Effect of Consumer Bargaining Power on Price Flexibility of Rice in Imo State, Nigeria

The study examined the effect of consumer bargaining power on price flexibility of rice in Imo State, Nigeria. Data were drawn from the three agricultural zones in the State. A functional market in each of the zone was randomly selected. Primary data were obtained by means of interview schedule (questionnaire) administered to consumers of rice at retailers shops. Data were analyzed using descriptive techniques and ordinary least square (OLS) multiple regression analysis. The result showed that mean weekly consumers’ unit price of rice was =N226.23/kg with a mean weekly
purchase of 7.7 Kg/week. About 60.00% of rice consumers have a weak bargaining index of 0.87 while the mean bargaining power of rice is 68.25% and this gave a baseline for rice retail price. The result of multiple regressions showed that the co-efficient of price of substitutes (X1, age (X4 and educational level (X5 are positive and have significant relationships with consumers’ bargaining power. Consumers’ awareness of their bargaining power and good understanding of marketing
systems and its modus operandi, price trends, formation and fixing could help them take their proper place as price givers and kings in the market place hence, this study recommends the need for consumers’ to improve their level of education in order to reposition themselves to make good use of market information to their advantage in bargaining. Consumers should form co-operative societies through which they can share market information, buy rice in bulk to reduce retail prices and at the same time play a key role in price formation.