ANALYSIS OF DISCOUNT PRICING AND ITS DETERMINANTS AMONG COCOA MARKETERS IN ONDO STATE, NIGERIA

Studies on the effect of discount pricing on the market margin of cocoa marketers are rare in the literature. Thus, the study identified the common types of price discounts and discount pricing strategies adopted by marketers, described the structure of cocoa market, estimated the marketing margin and determined factors influencing price discounting strategies among marketers in the study area. A combination of purposive and random sampling techniques was employed to select 120 respondents. Data were collected using structured interview schedule. Descriptive statistics, Herfindal Index, marketing efficiency model, marketing margin and multiple regression analysis were the analytical tools employed to achieve the research objectives. The result revealed a Herfindahl index value of 0.155. This showed a competitive and non-concentrated cocoa market. Marketing efficiency value of 120.1%, indicated that the respondents perform marketing activities efficiently. The estimated marketing margin value of 16.7%, indicated that every ₦1 sale result to a price spread of about 16.7k in cocoa marketing. Hence, cocoa marketing is economically viable and is therefore worthwhile. The marketing margin (t=-2.521), cost of spoilt cocoa bean (t=-2.313), marketing experience (t=1.919), age (t=-1.971) and membership of traders association (t=1.919) were the significant variables explaining price discounting among marketers in the state. Training of cocoa farmers is recommended to enhance modern cocoa processing and storage techniques so as to increase efficiency. Marketers are also encouraged to pool their resources together through the various associations to achieve economies of scale in order to reduce the cost of production for increased marketing margin.