Global Journal of Management and Business Research

Volume 11 Issue 4 Version 1.0 March 2011

Type: Double Blind Peer Reviewed International Research Journal
Publisher: Global Journals Inc. (USA)
ISSN: 0975- 5853

Marketing and Distribution Channel of Processed Fish in

Adamawa State, Nigeria
By A.J., Madugu, A. Edward
Adamawa State University, Mubi, Nigeria.
Abstracts - This study investigated the causal relationship between quantity of fish sold and
marketing costs in Adamawa State. Specifically, the profitability was determined and distribution
channels identified. Structured questionnaires were used to collect data from 80 fish marketers
using purposive and simple random sampling technique from Jimeta, Yola, Gurin and Labondo
markets. Analytical tools used were descriptive statistics, market margin and multiple regression
analysis. The result showed a margin of 39.8% which could be attributed to the marketing
functions. The study identified a decentralized distribution channel in the area. Regression
analysis revealed an R2 of 63.8%, F-value of 8.93 and a very low standard error of 0.38889. The
result further revealed that initial capital, cost of fish, processing cost and handling charges were
positive and significant at different levels indicating that they were the major determinants of
selling prices of processed fish in the area. The study concluded that processed fish marketing in
the study area was profitable. It recommended that marketers should form a strong co-operative
society. There is also a need for government intervention by reducing tax and providing licence
to increase the number of micro-credit finance institutions.

Keywords : Processed fish, Distribution Channel, causal relationship, Adamawa State.

Classification: GJMBR-A Classification: JEL Code: D33,D41,Q22

Marketing and Distribution Channel of Processed Fish in Adamawa State, Nigeria

Strictly as per the compliance and regulations of:

© 2011 . A.J., Madugu, A. Edward .This is a research/review paper, distributed under the terms of the Creative Commons
Attribution-Noncommercial 3.0 Unported License http://creativecommons.org/licenses/by-nc/3.0/), permitting all non-commercial
use, distribution, and reproduction inany medium, provided the original work is properly cited.
 Marketing and Distribution Channel of
Processed Fish in Adamawa State, Nigeria

March 2011
A.J., Madugu1, A. Edward2

Abstract : This study investigated the causal relationship protein malnutrition problem (Ladipo et al., 1982, Goeff
between quantity of fish sold and marketing costs in Adamawa et al., 1995). 21
State. Specifically, the profitability was determined and Marketing and distribution channels are
distribution channels identified. Structured questionnaires were important characteristics in the process of getting

Volume XI Issue IvvV Version I

used to collect data from 80 fish marketers using purposive
produce from source to consumers. Olukosi and Isitor
and simple random sampling technique from Jimeta, Yola,
Gurin and Labondo markets. Analytical tools used were (1990) categorized marketing channels into centralized
descriptive statistics, market margin and multiple regression and decentralized channels. Centralized channels deals
analysis. The result showed a margin of 39.8% which could be with agents who serve as middlemen between
attributed to the marketing functions. The study identified a producers and consumers while decentralized is a kind
decentralized distribution channel in the area. Regression of channel where both consumers and agents can buy
analysis revealed an R2 of 63.8%, F-value of 8.93 and a very directly from the producers. Fish distribution channel is
low standard error of 0.38889. The result further revealed that common to must developing countries with series of
initial capital, cost of fish, processing cost and handling middlemen between producers and consumers (Moses,
charges were positive and significant at different levels
1992).
indicating that they were the major determinants of selling
prices of processed fish in the area. The study concluded that Eyo (2001) stressed that processed fish is sold

Global Journal of Management and Business Research

processed fish marketing in the study area was profitable. It as smoked or dried without varieties as fish fingers,
recommended that marketers should form a strong co- cakes and other ready to serve fish foods to stimulate
operative society. There is also a need for government wider interest in marketing, distribution and
intervention by reducing tax and providing licence to increase consumption. Fish supply and marketing suffer from
the number of micro-credit finance institutions. various set backs ranging from shortage of supply, price
Keywords : Processed fish, Distribution Channel, causal fluctuations due to drying up of source, poor distribution
relationship, Adamawa State. and length of chain, spoilage in transit etc. (Tomek and
Robinson, 1981). Furthermore, due to the cumbersome
I. INTRODUCTION nature of fish distribution channel, the local fish seller is

I
faced with the problem of profit maximization. The broad
n the last two decades, there has been a land slide
objective of the study was to investigate the causal
movement towards markets liberalization in the world.
relationship between quantity of fish sold (distributed)
Although the pace and depth of liberalization have
and marketing costs in Adamawa State, North Eastern
varied from place to place, the movement have affected
Nigeria.
both international and domestic markets and no
continent remains untouched (Onu and Iliyasu, 2008). II. METHODOLOGY
They further explained that the kinds of markets that
have emerged from this movement differ markedly Study Area: The study area was Adamawa State
across Sectors and Countries. Several studies that Nigeria. It has a land area of 38.741km2 lying roughly
examined the marketing system of fish and its between latitudes 7o and 11o North and between
implications for agricultural and Economic development longitudes 11o and 14o East of the Greenwich meridian.
in Nigeria in general have employed the relationship (Adebayo, 1999). It has an annual rainfall that ranges
between costs and selling prices of fish (Ali et al., from 700mm to 1600mm with a mean monthly
2008). Fish, especially in its dry form is known as the temperature range of 26.7oc to 27.8oc. The Major
cheapest source of animal protein which supplements occupations of the inhabitants includes fishing,
about 40% of the protein intake of the Nigerian processed fish is major economic activity in the area.
population (Eyo, 1992). Processed fish has also been Fresh fish cannot be preserved for long, thus it is
recognised as a way out of the ravaging and pervasive processed into smoked or dried to add value. This is
due to the tropical nature of the area and inadequate
About 1 : Dept. of Agricultural Econs. & Ext., Adamawa State storage facilities. Others include farming and rearing
University, Mubi, Nigeria.Email : altine_j@yahoo.com animals. Rivers and lakes found in the state include river
About 2 : Dept. of Biological Sciences, Adamawa State University, Benue, Gongola, Chochi and Njuwa lake. Crops grown
Mubi, Nigeria.

©2011 Global Journals Inc. (US)

 Marketing and Distribution Channel of Processed Fish in Adamawa State, Nigeria

are maize, sorghum and cassava while others are processed fish was transferred from producers to
cotton groundnuts and sugarcane (Sajo and Kadams, consumers and a distribution channel was drawn.
1999).
* Market Margin Analysis: Market margin if not perfect
III. DATA COLLECTION AND SAMPLING and static is also measure of market performance
March 2011

PROCEDURE (Olukosi and Isitor, 1990). This is the ratio that

determines the gap between producers and consumers
Purposive and simple random sampling price. It is expressed as:-
techniques were used. Four markets were selected SP
being the major fish markets in the area. 80 fish MM = x 100%
CP
22 processors and marketers were randomly selected
using a sampling frame from the four markets in a ratio Where, MM = Market Margin, SP = Selling
proportional to market size i.e. 30 in Jimeta market, 20 in Price and CP = Cost Price
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Yola market and 15 each in Labondo and Gurin

markets. Data for the study were collected through
V. RESULTS AND DISCUSSION
structured questionnaires administered to fish
processors and marketers while secondary data were Socio-economic Characteristics of Marketers:
obtained through journals, books, seminar series, The Socio-economic characteristics of marketers which
newspapers etc. primary data collected includes socio- include age, gender, family size and years of experience
economic variables, prices, costs and returns, sales and are presented in Table 1. Data showed that marketers
problems associated with processed fish marketing. between the ages 31-40 have the highest percentage
(46.25%) followed by those above 40 years (28.75%)
IV. ANALYTICAL TECHNIQUES and between ages 21-30 years (15%). It can be
* The socio-economic characteristics and concluded that, most of the marketers are in their
problems associated with processed fish marketing economic active years.
Global Journal of Management and Business Research

were analysed using descriptive statistics such as The table further reveals that male respondents
frequencies, percentages and charts. comprise of (50%) and the same goes for the female.
This means that both males and females participate
* Multiple Regression using the ordinary least equally in marketing of processed fish. Females are
square (OLS) regression technique was used to therefore not left out in fish marketing. A similar study in
determine the effect of marketing cost on the selling Benue State found about 90% women participation in
price of processed fish (smoke and dried) in the state. fish marketing. (Lawal and Idega, 2004). This is further
The model was specified as follows:- supported by Williams and Awoyemi (1998) who
Y=f (X1, X2----X10) observed that women in small-scale riverine fishing
villages also perform other types of income earning
Where Y=quantity of processed fish distributed in activities to supplement the household income, such
kg/month income sources were earned through sales of fisheries
X1= Initial Capital investment products and social services in fish distribution and
X2= Cost of fish/kg in (N) marketing.The data illustrated that marketers with family
X3= Processing cost/kg in (N) size that range between 1-10 persons have the highest
X4= Packaging cost/kg in (N) percentage (71.25%) followed by those that have
X5= Handling charges/kg (N) persons ranging between 11-20 (18.75%). This implies
X6= Storage Cost (N) that the lower the number of family dependant on
X7= Transportation cost/kg (N) marketers the better the market performance because
X8= Produce tax/kg in (N) less time is spent on family issues and more on
X9= Market Union tax (N) marketing. Only about 3.75% of the respondents have
X10= Local Government tax (N) above 20 persons while 6.25% have no dependants in
Ui= Error term their households.Marketers with experience of about 11-
Bi= Coefficient of Independent variables to be 20 years and 21-30 years constituted about 30% and
estimated. 28.75% of the total respectively. This is substantiated by
A priori, the coefficients of the independent variables the findings of Ali et al., (2008) who observed that
were expected to be positive and have significant marketing experience is important in determining the
relationship with the dependent variable, indicating profit levels of marketers, the more the experience, the
effect of marketing cost on selling price. more marketers understand the marketing system,
condition, trends, prices etc. The data illustrated that
* Marketing Channel: Marketing channel was identified majority of the marketers had some formal education.
using the participants and the route through which 55.0%, 35.0% and 6.25% had primary, secondary and
©2011 Global Journals Inc. (US)
 Marketing and Distribution Channel of Processed Fish in Adamawa State, Nigeria

tertiary education respectively. Only about 3.75% of the gets to the consumers. This chain reveals that the
respondents have no education at all, implying that distribution channel in the area is decentralised. i.e. both
literacy level of processed fish marketers in the area was consumers and agents (middlemen) buy directly from
fairly high. This is supported by Dogondaji and Baba the producers. A decentralised channel is usually a

March 2011
(2010) who observed that high literacy level could have short chain which reduces the activities of middlemen,
positive impact on the adoption of agricultural thereby reducing exploitation.
technologies. Marketing Margin Analysis: Marketing margin
Effect of Marketing Cost on Processed Fish depicts the ratio that determines the gap between
Distributed : the effect of marketing cost on processed producer and consumer prices. For this study, the total
fish sold was estimated via the multiple regression selling price was N214, 614, 40 while the total cost or
(Table II). Result revealed that initial capital, cost of fish, purchase price was N129, 213.30. therefore, the market 23
processing cost and handling charges were significant margin was found to be 39.8%. This margin is high, thus
at 10%, 5% and 1% levels respectively indicative of it can be concluded that marketers in the study area are

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positive relationship between selling price and cost making profit.
prices in all the markets. The positive and significant Problems Associated with Fish Marketing in the
coefficients show that they are the major determinants of Study Area: Major problems confronting processed fish
selling prices of processed fish in the area. Packaging marketers in the area were identified. This is illustrated in
costs, produce tax and LGA tax also had positive fig. I.
coefficient, the implication in that these variables also Poor access to capital was ranked first with
have an effect on the selling price by increasing it. 45%. Which was as a result of inadequate sources of
Transportation and storage costs have negative finance and the problem of collateral before obtained
coefficients, this implies that, in the study area, loan. Absence of co-operative society was ranked 2nd
marketers do not pay transport and storage costs, they with 37.5% poor transportation network was ranked 3rd
sell to marketers that come from the regional markets with 10%, this maybe as a result of poor road network

Global Journal of Management and Business Research

while others buy from wholesales and merchants and linking the rural fish markets to the urban centres. The 4th
sell within the same market. The insignificant co-efficient ranked problem was lack of government assistance in
exhibited by transportation and storage cost could be as form of tax reduction and subsidy.
a result of two markets being producer markets (Gurin
and Laboundo markets). This may be due to the fact VI. CONCLUSION AND
that most processors in these markets do not transport RECOMMENDATIONS
nor store their fish but rather sell to marketers that come Marketing of processed fish is a lucrative
from Yola metropolis and environs. The marketers here business in the study area if well -managed and
are more or less “fishermen processors” thus, most of distributed. There is a need for the formation of a strong
them sell their fish to other marketers, therefore, they do co-operative society by marketers so as to ease the
not usually store nor transport the commodity. Ali et al. problem of capital and loan acquisition from finance
(2008) also observed that fish marketers at Alau Dam institutions. Government should assist marketers by
landing site were more or less fishermen who do not reducing tax and provide licence for more micro-credit
transport or store their products but sell to marketers finance institutions to provide short term loan to
coming from the environs. They also observed a marketers.
negative and insignificant coefficient in transportation
and storage cost of fish marketers.
Marketing Channel: the participants in the
processed fish marketing were identified based on the
quantity of fish traded per month (Table III). Results
revealed that producer/processors had the highest
percentage of 40.1%. The producer/processors were
categorised into fishermen processors, female
processors and middlemen processors. This was
followed by the wholesalers with 36.9%, merchants had
13.8% and the least were the retailers with 9.2%. A
distribution channel was also identified. Figure II shows
that both wholesalers and consumers buy directly from
the producer/processors (that is, fishermen processors,
female processors and middlemen processors). The
merchants and retailers buy from wholesalers and finally

©2011 Global Journals Inc. (US)

 Marketing and Distribution Channel of Processed Fish in Adamawa State, Nigeria

Table 1: Socio-Economic Characteristics of Processed Fish Markets

Variables Number of respondents Percentage
AGE
March 2011

≤21 2 2.5
21-30 12 15
31-40 37 46.25
41-50 13 16.25
51-60 10 12.5
24 >60 6 7.5
Total 80 100
Gender
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Male 40 50
Female 40 50
Total 80 100
Years of Experience
≤10 28 35
11-20 24 30
21-30 23 6.25
>30 5 100
Total 80 100
Educational Attainment
None 3 3.75
Primary 44 55.0
Global Journal of Management and Business Research

Secondary 28 35.0
Tertiary 5 6.25
Total 80 100
Family Size

Table 2: Regression Estimates of Processed (Smoked and Dried) Fish Marketers.

Explanatory Variables Equation Form Double Log
Exponential
Constant Term 2.880 4.428
X1 Initial capital 0.00002812 0.08868
(1.371) (1.985)**
X2 cost of fish 0.000199 0.0645
(1.224) (1.727)*
X3 Processing cost 0.0462 0.315
(2.759)*** (6.162)***
X4 Packaging cost -0.00119 0.0259
(-1.588) (0.470)
X5 Handling charges 0.00449 0.159
(3.795)*** (2.866)***
X6 Storage cost 0.000405 -0.00319
(2.850)*** (-0.161)
X7Transportation cost -0.000103 -0.0120
(-0.824) (-0.251)
X8 Produce tax -0.000449 0.000418
(-0.997) (0,018)
X9 Market union tax 0.000228 -0.00553
(0.310) (-0.200)
X10 L.G.A. tax 0.000347 0.157
(0.920) (2.752)
R-2(%) 58.7 63.8
F- value 7.23*** 8.93***
S- error 0.41495 0.38889
*** Significant at 1 % level; ** Significant at 5 % level; * Significant at 10 % level

©2011 Global Journals Inc. (US)

 Marketing and Distribution Channel of Processed Fish in Adamawa State, Nigeria

Table 3: Quantity of Processed Fish Distributed/Kg/Month

Categories Quantity of Fish Traded Percentage
Producers/Processors 4,350 40.1

March 2011
Wholesales 4000 36.9
Merchants 1,500 13.8
Retailers 1000 9.2
Total 10,850 100

25
7.5%

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10%
Poor access to capital.
Absence of cooperative societies.
45%
Poor transportation and road network.
Lack of Government assistance.
37.5%

Global Journal of Management and Business Research

Fig. 1: Problems Associated with Processed Fish Marketing in the Study Area

Fishermen Processors

Middlemen Processors Female Processors

Wholesalers

Merchants

Retailers

Consumers

Fig 2: Processed fish distribution channel in the study area

©2011 Global Journals Inc. (US)

 Marketing and Distribution Channel of Processed Fish in Adamawa State, Nigeria

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Global Journal of Management and Business Research

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