CHAPTER TWO

2.0 LITERATURE REVIEW

2.1 THE CONCEPT OF MARKET

Markets play a very vital role in the economic life of the people. They are

essential in the chain of commodity distribution. Markets strengthen the

economic base of a town and also sustain the tax base of the Local Authority.

Most roads and streets are the means of transportation coverage for

markets. Nearly 30 to 40 percent of the population of a Yoruba town is

engaged in trade and commerce (Ajetunmobi R.O.(2010). Apart from the

business done in shops and stores on the streets, most of the trading

activities take place in town and village markets. The market, as a business

institution, has given a large measure of economic opportunity and social

security to women, who form the bulk of the traders (Adelamo, 2009).

According to Adewole (2009) markets are not only economic institutions but

also serve as social entities. They forge links between people of diverse

ethnic groups, racial backgrounds and cultural traits. They also serve as

meeting places for socio-cultural, religious and political activities. Markets

provide a physical setting for interaction between urban and rural cultures.

Commercial land use can be determined by economic factor, social factor

and public interest. It is the economic factor that determines the location of

any commercial activities because before the activity can be located, the

owner has to consider the area of profitability of such activity in term of

input. Social, commercial land use is influenced by social changes in any

environment such as concentration and dispersion of services and

population, segregation of population into various distinct areas and

invasion/succession processes. Public interest is only concerned with how

livable, workable and aesthetic urban setting is in terms of unity and

efficiency of overall land use pattern. Where there is livability of people,

unity and efficiency in the arrangement of land uses would eventually

influence some commercial activities to meet the demand of people living in

such environment. The location of traditional markets in Ibadan is not far

fetch from economic factors, social factors and public interest (Balogun,

2008)

According to Alao (2001) markets are meeting places of consumers,

producers, sellers and buyers. This implies that markets operators consist of

both local and outsiders. A market according to Hodder (2009) is an

authorized public gathering of buyers and sellers of commodities meeting at

appointed place at a regular interval.

Markets are mostly classified on the basis of their periodicity. They can

be divided into three classes; daily markets, special markets and rural

markets. Daily markets are the characteristics of the major markets centers.

These can both be day and night markets. These types of markets are mostly

characteristic of urban markets, and can be sited all over the towns and

cities. Special markets often take place at annual festival periods, like

Christmas and Easter fair, it can also take place once in a couple of more
years like state trade fair. Rural markets take place regularly on one or more

fix days each week or month and are characteristics of smaller market

centers.

Markets play a basic role in economic welfare. In rich countries life

would be unimaginable without access to a wide array of reasonably well

functioning markets, from food to credit and insurance. It is almost never the

case that a rich-country household has to produce something in order to

consume it, or that its members cannot

sell their labor for a salary or wage. Credit markets function for small

businesses and

farms to finance investment projects, credit cards can be used to help

households cover

income shortfalls, and insurance markets help protect people from

unexpected income

and health shocks.

Markets are important for pro-poor development and poverty alleviation, for

many reasons.1 The livelihoods of most of the worlds poor people depend

directly on their involvement in markets, either as producers or workers.

Historically, the major successes in poverty reduction have been associated

with the growth of markets and the

private economy. When asked about the major challenges confronting them,

poor people frequently cite marketseither their lack of access to markets or

the effects of markets on their livelihoods. Markets can play a valuable role in
promoting and facilitating economic efficiency, by facilitating exchange and

the coordination of many different kinds of resources, goods and services.

They can help protect poor people from local food-production shocks. In

these ways, markets are vital for income growth and survival.

Markets are the most widespread exchange system and play dynamic role

not only in the rural socio- economic development but also performed the

significant role in the regional level. The role of markets in rural development

planning is the need of the hour to study. Therefore, the academicians,

planners and social scientists use these periodic markets in formulating their

regional development strategies as nodes or hearts of diffusion of

development impulses. These nodes are created functional landscape

features which have been imposed upon the evolved periodic markers

(Mukerji, 2008).

In developing countries, the periodic market centre are the farmers first

contact point with the marketing channels and considered as the nerve

centres of the economic, social and cultural activities of the rural life of the

country. The producer farmers not only depend on these markets for disposal

of their produce for cash, but also for the farm products which they do not

produce themselves.

As a centre of diffusion, they play a significant role in the habitate, economy

and life of the people and act as basic building blocks of the complex market

place exchange system of modern world. Development of market centres

implies the economic development. The growths of market centres always

follow the development of agriculture, transportation and industries. Market

towns are economically most viable and represent the regional pattern of

development because market towns provide trade and commerce service to

the region, act as nodal centre for transportation and serve as a

growth centre by providing various services to the region.

THE CONCEPT OF RURAL MARKET

A rural market (also referred to as a farmers market) is one of many

varieties of systems, institutions, procedures, social relations and

infrastructures whereby parties engage in exchange. While parties may

exchange goods and services by barter, most rural markets in Nigeria rely on

sellers offering their goods or services (including labour) in exchange for

money from buyers. The rural market is a physical retail market featuring

foods sold directly by farmers and farmers wives to consumers and

wholesalers/aggregators from the urban centres. Typically, it consists of

booths, tables or stands, outdoors or indoors, where farmers sell fruits,

vegetables, meats, and sometimes prepared foods and beverages. Rural

markets can be classified on the basis of their periodicity, namely: daily

markets, special markets, and periodic markets. The periodic markets take

place regularly on one or more fixed days each week or month and are

characteristics of smaller/rural market centres.

According to Braun et al. (2008), arrangement of rural markets over space

takes into cognizance the distribution of population and settlement, degree

of mobility of traders and buyers, and local variations in productive capacity

and resource endowment. This space-time arrangement of periodic markets

ensures a premium return from waiting for demand and supply of goods and

services. Rural markets exist world-wide and reflect the local culture and

economy of a particular community. The reflection of the local culture

sometimes determines the location and the name of a rural market. Thus,

The Kings Market is often located near a kings palace. The sizes of rural

markets range from a few stalls to several blocks of stalls. In some cultures,

live animals, imported, locally unavailable delicacies and personal goods and

crafts are sold.

Rural markets perform diverse socio-economic functions in most Nigeria rural

communities in the integration of peasant economies into regional and

national socio-economic systems. A market is a place where the distribution

of good and services take place. Marketing can therefore be described as a

transaction of goods and services at a given place and pricing system.

Marketing has always been in existence even before the advent of money

when trade by-barter was being used as a way of exchange it had revolved

round marketing.

Marketing is the backbone of economic activities; it is involved in

different stages of production and making the final products reach the final
consumers. It can also be describe as the direct flow of goods and services

from producers to the users in such a way the utility in time, place and

ownership enhanced.

PERIODIC MARKETS

Periodic markets are mostly rural because where we have periodic

markets in urban centre these markets also act as daily markets. For

instance, Opolo market, Okutukutu market, Akenfa market, etc, in Yenagoa

which are rural markets also act as daily markets, as traders also transact

business in them on daily basis. The only difference is that there will be more

people from different villages and towns and a variety of goods and services

on a market day.

Rural periodic markets came into being as a result of the organization

of rural markets. Rural market in the various towns and villages are as old as

the settlement. Some markets are located in the vicinity of the place, while

some are strategically located in the centre of the community, others are

located on neighbourhoods basis.

Historically, it is not easy to know the exact date and when these rural

markets came into being, because a lot of factors are responsible for

emergence of market in rural areas. When rural markets first originated,

exchange of goods required a mutually convenient time and place and one

party or both had trade. The time and place for commercial gathering had to

be standardized because potentials traders and consumers had to know

where and when to meet.

 Rural markets are invaluable socio-economic components of the rural

space. Commercial activities among rural dwellers are mostly carried out

through periodic markets. Among the importance of rural markets in their

major role in bridging the gap of social economic isolation associated with

rural areas as well as integrating peasant traditional societies into regional

and national socio-economic systems.

Part (2001) in his study noted admirably that although the importance

of rural markets to national development are unfortunately under estimated,

they serve as focal points for exchange of commodities and innovation

avenues for social functions; centres for communications and entertainment

and points for rural evangelism. Rural markets not only serve major outlets

for retail goods; they are also means of aggregating rural surpluses (Hay and

Smith, 2000).

Rural markets are point for sale of farm produce into larger sacks for sale in

urban markets. Arrangement of rural markets over space take into

cognizance the distribution of population and settlement, degree of mobility

of traders and buyers and local variations in productive capacity and

resource endowment (Lado 2008). This space time arrangement of rural

markets ensures a premium return from waiting for demand and supply of

goods and services of rural markets as central places according to Geist

(2000) can be determined on the basis of structural and functional criteria of

goods and catchments area. The temporal structuring of rural markets fulfills

the local need for which they are established and the interval between
markets afforded sufficient time for preparation (within the context of money

and wares) for the next market day (Okafor 2002; Omole 2002). As such a

five day interval pattern has been documented in Korea (Park, 2001); while

Hays (2006), observed a once or twice a week periodicity in Nigeria

Market is a recognized medium that allows buyers and sellers of a specific

good or service to interact in order to facilitate an exchange. It is also event

or occasion, usually held at regular interval, at which people meet for the

purpose of buying and selling of merchandise. The term market according

to Holder and Ukwu (2009) is defined as an authorized public concourse of

buyers and sellers of commodities meeting at the place, more or less strictly

limited or defined at an appointed time. This definition has been accepted in

general and it refers that only those authorized public places and buildings

where transaction of goods and services take place in an organized manner

and at a particular point.

Most markets in the rural areas are traditional and local based on the

type of goods and services that offers in the markets. Perhaps this is why

Vagale (2003) classified traditional markets on a functional basis. He grouped

markets in terms of scale of transactions (whether retail or wholesale); type

of commodities sold i.e. food grains, cloth and household goods; periodicity

whether daily or occurring at regular intervals; time of operation whether

functioning in the day or night; nature of growth i.e. organic, laid out,

planned; and ownership of land buildings i.e. town council, local community,

family head and individuals. In Sagbama Local Government Area most

markets are held on specific regular intervals which made them take the

characteristics of rural markets. However, the most valid and useful

classification of market in Nigeria town seems to be the one based on the

periodicity of markets operation. Operating system of traditional market is

both day and night while some markets operate at days interval.

Mabogunje (2008) classified markets into three tiers: which are;

provincial markets that usually hold every four days, attended by the

inhabitants within the province; inter-kingdom markets that usually hold

every eight days, patronized by people from other distant kingdoms; and

larger metropolitan markets that serve as terminals of numerous long-

distance trade routes from far and wide. This implied that most four days

rural markets in Sagbama LGA are patronized by rural villagers who lived

close to the markets for the transaction of local farm produce.

There are two different set of rural markets in any area. Vagale (2003)

further said that market takes place at two levels i.e. local and regional. At

the local level, commodities flow from the rural catchments to an urban node

and vice versa, through daily market. At the regional level, rural markets are

held at specific intervals to replenish stock of local markets in urban areas

Filani and Iyun (2004) suggested that periodicity, is the general

situation of the marketing system of the rural area, as buying and selling

activities take place every day of the week in nearly all the markets within

the metropolis Browley (2001) saw the market as a place which provides

opportunities to meet ones friends and kinsmen for the exchange of news
and gossip. Market gives room for freedom of speech and high level of

socialization because of its nature of buying and selling among different

categories of people. Belshaw (2005) argued convincingly on the political

roles and relevance of market places. He stressed that markets consist of

different people from different part of a region on every market day. Market

centes are used as a means of disseminating information. This is true of

most markets in remote area of Sagbama areas. This is because

communitys town criers take advantage of the markets days to disseminate

information.

Zhang and Wang (2011) stressed that the circulation system of

agricultural products for consumption is important component of the whole

market circulation system. Their research discovered that most market

circulation system and the development of agricultural circulation system is

lagging behind, which limits the development of circulation system of an

entire country.

Therefore, they suggested the establishment of a modern system for

the circulation of agricultural products, the development of a system of

information dissemination, distribution, intermediary service and network

operating to allow smooth flow in the circulation of agricultural product mix

and market demand and the development of the whole market system in

further.

Adelemo (2009) amplified the fact that market places are fundamental

points of economic life and that traditional market system in Nigeria

represents an articulation of spatial linkages which had been neglected in the

post- independence development, such as the building of transport routes to

link settlement. Despite the lack of recognition given to the development of

market centre in the post- independence period, market centers still strive to

perform integrative functions by providing the link between the production

and consumption centers of the economies within which they are located. It

is clear to note that not all the market centres are in urban centres, yet, they

act as centres for the diffusion of information to the surrounding areas and

regions (Adelemo, Ibid).

Anthonie (2003) asserted that market places are social centres.

According to him, a market place is an avenue for courtship, visits, exchange

of ideas and other social activities; for dancing, drumming, reuniting and

other festivities. He argued that a market day is generally regarded as a

social gathering day, apart from the economic activities taking place in the

markets. He therefore advised that the social function of market places

should be utilized through the provision of organized recreation facilities this

would be of tremendous advantage for the overall social cohesion for the

development of the youth physically and mentally, and would probably be

a good forum for the enlightenment of the populace at large. Holder and

Ukwu (2009) expressed that most markets have for some time served as

places for sacrifice or ritual centres. The purpose for this according to him is

to maintain peace at the market and in the town in general. In some cases,

town spirits are still believed to meet and live in trees, in and around the
market places. This social event is meant to satisfy the spirit within the

vicinity.

Vagale (2003) in his study on market radius and the distance covered

by people for patronage and said that markets within a radius of one to

seven or eight miles from urban and rural settlements which they serve and

therefore can be reached by walking. These markets whether daily or

periodic, deal in a variety of commodities like yams, grains. Kolanuts, pulses,

meat, vegetable oils, cooked food, cloth, leather goods, earthen and enamel

wares, plastic goods, salt, soap and herbs.

According to Ajetunmobi (2010) in his study the role market plays in

the socio-economic development of the society opined that market brings

about inter-group relationship among different relations. Since mans want

are insatiable and unlimited, the need to exchange various goods from

different regions developed. He further stressed that inequality in skills and

resources led to the creation of market in mans environment which begins

with trade-by-barter before the advent of money.

NATURE AND CHARACTERISTICS OF RURAL MARKET

There goes a saying that the proof of the pudding lies in the eating. So

also the proof of all production lies in consumption/marketing. With the rapid

pace of technological improvement and increase in peoples buying capacity,

more and better goods and services now are in continuous demand. The

liberalization and globalization of the Nigerian economy have given an added

advantage to sophisticated production, proliferation and mass distribution of

goods and services.

Taking these into consideration, the question may arise whether

marketers should concentrate their activities in urban Nigeria consisting of

metros, district headquarters and large industrial townships only, or extend

their activities to rurals.

Characteristics of rural market

1. The rural markets are of diverse nature. There are people from diverse

cultural, linguistic and religious background.

2. Shift towards rural markets are mainly because of saturation and

competitiveness of urban market. Marketers do not want to neglect

this huge untapped market.

3. The incomes of rural customers are also increasing. As seen earlier

disposable income of rural consumers have increased and they spend

on consumer durables.
4. Rising literacy has generated a demand of life style products. Lot of

youth move out of the village and visit surrounding cities. They come

back and influence decision making.

5. Cable television has also contributed to an increase in life style. The

reach has increased and marketers are in a position to promote their

products much more easily,

2.2 THE THEORY OF RURAL MARKETS / RURAL MARKETING

Contribution to the theory of rural markets and mobile trading can be

placed in either an economic or a non-economic tradition. The non-economic

emphasis tends to view rural markets as a social phenomenon which is

common in area (Tinkler, 2003). This view was supported by Brombley and

Good (2007). They asserted that markets are held periodically to coincide

with existing rural institutions and that local traders and consumers who are

usually producers could not go to market at anytime but have chosen to

trade on a traditional rest day or a day when they were accustomed to

converge upon a central place for social and religious activities or to hear

proclamation and pay tribute to or receive alms from local authorities.

The economic tradition includes two distinct themes, the one steaming

from a central place theory integrating of rural marketing, other from the

location theory. In both of these, rural markets and marketing are

distinctively economic phenomena. This implies that markets are held to

exchange goods and services solely to make profit.

Perhaps this is why Hay (2001) opined that the decision to adopt rural

marketing may have one of three intention: to achieve viability, to increase

excess profit and lower retail prices or raise producer prices as a move to

forestall competition. He also asserted that, rural marketing is an attempt to

achieve these aims by reducing the total over head costs which must be

covered at a single market place.

 The first effort attempt at a theory of rural markets was contributed by

Stine (2009), using the Korea markets. He analyzed rural market in terms of

central place theory and specifically in terms of minimum and maximum

ranges. He then analyzed the distance people are ready to go to obtain

goods, how settlements are distributed over space and the tributary or

market area, the bigger, the settlement, the more the tributary or market

area, but will have area of smaller, tributary nesting within that of a bigger

settlement. The minimum range of goods indicates the radius of a circle

encompassing the level of demand actually required for a firm to realize

profit from offering a central good. The maximum range represents the

farthest distance dispersed consumers are willing to travel to purchase a

good at a central place. When the maximum range of a good is greater than

or equal to minimum range the firm will survive and be immobile (Stine,

Ibid). By contrast, if the minimum range of a good is greater than the

maximum distance a consumer is willing to travel the firm will either die out,

become rural but remain spatially fixed or become spatially mobile and move

among a given series of location (market sites) according to a re-established

temporal pattern. Furthermore, as the degree of mobility increases the

difference between these two ranges become greater. The outcome is a

mechanism that intensifies exchange in place and time there enabling

traders and marketers to attain minimum range (that in survival threshold)

for their products.

 Stine argues that the two ranges vary with income density, elasticity of

demand and transport cost. And that rural markets are open only once every

few days because of the per capita demand for the goods sold in the market

is low and high transport limit the extent of the market and the aggregate

demand is therefore insufficient to support permanent sellers. For the

consumers also marketing rurality lessens the physical distance between him

and the goods and services he desires. According to Stine, he is able to free

himself from the discipline of space (costly transport) by submitting to the

discipline of time. The issue of transportation is also important because if the

cost of purchasing a good is also important transportation as the cost

increase, there will be a situation whereby people will not want to purchase

in the area again, there will have to be an alternative good or another

location where goods can be purchased without additional transport cost. A

trader that wants to sell more than his competitor must not let his price

exceed his competitors even after the transport cost has been added

(Hotelling theory, Hotelling 1929).

Apart from Stines theory, rural markets are also periodic because it is

labour intensive and there might not be enough goods to sell, if the

marketers were to meet everyday. Also it is characterized by low level of

specialization: individual generally perform the role of producing and at the

same time marketing. In this case time is needed for them to be able to

perform both functions, hence the emergence of periodic markets in rural

areas.
SIGNIFICANCE OF THE RURAL MARKETS

If you meet a sales executive today and ask which market he would prefer to

serve, the immediate answer would be, Rural Markets as they are still

unexploited. A number of factors have been recognized as responsible for

the rural market boom. Some of them are:

1. Increase in population, and hence increase in demand.

2. A marked increase in the rural income due to agrarian prosperity.

3. Large inflow of investment for rural development programmes from

government and other sources.

4. Increased contact of rural people with their urban counterparts due to

development of transport and a wide communication network.

5. Increase in literacy and educational level among rural folks, and the

resultant inclination to lead sophisticated lives.

6. Inflow of foreign remittances and foreign made goods in rural areas.

7. Changes in the land tenure system causing a structural change in the

ownership pattern and consequent changes in the buying behaviour. The

general rise in the level of prosperity appears to have resulted in two

dominant shifts in the rural consuming system. One is conspicuous

consumption of consumer durables by almost all segments of rural

consumers, and the obvious preference for branded goods as compared to

non-branded goods of rural.

CHALLENGES OF RURAL MARKETING

There are many problems to be tackled in rural marketing, despite rapid

strides in the development of the rural sector. Some of the common

problems are discussed below:

Transportation: Transportation is an important aspect in the process of

movement of products from urban production centers to remote villages.

Communication: Marketing communication in rural markets suffers from a

variety of constraints. The literacy rate among the rural consumers is very

low. Print media, therefore, have limited scope in the rural context. Apart

from low levels of literacy, the tradition-bound nature of rural people, their

cultural barriers and their overall economic backwardness add to the

difficulties of the communication task. Post, telegraph, and telephones are

the main components of the communication infrastructure. These facilities

are extremely inadequate in the rural parts of our country. In rural areas, the

literacy percentage is still low, compared to urban areas. Warehousing: A

storage function is necessary because production and consumption cycles

rarely match. Many agricultural commodities are produced seasonally,

whereas demand for them is continuous. The storage function overcomes

discrepancies in desired quantities and timing. In warehousing too, there are

special problems in the rural context. The central warehousing corporation

and state warehousing, which constitute the top tier in public warehousing in

our country, have not extended their network of warehouses to the rural

parts. It is almost impossible to distribute effectively in the interior outlets in

the absence of adequate storage facilities. Due to lack of adequate and

scientific storage facilities in rural areas, stocks are being maintained in

towns only.

Rural markets and sales management: Rural marketing involves a

greater amount of personal selling effort compared to urban marketing. The

rural salesman must also be able to guide the rural customers in the choice

of the products. It has been observed that rural salesmen do not properly

motivate rural consumers. The rural salesman has to be a patient listener as

his customers are extremely traditional. He may have to spend a lot of time

on consumer visits to gain a favourable response from him. Channel

management is also a difficult task in rural marketing. The distribution

channels in villages are lengthy involving more intermediaries and

consequently higher consumer prices. In many cases, dealers with required

qualities are not available.

Inadequate banking and credit facilities: In rural markets, distribution is also

handicapped due to lack of adequate banking and credit facilities. The rural

outlets require banking support to enable remittances, to get replenishment

of stocks, to facilitate credit transactions in general, and to obtain credit

support from the bank. Retailers are unable to carry optimum stocks in the
absence of adequate credit facilities. Because of this problem, they are not

able to offer credit to the consumers. All these problems lead to low

marketing activities in rural areas.

Market segmentation in rural markets: Market segmentation is the

process of dividing the total market into a number of sub-markets. The

heterogeneous market is broken up into a number of relatively homogeneous

units. Market segmentation is as important in rural marketing as it is in urban

marketing. Most firms assume that rural markets are homogeneous. It is

unwise on the part of these firms to assume that the rural market can be

served with the same product, price and promotion combination. Branding:

The brand is the surest means of conveying quality to rural consumers. Day

by day, though national brands are getting popular, local brands are also

playing a significant role in rural areas. This may be due to illiteracy,

ignorance and low purchasing power of rural consumers. It has been

observed that there is greater dissatisfaction among the rural consumers

with regard to selling of low quality duplicate brands, particularly soaps,

creams, clothes, etc. whose prices are often half of those of national brands,

but sold at prices on par or slightly less than the prices of national brands.

Local brands are becoming popular in rural markets in spite of their lower

quality.
Packaging: As far as packaging is concerned, as a general rule, smaller

packages are more popular in the rural areas. At present, all essential

products are not available in villages in smaller packaging. The lower income

group consumers are not able to purchase large and medium size packaged

goods. It is also found that the labeling on the package is not in the local

language. This is a major constraint to rural consumers understanding the

product characteristics.

Socio-economic importance of rural markets in Nigeria

The rural markets in Nigeria are rarely static entities. They tend to change

and evolve depending on the needs of the buyers and sellers participating in

them, the nature of competitive forces, and the availability of technology.

Rural marketing is sometimes simply thought of as the process of buying and

selling. In reality however, its tasks are much more extensive than this.

Basically, the significance of periodic markets is pivoted on a diversity of

functions performed out of which the economic, social and political functions

have been identified as the major ones.

Economic functions. The economic function can be explained under three

major sub-functions which are: Exchange functions: This involves finding a

buyer or a seller, negotiating a price and transferring ownership. These

functions take place at the physical meeting point for buyers and sellers

(market), at the point of production or via some other means of

communication. At this point, formal or informal property rights are

important to ensure the reliable transfer of ownership and to guarantee

legality (e.g. to ensure that animals on sale were not stolen and will not be

reclaimed). The performance of this exchange function often involves

interesting bargaining (haggling), the mode of which varies from one

culture to the other. A participant in a rural market must understand the

mode of transactions to operate optimally in the market.

Physical functions: This enables the actual flow of commodities through

space and time from producer to consumer and their transformation to a

form desirable to the consumer. Assembling or concentrating the product at

convenient points allows its economical transport (e.g. yams from different

owners are aggregated in a particular point for joint transportation). Storage

allows the commodity to be held until peak season demand, thereby

stabilising supply. Processing adds value by transforming the commodity into

the products desired by the consumers. Grading and standardisation allow

the consumer to be more confident of the characteristics of the good being

purchased. Most rural markets in Nigeria perform these functions, and in the

process, they link the rural with the urban economy. On the market days,

agricultural products are aggregated, sorted/graded and minimally cleaned

(for grains). Little or no storage function is performed in the rural markets.

Thus, agricultural products that are not sold by the close of the market day,
for markets that are not daily, are sold out at giveaway prices, otherwise

they will gradually rot away.

Financing and risk-bearing: These are two important facilitating functions

performed by rural markets. The owner of goods at any marketing stage

must sacrifice the opportunity to use the working capital needed to buy

those goods elsewhere. Or the owner must borrow that capital. In either

case, capital must be provided by the trader or by some lending source.

There is also an implicit cost in the risk of losing all or part of that capital

through theft, spoilage, mortality or changing market conditions. Rural

market women (aggregators) who often act as intermediaries between

farmers and other buyers must provide the capital to aggregate products

and bear the risk of spoilage and/or theft. In Nigerias rural market, spoilage

is a major cost because of poor handling and/or storage facilities for fresh

agricultural products. Without the willingness to provide the capital and to

bear these costs, no stage of the market chain could function.

Social functions. Apart from the economic functions, rural markets help

maintain important social ties, linking rural and urban populations and even

close neighbours in mutually rewarding exchange. Also, buying at markets

encourages attention to the surrounding area and ongoing activities. By

providing outlets for local products, rural markets help create distinction
and uniqueness, which can increase pride and encourage visitors to return.

The Nigerian rural markets are points of cultural mix in which people of

different tribes come together from the different parts of the country to

interact. The Hausa kolanut buyers come from Northern Nigeria to aggregate

kolanuts in the southern markets while the Yoruba yam wholesalers travel to

Northern Nigeria to aggregate yams that are later transported to the

southern markets. Rural markets therefore create the framework for cultural

blending in Nigeria, a nation with great cultural diversity.

Rural markets also provide opportunities to meet neighbours while getting

the required household food supplies. They serve as focal points of rural

interactions where people can meet and form social groups and associations.

In Nigerian society, traders such as yam sellers, garri sellers, etc. form

trade/social groupings. These groupings support members socially,

combining efforts to celebrate weddings, burials, etc.

Political functions. In a typical Nigerian rural market setting, social groups

and associations formed basically for socio-cultural benefits in the rural

communities also serve as strong units/groups of political associations that

are mostly relevant during electioneering campaigns and the election of

political office holders. These market groups, which come in different forms,

such as market women associations, yam sellers associations, etc., are

organised into structures that are headed by formally recognised leaders or

traditional chiefs in the community (e.g. Iyaloja leader of market women).

Market groups were at the forefront of resistance to colonial rule protesting

against some obnoxious impositions by the colonial administration. It is also

on record that Egba market women led by the late Mrs. Funmilayo Rnsome

Kuti rejected a flat rate tax for women and forced the Alake (traditional ruler)

of Egbaland to abdicate in1948. In Lagos, market women worked closely with

the early nationalists, especially the great Herbert Macaulay, who

encouraged them to form a central organisation under the leadership of

Madam Alimotu Pelewura in 1923. The current (female and male) leaderships

of the market operators in Nigeria have been active players in Nigerian

politics. Although they usually do not seek public offices, successive

administrations have used them to mobilise market groups to support their

various programmes.

The role of rural market in economic development

Marketing and trade play vital roles in the economic growth and overall

development of a nation. The major roles of marketing and trade in the

national economy can be thought of in terms of:

Specialization in activities of comparative advantage

Enhanced resource-use efficiency and trade
Advances in marketing with economic growth.

Specialisation in activities of comparative advantage

Without market facilities, areas must maintain diversified activities to

produce their own food, shelter, tools and other needed goods. In the

presence of a market, however, an individual can specialise in one activity

and sell the surplus in order to purchase other needed goods. The individual

is likely to specialise on the basis of a comparative advantage in that activity

for which he or she has some special resource or ability. A comparative

advantage exists when an individual or region can produce a good, relative

to the price of other goods, more cheaply than another individual or region.

In livestock production, comparative advantage is often the result of agro-

ecological conditions particular to a region making it suited to certain

specialised activities. The agro-ecological basis for production results in

regional comparative advantage, whereby all of an area with that common

agro-ecological base shares the ability to produce the good relatively more

cheaply than another area

As economic growth proceeds, several changes in rural market take place.

With economic development, the activities and tasks of rural market

increase. Activities such as storage and processing, packaging and retail

distribution become more important. Greater activity moves away from the

site of production and towards rural market. This, in turn, creates

employment opportunities and further specialisation (diversification of the

community). Since livestock products typically have positive income

elasticities of demand, economic growth can lead directly to new

opportunities for production. Thus, the livestock subsector increases in

importance.

With development, more economic agents may enter trade, helping to

improve rural market services and, in some cases, allowing the market to

capture external economies of scale. This refers to a situation where the

presence of many agents allows each one to operate at a lower cost. An

example is the case where increased trade in some commodity (e.g.

livestock allows for the establishment of large storage facilities (e.g. pre-

slaughter holding areas), which lowers per unit storage costs. The physical

infrastructure can also be affected in a positive way by large markets, in the

form of better roads and communication, offering the potential for external

economies of scale.

The role of rural market is incomplete without giving adequate importance to

the overall field of management. Implementation of good rural market ideas

requires good management. The following conditions should be met before

any government embarks on a rural market approach: (a) Recognising that

rural market and management are professional disciplines; and (b)

Recognising that in organising different governmental operations, deliberate

screening of candidates for their competence in the field of management is

essential.

Some of the role of rural market in economic development include the

following;
Population Control: Despite adoption of the explicit goal of formulating

population policies and programmes to accelerate the adjustment of

reproductive patterns to changes in survival patterns the high birth rate has

not changed significantly in most of the developing countries. Such failure

could have been avoided had the management of family planning

programmes used virtually all the technology of rural market. Population

programmes face extensive informational problems. The magnitude of the

communication problem is somewhat parallel to the need for intensive

distribution of contraceptive devices in order to reach the different sectors of

the population. Market research can be used to set up targets for different

markets and to test the effectiveness of different administrative and

communication programmes. The technology of rural market pervades the

administration of population control programmes in setting up targets, in

devising communication schemes, in developing appropriate distribution

methods, in motivating the community in the adoption of family planning

practice, in devising incentive schemes, in affecting public attitudes toward

the use of contraception, in developing and testing new methods of

contraception, in developing proper market segmentation strategies and

measures of effectiveness for different programmes.

Agricultural Development and Farm Productivity: Low farm

productivity of many developing countries is often due to factors such as

inefficient methods of irrigation, lack of mechanisation in farming,

inadequate supplies of fertiliser and natural disasters. But one fundamental

problem which is not recognised is lack of rural market system. Development

specialists such as Owens and Shaw rightly pointed out that agricultural

development is more a human problem than a technical problem. If all

farmers can be provided with production inputs, the financial system, the

market and the agricultural knowledge they can improve the agriculture.

Most of the farmers lack access to market system and thus lack both

resources and incentives to modernise their production.

Development of rural market system is of fundamental urgency in bringing

about the necessary agricultural revolution. Proper incentives should exist for

a subsistence farmer to produce more. The most basic incentives is his

access to the national market.

Rural market technology can play a major role in enabling this phase of

institutional development.

Institutional access to the national rural market system could be

accomplished as an independent task or as part of a major social

developmental action. The rural market system could be a part of community

centre which offers a variety of services social, economic and educational to

its residents. In the past a variety of community development schemes were

introduced in developing countries. But a community centre differs from a

community development programme in two respects, fiscal responsibility

and management by the community. The concept of community centre is not

new. Its design and development needs a variety of interdisciplinary skills, of

which rural market is one of critical contributors. Rural market technology

can help define the economic, financial service and management

components of the community centre.

Education and Manpower Training: Rural market concepts and

techniques may have profound impact on meeting the nation's manpower

needs. Developing nations need a wide variety of human skills to bring about

economic and social development. Much of educational thrust in developing

nations is restricted geographically to urban areas. Very little emphasis is

placed on non-formal training programmes to increase the productivity of

rural labourers, farmers and the like. There is considerable truth in saying

that "the uneducated are not always unwise, the illiterate are not always

ignorant." Generally speaking, educational institutions have defined their

markets very narrowly. Many of these institutions could mount a wide variety

of extension programmes or outreach activities in their surrounding

communities and train people through non-academic instruction.

Students often do not see any relationship between their educational

aspirations and job aspirations. The employment practices are partly

responsible for this. Very often employers do not insist on hiring personnel

with appropriate educational skill. This vicious circle has to be broken to

influence public attitude toward job-oriented education. Job productivity can

be increased by developing realistic training requirements for different

educational categories. Before taking on a major future oriented

reorganisation of the educational system the developing nation has the

immediate problem of employing the currently unemployed and improving

the productivity of the currently employed. The techniques of rural market

research and product development can contribute in many ways to the

needed educational revolution.

Industrial and Entrepreneurial Growth: Many developing nations in their

quest for industrial growth have imported sophisticated intensive technology

from the West. This has put an enormous burden on the nation's scarce

foreign exchange. In this process the technological and capital needs of small

industries have been largely neglected. In this respect developing nations

may take lesson from both Japan and the United States where small

businesses constitute a large part of their industry.

Some nations have encouraged the building of factories in the rural sector.

This strategy often proved to be uneconomical as the job skills demanded by

these factories are quite alien to the technical skills the rural community can

offer or can be trained for. Industrial development has to be tied to the local

community. In developing countries where high technology investments are

prominent, the operation of these enterprises has suffered from managerial

problems. A nation's demands for management professionals will grow as it

proceeds to industrialise, and the supply of talent should keep up with the

projected growth patterns. New entrepreneurs can be produced and existing

entrepreneurs can be stimulated to greater efforts in their business through

training

Export Promotion: In such a governmental activity rural market plays an

invaluable role. Trained marketing professionals should be placed abroad to

seek export opportunities as well as to conduct necessary research on the

nature of the competition that the country is likely to face abroad. On the

domestic front, information on market opportunities must be widely

disseminated for all potential entrepreneurs in the product field.

Opportunities should also exist for the development of new export ideas by

individual manufacturers. In order to perform this function effectively, the

government should centralise all export related activities in an "Institute for

Export Promotion" with considerable operating authority.

Tourism: Marketing of tourism is a difficult task because if requires

a) an extreme degree of job specialisation in its organisation and hiring of

skilled personnel,

b) development of physical facilities,

c) innovative pricing mechanisms in coordination with the elements of

the private sector,

 d) a sense of understanding of the problems tourists face in alien

countries, and (c) building an integrated organisational structure to

coordinate all aspects of tourist activities.

In drawing out tourism promotion programme realism, accuracy of

information, cultural habits of people, life styles of the local population, and

risks of unguided travel should be emphasised. To facilitate and encourage

travel a wide variety of tour package should be made available. To sustain

the growth of tourism the characteristics of a potential tourist to the country

should be researched.

The Contribution of Rural Markets in Rural Development in Nigeria.

The contribution of rural rural market in rural development can be best

appreciated within the context of our understanding of the term rural

development. In a broader context rural development has to do with the

transformation of the nations mode of production so as to bring qualitative

changes in the living conditions of the rural people ( DEFFRI,2007). This by

interpretation means it could basically entail bringing forth a qualitative

change or up-liftment in the living standard of the people brought about

through integrated approach(United Nation,2001). The contribution of rural

rural market to rural development can therefore be better understood within

the context of these definitions. We can look at this contribution from two

perspectives;

1. Economic Perspective-Rural markets in this geographical area perform

two functions;

a) Provide platform for the export of agricultural products and services to

points outside the rings.

b) Enable rural people within a ring to meet their needs or access to

those goods that cannot be produced within their own ring.

With improvement in communication network there has been an

astronomical increase in their performance in both functions resulting into

increasing demands for goods sold at the markets. The ring system, the

commodity specialization, the character and the mode of operation of rural

rural markets has provided ready market for products from the hinter land

surrounding any market. In this way, the rural farmer does not have to wait

for long to dispose of his products or search for buyers from one point to

another or bother much about storage facilities which are non existence in

the rural areas. The influx of people into the market on each market day

gives the farmer the advantage of quick sale of his products. In this way

most farmers have been able to outgrow the subsistence mode of

production. In order to meet up demand they have been able to increase

their productive capacity. This has brought forth a significant improvement in

household income and the opportunity to meet more basic household needs.

2. Development Perspective- Rural market centres serve as central places to

the hinterland as well as providing services for the population in the

surrounding villages. The local government headquarters were established to

allow for the cluster of services, facilities and infrastructure to serve disperse

rural population. This it is believed will stimulate development in the

surrounding hinterland but the nakedness in terms of social and economic

infrastructure in these centres had reduced the local government

headquarters to mere administrative units. The influx of people, goods and

services into the rural markets has provided for the rural people access to

variety of services and goods needed to meet their need for shelters, food

and clothing. Services and goods which cannot be found in the surrounding

villages are found in rural markets. The centrality of the markets in each ring

ensures that it is accessed by a large population within the ring. Today

because of the rapidly increasing population which rural markets continue to

attract, the goods and services they offer, some rural market centres have

attracted some public facilities thus increasing their status. The provision of

roads linking some rural market centres with the hinterland has increased

the intensity of farming activities on the part of the rural farmer occasioned

by the high demand for his product each market day. The increasing status of

these rural markets have brought into the surrounding rural villages

increasing opportunities for development and growth as well progressive

adjustment in well-being. In this way the rural dweller is able to strike a

balance between opportunities and household or community needs. It can be

conclusively stated that as the rural markets in the State continue to

increase in status and functions, their propulsive qualities have also

continued to radiate outward into the surrounding hinterland within the

individual rings.

Developing Rural Market Centres as Growth Nodes in Nigeria.

The centrality of rural markets, their functions and the population they serve

had qualified them as potential points for location of public infrastructure.

The location of public facilities in the local government headquarters had not

produced the expected benefits in terms of service delivery. One of the

reasons is that the choice of location of some of these local government

headquarters was politically influenced. Thus most local government

headquarters are not centrally located and cannot be easily accessed by the

population in the hinterland. The situation is compounded by the issue of

poor transportation network in rural Nigeria which has its effect on travel

time and cost. We may agree with some spatial development scholars that

development cannot appear everywhere and all at once but can appear in

poles or nodes and spread along diverse channels with varying terminal

effects to the surrounding areas(Perroux,2005). Phased infrastructural

development of selected first order rural market centers will help create the

basis for more economic activities to locate in such centres. There are about
twenty of such centres in the State with an average market population of

4000 and above recorded each market day. There is no denying the fact that

the process of urbanization in the state had resulted into skewed

development with almost all demographic and economic activities occurring

in Nigeria. This has resulted into several socio-economic problems which has

given successive government in the State sleepless night. Thus development

of some rural market centers will play a positive role in the surrounding

hinterland. The phased development of infrastructure which is recommended

as a first step may be a long term plan but can be achieve within the context

of good governance. The life span of the plan should not be terminated by

change in government which is one of the challenges to rural development in

the country( Onurah,2006; Onibokun,2007). The next phase should be the

location of carefully planned economic activities, industrial estate and scenic

parks. Consideration should be given to industries that will utilize the

resources in which the people in that ring have absolute advantage over

others. This step will encourage the movement of more population to such

centres. It will also promote opportunities for highly skilled and semi-skilled

labour within each ring.

Summary

The rural market is fascinating and challenging at the same time. It offers

large scope on account of its sheer size and it is growing steadily. Even a
small growth can push up the sales of a product substantially, in view of the

huge base despite the fact that there are enormous amount of problems. It is

an attractive market from this angle also that the urban market is highly

competitive, the rural market is relatively quiet. In fact, for certain products,

it is a totally virgin market.

Economic reforms have brought about major changes in the whole market

environment. With these changes, rural marketing will become an important

playground for our marketers. Successful rural marketing calls for a review of

the rural marketing environment, developing proper understanding of the

nature and profile of rural consumers, designing the right products to appeal

to them, and adopting suitable media as well as appropriate strategies for

communication and distribution.

Rural markets, otherwise called farmers markets in Nigeria, are important

traditional institutional frameworks which perform a number of key

economic, social and political functions in Nigerian society. The economic

functions are similar to those of other markets in other parts of the world

while the social functions are influenced by the traditional socio-cultural

settings in the Nigerian society. The political functions are historical and have

their roots in the nations colonial past and its resistance to colonial rule.

It is true that marketing in a developmental sense produces profit, but the

profit is in the kind of human resource development and ultimately national

development. To Raffaele "economic development is a social process in

which interaction between rising human capacities and their employment

and the environment and institutions favourable to them takes place." For

effective contribution to economic development marketing must deal with

issues concerning socio-economic aspects of the nation's environment.

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