THE EFFECT OF CONSUMER PROTECTION ON BRAND LOYALTY IN FAST MOVING CONSUMABLE GOODS.

CHAPTER ONE

INTRODUCTION

1.1 Background To The Study

In 2002, the World Health Organization stated that about 70 percent (%) of the drugs available in Nigeria were fake or substandard. Also, the National Agency for Food and Drug Administration and Control (NAFDAC) states that 41 percent (%) of drugs alone were counterfeit. (Yankus 2006 & Akunyili 2007)

We can see that there is a problem that is reoccurring in Nigeria with respect to the lack of protection to consumers. Consumers are not loyal to the brands which they continually purchase. Consumer sovereignty can be seen as the moral basis of Marketing theory. (Kelly 2005) Consumer rights are not respected and protected, which leads to a lack of brand loyalty in Nigeria even in fast-moving consumer goods (FMCG). Consumers have become so tired of the lack of respect shown by producers that make fake products and change the quality of their product which brought forth the term consumerism, to protect the interest of consumer’s right. (Arnt, Barksdale & Perreault, 1980)

The protection of consumers has brought about consumer orientation, consumer focus and consumer-driven strategies which are strongly incorporated into marketing terminology. (Kelly 2005). Consumerism has been defined as a social movement that seeks to improve the rights as well as power which consumers have. (Kotler 1972, Perreault & McCarthy 2002)

In Nigeria, businesses are driven by the need to make a profit. This makes them do things that are unethical and immoral, which have come to make the lives of consumers endangered. This has led them to complain and show a lack of patronage to their products. In Nigeria and most developing countries, there is a lack of movements to support and help protect consumers. (Bello, Suleiman & Danjuma 2012) Consumerism is a missing factor in Nigeria that has brought about government policy through legislation and efficient way of enforcing their laws rather than supporting consumers’ interests and feelings. (Keynak 1985) The different democratic governments have been successful in implementing agencies aimed at protecting consumers from fake and sub-standard product. Some of these agencies are; National Agency for Drug and Administration and Control (NAFDAC), Standards Organization of Nigeria (SON), Nigerian Industrial Standard (NIS), Consumer Protection Council of Nigeria and Consumer Protection Council Act. These bodies try to protect consumers from harmful products of suppliers as well as producer. (Bello, Suleiman and Danjuma 2012)

Once consumers get protected from some of the harmful effect which make them switch between brands, they will show more patronage, satisfaction and referral to such brands which takes into cognizance their rights and interests. This will lead to repeat purchase of the brand which meet and supersede their expectation. Being protected especially in fast moving consumer goods which are used every day as a household item will keep them interested. Consumers are the heartbeat of companies because they produce goods and services to meet consumer needs. Once consumers are not protected and do not patronize such business, their production would slowly go down to a halt.

Barksdale & Darden 1971, states that consumers are the center of all Marketing activities as well as business activities. This makes them highly important to the sustainability of the business. There is a paradoxical feeling to this where businesses’ paramount focus is in the advertising of their product to consumers more than their welfare which can be seen as a servant or slave treatment. (Vetrivel & Mohanasvndari 2011). Nigeria as a nation has shown numerous factors that proves that there is a need for a strong consumer protection law that will protect their interest. This can also make them undividedly loyal to their brand. The lack of consumer protection has led consumers to make a continuous purchase of products from roadside hawkers and retailers with no brand names or unrecognized brand names with a little reputation (Bello, Suleiman & Danjuma 2012). Consumers are faced with the difficulty of having the opportunity to reach out to manufacturers or dealers of products that are properly made with recognizable and highly reputable brands. This makes them acquire substandard products which they are not adequately protected from. This has made a lot of Nigerian consumer show unstable loyalty to different brands by making a purchase of any product with the cheapest price that meet their needs depending on their income levels.

Bello, Suleiman & Danjuma 2012, argue that consumers of the Nigerian market can be complacent. Taking the statistics from Mercy 2008 which proves that Nigerian complacency comes from the fact that consumers make the wrong choice to the purchase especially from electronics. The consumers tend to purchase from dealers with no reputation or are not major importers which do not offer them warranty or refunds of their money along with post-purchase services. Nigerian consumers need to grasp the idea that they are very important, or they are the main source of income that flows into companies. Once they understand that then, they will be more interested in ensuring that they are protected in their rights as consumers. This will make consumers show more undivided patronage to reputable brands which will, in turn, give them satisfaction and they will make referrals of the brand which they use as household products. The fact that there are no policies or proper law put in place to check the authenticity of manufacturers and their advertisement claims about their product, and the fact that consumer pay for a packaged product without the ability to monitor the quality and quantity in some cases has led to challenges faced by consumers in Nigeria. This led to the establishment of laws to protect consumers. (Uche 1990)

In a market place, where there is little or no competition there arise defective goods and services, (Kanyip, 2005). However, if there are competition in the market for goods and service, consumers will express their preference for better judgement of their choice which will drive away undesired suppliers of goods and services in the market. According to Kanyip, (2005) Nigeria today with its sharp recession and sky rocketing prices of good’s brand name and goodwill, those cheaper products lack warranty and services to repair when damaged. Umenyin, (2007), states that a market with imperfection and lack of proper information as well as misleading information through deceptive advertisement has encouraged the increase of fake and substandard goods. In Nigeria and other countries around the world, consumer protection is the idea designed to ensure consumers right and interest, and are protected from bad practices of businesses, unscrupulous producers and service providers. (Bello, Suleiman & Danjuma 2012). Government has made an attempt to make provision for regulatory policies to protect and enforce the right of consumers who pay for the goods and services rendered to them. Consumer protection law has two parts to it are details out the need to protect the interest, right and safety of end-users of products and services. On the other hand, it tries to monitor and regulate the contractual transactions and private laws of relationship regulated for consumer protection. (Oko & Anyanwu, 2015)

It is highly important that Nigerian consumers are protected from companies, wholesalers, retailers, manufacturers and suppliers of unscrupulous product that is not only harmful to their health. This shows there is an interest to ensure that the money they pay for goods and services are properly monitored. Consumers that are protected as well as given good services will show undivided loyalty to such products. However, when these consumers are not protected, and they begin to lose patience for producers of unethical product they will show divided, unstable loyalty. Their loyalty will lead to a lack of patronage and satisfaction to the brand. Such brands will not be able to have good referrals from loyal customers that have made a repeat purchase of their product for years due to lack of knowledge of their right and interest which have not been valued. In a nutshell, Nigerian consumers need to be protected and they need to be able to ascertain the product they buy are of good standard and quality which meet their wants and needs. These consumers will remain loyal to these brands especially in fast-moving consumer goods in Nigeria.