1.1 Introduction
Ginger marketing distribution channels are group of people or organizations that direct the flow of ginger commodities from producers to consumers vertically. These market channels include market levels and actors that have a role in the distribution and transformation of the commodity. The flow of agricultural commodities starts from the farm but sometimes stored before directed to the rural (tertiary) markets then to the secondary markets or storage chamber where middlemen and wholesalers buy them in desired quantities and then sent to primary or main market or storage rooms from here, they are transported to the final markets where the goods are sold to retailers, wholesalers and big companies from export (ANSAB, 2011).
As a prelude to other parts of this study, this chapter will discuss the background upon which this study was initiated, the statement of problems that led to this study, the Aim and Objectives of the study. Others are Significance of the study, Scope of work, Research hypothesis and questions, Limitations of the Study and Definition of technical terms.
1.2 Background of Study
Ginger (Zingiber officinale Rosc) is a monocotyledonous, herbaceous, tropical plant belonging to the family Zingiberaceae. It’s a perennial plant usually grown as an annual crop. The crop is native to southern Asia mainly in India and china from where it spread to most tropical and subtropical countries. The plant is erect, has many fibrous roots, aerial shoots (pseudo stem) with leaves, and the underground stem (rhizome) where the ginger spice is obtained (Vasala, 2012). The roots of ginger are of two types, fibrous and fleshy. After planting, many roots having indefinite growth grow out of the base of the sprouts. These are the fibrous roots, and the number of such roots keeps on increasing with the growth of tillers. These fibrous roots are thin, have root hairs (Ravindran and Babu, 2016).
Binish (2018) defined marketing costs as costs incurred in moving goods from the producer to the consumer and the number of services offered. He further divided marketing costs into three; direct costs which include direct marketing functions and services for example; transportation and assemblage costs, treatment costs (loading, unloading and repackaging), processing and storage costs, taxes, levies, customs and duties. The operating costs which are the opportunity cost of tied up capital and physical damages that arise from transportation, storage as a fraction of initial market crop value.
According to Binish (2018) marketing channels are very important because they aid and streamline how every consumer gets their desirable products. He further said that marketing Channels have become eyes and ears of marketing today and receive countless attention, they do not only create value addition but also customer and shareholder value, brand equity and market presence for a company.
According to Pandey et al. (2010), prices paid by consumers and the corresponding share received by the producer are affected by marketing channels which are important channels of agribusiness He further stated that the shorter the channel, the less the marketing costs and cheaper the commodity to consumer. Devendra et al. (2019) in his study revealed that there are three types of marketing channels and the common types were; Farmers-Wholesalers-Retailers-Consumer constituted 40% respondents, 21.20% respondents in the Farmers-Retailers-Consumers, 17.50% respondents followed marketing channel of both Farmer-Wholesalers-Retailers-Consumers and Farmers-Commission agents-Wholesalers-Retailers-Consumers, 16.20% respondents followed both Farmers-Wholesalers-Retailers-Customers and Farmers-Retailers-Customers and 5% followed marketing channel of Farmers-Commission agents-Wholesalers-Retailers-Consumers.
Ginger has no information on the primary centers of domestication since ginger rhizomes can be easily transported over long distances and spread all over the tropics and subtropics hence the most dominantly grown spice as discussed by Ravindran and Babu (2016). Dinesh (2017) stated that ginger is one of the earliest known oriental spice. Ginger was introduced in East Africa by the Arabs in the thirteenth century (Okwuowulu, 2016).
Therefore, in Yakowa Market Kafanchan Kaduna State where the research was carried out, the activities that was conducted is to know the Impact of Marketing Distribution on Sales Profitability Ginger.
1.3 Statement of Problems
Investigation revealed that ginger producers lack appropriate skills, knowledge and information on ginger marketing (Geta and Kifle, 2011). The producers are not aware of market information like value chain information including price at the end markets, demand situation and quality of the products. These compel them to sell at relatively low price.
The determinants of this profit are also not known well. This is partly due to limited research on horticultural crops. Lack of such knowledge makes it uncertain to the traders as to what prices to charge, and at what frequency to trade. If this uncertainty is not urgently addressed, many traders will be driven out of retail ginger trade, to the detriment of Nigeria’s economy.
On the other hand, producers have very little stake over the value chain, and the system is mainly operated by the middleman, wholesalers, suppliers, retailers and cooperatives, who have the access to market information and the backward flow of this information to the farmers is managed in favor of these stakeholders (Geta and Kifle, 2011). There is need to ensure high level of farmers’ participation and integration in the value chain through exploring market structure and opportunities to minimize unplanned losses in Ginger production. It is not clear whether retail traders of ginger make profits, and whether they are aware of this.
1.4 Aim and Objectives of Study
The aim of the study is to assess the Impact of Marketing Distribution on Sales Profitability Ginger using Yakowa Market Kafanchan Kaduna State as a case study. In achieving this aim, the following specific objectives were laid out as follows:
- To characterize ginger traders in the study area different markets.
- To determine the profitability of ginger marketing distribution in the study area.
- To estimate the profit function for ginger retail traders in study area.
- To identify the constraints faced by ginger traders in the different markets in Yakowa Market Kafanchan Kaduna State.
1.5 Research Questions
The study came up with research questions so as to be able to ascertain the above stated objectives. The specific research questions for the study are stated below as follows:
- Is ginger marketing distribution profitable in the study area?
- Are there constraints faced by ginger traders in the different markets in Yakowa Market Kafanchan Kaduna State?
- How is ginger traders characterized in the study area different markets?
- What are the profit functions for ginger retail traders in Yakowa Market Kafanchan Kaduna State?
