 Price Haggling
Lysons (1993:215) stated that price haggling is sometimes known as bargaining. Lysons
further defined it as “any form of verbal communication in which the participants seek to
exploit the relative strengths of their bargaining positions to achieve explicit or implicit
objectives within the overall purpose of seeking to resolve the identical areas of
disagreement.” Many haggling/negotiation issues revolve around price and/or cost trade-offs
with the rest of the commercial package offered. Thus a buyer may agree to pay a slightly
higher price than it had intended if the sellers agree to deliver more quickly than originally
suggested.
Baily (2007:111) identified four main situations in which price haggling/ negotiation may be
used:
(i) An established supplier wants to increase the price or to change the offer
package.
(ii) The buyer wants an established supplier to reduce the price or to change the
offer package.
(iii) A potential supplier wants to oust the existing supplier.
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(iv) There is no regular supplier and it is a new task purchase.
Coles (1998:42) defined bargaining or haggling as a type of negotiation in which the buyer
and seller of a good or service dispute the price which will be paid and the exact nature of the
transaction that will take place, and eventually come to an agreement. Bargaining is an
alternative pricing strategy to fixed prices. Optimally, if it costs the retailer nothing to
engage and allow bargaining, he can define the buyer’s willingness to spend. Harris
(1998:44) argued that price haggling allows for capturing more consumer surplus as it allows
price discrimination, a process whereby the seller can charge a higher price to any buyer who
is more eager (by being richer or more desperate). Haggling has largely disappeared in parts
of the world where the cost to haggle exceeds the gains to retailers for most expensive goods.
(Wood: 2008:146).
Pent (2006:127) stated that haggling is the process of bargaining between the buyer and the
seller until a mutually agreed price can be settled upon. Many people are uneasy about
initiating a haggle, feeling that it insults the seller and should be something reserved for
bazzars and market places. However, there is no reason that in many everyday buying
scenarios, you cannot negotiate price to your advantage, thereby saving money.
Lysons (1993:233) postulated that the concept of haggling is based on the idea that you, a
buyer, come out of a purchase having paid a fair price for a product. It neither involves
cheating the seller nor you being cheated. It is worthwhile remembering that the aim of a
haggle is always to settle on a fair price; it is not about trying to trick the seller into knocking
an unreasonable amount of money off the asking price. It must be noted that the seller must
make a profit.
15
Having said this, Baily (2007:46) believes that many sellers will intentionally price their
products higher in anticipation of that price being haggled down by customers particularly in
private sale or second hand goods shops. So there is often elbow room for you to pay less
money than is being asked while still allowing the seller to make profits. Brassington and
Pettitt (2003:457) stated that there are many potential areas of the offer that might have to be
haggled or negotiated.
Quality Packaging Product Requirement Specification
Price Quality
Terms of payment Future contract options
Discounts Cancellation compensation
The Contract
Transport Charges Remedies for major or minor default
Trade-in allowances Guarantee and Warranties
Cost of Samples Exclusivity Delivery Details Development Inspection
Support in Production arrangements
Figure 2.1: Haggling/Negotiation Variables
Source: Bransington, S. and Pettitt, F. (2003) Principles of Marketing. London:Prentice
Hall, Inc. page 457.
The key skill in effective negotiation is the ability to negotiate elements of the package in
term of a trade-off. Figure 2.1 highlights typical arrears of concerns. Of course, this will vary
from situation to situation. Thus, the trade-in allowance may be increased if the payment is
16
made in total up front, or a discount may be increased if the customer collects the item at his
own expense. Not all elements of haggling or negotiation will involve price, but virtually all
of them will involve cost.
Coles (1998:42) explained that haggling is another word for bargaining where the people
involved negotiate over the price to be paid for product or service and the nature of
transaction and intimately reach an agreement. People often haggle before making a deal, be
it common items or consumer products which are more expensive products. Haggling no
longer exist in a place where the cost to bargain is much higher than the profit gained by the
retailer for common goods.However, haggling has advantages to the retailers while selling
expensive goods to uninformed buyers. Haggling for small items may take a few minutes
while those involving bigger and more expensive goods may take a longer time. During the
haggling process, the shopkeeper may indulge the customer with refreshments and
informative talk, extolling the features of service or product.
Makaleley (2001:17) added that haggling is an alternative pricing to fixed prices. By
following the process of price discrimination, the seller can sell his goods at a higher price to
the buyer who can afford it. Haggling may be a common feature in some places of the
worldwhile it may be unheard of in certain regions. Visitors who have no experiences of
haggling may have a tough time shopping in a region where haggling is a common practice.
Lysons (1993:47) stated that it is necessary to haggle in some markets as the sellers usually
quote a much higher price expecting the customer to indulge in haggling. Hence as a
customer, it is necessary to have a basic understanding on the value of an item and set a
reasonable standard so as to avoid getting cheated. Many government shops have fixed prices
17
which could give the customers some ideas on the price of item. Consequently, if the other
retailer has quoted a very high price, the customer can express astonishment that would force
the retailer to quote a more acceptable price. Coles (1998:45-46) described the dimension on
how haggling works. He stated that during the transaction process, the retailer may quote a
price for the item picked up by the customer who reacts with shock to hear the highly quoted
price. The customer demands a much lower price which is however not acceptable to the
seller. So this starts the bidding and haggling with the retailer justifying the cost of the item
by stressing on its unique features while the customer quotes the price on the basis of
previous buys by the other known people. Ultimately, the consumer buys the product after
reaching an agreeable price to both the parties.
2.2.4 History and Development Structure of Price Haggling Activities
The works of Winberley, citing Graeber (1995: 143) gave a description of trade in line with
price system and usage. Winberley (2013: 48) explained that some people quite enjoy
haggling, some do not, but it is always tiring and time-consuming. Economists have long
been fascinated by the process of market negotiation. They even have seen it as a paradigm
for human interaction. Smith (1946:12) defended self-interested arm’s length trade as a more
solid economic base for society than unreliable benevolence.
Walras (1976:16) upped the stakes with his powerful idea of a general equilibrium. But to
construct it he needed to spin a fairy tale of an autarkic village market, to which peasants
bring their produce and discuss prices until everybody is in subjective equilibrium, when
thebell strikes and all the contracts are consummated. It’s too bad that no such market has
ever been seen. And that counts as realistic by the standard of later general equilibrium
18
models, with perfect information and zero transactions costs across the whole industrial
economies.
Across the globe, the style or pattern of haggling is not much different. Pent (2006: 46)
argues that the method for negotiating on price tends to be similar with buyers looking for the
cheapest price whatsoever and the sellers wanting profit. Often, Makaleley (2001:46) stated
that the language tone tends to be official or unofficial depending on the market structures,
literacy level of both the buyers and sellers as well as what the market conditions dictate.
In many parts of the world, the haggles thrive in poorer countries and have less room to
manoeuvre in richer ones. The issues of haggling are still very popular as it operates in all the
systems of Nigeria Market Structures (Adekeye 2008:146). This is particularly witnessed in
the very high price setting for goods/services, based on the premise that the consumer/buyer
will always want to haggle, even when he/she is told the cost price of the product. This
accounts for the situation where a product’s ‘asking price’ that is N1, 500 can be actually
bought for N600. Price setting that encourages haggling. This is enshrine in the culture of the
people as they belief that their next neighbour will always want to take undue advantage of
them, and the culture of suspicion and mistrust results in haggling, which then causes the
sellers to set high prices for commodities, in anticipation of price haggling.
Lindsay (2012:1-9) gave some very general rules around the world about haggling situations.
a. Western Europe, Australia, New Zealand: Haggling cultures are
similarin the US and Canada, with the exception of large immigrant
populationswho may operate outside of them, enthusiastically haggling in
their neighborhoods or in stalls or markets they run and are frequent.
19
b. Central and South America: Stores that use price tags may not practice
haggling, but in markets and at souvenir shops one is free to bargain
away.
c. The Middle East: This is the Haggling Centre of the world! Even in
countries dripping with oil wealth, the foreigner attempting a purchase in
a store or shop should be wary of being overcharged and also be ready to
bargain.
d. Asia and Africa: Haggling is traditional and still expected. Although the
old patterns are being whittled away, they seek local guidance. Typically a
street or market seller will offer a first price that is unreasonably high. A
notable exception is Japan, where people ask for a lower price.
The main discussion by Lindsay (2012) shows the trend of price haggling around the world
with a main fact signifying that it is not only in Nigeria and Africa, but in almost all parts of
the world across different cultures.
2.2.5 Price Haggling Strategies; The Tactics of Where, When and How to Haggle?
Makaleley (2001:42) postulated that several strategies can be utilized when making effective
and efficient haggling decisions. He discussed themunder three (3) separate headings:
(i) Where to haggle?
(ii) When to haggle?
(iii) How to haggle?
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2.2.5.1 Where can Consumers Haggle?
Pent (2006:133) stated that consumers can’t negotiate price everywhere. Some prices stay
fixed as advertised and that’s that. Some sellers won’t move on price, even under the
solicitations of the smoothest tongued haggler. However, there are plenty of places
consumers can put haggling tactics to good use. Here are Pent’s (2006: 133-134) opinions.
(a) Jumble sales or any sales of used goods are prime haggling territory. The seller will
be looking to get rid of items they don’t want, and so will be willing to drop down in
price in order to make a sale.
(b) If consumers are buying anything from a private seller, a certain amount of haggling
is usually expected, especially on items where the sellers state ‘ONO’ (Or Nearest
Offer)
(c) Car dealerships are another good example of a buyer-seller exchange where the price
is expected to be subject to negotiation.
(d) Damaged-goods in stores or retail outlets can have a great amount of opportunity to
haggle.
(e) Products of high value are more likely to be discounted by the seller than low-value
items, where there isn’t much point in haggling in the first place.
(f) The independent retailers are perfect places to haggle because the owners have
ultimate discretion over the price of their goods.
Cole (1998:74) claimed that consumers should bear in mind that sometimes it is entirely
inappropriate to haggle over a price. In Nigerian open market, however, consumers can
haggle everywhere except department stores, supermarkets, petrol stations and a few other
places.
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2.2.5.2 When should Consumers Haggle?
Makaleley (2001:43) went on further to support Pent’s (2006:133) opinions by stating the
conditions necessary for consumers to haggle. Here are some of them.
(a) If a consumer is intending to haggle in a shop, it is best to try his/her luck when the
premises are quiet. Never haggle when there is a queue, as the seller as well as the
other waiting customers will quickly lose patience with the consumers.
(b) The appropriate time to haggle is towards the end of a sale, where items have already
been discounted. Items that have already been slashed in price are more likely to be
discounted further especially at the end of a sale, where the seller wants to get rid of
as much surplus merchandise as possible.
(c) If the consumer is coming to the end of a phone or internet contract, it is worth
reviewing what he or she is paying when compared to other providers. If the
consumers feel that there is an uncompetitive rate, he/she can either switch providers
or haggle with the current one.
(d) Another good time to haggle is when a product is nearing the end of its shelf-life or
becoming obsolete. For example a seller is more likely to lower the price on outdated
mobile phones to make for new models.
However, in contemporary open markets in Nigeria, consumers can haggle at any time of the
day in the market overt. (Onah and Okoli 2014:47)
2.2.5.3 How can Consumers Haggle?
When a consumer has decided to enter into a haggle, he/she needs to remember that there can
only be two outcomes, either the consumer outright refuses any money off, or he/she comes
away with a discount. Either of the ways, the consumer has nothing to lose in trying his/her
luck. Pent (2006:136) noted that the first thing the consumer needs to do before entering into
22
discussion with the seller is to do his/her research by checking the price of his/her desired
product elsewhere. The consumer can compare prices online, or hurt down the best deals on
the high street.
This will arm the consumer with the knowledge to make an informed offer when it comes to
haggling, and also enable the consumers to tell the seller how much cheaper he/she could buy
the same item elsewhere. Often, simply telling the seller that the consumer has come across
the item at a lower price will encourage the seller to knock the price down, in order to try and
secure the business.
Before a consumer starts to haggle, it is also necessary to have a set price in mind that he/she
will not exceed, whatever happens. If the consumer finds that the seller can’t push the price
any lower than this, he/she should simply walk away from the haggle. The consumer never
has an obligation to buy until the price has been agreed upon.
2.2.6 Rules of Price Haggling: the Do’s and Don’ts of Haggling
In order to be effective in the contemporary price haggling situations, researchers have
formulated certain rules and guidelines that can guarantee efficient haggling decisions. Coles
(1998:17-34) and Harris (1998:16-18) pointed out the following do’s and don’ts.
Coles (1998:17-34), while developing the work earlier made available by Harris (1998:16-
18), listed the following rules:
(i) Keep yourself cool. If you lose your temper, a haggle can quickly become an
argument.
(ii) Be friendly and build rapport with the seller.
23
(iii) Be honest and straight-forward in your haggling approach.
(iv) Don’t use the argument that you can’t afford the item. If you couldn’t afford it, you
wouldn’t be trying to buy it.
(v) Don’t argue over pennies (money)
(vi) Don’t demand a discount – sellers never have an obligation to lower prices;
however,sometimes you might find them lowering prices.
In Nigerian open markets, however, the parties in haggling process engage several strategies
and tactics such as concessions where the parties shift grounds to agree on a mutual price for
the product. Also a party may come up with a counter offer instead of saying yes or no to the
first offer. Sometimes a party that has a stronger position or advantage in the negotiation
process may engage bluffs strategy to win the other party. In some instances a party may turn
down an offer and request for another because he is not willing to give more than necessary.
(Onah and Okoli 2014: 46)
2.2.7 Merits and Demerits of Price Haggling.
Moncrieff (2010:1) posits that haggling, or the process of steady negotiation towards a price
that is acceptable to both parties but (almost always) lower (and never higher) than the
original asking price, is actually an elegant if somewhat time consuming process that
improves economy efficiency. Put simply, everyone is better off where haggling is possible.
Unfortunately, it is generally not considered acceptable in developed countries to haggle with
shop keepers for a particular item. Partly this is because, often, the person dealing with
customers would not know the value of the item and therefore would likely make a loss for
the store, or partly because it would be time consuming to haggle over an entire day in a large
supermarket, and partly because culturally it just isn’t the one thing. The buyer should either
want the item at the asking price or he/she goes somewhere else.
24
Moncrieff (2010: 2) added that haggling benefits everyone in the transaction. The key idea in
haggling is that every consumer has different preferences, meaning that some are willing to
pay more for this items and some less. In an economy where the price is fixed, those that are
happy with this price will pay it and go away with the goods. Those that place a higher value
on the goods will gain more satisfaction than those that are not willing to buy, and those that
are not willing to buy lose out completely. Crucially, the shop keeper also losses out on these
sales if the price he sets is only just high enough to cover his costs. So haggling would not be
in his interest. But in most cases, the shop keeper and trader could afford to cut his price at
least slightly. This is where haggling comes in. The trader knows that some of his customers
are willing to pay more and some less. If all he can observe is whether they buy at the set
price, then he cannot extract more money from the customer who is willing to pay more. But
if he can haggle (and especially, if he is good at it) then he can learn a good deal through the
negotiating process about how willing his customer is to pay more or less.
But it cuts both ways. Mint (2004:17) added that the customer is learning about the market
trader too. If the customer pushes too hard i.e. by demanding a price that is too low for the
seller to cover his costs then the seller rejects the offer and the customer must either choose to
go away empty handed or raise his offer. In any case, the walk-out is the crucial point in the
negotiation; this is the last calling of your opponent’s bluff, and the customer has to be
willing to gamble the loss of the item against the chance that the market trader will relent and
lower his price.
Makaleley (2001:16) stated that haggling is beneficial to both sellers and buyers. Of course,
in some cases one or even both of the parties will do worse than in the fixed price would
because of imperfection in the negotiation process. However, in general where there is an
25
ability to haggle, the benefits for the parties will be greater. According to Onah and Okoli
(2014: 15), quarrels and disagreements among people are reduced through haggling and close
contact at market centres. Where even they show up it is easier to resolve them.
Chartered Institute of Purchasing and Supply (CIPS; UK) (2004) gave some fundamental
advantages and disadvantages of haggling/negotiation. It believed that a successful
negotiation leads to commonly accepted resolutions. Haggling/negotiations take place not
only between merchants and customers but also between state and organisation leaders to
resolve major political and economic issues. The following are the combined advantages and
disadvantages of haggling based on (CIPS; UK) submission:
a. Haggling /Negotiating can prevent disagreement or conflict that may arise in purchasing.
b. Haggling /Negotiation often open new economic opportunities
c. Haggling/Negotiation can show weakness of either of the parties involved.
d. Negotiation/Haggling require competence and skill and once lacking, can lead to
purchasing problems
2.2.8 Factors Responsible for Price Haggling
Timothy (2004:18) presented multiple factors that led into how consumers think about a
brand beyond pricing. However, many of them, like in store experiences, and perception
about quality, take much time and effort to change. In between a pricing change and sales in
those other areas will be a period in the wilderness.
Archarya (2012:4) postulated that there are some points that can really influence haggling
process. Haggling is a process where each party involveds in it tries to gain advantage for
them by the end of the process. Here are the factors identified by Archarya (2012:4-10):
26
a. Goals: what goals do the first party and the other party wants to get out of the
haggling activities?
b. Trade: what do the first party and the other party have that they want to enter into?
c. Alternatives: if the agreement with other party can’t be reached, what alternative
do the parties have? Are they good or bad?
d. Relationship: what is the history of the relationship?
e. Consequences: what could be the possible consequences when the parties don’t
reach an agreement? Who will be affected? By what extent?
f. Power: who has power in the relationship?
g. Possible solution: based on all of the considerations, what possible compromises
might be those?
It must be noted that Lysons (1993:17) stated that the nature and origin of the product also
determine the level of how such products are haggled. Imported goods, according to him, are
less haggled or priced in contrast to the traditional products. Lysons (1993:46-48) further
explained that, most of hagglings on notable complex buying situations are anchored on price
of the goods, the product quality, the delivery terms, the market trends, competitive offers,
retailers/middlemen characteristics, as well as environmental phenomenon. He recommended
that manufacturers must adequately take all these factors into consideration so as to facilitate
positive product positioning in the consumers’ mind.
2.2.9 Price Haggling and Fixed Price Strategy
Brassington and Pettitt (2003:465) defined the term ‘fixed price” as a phrase that is used to
mean the price of a good or a service that is not subject to bargaining. The terms commonly
indicate that an external agent, such as a merchant or the government, has set a price level,
27
which may not be changed for individual sales. In the case of governments, this may be due
to price controls.Bargaining is very common in every part of the world, outside of retail
stores in Europe or North America or Japan. This makes it an exception from the general
norm of pricing in these areas. In pricing, most of the open markets often allow bargaining or
haggling to occur. Howeverin many supermarkets and departmental stores (e.g. ROBAN
STORES, SHOPRITE etc.) prices for all the goods are fixed with no room for negotiation.
Adekeye (2008:18) gave some benefits of fixed price against haggling price. These according
to him are:
(i) Fixed price save time and reduces unnecessary stress from consumer’s view point.
(ii) It makes selling and marketing jobs easier for trading stores or outlets.
(iii) It ensures customer relationship and repeat purchases because the consumer always
believes he/she is not cheated
(iv) Finally, fixed pricing develops marketing system and commercial policy of a nation.
In the work of Pent (2006: 16-46), while analysing the concept of bargaining as it is
concerned in the African continent, he noted that four (4) categories of people tend to haggle.
These are:
(i) Low income earner and lower uppers class stratum of the social class elites.
(ii) Average/middle level educators who always want value for cost when they buy.
(iii) Parents and well-acquainted students who are very rigid in consuming all the times.
(iv) The literates who are more concerned of value and cost-to-satisfaction when
purchasing products. (Pent, 2014:17)
In the work of Adekeye (2008:18), not all products are haggled, as many of beverages, beer
and drinks are fixed from many manufacturers. Adekeye further identified perishable goods,
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agricultural produces, clothes and fashions, complex products, electronics and
materials/goods of high prices as those that consumers haggle most on.
2.2.10 Barriers to Effective Price Haggling
Landes (2005:46), in his work on consumerism, gave several barriers to effective price
haggling. Landes further stated that it is in any consumer’s best interest to try to get the
lowest price on all purchases. Yet haggling, negotiating, or bargaining, at least in
manyculture, is a social norm other than in specific situations such as buying a car that is not
a non-negotiable brand like Saturn or Scionwhere haggling is uncommon.
Landes (2005:47-48) identified several emotional barriers to haggling. Here are a few of
them:
a. The Impression of Strangers: As haggling is a normal social activity, someone who
considers haggling might refrain from doing so for the fear of being seen as abnormal.
Most retailers operate in public, so it is more than likely, other people will be able to
purchase. Once the consumers ask a sales person in a retail store “what is the best
price he/she can offer” The consumer gets stares from strangers. The opinion of
strangers is irrelevant. It is simply in the best interest of the seller to sell what the
consumer wants for the best price possible. The best way to by-pass this barrier is to
ignore everyone other than the sales person, the sales manager and consumer
himself/herself.
b. The consumer’s self-image: One thing that might be preventing the consumer from
starting the dance of number-offering is the idea that the strangers might be right. If
the item to be purchased is something that the consumer can legitimately afford, there
may be no need to engage in haggling at all. People buy things they can’t afford every
29
day without negotiating the price. Perhaps, consumers think they should be the people
haggling while those who can afford the purchase should be happy to pay the full
price. The only reason consumers’ self-image is at stake is because of today’s culture.
But if the consumer would feel inadequate for trying to pay less than other people,
he/she should take himself/herself out of the picture.
c. Fear of Rejection: This is the powerful force that stops awkward boys from asking
girls on dates. The word ’no’ is one of the most displeasing sounds to the human ear
and brain, and people will try to avoid hearing it at all costs. The avoidance means
that many important questions will not be raised because of fear. The right question
would never result in a yes or no answer. For example, “considering that it is a
discounted product and consumers are making room for new model, what is the
lowest price he/she could pay for it?” Rather than, “can the consumer do any better
than that?” If the consumer’s line of questioning doesn’t result in any savings, at least
the consumer tried.
Smith (1946: 11), while adding more on discussions of the barriers to price haggling or
bargaining, gave three(3) main obstacles to the price haggling or bargaining and these are:
(i) Cultural and social norms
(ii) Prevailing market conditions and trends taking place
(iii) Consumers’ perception regarding haggling price versus fixed price tactics.
2.2.11 Price Haggling and Consumer Decision Making
As already related earlier, Kottler and Keller (2013:190) explained that marketing scholars
have developed a ‘stage model’ of the buying decision process. The consumer passes through
five stages: problem recognition, information search, evaluation of alternative, purchase
30
decision and post purchase decision/behaviour. Clearly, the buying process starts long before
the actual purchase and has consequences afterward.
Often, consumers do not always pass through all the five stages in buying a product. They
may skip or reverse some stages. A woman buying her regular brand of toothpaste goes
directly from the need for toothpaste to purchase decision, skipping information search and
evaluation.Even when consumers decide to buy, many factors affect the purchase decision
among which is price and product-quality. Brassington and Pettitt (2003:468) explained that
price negotiation is one of the main factor that affect buyers at the purchase decision stage.
Other notable factors are anticipated situation factors, attitude of others and perceived risks.
2.2.12 Price Haggling and Consumer Price Sensitivity
Price haggling and price sensitivity tend to be highly related. The relationship is simply that
haggling tends to be more intense when consumers are more price sensitive. Jobber
(2013:572) established the relationship. To him, the demand curve shows the markets’
probable purchase quantity at alternative prices. It sums the reactions of many individuals
who have different price sensitivity. The first step in estimating demand is to understand what
affects price sensitivity. Generally speaking, customers are most price sensitive to products
that cost a lot or are bought frequently. They are alsofewer price sensitive when the price is
only a small part of the total cost of obtaining, operating and servicing the product over its
lifetime. A seller can charge a higher price than competitors and still get the business if the
company can convince the customer that it offers, the lowest total cost of ownership (TCO).
Companies prefer customers who are not price sensitive. The firms need to understand the
price sensitively of their customers and prospects and the trade-offs people are willing to
make between price and product characteristics.Stewart (1995:142) said that the sensitivity
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price is based on the information that most of the consumers have in their memory and alsoas
a result of price haggling activities that are often undertaken from time to time in open and
traditional market places.
2.2.13 Price Haggling and Choice by Buyers
Buying choice and loyalty are inputs of effective price haggling. Rogers (2006:11) opined
that prices are a key positioning factor and must be decided in relation to the target market,
the product and service assortment mix and the competition. All the retailers and market
traders want loyalty from buyers, and in order to achieve this and high volumes they must
pay attention to pricing tactics. Many of them will put low prices on some items to serve as
traffic builders or loss leaders. Others plan mark downs on slower-moving merchandise as
well as allow the bargaining process to be very free and flowing to encourage customer
loyalty. Poor negotiating/bargaining activities have led to missing of many profitable buyers
who may not only buy presently from the seller, but who may also expedite repeat purchase
and buying.
2.2.14 Price Haggling and Customer Relationship
Kotler and Keller (2013:184) defined customer relationship management as the process of
managing detailed information about individual customer and carefully managing all
customer “touch points” to maximize customer loyalty. Customer relationship enables
companies to provide excellent real-time customer service through the effective use of
individual account information. Based on what they know about each valued customer,
companies can customise market offerings, service, programmes, messages, and media.
Customer relationship management is important because a major driver of company
profitability is the aggregate value of the company customer base (Gbede 2001:78)
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In relationship to open markets, customer relationship is one of the main tasks needed by the
market sellers/traders so as to boost patronage and repeat buying from the established buyers
(Achumba, 2004:78). Gbede (2001:92) identified several conditions that can affect the
customer relationship activities of many Nigerian open markets. Among the cardinal
conditions mentioned is the price tactics used by the operators of these markets. In line with
the outcome of his research, Gbede (2001:93) stated that there are frequent brand/seller
switching behaviour prevalent in many open markets and these come from poor bargaining
process; and lack of good character and behaviour from the market traders/sellers.
2.2.15 Price Haggling Model
In this section, we review one of the most known models of haggling/bargaining which is
known as Rubin Stein Bargaining Model. A Rubinstein bargaining model refers to a class
of bargaining games that feature alternating offers through an infinite time horizon. The
original proof is due to Ariel Rubinstein in a 1982 paper. For a long time, the solution to this
type of game was a mystery; thus, Rubinstein’s solution is one of the most influential
findings in game theory.
Requirement of the Model
A standard Rubinstein haggling/bargaining model has the following elements:
a. Two players.
b. Complete information.
c. Unlimited offers- the game keeps going until one player accept an offer.
d. Alternating offer- the first player makes an offer in the first period, if the second
player rejects, the game moves to the second period in which the second player makes
an offer, if the first rejects, the game moves to the third period and so forth.
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Desirability of the model
Rubinstein bargaining/ haggling model has become pervasive in literature because it has
many desirable qualities:
(i) It has the entire aforementioned requirement, which is thought to accurately
stimulate real - world bargaining.
(ii) There’s a unique solution.
(iii) That solution is pretty clean, which wasnot necessarily expected given the game is
infinite.
(iv) There’s no delay in transaction.
(v) As both players become infinitely patient or can make counteroffers increasingly
quickly then both sides get half of the pie.
(vi) The result quantifies the advantage of being the first to propose (and thus
potentially avoiding the discount).
(vii) The generalisation result quantifies the advantages of being less pressed for time,
i.e. of having a discount factor closer to 1 than that of the other party.
This model reflects the real situation within every haggling process, where as long as both
parties are patient, the processes of offering and counter-offering continues until an agreed
price that is suitable to both parties is reached.
2.2.16 Consumer Decision Making
We have discussed in details price haggling and negotiation. This section will address
consumer buying behaviour in the contexts of market in which buyers haggle/negotiate to
reach a buying choice.
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Market means different things to different people. Kotler (1980:145) highlighted several
definitions of markets. To him, some people consider market as being “a fixed geographical
location where goods and services are bought and sold”. Some regard it as “the aggregate
demand for a given product” (Jhighan 2006:321), while others believe that market exist in a
widely dispersed offices connected for transaction by telephone, telegrams, letters etc.
Bransington and Pettitt (2003:17) saw market as follows:
“A market for a product or service consists of individuals or organisations that have
purchasing power and that are current or potential buyers of the product or service.”
This definition clearly states the conditions for the existence of a market. These include:
(a) The presence of individuals
(b) They can be organisations
(c) They have purchasing power
(d) They are willing to buy the product.
Kotler and Amstrong (2011:188) therefore added to the definition by stating that markets are
individuals or organisations who are either actual or potential buyers of a product. Consumer
Markets according to Stanton and Sommers (1981:16) comprised individuals, groups of
individuals and organisations buying products for consumption motive only. Therefore,
goods bought in these markets are destined for final consumption. They are not buying or
willing to buy to make profit but to satisfy certain basic or psychological needs, wants or
aspirations. The consumer markets include all those who have financial and credit
capabilities to purchase a given product.
35
When a consumer buys and uses a particular product, he/she engages in buying decision
making. Kotler and Keller (2013:213) defined consumer behaviours as the study of how
individuals, groups and organisation select, buy, use and dispose goods, services, ideas, or
experience to satisfy their needs and wants. The study of consumer provides clues for
improving or introducing products or services, setting prices, devising channels, crafting
messages and developing other marketing activities. Firms must understand every facet of
consumer behaviour. The best way to understand how consumers buy is to map the actual
stages they pass through to reach their buying decision. Each stage suggests certain things
that marketers can do to facilitate or influence the consumers’ decision making.
The lists below provide some key consumer behaviour questions in terms of “who, what,
when, where and how?” In line with Jobber (2013:291), the lists are:
(i) Who buys our product or service?
(ii) Who makes the decision to buy the product?
(iii) Who influences the decision to buy the product?
(iv) What do the customers buy? What needs must be satisfied?
(v) Why do customers buy a particular brand?
(vi) Where do they go to look to buy the product?
(vii) How do they buy? Any seasonality factors?
(viii) How is our product perceived by customers?
(ix) What are the customers’ attitudes toward our product?
(x) What social factors might influence their decision?
(xi) How do personal or demographic factors influence the purchase decisions?
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Engel et al, (1978:16-44) have developed a “Stage-Model” of buying process. The consumer
passes through five stages i.e. “problem recognition, information search, evaluation of
alternatives, purchase decisions, and post-purchase decision/behaviour”. The buying process
starts long before the actual purchase and has consequences long afterwards. The model of
buying decision process is shown below:
Figure: 2.2 Consumers Buying Decision Process
Source: Kotler, P. and Keller, K. (2013) Marketing Management; India: Pearson. Page
378.
2.2.16.1 Problem Recognition
McCarthy (2005:171) stated that the buying process starts when the buyer recognises a
problem or need. The need can be triggered by internal or external stimuli. With an internal
stimulus, one of the person’s normal need: hunger, thirst, sex etc. rises to a threshold level
and becomes a driver or a need that can be aroused by an external stimulus.
2.2.16.2 Information Search1
An aroused consumer will be inclined to search for more information. Schiffman and Kanuk
(2005:163) differentiated between two levels of arousal. The milder search state is called
heightened attention. At this level a person simply becomes more receptive to information
about a product. At the next level, the person may enter an active information search,
looking for reading materials, phoning friends, going online and visiting stores to learn about
the product. Buyer’s information sources fall into four (4): personal, commercial, public and
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Problem
Recognition
Information
Search
Evaluation
Alternative
Purchase
Decision
Post-
purchase
Decision
experimental. The information received about a product, helps the consumer place a value on
the product, and based on the perceived value of the product, he/she is able to determine
whether the price set for the product is worth it or not. This leads to the haggling process,
which aims at ensuring that an agreeable price is arrived at by both parties.
2.2.16.3 Evaluation of Alternatives
This deals with how consumer process competitive brand information and make a final value
judgment. No single process is used by all consumers or by one consumer in all buying
situations. There are several processes; the most common models see the process as
cognitively oriented. That is, they see the consumer as forming judgment largely on
conscious and rational basis. The final value judgement determines the price the consumer is
willing to buy the product, and if at variance with the seller’s price,it leads to a haggling
situation.
2.2.16.4 Purchase Decision
In the evaluation stage, the consumer forms preference among brands in the choice set. The
consumer may also form an intention to buy the most preferred brand. In executing a
purchasing intention, the consumer may take up to five sub-divisions: brand, dealer, quality,
timing and payment. Even, if consumer form brand evaluations, two general factors can
intervene between the purchase intention and the purchase decision. The first factor is the
attitude of others and the second is the unanticipated situational factors. This heavily
influences his decision on the value to place on the product and what to pay for it,
irrespective of what the seller is offering. This conflict leads to haggling.
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2.2.16.5 Post-Purchase Behaviour
After the purchase, the consumer might experience dissonance that stems from noticing
certain disquieting features or hearing favourable things about other brands, and will be alert
to information that supports his or her decision. Marketing communications should supply
beliefs and evaluation that reinforce the consumer’s choice and help him or her feel good
about the brand. Marketer’s job therefore does not end with the purchases. They must
monitor post-purchase product use. This can be achieved by haggling, in this respect, not
only on the price value but also on the quality of the product and rightness of the buyer’s
choice.
2.2.17 Factors Affecting Consumer Buying Decisions:
A multitude of factors play some roles in influencing buying behaviour of consumers. These
factors are sorted into four by Kotler (1980:137). For Kotler, there are those associated with
the buyer, with the product, with the seller (firm) or with the situation. This is shown below:
Buyer Seller
Situation
Figure 2.3: Factors Affecting the Buying Process
Source: Kotler P. (1980) Marketing Management USA: Prentice Hall Inc. page136.
39
Product
The various factors associated with each of the major components are described below:
a. Product Characteristics:Various characteristics of product will influence the buying
decision. Buyers will pay attention to product features, styling, quality, prices and
back-up services.
b. Seller Characteristics: The characteristics of the seller will influence the buying
outcomes. In this case, buyers will form an opinion about the manufacturer, its retail
outlets, knowledge ability, friendliness and services.
c. Situation Characteristics: Various situational factors also influence the buying
decision. One such factor is the time pressure felt by the buyer. Other factors include
the time of the year, weather change, and meeting with friends who have opinions
about the products.
d. Buyer’s Characteristics: Several characteristics of the buyers would affect its buying
behaviour. This will include cultural, social, personal and psychological factors that
operate in the buyer. Cultural factors include the culture from which the buyers come,
the subculture identity and the social class. Social factors include the influence
ofother people in the buyer’s life, particularly reference groups, family roles and
statuses. Personal characteristics include age, life cycle position, occupation,
economic circumstances, life style and personality. Finally, psychological
characteristics include buyers’ motivation, perceptions, attitudes, beliefs and learning.
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BUYER
Cultural Social Personal
Cultural Reference Age & Life PsychologicalgroupsSubculture Family OccupationMotivationSocial Day Role & Economy Perception
Status Life Style Learning
Attitude
Figure 2.4: Buyer Characteristics Influencing Buying Decision
Source: Kotler, P. and Amstrong, G. (2011) Principles of Marketing, USA: Prentice Hall
Inc. page 254.
2.2.18 Buying Situation and its Causes
The complexity of buyer behaviour will of course vary with the type of purchase. There are
great differences between buying toothpaste, a tennis racquet, an expensive camera and a new
car.Howard and Shelth (1975:16-24) suggested that consumer buying can be viewed as
aproblem solving activity and have distinguished between three (3) classes of buying
situations:
2.2.18.1 Routinized Response Behaviour
This is the simplest type of buying behaviour which occurs in the purchase of low cost,
frequently purchased items. The buyers are well acquainted with the product class and aware
of the major brands and their attributes, and have a fairly well-defined preference order
among the brands. However, an unexpected change in their anticipated product price and/or
41
quality leads to a re-evaluation of their perceived value of the product, and hence what they
are willing to pay for it, which then leads to haggling between the buyer and seller.
2.2.18.2 Limited Problem Solving
Buying here is more complex when buyers confront an unfamiliar brand in a familiar product
class. It requires information before making a purchase choice. The limited problem solving
involves that buyers are fully aware of the product class and the qualities they want but are
not familiar with the entire brand and their features. Considering their lack of familiarity
with the product, the buyer perceives the seller may want to take advantage of him and
ensures this is not the case by extensively haggling on the product to be satisfied that he is
getting a good deal.
2.2.18.3 Extensive Problem Solving
Buying reaches its greatest complexity when buyers face an unfamiliar product class and do
not know the criteria to use. In his own opinion, Assael (1987:87) describes three (3) types of
consumer buying behaviour based on degree of differences among brands. These are:
2.2.18.3.1 Dissonance Reducing Buying Behaviour
This occurs when consumers are highly involved with an expensive, infrequent or risky
purchased product but see little differences among the brands. Since little differences are
observed among brands, the consumers value the products on the same pedestal and try to
acquire them at the same or almost the same price. This results to haggling as it may not be
the basis upon which the seller sets the price for the goods.
42
2.2.18.3.2 Habitual Buying Behaviour
This occurs under conditions of low consumer involvement and the significant brand
differences. For example, salt. Consumers have little involvement in this category; they
simply go to the store and reach for a brand. If they keep reaching for the same brand, it is
out of habit rather than strong loyalty. Consumers appear to have low involvement with
most-cost frequently purchased products. When a newer brand is introduced, that is
particularly less popular, the consumer assumes the product is not as qualitative as the one
he/she habitually buys, and attaches less value to it. This could lead to haggling between the
consumer and seller.
2.2.18.3.3 Variety-seeking Buying Behaviour
Consumers undertake variety-seeking buying behaviour in situations characterized by low
consumer involvement but significant brand differences. In such cases, consumers often do a
lot of brand switching.The consumer may stick to the choice of a particular brand if the
product price agrees with his/her perceived product value, which may not be that of the
seller’s perception, thereby resulting in haggling.
2.2.19 Pricing Issue and Characteristics in Different Prevailing Market Contexts
Brassington and Pettitt (2003:396-398) summarized the impact on pricing of the issues and
characteristics prevailing in various kinds of markets. They highlighted the fact that pricing
is not just a cost-driven exercise, but a skill that requires knowledge and understanding of
both the customer and the external environment. Here are the discussions of various market
characteristics.
43
2.2.19.1 Consumer Markets
Jobber (2013:323) stated that there is much competition for consumers’ disposable income.
This is reflected in both the range of different product markets available for them to spend
onand the variety of products competing in any one market. Consumers also have a great
deal of discretion over whether they spend or not. There are very few real necessities and, on
many occasions, consumers buy because they want to, rather than because they need to.
As a result of the fact that consumers are largely buying to please themselves, their
assessment of competing products in most markets is often informal, irrational, or even non-
existent. As already stated in the earlier discussion, psychological factors can play a much
greater role than analytical skills. Even where hard product information is provided, the
consumer does not necessarily make the effort to digest it properly or retain it. It may simply
be used selectively as support for a decision that has already been made. Price too, as has
already been pointed out, may be interpreted variously, depending on the individual
customer.
All of the above make it very difficult to identify the scope for price negotiation and, indeed,
McCarthy and Perrault (2005:161) argued that, in most consumer markets, the unit price of
the goods is so low that there is no need for such a tool. The price is on the product. There
are some exceptions, however. Consumers expect to negotiate the price with the dealer; the
dealer recognises this and sets the opening price at a level where he can afford to be beaten
down 10 or 15 percent.
Nevertheless, price is still an important element of the consumer product’s marketing mix.
Price banding can be a useful addition to a market segmentation exercise. Brassington and
44
Pettitt (2003:397) posited that a consumer for whom price is the primary consideration in
comparing competing offerings is said to be price sensitive. In dealing with such consumers,
marketers have to be particularly careful to get the price right because customers are less
likely to be seduced by non-price factors into moving outside their preconceived price band.
2.2.19.2 Retail and Wholesale Market
Stanton and Sommers (1981:163) explained that retail and wholesale markets take a far more
rational approach to price interpretation than do consumer groups. As intermediaries, they
have to look in two directions, at both the manufacturer and the consumer. They have to be
realistic about what price they themselves can charge for a product to their customers, and
this in turn establishes what kind of price they are looking to pay to the manufacturer, if they
are to maintain a reasonable profit margin. This price also needs to reflect the services in
respect of selling the product that the intermediary has to perform.
Stanton and Sommers (1981:164) stated further that looking in the opposite direction at the
consumers, retailers and wholesalers will also expect pricing structures to reflect demand.
For example, if a product is going to have a mass-market appeal and will sell in high
volumes, then the intermediaries will need to be able to sell it at a competitive price,
especially if it is a new brand entering an established market.Price discipline is also expected,
in the sense that manufacturers should not be seen to be selling directly to the public at lower
prices than the retailers could set. Price discipline sometimes goes further than this, and
retailers become upset if they think that manufacturers are selling to other retailers at lower
prices.
45
Kotler and Keller (2013:178) revealed that when pricing is considered alongside retail and
wholesale structures, these intermediaries are very knowledgeable about alternative product
offerings and will therefore use price as a bargaining weapon where they can. Manufacturers
in turn may well be willing to make price concessions in order to gain distribution through a
powerful retail chain. Another means by which the retailer can keep prices lower is by
offering own-brand goods.
2.2.19.3 Service Markets
Zeithaml (2004:14) states that because a service is intangible, it is very difficult to assess its
quality before purchasing it. Often, price comparison is the nearest a potential buyer can get
to working out the relative quality of similar competing offerings. Another peculiar feature
of services is that they are perishable, in that they happen at a particular time and place, and if
there is no customer there, the product is lost. A service pricing is somehow very complex
and more tasking. This encourages haggling, as the question of the real value of product as
against the price set arises.
2.2.19.4 Non-Profit Markets
Non-profit organisations, according to Baker (1985:172), differ in that they see themselves as
existing and operating for the benefit of the public rather than for the creation of profit. Their
objectives, therefore, are to encourage people to use their services or products, or to
participate in their activities. Pricing can have a major role in achieving that, if goods and
services are sold at cost or subsidized to a point where they are visibly below market rates.
Some activities, such as minority interest, arts and events, could not be produced on a
commercial basis unless ticket price were atomically high, and therefore public subsidy or
sponsorship is essential to keep prices down to an affordable and accessible level. Kotler and
46
Armstrong (2011:399) added that unlike the practice in most ordinary consumer markets,
where price is directly exchanged between the buyer and the seller, in the non-profit sector,
price sometimes passes through a third party. When this happens, it can blunt the consumer’s
price sensitivity but haggling may still be an issue.
2.3 Theoretical Framework
2.3.1 Haggling/Bargaining Theories
The following are the theoretical approaches used in negotiation/haggling studies reviewed
for this work.
The personality theory emphasizes that the type of a person’s personality, determines the
bargaining process and its outcome. Behavioural theory deals with a distinction between
hard-liners and soft-liners. Kent refers to hard-liners as warriors (Kent 1974:14) while soft-
liners are shop keepers. It varies from region to region. Haggling may take place more in
rural and semi-urban areas than in a metro city.
Haggling or bargaining games refers to a situation where two or more players must reach
agreement regarding how to distribute an object or monetary amount (Pent 2006:124). Each
player prefers to reach an agreement in these games, rather than abstain from doing so.
However, each prefers that agreement which most favours his interests. Analysing these
kinds of problems requires for a solution specifying which component in dispute will
correspond to each party involved.
Players in a bargaining/haggling problem can haggle for the price objective as a whole at a
precise moment in time. The problem can also be divided so that parts of the whole objective
become subject to bargaining during different times. In a classical haggling situation, Kent
47
(1974:17) argued that the result is an agreement reached between all interested parties, or the
status quo of the problem. It is clear that studying how individual parties make their
decisions is insufficient for predicting what agreement will be reached. However, classical
bargaining theory assumes that each participant in a bargaining process will choose between
possible agreements, following the conduct predicted by the rational choice model.
Makaleley (2001:171) added retail prices as one of the theories of haggling/bargaining.
Makaleley stated that the retailers can choose to sell at posted prices or allow bargaining:
selling at a public posted price commits the retailers not to exploit buyers once they enter the
retail store, making the store more attractive to potential customers, while a bargaining
strategy/haggling has the advantage that allows the retailer to price discriminately between
different types of customers. In some markets, Kotler and Keller (2013:395) stated that firms
post prices but consumers are open to haggle. When the proportion of haggling consumers
goes up, prices tend to rise.
“Integrative approach refers to the potential for the parties’ interests to be (combined) in ways
that create joint value or enlarge the pie.” Potential for integration only exists when there are
multiple issues involved in the negotiation. This is because the parties must be able to make
trade-offs across issues in order for both sides to be satisfied with the outcome.
Integrative Haggling (also called “interest-based bargaining”or“win-win bargaining”) is a
negotiation strategy in which parties collaborate to find a win-win solution to their dispute.
This strategy, according to Pent (2006:131), focuses on developing mutually beneficial
agreements based on the interests of the disputants. Interests include the needs, desires,
concerns, and fears important to each side. They are the underlying reasons why people
become involved in a conflict.
48
Narrative theory is a different approach to conceptualising bargaining because it is as co-
construction of a social narrative, where narrative, rather than economic logic drives the
outcome. (Cole, 1998:63).
The game theories developed from the classical work of Von Neumann and Morgenstern
(1944), Theories of games and economic behaviour. This approach has been used and
expanded by Rapoport (1964) and his associates (1976, 1984)
As a theoretical approach to the study of negotiation as complex, dynamic human behaviour,
this approach has more limitations than advantages. Game theories focus on fixed-sum
dilemmas, where there are only winners and losers. In practice, this is hardly ever the case as
there are usually shared gains and losses (Walton, Mckersie 1995). Secondly, communication
in the negotiation process often changes the participant’s objectives, preferences and
expectations. As a static model, the game theory does not allow for such changes, especially
where objectives are set in advance. Thirdly, the game theory oversimplifies the underlying
assumptions that there are only a set number of participants, issues and courses of action
available, and that participants are always rational in their actions (Putnam 1985; 3).
The limitations discussed here prohibit the transfer of the research findings (mostly done
under simulated or laboratory situations) for application in practice (Kohan 1980)
The bilateral monopolistic theories address themselves to real negotiation problems, but their
research designs do not reflect this advance in their knowledge. Their concepts can only be
put into operation with difficulty, or not at all, and many variables that are present and
fluctuate in practice, have been omitted or strictly controlled in research of this nature.
Strauss’s (1977:33) statement supports this: “Bargaining theory made little allowance for
49
such complexities as mixed-motive situations, past history and socio-economic environment,
intra-organisational bargaining, or the institutional needs of the parties.
The verbal type theory approach includes research based on various theoretical perspectives
such as transactional analysis, exchange theory, systems theory, and is combined with a wide
variety of research method such as case studies, historical analysis and interviews with
negotiators.
These studies have contributed greatly to the understanding of negotiation, by diverting from
the previous types of theories in reaction to the deductive methodology that was employed.
Researchers using this approach do not favour the limiting quantitative techniques of the
game theory and usually concentrate on in-depth discussion of a few (or a single) case
studies. Knowledge gained by such an approach brought a new, in-depth dimension to the
existing knowledge of negotiation. The results obtained by these studies, as there are no
standards, measures, or observation guidelines that can be compared, and the research
designs (if any) do not allow for external validation. The research available within this
grouping of research approaches, therefore, does not at present contribute to systematic
theory development in the negotiation field (Kohan 1980, Bercovitch 1983)
2.3.2 Future Theoretical Development
None of the available research in these theoretical approaches explains negotiation as a
complex and dynamic process of human behaviour. It has, however, led to the development
of various models of negotiation. By systematising and comparing the underlying structures,
strengths, and limitations of these negotiation models, it is possible to establish guidelines for
a productive model that can represent negotiation in a more realistic and productive way.
50
Gulliver (1979) advises the use of an approach and a model that are less restrictive in terms
of the negotiating process, and that make allowance for various negotiation situations and the
many variables and issues that influence the process. Such an approach, and models resulting
from it, should assist in the understanding or negotiation as a complete, complex process that
takes place in a social and organisational context.
2.4 Empirical Review
Rapport et al., (1995) carried out “An Experimental Study of Buyer- seller Negotiation with
One-sided Incomplete Information and Time Discounting Documentation and Source Code
for Two-person Sequential Bargaining Experiments”. They studied a multi period bargaining
mechanisms in which a seller negotiates with a buyer over the price of an indivisible good.
Their findings revealed several behavioural regularities, which do not support the sequential
equilibrium for this bargaining mechanism. They concluded that in line with development in
behavioural decision theory and game theory, which assume bounded rationality, they found
that subjects follow simple rules of thumb in choosing strategies, reflected in behavioural
consistencies observed in their study.
Srivastava et al, (2000) carried out a study on “Price and Margin Negotiations in Marketing
Channels: An Experimental Study of Sequential Bargaining under One-Sided Uncertainty
and Opportunity Cost of Delay”. They sought to examine price/margin setting in marketing
channels within a sequential bargaining framework. In doing this, they adopted the
Grossman and Perry’s game-theoretic model in predicting bargaining behaviour and
outcomes in marketing channels. This was achieved by studying a manufacturer and an
independent distributor negotiating sequentially to establish transfer (wholesale) price of an
indivisible good in a one-sided incomplete information game. They were able to derive both
51
point predictions and directional implications from this sequential equilibrium (SE)
bargaining model. This tested how manufacturer’s uncertainty about distributor value
(consumers’ reservation price), opportunity cost delay, and the actual reservation price (total
surplus) should influence bargaining outcomes. The findings from this study revealed that
point prediction of the sequential equilibrium model fell considerably short in describing
bargaining behaviour and outcomes. The study revealed that high uncertainty impeded
efficient negotiation, eliciting high first offers from manufacturers and increasing bargaining
duration. Also it was observed that higher reservation prices (higher surplus) lowered
bargaining duration, increased bargaining efficiency, and raised profits for both parties. The
study further revealed that higher delay costs produced quicker agreements but distributors
did not benefit from their informational advantage.
Perks and Oosthuizen (2013) carried out a study on “Exploring Supplier Negotiation Best
Practices and Supplier Relationships Strategies in South Africa”. They focused on exploring
the supplier negotiation best practices and the supplier relationships created beyond the
supplier agreement in South African businesses. They specifically tried to provide a
theoretical overview of negotiation best practices of supplier agreements and strategy for
creating long-term supplier relationships, explore what South African businesses perceive as
best practices when negotiation supplier agreements. They explored strategies by
businessesin South Africa to create long-term supplier relationships and provide guidelines to
businesses in South Africa on supplier negotiation best practices and strategies, fostering
long-term supplier relationships. Their study revealed that it is important to negotiate the
best possible terms with suppliers.However, long-term supplier relationships are not created.
This is revealed in their findings that suppliers’ contract is renegotiated quarterly and records
of suppliers defect rates are kept as well as how suppliers resolved conflict and use discussion
52
as a means of resolving supplier disputes. Their study also showed that small businesses are
more concerned about negotiating sound supplier agreements whereas large businesses are
more concerned about creating long-term supplier relationships.
2.5 Summary of Literature Review
Marketing is the scientific study of exchange relationships, and as such it is the set of human
activities directed at facilitating and consummating exchanges. It is observed that in most
cases, mutually beneficial relationship exists between the seller and consumers, hence,
haggling is a type of negotiation in which the buyer and the seller of a good or service dispute
the price which will be paid and the exact nature of the transaction that will take place, and
eventually come to an agreement.
Haggling is an alternative pricing strategy to fixed prices and the process of bargaining
between consumer and seller continues until a mutually agreed price can be settled upon.
This exercise takes the form of verbal communication in which the participants seek to
exploit the relative strength of their bargaining positions to achieve the explicit or implicit
objectives within the overall purpose of seeking to resolve the identical areas of
disagreement.
Personality theory in bargaining emphasised that the type of personality determine the
bargaining process and its outcome. In this instance, various research papers refer to
hardliners as winners. Haggling has largely disappeared in parts of the world where the cost
to haggle exceeds the gains to retailers for most expensive goods and may even take place
more in rural and semi-urban than in a metro-city.
53
Classical bargaining theory assumes that each participant tries to exploit the weakness of the
other in a bargaining process, while integrative theory refers to the potential for the parties’
interest to be (combined) in ways that create joint value. Potential for integration only sets in
where there are multiple issues involved in the negotiation. This calls for parties to make
trade-offs across issues of interest in order for both sides to be satisfied with the outcome.
There are several strategies that can be utilized when making effective and efficient haggling
decisions under these separate headings thus: where to haggle, when to haggle and how to
haggle. In any case, consumers never have an obligation to buy until price has been agreed
upon. The major advantage of haggling is that it is a process of negotiating towards a price
that is acceptable to both parties and that everyone is better off where haggling is possible.
Consequently, haggling benefits everyone in the transaction as a product of compromise.
Several emotional barriers to haggling have been identified as impression of strangers,
customer’s self-image and fear of rejection. Also, main obstacles to haggling are cultural and
social norms, prevailing market conditions and trends taking place, as well as consumers’
perception regarding haggling price versus fixed price tactics. It is noted that while some
people quite enjoy haggling, some do not, but it is always tiring and time consuming. It also
shows the trend of price haggling around the world with a main fact signifying that it is not
only in Nigeria and Africa, but in almost all parts of the world across cultures. Haggling
seems to be the rule and not exception in open markets partly because of traditional rule, lack
of trust and doubts in the value system.
Price haggling and price sensitivity tend to be highly related. The relationship is established
as the demand curve shows the market’s probable purchase quantity at alternative prices.
This sums up the reaction of many individuals who have different price sensitivity. Also
54
buying choice and loyalty are greatly an input of effective price haggling. The consumer
passes through a number of stages which starts long before the actual purchase and has
consequences long afterwards. Also, there are a multitude of factors that play roles in
influencing behaviour of consumers. However, this study is focused on price as one of the
major determinants of consumers’ buying decisions.
2.6 Gaps in Literature
From the literature reviewed in this study, the works of Rapport et al, (1995), Srivastava et al,
(2000) and Perks and Oosthuzien (2013) were reviewed and found relevant to the study.
However, certain gaps were identified.
Though the study by Rapoport et al, (1995) on Experimental Study of Buyer-seller
Negotiation with One- sided Incomplete Information and Time Discountingrevealed that
consumers reflected behavioural consistencies in following simple rules of thumb in choosing
strategies, their study, however, did not show how negotiation (in the context of this study
known as haggling) influenced decision making.
Srivastava et al, (2000) who showed that high uncertainty impeded negotiation and resulted
in delays in their study on Price and Margin Negotiations in Marketing Channels: an
Experimental Study of Sequential Bargaining under One-sided Uncertainty and Opportunity
Cost of Delay, failed to identify if bargaining (price haggling) while impeding negotiations
and resulting in delays could hinder repeat patronage or not.
Perks and Oosthuzien (2013) in their paper on Exploring Supplier Negotiation Best Practices
and Supplier Relationships Strategies in South Africa, showed the practice of negotiation and
55
re-negotiation to ensure best practices in business but did not determine whether negotiation
(price haggling) was equally effective in the open market system. Also, while trying to
establish suppliers’ relationship, they did not show if negotiation was a determinant to the
consumer/seller relationships.
Therefore, this study seeks to address these highlighted gaps, as already outlined in the
objectives of this study.
56
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CHAPTER THREE
RESEARCH METHODOLOGY
3.1 Introduction
The main aim of research is to provide a dependable solution to problems through objective,
planned and systematic collection, analysis and interpretation of data. This research adopts a
“survey method” and design because survey research focuses on the people, the vital facts of
people and their beliefs, opinions, attitudes, motivation and behaviour.
3.2 Research Design
Research design and methodology adopted gave the procedures and methods of data for the
research. In other words, they highlighted the relevant information for the work done in the
best way. As it is generally known, the research methodology is a programme that gives the
researcher the process of collecting, analysing and interpreting observation under study. It is
a module of proof that allows the researcher to draw references concerning the study.
Luck and Rubin (1999:23) defined research design as the overall master plan of how the
researcher intends to execute the entire research study. This research employed “Survey
Method” to determine the effects of price haggling as a strategy on consumers’ buying
decision in the selected traditional markets in Ibadan. Survey Method was chosen because of
its relevance in the use of important research tool such as questionnaire which is a veritable
instrument that can be utilized to elicit necessary information from the respondents (Onodugo
et al, 2010:65).
62
3.3 Area of the Study
The area of this study consists of selected traditional markets in Ibadan. Five main traditional
markets were selected, and these are Dugbe, Mokola, Bodija, Aleshinloye and Ojoo markets
in Ibadan, Nigeria. The markets are generally the main open markets in Ibadan (Laolu 2009:
24). Ibadan is the largest city in sub-saharah West Africa. It is the capital city of Oyo State
and the third largest metropolitan area by population in Nigeria, after Lagos and Kano, with a
population of 1,338,659 according to the 2006 census. Ibadan is also the largest metropolitan
geographical area(Laolu 2009: 43). There are several markets and commercial centres in
Ibadan with Dugbe, Mokola, Bodija, Aleshinloye and Ojoo as traditional open markets
selected for this work. They have very unique characteristics of being known as major
traditional open markets.
3.4 Population of the Study
Onwura (1998:45) stated that population is the set of objects or individuals about which
statistical investigation is carried out. The population for this work consists of the traders in
the selected traditional markets in Ibadan (Dugbe, Mokola, Bodija, Aleshinloye and Ojoo) as
well as consumers that patronize the markets. Hence, there are two sets of population for this
study.
The registered market traders in these markets as at the time of this research are;
Markets Registered Number of Traders
Dugbe 587
Mokola 88
Bodija 242
Aleshinloye 216
Ojoo 143
TOTAL 1276
Source: Market Registry of the Local Government(s).
63
This figure was given by the head of Market Registry at each of the markets appointed by the
various Local Government Authorities. The registered traders consist of both shop and Kiosk
owners, excluding other roadside sellers. The study population limits its application to only
registered traders in the markets.
The population of consumers, in the selected traditional markets, which is the second set of
the potential population is not known.
3.5 Sample Size Determination
Having defined the population, the researcher determined the size of the sample. This is so
because time, cost, and large representation of the entire study population may not allow the
researcher to have general full representation of the whole population. Hence, sample size
determination is necessary. The sample size of the population of both “traders” and
“consumers” were determined statistically.
Since the population of the study has already been stated as consisting of “traders” and
“Consumers”, the sample size for the two groups are determined below. Because the
population of the study for traders is known and finite and due to the fact that it consists of
1276 registered traders in all of the selected markets, we use Yamane’s (1979: 172) formula
to determining the sample size. The formula is shown below.
n = N 1+N(e)2
Where: n= Desired Sample size
N= population size
e= limit of tolerable error (usually 95%, that is 0.05)
Hence, the sample size for trader will be 305. (Appendix IX)
64
Using the formular:
nh = Nh x n N
Where nh = Sample size for each study group
N = Population size
Nh = Population of each study group
n = sample size for the population
Each of the traditional markets is calculated to have the following samples;
Dugbe =140
Mokola =21
Bodija =58
Aleshinloye = 52
Ojoo = 34 (Appendix IX)
3.6 Sample Size of Consumers
Pilot survey is usually on a small scale, carried out prior to the main survey, primarily to gain
information to improve the efficiency of the main survey. In this work, a pilot survey was
used to test the questionnaire as well as the effective size of the sampling unit of consumers.
Hence the researcher conducted pilot survey with twenty-five (25) consumers who regularly
patronize each of the traditional markets selected to understand their views regarding the
haggling strategies as they affect their buying decision making. The main aim for conducting
a pilot survey was to enable the researchers draw inference about the instruments that was
used. Eighty per cent of the studied consumers have a positive response toward pricing
haggling as it affects their buying decision, 20% were in the negative opinion. (Appendix III
and IV)
65
Working on 95% confidence level and a tolerable error of 5%, the formula for determining
sample size for infinite population (Williams 2001) is used to estimate the sample size of the
consumers, since they are infinite and unknown.
n = pq (Z2) or Z2pq e2 e2
Where; p = frequency of occurrence or probability of responses/positive success.
q = 1 – p
n = Desired sample size
z = Desired level of confidence (1.96)
e = estimated tolerable error or standard error (0.05).
Hence, the sample size for the consumers is calculated to be 246 respondents.
This is shared randomly among the selected five markets equally. (Appendix X)
3.7 Sampling Techniques and Method
The non-probability convenience sampling was used as the sampling technique for this study.
No pre-set condition is considered for the selection of the elements of the study groups. Thus
this sampling technique is adequate as it is used when elements are included in the sample
without pre-specified or known probabilities of being selected (Anderson et al, 2011). The
respondents were selected in the market at the convenience of the researcher.
3.8 Sources of Data Collection
Data for this study was collected mainly from primary source. Data was gathered from the
primary source through questionnaire that was self-administered on the respondents. The
respondents consisted of traders and consumers.
66
3.9 Instrument for Data Collection
The major instrument that was used in collecting the necessary primary data for this study isa
questionnaire. The questionnaire was designed in a simple way to elicit information from
both the traders and the consumers. Since we were dealing with two sets of respondents, two
sets of questionnaire were developed. One administered on the traders and the other on the
consumers.
The researcher made the questionnaire for traders to be as simple and direct as possible as
some of them did not have formal education to respond to difficult questions. The
questionnaire for the consumers was detailed and comprehensive as the research is mostly
directed at them.
Altogether, five hundred and fifty one (551) copies of questionnaire were printed, three
hundred and five (305) were directed to the selected traders while two hundred and forty-six
(246) were given to the customers. The questionnaire was divided into two sections – A and
B. Section A addressed the respondents biographical and psycho graphical data while section
B addressed questions relating to the objectives of the research.
3.10 Validity of Research Instrument
Validity, according to Uzoagulu (1998), is the appropriateness of an instrument in measuring
what it tends to measure. To validate the research instrument, the researcher ensured that the
structured questionnaire is subjected to the combination of face and content validity.
The instrument was sent to validators who are marketing professionals and the type of
validation needed was specified. This is to make sure that the inappropriate items in the
research instrument that may confuse the respondents are completely removed or re-cast.
67
Content validity is the extent to which the items of an instrument are representative of the
contents and behaviours specified by the theoretical concept being measured. Therefore, the
researcher’s supervisor helped in checking that the instrument contains all the aspects of the
subject that were included in the questionnaire.
3.11 Reliability of Research Instrument
Reliability on the other hand, is defined as the degree to which a given measurement
procedure will give the same description of that phenomenon if the measurement is repeated
(Ebo, 2009). In carrying the reliability of the research instrument, the Cronbach’s Alpha is
used. Cronbach's alpha (α) is an estimate of reliability, specifically the internal consistency,
of a test or scale. When internal consistency is present in a test, it is interpretable (Cronbach,
1951). Cronbach's alpha seeks to measure how closely test items are related to one another
and thus measuring the same construct. The formula for Cronbach's alpha is as follows:
Where;
n = number of items,
si2 = variance of the ith item, and
sT2 = total score variance (Cronbach, 1951)
When test items are closely related to one another, Cronbach's alpha will be closer to 1, and
when test items are not closely related to one another, Cronbach's alpha will be closer to 0.
Anα of 0.90-0.95 is desirable for clinical interpretation of tests (Bland and Altman, 1997).
To achieve this, the data collected from the 25 respondents that actively and fully participated
in the pilot study were used. Using the SPSS (17.0) computer software, the Cronbach’s
68
alphafor the research questionnaire was determined based on the responses captured in the
questionnaires. Alpha of 0.83 (for consumers – see Appendix III for detailed result) and 0.81
(for market traders – see Appendix IV for detailed results) were obtained. These values being
closer to 1 indicated that the research instruments were very reliable and thus could be used
for the study.
3.12 Method of Data Analysis and Presentation
All the data on both biography and psychographic variables (e.g. age, sex, education etc) are
presented in simple percentage distribution tables. Furthermore, analysis and interpretation
of the data in these tables were based on the frequency of each data. The researcher utilized
simple average and frequency table to present the results of the questionnaire. It was also
used to present the results collected for demographic and biographic data. The primary data
obtained from the questionnaire was presented in absolute figures and where necessary in
percentage or proportion.
Test proportions were used to analyse the responses to the questions and were used to test the
hypotheses. Questionnaire was the main data collection instrument to test each of the
hypotheses formulated. The responses of the respondents in relation to the raised questions in
the questionnaires were data to test the hypotheses. The linear regression analysis wasused to
test hypotheses one and four while the Z-test statistics was used to test the hypotheses two
and three.
69
The general formula for the Regression Analysis is:
Y = a + βX + e … (1)
Where; Y = Dependent Variable (consumer decision making and consumer/seller
relationship)
X = Independent Variable (price haggling)
a = constant
β = coefficient of X
e = error margin
Decision Rule
Reject H0 where |p < 0.05| given the computed value of the coefficient β for each of the
independent variables in the model.
The formula for Z-test is;
Z = x−μ
σ√n
… (2)
Where;x = population meanµ = sample meanσ = standard deviationn = sample size
Decision Rule
Reject H0 if |p < 0.05| given the computed value of Z. Otherwise, accept it.
70
REFERENCES
Anderson, D.R., Sweeny, D.J. and Williams, T.A. (2011) Statistics for Business and
Economics. USA: South Western Cengage Learning.
Bland J.M. andAltman D.G. (1997) “Cronbach's Alpha”, BMJ; 314: 572 (May)
Cronbach, L. J. (1951) “Coefficient Alpha and the Internal Structure of Tests”,
Psychometrika 22(3), (First quarter)
Ebo, C. (2009) Social and Economic Research: Principles and Methods. Enugu: African
Institute for Applied Economics.
Laolu, M.I. (2009) “Traditional Markets in Ibadan City”. Journal of Sociological
Development. Vol. 23 (May)
Luck, D. and Rubin, D. (1999) Marketing Research. India: Prentice Hall Incorporation.
Onodugo, V., Ugwuonah G. and Ebinne, S. (2010) Social Science Research Principles,
Methods and Applications. Enugu: El’ Demark Publishers.
Onwura, E. A. (1998) Introduction to Academic Research Methods. Enugu: Gostak Printing
and Publishing Co. Ltd.
Uzoagulu, A.E. (1998) Practical Guide to Writing Research Project Report in Tertiary
Institutions. Enugu: John Jacob’s Publishers Ltd.
Williams, E.A. (2001) Sample Size Determination for Social Research. USA: Prentice Hall
Inc.
Yamane, T. (1979) Statistics for Beginners. London: McGraw Hill Inc.
71
CHAPTER FOUR
DATA PRESENTATION, ANALYSIS AND INTERPRETATION
4.1 Introduction
Data collected is presented and discussed descriptively using frequency and percentage
tables, mean and standard deviation, while inferential statistics were used in testing the
validity of various study hypotheses. These were done with the aid of the SPSS 17.0
statistical software.
4.2 Data Presentation
Data collected from the study are presented below.
4.2.1 Questionnaire Distribution and Response
Out of the 551 copies of the questionnaires that were administered to the respondents 505
copies were correctly filled and returned (giving a 91.7% success rate) while 46 copies were
incorrectly filled or not returned (giving a 8.3% failure rate). Since, the success rate is
91.7%, the data collected from the field is deemed adequate enough for the study. The details
of the return rate are presented in Table 4.1.
Table 4.1: Questionnaire Distribution Response
Consumers (%) Traders (%) Total (%)
Administered 246 (100.0) 305 (100.0) 551 (100.0)
Correctly Filled and Returned 225 (91.5) 280 (91.8) 505 (91.7)
Incorrectly Filled or Not Returned 21 (8.5) 25 (8.2) 46 (8.3)
Source: Field survey, 2014
72
4.2.2 Profile of Respondents
The distributions of the respondents according to their various demographic characteristics
are presented in Table 4.2 to 4.8.
4.2.2.1 Gender
The distribution of the respondents according to their gender is presented in Table 4.2.
Table 4.2: Gender Distribution of RespondentsGender Consumers (%) Traders (%) Total (%)
Male 103 (45.8) 172 (61.4) 275 (54.5)
Female 122 (54.2) 108 (38.6) 230 (45.5)
Total 225 (100.0) 280 (100.0) 505 (100.0)
Source: Field survey, 2014
As presented in Table 4.2, majority (54.5%) of the respondents that participated in the study
are males. However, more (54.2%) of the consumers that participated in the study are
females while more (61.4%) of the traders that participated in the study are males.
4.2.2.2 Age
The age distribution of the respondents is presented in Table 4.3.
Table 4.3: Distribution of Respondents by AgeAge Consumers (%) Traders (%) Total (%)
Less than 18 years 38 (16.9) 70 (25.0) 108 (21.4)
18 – 34 years 65 (28.9) 105 (37.5) 170 (33.7)
35 – 50 years 95 (42.2) 80 (28.6) 175 (34.6)
Above 50 years 27 (12.0) 25 (8.9) 52 (10.3)
Total 225 (100.0) 280 (100.0) 505 (100.0)
Source: Field survey, 2014
73
The data presented in Table 4.3 reveals that more of the respondents that participated in the
study were aged 18 to 50 years. In particular, a greater percentage (42.2%) of the
consumersthat participated in the study are aged 35 to 50 years while the a higher percentage
(37.5%) of the traders that participated in the study are aged 18 to 34 years.
4.2.2.3 Occupation
The distribution of the consumers that participated in the study based on their occupation is
presented in Table 4.4.
Table 4.4: Distribution of Respondent by OccupationOccupation Frequency Per cent (%)
Businessman 50 22.2
Public/Civil servant 59 26.2
Student 38 16.9
Private Employee 31 13.8
Researcher/Consultant 18 8.0
Apprentice/Unemployed 29 12.9
Total 225 100.0
Source: Field survey, 2014
Table 4.4 shows that the participation of the respondents in this study virtually cuts across all
occupations. However, Public/Civil Servants and Businessmen had higher percentage
participation of 26.2% and 22.2% respectively.
4.2.2.4 Religion
The respondents’ distribution by their religious affiliations is presented in Table 4.5.
Table 4.5: Distribution of Respondents by ReligionReligion Consumers (%) Traders (%) Total (%)
Christianity 112 (49.8) 123 (43.9) 235 (46.5)
Islam 98 (43.5) 144 (51.5) 242 (47.9)
Traditional Religion 15 (6.7) 13 (4.6) 28 (5.6)
74
Total 225 (100.0) 280 (100.0) 505 (100.0)
Source: Field survey, 2014As presented in Table 4.5, most (47.9%) of the respondents practice Islam as their religion.
4.2.2.5 Marital Status
The distribution of the respondents according to their marital status is presented in Table 4.6.
Table 4.6: Distribution of Respondents by Marital StatusMarital Status Consumers (%) Traders (%) Total (%)
Single 89 (39.6) 104 (37.1) 193 (38.2)
Married 99 (44.0) 132 (47.2) 231 (45.8)
Divorced 16 (7.1) 32 (11.4) 48 (9.5)
Widowed 21 (9.3) 12 (4.3) 33 (6.5)
Total 225 (100.0) 280 (100.0) 505 (100.0)
Source: Field survey, 2014
Table 4.6 shows that higher percentages (45.8%) of the respondents are married. This is
followed by the percentage (38.2%) of the respondents that are single.
4.2.3 Line of Products
The distribution of the traders that participated in the study according to their line of products
is presented in Table 4.7.
Table 4.7: Distribution of Traders by Selected Products CategoryLine of Products Frequency Per cent (%)
Clothing and Textiles 52 18.6
Cooked Foods/Snacks 60 21.4
Raw Food Items 59 21.1
Ram/Goat/Cow 34 12.1
Drinks 49 17.5
Unclassified 26 9.3
Total 280 100
Source: Field survey, 2014
75
The data presented in Table 4.7 shows that more of the respondents traded on cooked
foods/snacks (21.4%), raw food items (21.1%), clothing and textiles (18.6%) and drinks
(17.5%).
4.2.4 Sales Level per Day
The distribution of the traders that participated in the study according to their sales level per
day is presented in Table 4.8.
Table 4.8: Distribution of Traders by Daily Sales LevelSales Level Frequency Per cent (%)
Less than N5,000 40 14.3
N5,000 – N15,000 70 25.0
N15,000 – N32,000 101 36.1
N32,000 and above 69 24.6
Total 280 100
Source: Field survey, 2014Table 4.8 reveals that only few of the sampled traders (14.3%) have a daily sales level of less
than N5, 000. Respondents that earn between N15000 and N32000 are more (36.1%) than
the respondents from other daily sales levels. The sales level typically represents the volume
of transactions between sellers and buyers, and also could imply the level of haggling and
success of such level between the sellers and the traders.
4.2.5 Data Presentation based on Study Objectives
The presentations of data collected from the field are presented below according to the
various study objectives.
4.2.5.1 Effects of Price Haggling on Consumers’ Buying Decision Making
76
The respondents’ perception on the effects of price haggling on Consumers’ buying decision
making is presented in Tables 4.9 and 4.10.
Table 4.9: Consumers’ Perception of Price Haggling Effects on buying Decision Making
SA
(%)
A
(%)
NO
(%)
D
(%)
SD
(%)
Mean Std.
Dev.
I haggle when making buying decisions 77
(34.2)
110
(48.9)
0
(0.0)
26
(11.6)
12
(5.3)
3.95 1.13
Bargaining affects all my products and
brand buying choices
90
(40.0)
105
(46.7)
15
(6.7)
10
(4.4)
5
(2.2)
4.18 0.90
As a consumer, I believe in haggling as
against fixed price strategy in making
effective buying choice
49
(21.8)
115
(51.1)
20
(8.9)
24
(10.7)
17
(7.6)
3.69 1.15
Haggling on price does not have significant
effects on the buying decision making of
consumers
3
(1.3)
4
(1.8)
9
(4.0)
122
(54.2)
87
(38.7)
1.73 0.74
Price haggling tends to be related to price
sensitivity when making buying decision.
38
(16.9)
100
(44.4)
48
(21.3)
23
(10.2)
16
(7.1)
3.54 1.11
Source: Field survey, 2014
As presented in Table 4.9, 77 (34.2%) respondents and 110 (48.9%) respondents strongly
agreed and agreed respectively that they haggle/bargain when making buying decisions while
26 (11.6%) respondents and 12 (5.3%) respondents disagreed and strongly disagreed
respectively that they haggle/bargain when making buying decisions. Having a mean
response score of 3.95 + 1.13, majority of the sampled consumers haggle/bargain when
making buying decisions.
Ninety (40%) respondents strongly agreed that bargaining affects all their products and
brands choices. 105 (46.7%) respondents agreed, 15 (6.7%) respondents did not have any
opinion, 10 (4.4%) respondents disagreed and 5 (2.2%) respondents strongly disagreed. With
77
a mean response score of 4.18 + 0.90, the respondents agree that bargaining affects all their
products and brands buyingchoices.
From the mean response score of 3.69 + 1.15 and the responses of 49 (21.8%) respondents,
115 (51.1%) respondents, 20 (8.9%) respondents, 24 (10.7%) respondents and 17
(7.6%)respondents who strongly agreed, agreed, did not have any opinion, disagreed and
strongly disagreed, the respondents agreed that as consumers, they believe in haggling as
against fixed price strategy in making effective buying choice.
With 3 (1.3%) respondents strongly agreeing, 4 (1.8%) respondents agreeing, 9 (4%)
respondents having no opinion, 122 (54.2%) respondents disagreeing and 87 (38.7%)
respondents strongly disagreeing as well as a mean response score of 1.73 + 0.74, the
respondents disagree that haggling on price does not have significant effects on the buying
decision making of consumers.
In response to whether price haggling tends to be related to price sensitivity 38 (16.9%)
respondents strongly agreed, 100 (44.4%) respondents agreed, 48 (21.3%) respondents had
no opinion, 23 (10.2%) respondents disagreed and 16 (7.1%) respondents strongly disagreed.
With a mean response of 3.54 + 1.11, the respondents agreed that price haggling tends to be
related to price sensitivity when making buying decision.
78
Table 4.10: Traders’ Perception of Price Haggling Effects on Buying Decision MakingSA
(%)
A
(%)
NO
(%)
D
(%)
SD
(%)
Mean Std.
Dev.
As a trader, I have initiated
haggling/bargaining activity in my
selling efforts towards consumers.
75
(26.8)
152
(54.3)
24
(8.6)
16
(5.7)
13
(4.6)
3.93 1.00
Haggling affects all buying choices of
the customers regarding the final
product, its price and the choice
traders.
144
(51.4)
124
(44.3)
12
(4.3)
0
(0.0)
0
(0.0)
4.47 0.58
Haggling on price does not have
significant effects on buying
decision making of consumers.
30
(10.7)
48
(17.1)
19
(6.8)
139
(49.6
)
44
(15.7)
2.58 1.24
Price haggling tends to be related to
price sensitivity when consumers
make their buying decision.
95
(33.9)
117
(41.8)
33
(11.8)
20
(7.1)
15
(5.4)
3.92 1.11
Source: Field survey, 2014
As presented in Table 4.10, 75 (26.8%) respondents strongly agreed that they have initiated
haggling activity in their selling efforts, 152 (54.3%) respondents agreed with this statement,
24 (8.6%) respondents had no opinion and 13 (4.6%) respondents strongly disagreed. With a
mean response score of 3.93 + 1.00, majority of the respondents agreed that they have
initiated haggling/bargaining activity in their selling efforts towards consumers.
From the responses of 144 (51.4%) respondents who strongly agreed, 124 (44.3%)
respondents who agreed, and 12 (4.3%) respondents who had no opinion, as well as the mean
response rate of 4.47 + 0.58, the respondents agree that haggling affects all buying choices of
the customers regarding the final product, its price and the choice traders.
79
With a mean response score of 2.58 + 1.24, and 30 (10.7%) respondents strongly agreeing, 48
(17.1%) respondents agreeing, 19 (6.8%) respondents having no opinion, 139 (49.6%)
respondents disagreeing and 44 (15.7%) respondents strongly disagreeing, the respondents
did not agree that haggling on price does not have significant effect on the buying decision
making of consumers.
As indicated from the respondents of 95 (33.9%) respondents and 117 (41.8%) respondents
who strongly agreed and agreed respectively and the responses of 33 (11.8%) respondents, 20
(7.1%) respondents and 15 (5.4%) respondents who had no opinion, disagreed and strongly
disagreed respectively, as well as the mean response score of 3.92 + 1.11, the respondents are
of the opinion that price haggling tends to be related to price sensitivity when consumers
make their buying decisions.
4.2.5.2 Effects of Price Haggling on Consumers’ Repeat Patronage
The opinion of the sampled consumers and traders on effects of price haggling on consumers’
repeat patronage are presented in Table 4.11.
Table 4.11: Consumers’ Perception of Price Haggling Effects on Repeat PatronageSA
(%)
A
(%)
NO
(%)
D
(%)
SD
(%)
Mean Std.
Dev.
Price haggling outcomes often
affectsconsumers’ repeat purchase
and loyalty.
55
(24.4
)
108
(48.0)
17
(7.6)
23
(10.2
)
22
(9.8)
3.67 1.23
Price haggling is the main factor
that affects buyers’ patronage
regarding the product choice.
29
(12.9
)
128
(56.9)
24
(10.7)
27
(12.0
)
17
(7.6)
3.56 1.10
Price haggling does not always
bring about repeat patronage.
21
(9.3)
68
(30.2)
63
(28.0)
35
(15.6
)
38
(16.9)
3.00 1.23
Source: Field survey, 2014
80
Table 4.11 shows us that 55 (24.4%) respondents strongly agreed that price haggling
outcomes often affects the consumers’ repeat purchase and loyalty, 108 (48%) respondents
agreed that it does, 17 (7.6%) respondents had no opinion whether it does or not, 23 (10.2%)
respondents disagreed that it does while 22 (9.8%) respondents strongly disagreed that it
does. Having a mean response score of 3.67 + 1.23, the respondents agreed that price
haggling outcomes often reflect the consumers’ choice of seller and loyalty.
From the responses of 29 (12.9%) respondents who strongly agreed, 128 (56.9%) respondents
who agreed, 24 (10.7%) respondents who had no opinion, 27 (12%) respondents who
disagreed and 17 (7.6%) respondents who strongly disagreed as well as the mean response
score of 3.56 + 1.10, the respondents are of the opinion that price haggling is the main factor
that affects buyers patronage regarding the product choice.
As can be gathered from the responses of 21 (9.3%) respondents, 68 (30.2%) respondents, 63
(28%) respondents, 35 (15.6%) respondents and 38 (16.9%) respondents who strongly
agreed, agreed, had no opinion, disagreed and strongly disagreed, and the mean response
score of 3.00 + 1.23, the respondents did not agree that price haggling does not always bring
about repeat patronage.
Table 4.12: Traders’ Perception of Price Haggling Effects on Repeat PatronageSA
(%)
A
(%)
NO
(%)
D
(%)
SD
(%)
Mean Std.
Dev.
Price haggling outcomes often
affects traders’ sales.
96
(34.3
)
115
(41.1)
24
(8.6)
22
(7.9)
23
(8.2)
3.85 1.21
Price haggling is the main factor
that determines traders’ repeat sales.
120
(42.9
148 12 0 0 4.39 0.57
81
) (52.9) (4.3) (0.0) (0.0)
Price haggling doesn’t always bring
about customer retention.
38
(13.6
)
49
(17.5)
38
(13.6)
78
(27.9)
77
(27.5
)
2.62 1.40
Source: Field survey, 2014
As presented in Table 4.12, 96 (34.3%) sampled traders strongly agreed that price haggling
outcomes often affects traders sales, 115 (41.1%) sampled traders agreed with this, 24 (8.6%)
sampled traders had no opinion, 22 (7.9%) sampled traders disagreed with this and 23 (8.2%)
sampled traders strongly disagreed with this. With a mean response score of 3.85 + 1.21, the
sampled traders agreed that price haggling outcomes often affects traders’ sales level.
One hundred and twenty (42.9%) respondents strongly agreed that price haggling is the main
factor that determines traders’ repeat sales, 148 (52.9%) respondents agreed with this and 12
(4.3%) respondents had no opinion. Having a mean response score of 4.39 + 0.57, the
sampled traders are of the opinion that price haggling is the main factor that determines
traders’ repeat sales.
Having a mean score of 2.62 + 1.40 and 38 (13.6%) respondents strongly agreeing, 49
(17.5% respondents agreeing, 38 (13.6%) respondents being having no opinion, 78 (27.9%)
respondents disagreeing, and 77 (27.5%) respondents strongly disagreeing, the sampled
traders do not agree that price haggling does not always bring about customer retention.
4.2.5.3 Effects of Price Haggling on Open Market Operation
The respondents’ perceived effects of price haggling on open market system are presented in
Tables 4.13 and 4.14.
82
Table 4.13: Consumers’ Perception of Price Haggling Effects on Open Market Operation
SA
(%)
A
(%)
NO
(%)
D
(%)
SD
(%)
Mea
n
Std.
Dev.
Haggling is often done when making
buying decisions in an open market
operation.
43
(19.1)
117
(52.0)
19
(8.4)
22
(9.8)
24
(10.7)
3.59 1.21
Price is the only variable that I
haggle on during an open market
operation.
34
(15.1)
115
(51.1)
28
(12.4)
32
(14.2)
16
(7.1)
3.52 1.13
In an open market operation, my
perception regarding haggling prices
as against fixed price tactics is
positive.
15
(6.7)
63
(28.0)
119
(52.9)
21
(9.3)
7
(3.1)
3.26 0.84
Haggling wastes time during open
market operation.
110
(48.9)
115
(51.1)
0
(0.0)
0
(0.0)
0
(0.0)
4.49 0.50
My perception of open market
operation is bad when traders refuse
my proposal when haggling.
38
(16.9)
120
(53.3)
57
(25.3)
7
(3.1)
3
(1.3)
3.81 0.80
Source: Field survey, 2014
From Table 4.13, 43 (19.1%) respondents strongly agreed that they haggle in an open market
operation, 117 (52%) respondents agreed that they do so, 19 (8.4%) respondents did not have
any opinion on whether they haggle in an open market, 22 (9.8%) respondents disagreed that
they haggle in an open market while 24 (10.7%) respondents strongly disagreed that they
83
haggle in an open market. Having a mean response score of 3.59 + 1.21, the respondents
agreed that they haggle when making buying decision in an open market operation.
Thirty four (15.1%) respondents strongly agreed that they haggle only on price or on other
marketing variables, 115 (51.1%) respondents agreed that they haggle only on price or on
other marketing variables, while 28 (12.4%) respondents had no opinion. However, 32
(14.2%) respondents disagreed to haggling only on price or on other marketing variables and
16 (7.1%) respondents strongly disagreed with this. Having a mean response score of 3.52 +
1.13, the respondents are of the opinion that they haggle not only on price but on other
marketing variables during an open market operation.
Fifteen (6.7%) respondents strongly agreed that they have positive perception regarding
haggling prices as against fixed price tactics. 63 (28%) respondents agreed that it is positive,
119 (52.9%) respondents did not have any opinionand 21 (9.3%) respondents disagree with it
while 7 (3.1%) respondents strongly disagree with it. With a mean response score of 3.26 +
0.84, the respondents are of the view that their perception regarding haggling prices as
against fixed price tactics is positive in an open market operation.
All the respondents agreed that haggling wastes time during market operation. This is
captured in the responses of 110 (48.9%) respondents who strongly agreed and 115 (51.1%)
respondents who agreed to this assertion as well as the mean response score of 4.49 + 0.50.
Thirty eight (16.9%) respondents strongly agreed that their perception of open market is bad
when traders refuse their proposals. 120 (53.3%) respondents agreed with this assertion, 57
(25.3%) respondents did not have any opinion, 7 (3.1%) respondents disagreed with this
assertion and 3 (1.3%0 respondents strongly disagreed with this assertion. Having a mean
84
response score of 3.81 + 0.80, the respondents noted that their perception of open market is
bad when traders refuse their proposals when haggling.
Table 4.14: Traders’ Perception of Price Haggling Effects on Open Market OperationSA
(%)
A
(%)
NO
(%)
D
(%)
SD
(%)
Mean Std.
Dev.
Haggling activities consume much
time and efforts of trader in open
market operation.
205
(73.2)
75
(26.8
)
0
(0.0)
0
(0.0)
0
(0.0)
4.73 0.44
In open market operations, my
perception regarding haggling price
against fixed price is positive.
108
(38.6)
108
(38.6
)
31
(11.1)
25
(8.9)
8
(2.9)
4.01 1.06
My perception of haggling in an
open market is bad when consumers
refuse my proposal when haggling.
25
(8.9)
47
(16.8
)
80
(28.6)
80
(28.6)
48
(17.1
)
2.72 1.19
Source: Field survey, 2014
As presented in Table 4.14, 205 (73.2%) respondents strongly agreed that haggling activities
consume much time and efforts of traders in open market operations and 75 (26.8%)
respondents agreed to this statement. Since the mean response score is 4.73 + 0.44, it shows
that all the respondents agreed that haggling activities consume much time and efforts of
traders in open market operations.
Having 108 (38.6%) respondents that strongly agreed, another 108 (38.6%) respondents that
agreed 31 (11.1%) respondents that have no opinion, 25 (8.9%) respondents that disagreed
and 8 (2.9%) respondents that strongly disagreed and a mean response of 4.01 + 1.06, the
85
respondents agreed that consumers’ perception regarding haggling price against fixed price is
positive in an open market operation.
The sampled traders did not agree that consumers perception of haggling in an open market is
bad when they (traders) refuse their proposal This is reflected in the mean response score of
2.72 + 1.19, and the responses of 25 (8.9%) respondents who strongly agreed, 47 (16.8%)
respondents who agreed 80 (28.6%) respondents who had no opinion, 80 (28.6%)
respondents who disagreed and 48 (17.1%) respondents who strongly disagreed.
4.2.5.4 Effects of Price Haggling on Consumer/Seller Relationship
The respondents’ perception on the effects of price haggling on consumer/seller relationship
is presented in Table 4.15.
Table 4.15: Perception of Price Haggling Effects on Consumer/Seller RelationshipRespondent SA
(%)
A
(%)
NO
(%)
D
(%)
SD
(%)
Mean Std.
Dev.
Haggling can cause
disagreement or
conflict that may
arise in purchasing
Consumer 55
(24.4)
56
(24.9
)
47
(20.9)
34
(15.1)
33
(14.7
)
2.32 1.07
Trader 90
(32.1)
103
(36.8
)
57
(20.4)
20
(7.1)
10
(3.6)
3.87 1.06
Source: Field survey, 2014.
Table 4.15 shows that 5 (2.2%) sampled consumers strongly agreed that haggling can cause
disagreement or conflict that may arise in purchasing, 33 (14.7%) sampled consumers agreed
with this, 47 (20.9%) sampled consumers did not have any opinion on this matter, 84 (37.3%)
sampled consumers disagreed with this view and 56 (24.9%) respondents strongly disagreed
with this view. Having a mean response score of 2.32 + 1.07, the sampled consumers are not
of the opinion that haggling can cause disagreement or conflict that may arise in purchasing.
86
However the sampled traders agreed that haggling can cause disagreement or conflict that
may arise in purchasing. This is captured in the traders’ responses which showed 90 (32.1%)
sampled traders strongly agreeing, 103 (36.8%) sampled traders agreeing, 57 (20.4%)
sampled traders being undecided, 20 (7.1%) sampled traders disagreeing and 10 (3.6%)
sampled traders strongly disagreeing, as well as the mean response score of 3.87 + 1.06.
4.3 Test of Hypotheses
4.3.1 Test of Hypothesis One
Table 4.16: Summary Responses on Variables to Measure Effect of Haggling on
Consumers’ Buying Decision Making
Groups SA A NO D SD TOTAL
Consumer 257 434 92 205 137 1125
Trader 344 441 88 175 72 1120
Total 601 875 180 380 209 2245
Source: Field Survey, 2014.
Price haggling does not have a significant effect on consumers’ buying decision making
Table 4.17: Summarised Regression Results for Hypothesis One
Groups R R2 RegSSResS
SF Sig. Α βHagg
t-value
Consumers0.88
8
0.78
8174.834
46.98
1
829.83
40.000
1.24
10.946
28.807
Traders0.85
7
0.73
4100.021
36.27
9
766.02
10.000
2.46
10.536
27.685
Source: Appendix V
4.3.1.1 Analysis of Data from Consumers
87
R, the correlation coefficient, which has a value of 0.888 indicates that there is a relationship
between the dependent variable (Buying Decision Making) and the independent variable
(haggling). R square, the coefficient of determination, shows that 78.8% of the variation in
the dependent variable is explained by the model.
The regression sum of squares (174.834) is greater than the residual sum of squares (46.981)
which indicates that more of the variation in the dependent variable is explained by the
model. The significance value of the F statistics (0.000) is less than 0.05, which means that
the variation explained by the model is not due to chance. The Hagg coefficient of 0.946
indicates a positive relationship between haggling and buying decision making, which is
statistically significant (with t = 28.807).
These results reveal that from the consumers’ responses, price haggling has a significant
effect on their buying decision making.
4.3.1.2 Analysis of Data from Traders
R, the correlation coefficient, which has a value of 0.857 indicates that there is a relationship
between the dependent variable (Buying Decision Making) and the independent variable
(haggling). R square, the coefficient of determination, shows that 73.4% of the variation in
the dependent variable is explained by the model.
The regression sum of squares (100.021) is greater than the residual sum of squares (36.279)
which indicates that more of the variation in the dependent variable is explained by the
model. The significance value of the F statistics (0.000) is less than 0.05, which means that
the variation explained by the model is not due to chance. The Hagg coefficient of 0.536
88
indicates a positive relationship between haggling and buying decision making, which is
statistically significant (with t = 27.685).
These results reveal that from the traders’ responses, price haggling has a significant effect on
their consumers’ buying decision making.
4.3.1.3 Decision
Based on the above analysis, the null hypothesis is rejected and the alternative hypothesis
accepted accordingly. Hence, price haggling has a significant effect on consumers’ decision
making.
4.3.2 Test of Hypothesis Two
Table 4.18: Summary Responses on Variables to Measure the Effect of Price Haggling
on Repeat Patronage.
Groups SA A NO D SD TOTAL
Consumer 105 304 104 85 77 675
Trader 254 312 74 100 100 840
Total 359 616 178 185 177 1515
Source: Field Survey, 2014.
Price Haggling does not have significant effect on consumers’ repeat patronage.
Table 4.19: Z-Test Results for Hypothesis TwoGroups Mean Std. Dev. Z-value Sig.
Consumers 3.4074 1.1502 3.971 0.000
Traders 3.6190 0.9955 2.786 0.000
Source: Appendix VI
4.3.2.1 Analysis of Data from Consumers
89
With a Z-value of 3.971, which is greater than the critical Z of 1.96 (at 95% confidence
interval), it is observed that the consumers responses on the effectiveness of price haggling
on consumers’ repeat patronage is uniformly distributed. With p < 0.05, this result is
significant.
4.3.2.2 Analysis of Data from Traders
With a Z-value of 2.786, which is greater than the critical Z of 1.96 (at 95% confidence
interval), it is observed that the traders’ responses on the effectiveness of price haggling on
consumers’ repeat patronage is uniformly distributed. With p < 0.05, this result is significant.
4.3.2.3 Decision
From the foregoing, the null hypothesis is rejected and the alternative hypothesis accordingly
accepted. Hence, price haggling has significant effect on consumers’ repeat patronage.
4.3.3 Test of Hypothesis Three
Table 4.20: Summary of Responses on Variables to Measure Consumers’ Perception
of Price Haggling Effect on Open Market Operation
Groups SA A NO D SD Total
Consumer 240 530 223 82 50 1125
Trader 338 230 111 105 56 840
Total 578 760 334 187 106 1965
Source: Field Survey, 2014.
Price haggling does not affect open market operation.
90
Table 4.21: Z-Test Results for Hypothesis Three
Groups Mean Std. Dev. Z-value Sig.
Consumers 3.8074 0.8327 2.620 0.000
Traders 3.8527 0.8266 3.057 0.000
Source: Appendix VII
4.3.3.1 Analysis of Data from Consumers
With a Z-value of 2.620, which is greater than the critical Z of 1.96 (at 95% confidence
interval), it is observed that the consumers responses on the positive effects of price haggling
on open market operation is uniformly distributed. With p < 0.05, this result is significant.
4.3.3.2 Analysis of Data from Traders
With a Z-value of 3.057, which is greater than the critical Z of 1.96 (at 95% confidence
interval), it is observed that the traders’ responses on the positive effects of price haggling on
open market operation is uniformly distributed. With p < 0.05, this result is significant.
4.3.3.3 Decision
From the foregoing, the null hypothesis is rejected and the alternative hypothesis accordingly
accepted. Hence, price haggling has positive effects on open market operation.
4.3.4 Test of Hypothesis Four
Table 4.22: Summary Responses on Variables to Measure Consumers’ Perception of
Price Haggling Effects on Consumer/Seller Relationship
Groups SA A NO D SD Total
Consumer 55 56 47 34 33 225
Trader 90 103 57 20 10 280
91
Total 145 159 104 54 43 505
Source: Field Survey, 2014.
Price haggling has no significant effects on consumer/seller relationship
Table 4.23: Summarised Regression Results for Hypothesis Four
Groups R R2 RegSSResS
SF Sig. Α βHagg
t-value
Consumers0.88
4
0.78
1200.661
56.29
9794.811 0.000
-
0.7041.013
28.192
Traders0.93
0
0.86
4269.772
42.33
91771.339 0.000 1.012 0.880
42.087
Source: Appendix VIII
4.3.4.1 Analysis of Data from Consumers
R, the correlation coefficient, which has a value of 0.884, indicates that there is a relationship
between the dependent variable (Consumer/Seller Relationship) and the independent variable
(haggling). R square, the coefficient of determination, shows that 78.1% of the variation in
the dependent variable is explained by the model.
The regression sum of squares (200.661) is greater than the residual sum of squares (56.299)
which indicates that more of the variation in the dependent variable is explained by the
model. The significance value of the F statistics (0.000) is less than 0.05, which means that
the variation explained by the model is not due to chance. The Hagg coefficient of 1.013
indicates a positive relationship between haggling and consumer/seller relationship, which is
statistically significant (with t = 28.192).
92
These results reveal that from the consumers’ responses, price haggling has significant effects
on consumer/seller relationship.
4.3.4.2 Analysis of Data from Traders
R, the correlation coefficient, which has a value of 0.930 indicates that there is a relationship
between the dependent variable (Consumer/Seller Relationship) and the independent variable
(haggling). R square, the coefficient of determination, shows that 86.4% of the variation in
the dependent variable is explained by the model.
The regression sum of squares (269.772) is greater than the residual sum of squares (42.339)
which indicates that more of the variation in the dependent variable is explained by the
model. The significance value of the F statistics (0.000) is less than 0.05, which means that
the variation explained by the model is not due to chance. The Hagg coefficient of 0.880
indicates a positive relationship between haggling and decision making, which is statistically
significant (with t = 42.087).
These results reveal that from the traders’ responses, price haggling has significant effects on
consumer/seller relationship.
4.3.4.3 Decision
Based on the above analysis, the null hypothesis is rejected and the alternative hypothesis
accepted accordingly. Hence, price haggling has significant effects on consumer/seller
relationship.
93
REFERENCES
Brassington, S. and Pettitt, F. (2003) Principles of Marketing. London: Prentice Hall Inc.
Gbede, G. O. (2001) Strategic Sales Force Management. Lagos: Westboume School Print.
Jobber, D. (2013) Principles of Marketing. New York: Prentice Hall Inc.
Kotler, P. and Keller, K. (2013) Marketing Management. India: Pearson Publishers Ltd.
Makaley, M.M. (2001) Theory and Practice in Marketing. Ontario-Canada: McGraw Hill
Inc.
Moncrieff, W. (2010) “Haggling Pricing Strategy” Journal of Marketing, Vol. 17(July)
Onah, J. O. and Okoli, B. I. C. (2014) Traditional Markets and Marketing in Nigeria. Enugu:
Ezu Books Ltd.
Rogers, M. (2006) Theory of Marketing. London: Westline Prints.
94
CHAPTER FIVE
SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS
5.1 Introduction
This chapter focuses on the summary of findings, conclusion and recommendations for this
research.
5.2 Summary of Findings
The following are the summary of major findings based on the analyses of the research
questions and the tested hypotheses of the study.
Price haggling has a significant effect on consumers’ buying decision making. It was
found out that haggling process facilitates final purchase decision making.
Consumers’ willingness to buy is a consequence of favourable haggling process. It
was established that haggling affects the buying choices of the consumers.
Consequent upon the price sensitivity of consumers, most consumers prefer haggling
to fix price strategy in making buying decisions.
Price haggling is significantly effective on consumers’ repeat patronage. Repeat
purchase rather than trial purchase is germane to sustenance of business. It was
discovered that haggling makes consumers feel that they are part of the business.
After all, they participate in the process of arriving at the final price of the product.
This removes mistrust and suspicion, thereby building confidence in the consumer to
repeat purchase and return to the seller. Thus,repeat sales enhance the seller and
consumer relationship.
Price haggling has positive effects on open market operation. Findings revealed that
prices for most goods are not fixed in the selected traditional markets in Ibadan. It was
also discovered that even when certain goods have fixed prices, some consumers have
always attempted haggling on the prices. To most consumers, haggling practice is
95
convenient and fosters better relationships. It also fosters better knowledge of the
goods and their substitutes. The negative effect of time consumption is justified in the
belief that both consumers and traders have a lot to gain from the haggling process.
Price haggling has significant effects on consumer/seller relationship. It was found out
that healthy consumer-seller relationship is paramount in the mind of every trader.
The relationship has the capacity to create an informal information transaction
between the seller and the consumer. It was discovered that the relationship ensures a
personal touch which makes the seller and the consumer to be closer. Also the parties
have a better understanding of each other when involved in haggling. Friendship is
created as a result of familiarity arising from haggling. This oftentimes gives rise to a
situation where both parties have intimate discussions on personal issues beyond
business transaction.
5.3 Conclusion
This study on effects of price haggling strategy on consumers’ decision making in selected
traditional markets in Ibadan, Oyo State, Nigeria, focused on ascertaining the effects price
haggling as a strategy has on the buyer – seller process in traditional markets. Price haggling
has been established to exist, particularly in open markets. Sellers and buyers alike are
involved in the price haggling process, as it takes two to tango.
Price haggling as a marketing strategy plays a very important role in ensuring that consumers
make informed decisions on goods they want to purchase. The decisions are informed
because consumers do not only haggle about the prices of the goods, but they also get to
know more about the features of the goods being haggled over. In some cases, the haggling
process has enabled the consumers to make better choices of buying alternate products which
96
are better than the ones being haggled over, or detecting sellers that are not sincere. In all,
the price haggling process has the benefit of ensuring that consumers make appropriate
decisions on their buying process, create a good seller – buyer relationship which could result
in repeat patronage and could enhance sincere trading activities in the open market.
While in certain occasions, price haggling has resulted in time wastage and misunderstanding
between the parties involved, it has,on the other hand, ensured that the gains of personal
marketing are achieved. We can admit that the haggling process still has more room for
improvement. When improved upon it will ensure that the trading process in open markets is
more constructive, objective, honest and satisfying.
5.4 Recommendations
Based on the findings of this study, it is being recommended that;
Improvement should be made on the haggling process that will ensure trust, fairness
and justified price for product purchase. When this is done, it has the potentials of
ensuring that consumers are able to make buying decisions faster, thereby reducing to
thebarest minimum time wasted in haggling repeatedly over certain goods.
Manufacturers should set retail price range which has a minimum price and maximum
price on goods, thereby creating a situation where no party in the haggling process is
or feels cheated.
Consumers and sellers alike should develop effective communication and haggling
skills, which have the ability to ensure quick intelligibility, could foster better
relationships and ensure effective bargaining process.
While haggling is viewed in some settings as ‘war’, it should be very strategic in
implementation with little or no hostilities being experienced between the parties.
This will ensure repeat patronage by consumers to the particular sellers.
97
Consumer SellerOffer
Counter Offer
Strengths & Weaknesses
PersonalityEmotional Barriers
ImpressionSelf Image
Fear of Rejection
Product BarriersInformationAlternativesCompetitorsPlaceTime
Environmental BarriersCultural & Social NormsPrevailing Market ConditionsTrends taking placePerception of haggling price against fixed price tactics
Product Purchase
False PricingLack of TrustTime WastageNo Purchase
A conceptual model has been developed arising from the models reviewed to address
the problem of time wasting, lack of trust, lack of confidence and false pricing that
may be subjected to haggling.
Fig. 5.1:
Researcher’s Conceptualised Haggling Process Model
Three major setbacks to haggling have been noticed as emotional barriers, product barriers
and environmental barriers. These setbacks were arrived at based on various theories
reviewed in the research work. Smith’s (1946) work on main obstacles to haggling
highlighted the impact of the environmental barriers presented in the conceptualized model.
In his work, Makaleley (2001) showed the effects of barriers such as place and time on
99
haggling while Pent (2006) introduced Integrative Theory, which formed the basis of product
barrier concept in the model. The Personality Theory reviewed by Kent (1974) revealed that
the personality of the seller and the buyer play a significant role in initiating offers and
counter-offers in the process of bargaining, which Coles (1998) termed to be the Negotiation
Process. Also, in the Classical Bargaining theory reviewed by Kent (1974) it was argued that
the strength and weakness of either party determine the trend of the negotiation. If a
compromise is reached, a purchase is effected, but if not, the whole process is punctuated
with false pricing, lack of trust, time wastage and consequently no purchase is effected. In
case of negative outcome (i.e. no purchase), the process starts all over again in another shop
until purchase is made.
5.6 Suggestions for Further Study
This study basically focused on effects of price haggling strategy on consumers’ decision
making. It pointed out that price haggling does aid the consumer in making buying decisions.
However, in the course of the work, the need for effective haggling process is highlighted.
To this end, the researcher suggests that further studies should be carried out on models and
strategies of implementing effective haggling processes in business transactions.
100
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106
APPENDIX I
QUESTIONNAIRE FOR CONSUMERS
The attached questionnaire will be given randomly to consumers in the selected traditional markets in
Ibadan, Oyo State. It is strictly for academic purpose.
Letter to Respondents (consumers)
Department of Marketing,
Faculty of Business Admin.
University of Nigeria,
Enugu Campus,
July, 2014.
Dear Sir/Ma,
I am a post graduate student of the University of Nigeria pursuing an M.Sc degree in marketing. In
partial fulfilment for the award of the masters’ degree, I am carrying out the research on the topic
EFFECTS OF PRICE HAGGLING STRATEGY ON CONSUMER DECISION MAKING IN
SELECTED TRADITIONAL MARKETS IN IBADAN, OYO STATE.
In furtherance of this endeavour, I humbly request you to fill the attached questionnaire faithfully,
please. It will be appreciated if all the questions are answered fully. I wish to assure you that all
information given will be treated in confidence and used for the purpose of the research.
Thank you for your cooperation.
Yours faithfully,
Signed
Farayola Solomon O.
107
SECTION APlease tick ( ) as appropriate in the following questions.1. Sex: Male ( ) Female ( )2. Age: Less than 18years ( ) 18 – 35years ( ) 35 – 50years ( ) 50years and Above ( )3. Occupation: Businessman ( ) Public/Servant ( ) Students ( ) Private Employee ( )Research/Consultant ( ) Others ( )4. Religion: Christianity ( ) Islam ( ) Traditional ( )5. Marital Status: Single ( ) Married ( ) Divorced ( ) Widowed ( )
SECTION BPlease Tick ( ) against the appropriate answer(s) to each question. The answer/options are as follows:SA – Strongly Agree, A – Agree, N – No Opinion, D – Disagree, SD – Strongly DisagreeSN QUESTIONS SA(5) A(4) NO(3) D(2) SD(1)6 I haggle when making buying decision.7 Bargaining affects all my products and brand buying
choices.8 I frequently haggle in an open market.9 As a Consumer, I believe in haggling as against fixed
price strategy in making effective buying choice10 Haggling on price does not have significant effects on
the buying decision making of consumers.11 Price haggling tends to be related to price sensitivity
when making buying decision.12 Price haggling is the main factor that affects buyers’
patronage regarding the product choice.13 Price haggling does not always bring about repeat
patronage.14 Haggling is often done when making buying decision in
an open market operation.15 Price is the only variable that I haggle on during an open
market operation.16 In an open market operation, my perception regarding
prices as against fixed price tactics is positive.17 Haggling wastes time during open market operation.18 My perception of open market operation is bad when
traders refuse my proposals when haggling.19 Haggling can cause disagreement or conflict that may
arise in purchasing.20 I can initiate Haggling/Bargaining activities under all
shopping circumstances21 In many markets, products like beverages, beer, and
drinks are fixed. I have attempted to haggle on these22 only perishable goods such as agricultural products are
those that consumers haggle most
108
SECTION CPlease Tick ( ) against the appropriate answer(s) to each question. The answer/options are as follows:SA – Strongly Agree, A – Agree, N – No Opinion, D – Disagree, SD – Strongly DisagreeSN QUESTIONS SA(5) A(4) NO(3) D(2) SD(1)23 Haggling can prevent disagreement or conflict that may
arise in purchasing.24 Haggling on Price does not have significant effects on
the decision making of consumers.25 People who haggle more are the consumers in the low
social structure and economic base and not the rich ones.26 Price Haggling outcomes often reflect the consumers’
choice of seller and loyalty.27 Pricing is the only key area of product that are always
haggled on28 Price Haggling tends to be related to price sensitivity and this
affects the buyers’ choice.29 Psychological and sociological beliefs of the consumers serve
as the reference price point for haggling in market places.30 Price Negotiation /Haggling is the main factor that affect
buyers regarding product choice, seller choice and purchase actions in the buying decision stage.
31 Price Haggling does not always bring repeat sales to sellers and consumers relationship
32 Haggling needs skills and competence from both parties involved and once these are lacking it can lead to purchasing problems such as wrong product choice to buyers or lower price than normal for the sellers
109
APPENDIX II
QUESTIONNAIRE FOR MARKET TRADERS
The attached questionnaire will be given randomly to registered traders and sellers in the selected
traditional markets in Ibadan, Oyo State. It is strictly for academic purpose.
Letter to Respondents (market traders)
Department of Marketing
Faculty of Business Admin.
University of Nigeria
Enugu Campus,
July, 2014.
Dear Sir/Ma,
I am a post graduate student of the University of Nigeria pursuing an M.Sc degree in marketing. In
partial fulfilment for the award of the masters’ degree I am carrying out the research on the topic
EFFECTS OF PRICE HAGGLING STRATEGY ON CONSUMER DECISION MAKING IN
SELECTED TRADITIONAL MARKETS IN IBADAN, OYO STATE.
In furtherance of this endeavour, I humbly request you to fill the attached questionnaire faithfully,
please. It will be appreciated if all the questions are answered fully. I wish to assure you that all
information given will be treated in confidence and used for the purpose of the research.
Thank you for your cooperation.
Yours faithfully,
Signed
Farayola, Solomon O.
110
SECTION APlease tick ( ) as appropriate in the following questions.1. Sex: Male ( ) Female ( )2. Age: Less than 18years ( ) 18 – 35years ( ) 35 – 50years ( ) 50years and Above ( )3. Occupation: Businessman ( ) Public/Servant ( ) Students ( ) Private Employee ( ) Research/Consultant ( ) Others ( )4. Religion: Christianity ( ) Islam ( ) Traditional ( )5. Marital Status; Single ( ) Married ( ) Divorced ( ) Widowed ( )6. Line of Products: Clothing and Textiles ( ) Foods ( ) Consumables ( ) Ram/Goat/Cows ( ) Drinks ( ) Unclassified ( ) 7. Sales level per day: Less than N5000 ( ) N5000 – N 15000 ( ) N15000 – N32000 ( ) N32000 and above ( )
SECTION BPlease Tick ( ) against the appropriate answer(s) to each question. The answer/options are as follows:SA – Strongly Agree, A – Agree, N – No Opinion, D – Disagree, SD – Strongly DisagreeSN QUESTIONS SA(5) A(4) NO(3) D(2) SD(1)8 As a trader, I have initiated haggling/ bargaining activity
in my selling efforts towards consumers.9 Haggling affects all buying choices of the consumers
regarding the final product, its price and the choice traders.
10 Haggling on price does not have significant effects on buying decision making of consumers.
11 Price haggling tends to be related to price sensitivity when consumers make buying decision.
12 Price haggling outcomes often affects traders’ sales.13 Price haggling is the main factor that determines traders’
repeat sales.14 Price haggling doesn’t always bring about retention.15 Haggling activities consume much time and efforts of
trader in open market operation.16 In open market operations, my perception regarding
haggling price against fixed price is positive.17 My perception of haggling in an open market is bad
when consumers refuse my proposals when haggling.
111
SECTION CPlease Tick ( ) against the appropriate answer(s) to each question. The answer/options are as follows:SA – Strongly Agree, A – Agree, N – No opinion, D – Disagree, SD – Strongly Disagree.SN QUESTIONS SA(5) A(4
)NO(3) D(2) SD(1)
18 Haggling can cause disagreement or conflict that may arise in purchasing.
19 People who haggle more are the consumers in the low social structure and economic base and not the rich ones.
20 Price Haggling outcomes often reflect the consumers’ choice of seller and loyalty.
21 Pricing is the only key areas of product that are always haggled on
22 Price Haggling tends to be related to price sensitivity and this affects the buyers’ choice.
23 Psychological and sociological beliefs of the consumers serve as the reference point for price haggling in market places.
24 Price Negotiation /Haggling is the main factor that affect buyers regarding product choice, seller choice and purchase actions in the buying decision stage
25 Price Haggling doesn’t always bring repeat sales to sellers and consumers’ relationship
26 Haggling needs skills and competence from both parties involved and once these are lacking it can lead to purchasing problems such as wrong product choice to buyers or lower price than normal for the sellers
112
APPENDIX III
CRONBACH’S ALPHA RELIABILITY ANALYSIS RESULTFOR RESEARCH QUESTIONNAIRE - CONSUMERS
Scale: ALL VARIABLESCase Processing Summary
N %
Cases Valid 25 100.0
Excludeda 0 .0
Total 25 100.0a. Listwise deletion based on all variables in the procedure.
Source:SPSS 17.0 Output File
Reliability Statistics
Cronbach's AlphaCronbach's Alpha Based on
Standardized ItemsN of Items
.832 .851 26Source:SPSS 17.0 Output File
113
APPENDIX IV
CRONBACH’S ALPHA RELIABILITY ANALYSIS RESULTFOR RESEARCH QUESTIONNAIRE – MARKET TRADERS
Scale: ALL VARIABLESCase Processing Summary
N %
Cases Valid 25 100.0
Excludeda 0 .0
Total 25 100.0a. Listwise deletion based on all variables in the procedure.
Source:SPSS 17.0 Output File
Reliability Statistics
Cronbach's AlphaCronbach's Alpha Based on
Standardized ItemsN of Items
.811 .821 20Source:SPSS 17.0 Output File
114
APPENDIX V
Regression Results for Hypothesis One
ConsumersDescriptive Statistics
Mean Std. Deviation N
deci 4.0644 .99511 225
hagg 2.9852 .93424 225
Correlations
Deci Hagg
Pearson Correlation deci 1.000 .888
hagg .888 1.000
Sig. (1-tailed) deci . .000
hagg .000 .
N deci 225 225
hagg 225 225
Model Summaryb
Model R R SquareAdjusted R
SquareStd. Error of the
Estimate Durbin-Watson
1 .888a .788 .787 .45900 .083
a. Predictors: (Constant), hagg
b. Dependent Variable: deci
ANOVAb
Model Sum of Squares df Mean Square F Sig.
1 Regression 174.834 1 174.834 829.861 .000a
Residual 46.981 223 .211
Total 221.816 224
a. Predictors: (Constant), hagg
b. Dependent Variable: deci
Coefficientsa
Model
Unstandardized Coefficients Standardized Coefficients
t Sig.B Std. Error Beta
1 (Constant) 1.241 .103 12.093 .000
Hagg .946 .033 .888 28.807 .000
a. Dependent Variable: deci
115
TradersModel Summary
Model R R SquareAdjusted R
SquareStd. Error of the
Estimate
1 .857a .734 .733 .36125
a. Predictors: (Constant), hagg
ANOVAb
Model Sum of Squares df Mean Square F Sig.
1 Regression 100.021 1 100.021 766.439 .000a
Residual 36.279 278 .131
Total 136.300 279
a. Predictors: (Constant), hagg
b. Dependent Variable: dec
Coefficientsa
Model
Unstandardized CoefficientsStandardized Coefficients
t Sig.B Std. Error Beta
1 (Constant) 2.461 .066 37.044 .000
Hagg .536 .019 .857 27.685 .000
a. Dependent Variable: dec
116
APPENDIX VI
Z-Test Result for Hypothesis Two
Consumers
One-Sample Kolmogorov-Smirnov Test
hypo2
N 225
Normal Parametersa,,b Mean 3.4074
Std. Deviation 1.15016
Most Extreme Differences Absolute .265
Positive .104
Negative -.265
Kolmogorov-Smirnov Z 3.971
Asymp. Sig. (2-tailed) .000
a. Test distribution is Normal.
b. Calculated from data.
Traders
One-Sample Kolmogorov-Smirnov Test
hypo2
N 280
Normal Parametersa,,b Mean 3.6190
Std. Deviation .99547
Most Extreme Differences Absolute .167
Positive .167
Negative -.164
Kolmogorov-Smirnov Z 2.786
Asymp. Sig. (2-tailed) .000
a. Test distribution is Normal.
b. Calculated from data.
117
APPENDIX VII
Z-Test Result for Hypothesis Three
ConsumersOne-Sample Kolmogorov-Smirnov Test
hypo3
N 225
Normal Parametersa,,b Mean 3.8074
Std. Deviation .83270
Most Extreme Differences Absolute .175
Positive .076
Negative -.175
Kolmogorov-Smirnov Z 2.620
Asymp. Sig. (2-tailed) .000
a. Test distribution is Normal.
b. Calculated from data.
Traders
One-Sample Kolmogorov-Smirnov Test
hypo3
N 280
Normal Parametersa,,b Mean 3.8527
Std. Deviation .82655
Most Extreme Differences Absolute .183
Positive .083
Negative -.183
Kolmogorov-Smirnov Z 3.057
Asymp. Sig. (2-tailed) .000
a. Test distribution is Normal.
b. Calculated from data.
118
APPENDIX VIII
REGRESSION RESULTS FOR HYPOTHESIS FOUR
CONSUMERS
Descriptive Statistics
Mean Std. Dev. N
haggling can prevent disagreement or conflict that may arise in purchasing 2.3200 1.07105 225
Hagg 2.9852 .93424 225
Correlations
haggling can prevent disagreement or conflict that
may arise in purchasing hagg
Pearson Correlation haggling can prevent disagreement or conflict that may arise in purchasing
1.000 .884
Hagg .884 1.000
Sig. (1-tailed) haggling can prevent disagreement or conflict that may arise in purchasing
. .000
Hagg .000 .
N haggling can prevent disagreement or conflict that may arise in purchasing
225 225
Hagg 225 225
Model Summaryb
Model R R SquareAdjusted R
SquareStd. Error of the
Estimate Durbin-Watson
1 .884a .781 .780 .50246 .087
a. Predictors: (Constant), hagg
b. Dependent Variable: haggling can prevent disagreement or conflict that may arise in purchasing
ANOVAb
Model Sum of Squares df Mean Square F Sig.
1 Regression 200.661 1 200.661 794.811 .000a
Residual 56.299 223 .252
Total 256.960 224
a. Predictors: (Constant), hagg
b. Dependent Variable: haggling can prevent disagreement or conflict that may arise in purchasing
119
Coefficientsa
Model
Unstandardized CoefficientsStandardized Coefficients
t Sig.B Std. Error Beta
1 (Constant) -.704 .112 -6.267 .000
Hagg 1.013 .036 .884 28.192 .000
a. Dependent Variable: haggling can prevent disagreement or conflict that may arise in purchasing
Traders Model Summary
Model R R SquareAdjusted R
SquareStd. Error of the
Estimate
1 .930a .864 .864 .39025
a. Predictors: (Constant), hagg
ANOVAb
Model Sum of Squares df Mean Square F Sig.
1 Regression 269.772 1 269.772 1771.339 .000a
Residual 42.339 278 .152
Total 312.111 279
a. Predictors: (Constant), hagg
b. Dependent Variable: q18
Coefficientsa
Model
Unstandardized CoefficientsStandardized Coefficients
t Sig.B Std. Error Beta
1 (Constant) 1.012 .072 14.096 .000
Hagg .880 .021 .930 42.087 .000
a. Dependent Variable: q18
120
APPENDIX X
Pilot Survey
The researcher conducted pilot survey with twenty-five (25) consumers who regularly
patronize each of the traditional markets. Working on 95% confidence level and a tolerable
error of 5%, the formula for determining sample size for infinite population (Williams 2001)
was used to estimate the sample size of the consumers, since they were infinite and unknown.
n = pq (Z2) or Z2pq
154