ASSESSING THE FACTORS INFLUENCING CONSUMER SWITCH FROM LOCAL TO IMPORTED PRODUCTS (A case study of Kasapreko Company Limited-Ghana)

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ABSTRACT

It is believed that the consumers’ behaviour from a particular country regarding to goods and services produced in that country is considered as a key determinant of the economic growth and development of a nation. Due to an increased in imported goods and sudden high competitive consumer markets in Ghana, consumers have been exposed to foreign alternatives for domestic made products and foreign products. However, many of the local industry are working hard to survive in today’s turbulent Ghanaian market. This study was undertaken to investigate factors influencing consumer switch from local to imported alcoholic beverages with a case company Kasapreko.

Both qualitative and quantitative method was employed in attempt to gain an understanding of the research problems. A sample including 100 randomly selected consumers were surveyed using a structured questionnaire and Skype to telephone interview Kasapreko management in the capital of Ghana-Accra.

The findings of this study suggest that country of origin is more important than product attributes and other price factors. The Ghanaian consumer perceives alcoholic beverages made in the country in low regard relative to foreign ones. Also consumer taste and superior quality are the two most important reasons for the Ghanaian consumers’ preference for foreign alcoholic beverages.

Even though there is some element of ethnocentrism in between respondents; it has been revealed that they are not extremely ethnocentric. Therefore manufacturing firms in Ghana are urged to augment the quality levels of their products, reduce their prices and make available more products to have a competitive edge over imported ones and also enhancing local consumption.

Keywords: Consumer behavior, ethnocentrism, country of origin


TABLE OF CONTENTS

1 INTRODUCTION
1.1       Background of the study
1.2       Research Problem, Objectives and Questions
1.3       Importance and Limitation of the Study
1.4       Structure of the Study

2  LITERATURE REVIEW
2.1       An Overview of Consumer and Consumer Buying Behaviour
2.2       Consumers and Influencing Factors
            2.2.1 Cultural Influence
            2.2.2 Social Influence
            2.2.3 Personal Factors
            2.2.4 Psychological Influence
2.3       Marketing Mix
            2.3.1    Pricing
            2.3.2    Product
            2.3.3    Place
            2.3.4    Promotion
2.4       Ethnocentrism
2.5       The Impact of Country of Origin

3  RESEARCH METHODOLOGY
3.1       Case study
3.2       Sources of Data
            3.2.1    Qualitative Research
            3.2.2    Quantitative Research
3.3       Data Collection Method
3.4       Population and Sample Characteristics
3.5       Reliability and Validity

4  EMPIRICAL FINDINGS
4.1 Case Company in Brief
4.1.1 The Need to Encourage Local Consumption
4.1.2 Products and Distributors
4.1.3 Alcoholic Marketing in Ghana
4.1.4 Country Information
4.2 Findings and Discussions
4.3 Discussion with Management
4.3.1 The Effect of Country of Origin On Kasapreko Marketing Activities
4.3.3 Message Coverage of Originality
4.3.4 Price Comparability
4.3.5 Activities Enhancing Local Consumption
4.3.6 Product Awareness Creation by Kasapreko
4.3.7 Government Support
4.3.8 Meeting Local Demand

5  CONCLUSIONS
5.1 Summary
5.2 Recommendation for Local Companies
5.3 Recommendations for Further Studies

REFERENCES
APPENDIX


1 INTRODUCTION
In Africa, Ghana as a developing country, has been noted to be a hard-working nation lively to become a middle-income country with a target by the year 2020. This is an effort towards the right direction competing positively with other African countries and across the globe which will enhance the living standard of the country’s citizens (Ghana Government 2010). In pursuing the aim to become a middle-income country, Ghana as a developing nation cannot continue to depend on a large quantity of imported products to feed the local market.


The majority of developed countries have attained their objectives by relying on domestic production and also through government campaigns in support of the utilization of local goods. The intensity of dedication to the consumption of local products depends greatly the extent on ethnocentrism (Sciffman & Kanuk 2007).The government of Ghana has suggested the concept of national orientation. Among the five concepts, the first concept is called ‘Proud to be Ghanaian’. This concept calls attention to the necessitating Ghanaians to take pride in their national heritage and in those things Ghanaian and patronize made-in-Ghana products (Ghana Government 2010).

1.1 Background of the study

This thesis deals with the understanding of consumer switch pattern from local to foreign products. The case study concentrates on an alcoholic beverage company known as Kasapreko Company Limited (KCL) in Ghana, Accra. The purpose of the research is to find reasons behind why most consumers in Ghana prefer foreign products to the locally made ones and also how the manufacturing firms can market their locally made products for domestic consumption.

Improvement in communication via Internet and the higher television coverage has paved ways for convergence of taste and preference in numerous product categories across the globe. Consumers in developing countries have been motivated to demand the same quality of products as in developed countries (Saffu and Walker 2006). Considering the increase in globalization, it is significant to understand how consumers evaluate products from different origin.

Apparently, consumer perception towards countries, cultures and products keep changing therefore giving challenges for practitioners in the field of international

marketing and consumer behaviour (Josiassen and Harzing 2008). The generalization of findings to small developing countries, where there are no domestic brands or product in many products categories, is somewhat questionable. Yet, there are few studies that have systematically investigated this phenomenon in developing countries in sub-Saharan Africa and very little is known about the cause of consumer behaviour in this part of the world.

In addition, this study will research empirically the causes of consumer attitude towards local and imported products in the Ghanaian market. The aim of marketing research is to bring out some of the risks associated with marketing decisions. Also provide information outlining the basis of the entire decision making process which is applicable to all aspects of marketing mix decision and should be the core part of the process of formulating marketing strategy ( Proctor 2005).

The main reasons why this particular topic was chosen is due to the increasing rate on the consumption of imported products in Ghana and Kasapreko Company is no exception when it comes to the consumption of their product. It has fourteen branded products line such as Almo Bitters, Brandy, Dry Gin etc. Kasapreko Company limited is well known for meeting the growing demand for good –quality alcoholic drinks and the company which produces formulated, herbal based alcoholic beverages in Ghana (Kasapreko 2012)...

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