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Export Marketing: Catalyst for Nigeria Economic Paradigm Shift

Bright C. Opara Lecturer Department of Marketing, Faculty of Management Sciences Rivers State University of Science and Technology P.M.B. 5080, Port Harcourt, Nigeria Postal Address: P.O. Box 12182, Port Harcourt, Nigeria E-mail: Brightpara@yahoo.com Abstract This study highlight the need for viable export alternative to oil, which is a dominant export product in Nigeria, and considered the immense opportunities and benefits that exist in Non-Oil export and the fact that Nigerian firms have comparative potential advantages to export certain non-oil products to both developing and developed countries. The challenges or limiting factors that impact on Nigerian firms export involvement were also examined. The study revealed that Nigerian exporting firms can be categorised into Experimental, Active and Committed; and that Market opportunities impact on Nigerian firms export marketing involvement. The study concluded that Nigerian firms non-oil export involvement is the most viable alternative to oil (crude-petroleum) as a realistic economic transformation, a potential sustainer of the nations desired economic development and catalyst for Nigeria economic paradigm shift.

Introduction
Export marketing can be described as a nations economic facilitator, as it facilitates transactions between a countrys productive sector and its international consumer need/demand. It is the critical link in effectively utilizing the production resources of one country to the economic well-being and growth of both the importing and exporting countries. It has also been argued that export marketing and by extention marketing, might by itself go far toward changing the entire economic tone of the existing system, without necessarily changing the methods of production, distribution, population, or of income. What is needed in most developing countries (like Nigeria) growth to make economic development realistic and meaningful is to engage in effective export marketing and marketing in general. The developmental role of exporting can be appreciated from the fact that it earns foreign exchange, increase firms sales/profit, lower production cost, create employment, earn international recognition, enhance reputation, and improve living standard of both the exporting and importing firms/nations. Panagariya (1995), in a study of Chinas exporting strategy, remarked that, export is a key to high GDP growth rates. The critical economic difficulty faced by Nigeria as a result of oil glut or price fluctuation in the world market stimulated several search for alternative to oil as a sustainer of economic development since the 1980s, hence the need for export marketing as a viable alternative to oil (crude petroleum). This study therefore, examined and documents the derivable benefits and factors impacting on export marketing involvement of Nigeria manufacturing firms. It also highlighted the countrys market opportunities in foreign market involvement.

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Theoretical Framework
Theories are framework for understanding research work and help to give credence to studies of this nature. The issues addressed in this section are: Imperative of export as agent of development, strategic importance of non-oil export to Nigeria economy, prospect of Nigerian firms export marketing, and characteristic and challenges of Nigerian firms export marketing. Imperative of Export as agent of Development Non-Oil Export marketing is a development tool identified with economics of abundance which is also associated with the function of guiding production purposefully toward maximum consumer satisfaction and the general well being of society. The vital role of optimizing economic growth process can therefore, be credited to export marketing and or marketing. This is because marketing was instrumental in laying the groundwork necessary for rapid development of most developed nations. Walter Elkan (quoting Myint. 1971), observed that export expansion of peasant products, particularly in South East Asia, Uganda and West Africa, placed not so much emphases on the reallocation of given and fully employed resources from domestic to the export sector, but by bringing hitherto under utilized surplus of land and labour in the subsistence economy into export production. The significance of export to a nations economic development was further highlighted by Haberker (1961), as he observed that exports (or import substitution), now constitute important national goals. It has been argued that the economic development of any nation has some strong relationship with the export performance of the country. Ayal (1982) similarly noted that the economic problems faced by most countries, at a given period, were associated with export marketing of the nations. Kilpatrick and Miller (1978), relevantly remarked that determinants of export success from Israel, had to do with wages per employee which are strongly associated (positively) with capital per employee, and the study concluded that higher wages per employee, higher value added per production workers, and higher economies of scale, are the main characteristics discriminating between net exporting and net importing industries in the United States. It has also been argued that most of the benefits derived from exporting, may not be realized if the firms in developing countries do not first meet the home need of its products or services. Iyanda (1982) noted that it would be misplaced priority to plan to export when domestic demand has not been satisfied. However, the fact still remains that for firms to grow at home, they definitely need to sell their products/services abroad. The conception that a country should only export when it has surplus over domestic demand, undermines the policy of export-oriented development, which Nigerian government tend to be pursuing. Similarly the economic theory of comparative advantage also provides the rationale for economic activity, or another useful reason to be involved in the selling of a countrys goods and services across its national boundaries. The theory of comparative advantage states that each country need to specialize in the production of goods and services in which it is comparatively most efficient, and then export the products/services to countries that are comparatively least efficient. The exporting country will in turn import from such other countries products/services for which it is least efficient comparatively. This comparative theory goes further to postulate that through the re-allocating of resources, with a view to increasing production of goods and services which the country has a comparative advantage, trade-will attract for that country a greater total volume of goods/services than could have been obtained directly, provided the current exchange rate between both countries favours the producer of the goods/services. Strategic Importance of Non-Oil Export to Nigeria Economy The significance of non-oil export to Nigeria economy can firstly be appreciated from the perspective of imperative of export as agent of development, as discussed above. Export has also been described as
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the bed-rock of any economic development which is meaningfully centered on non-oil export in most countries of the world. Therefore the current deliberate efforts to enhance Nigerias non-oil export is derived from the failure of oil export (oil boom), which has not been meaningfully managed to positively reflect on the socio-economic well being of the people. Historically, Nigerias export involvement before the discovery of crude petroleum (oil) in the early 1950s was centered on the countrys traditional agriculture, mining and other related products. The products constituted Nigerian main export products then, and provided about 85% of total export earnings and accounted for not less than 63 percent of the countrys Gross Domestic Products as at 1960. From the Nigeria economic perspective, promoting non-oil export products will bring about reduction on the nations level of dependence on the dominance of crude oil or what can be describe as, mono-cultural foreign trade product that averagely racked in over 80% foreign earnings since 1970s. This can be a thing of the past if the export economic potentials of Nigeria are sincerely and usefully harnessed. It is in the recognition of the significance of non-oil export to a nation that Nigeria government made exporting of the countrys non-oil products, a major key element of its structural adjustment program (SAP) in 1986. The Nigerian non-oil export statistics proceeds for 1986/87, according to NEPC report, showed that Nigerians non-oil export shipments amounted to 483.6 million U.S. Dollars, while that of 1988 was 483.7 million U.S. Dollars, 1990 had a decline of 289.9 million dollars, and 1991 had an increase of 338.7 million dollars. These are some of the earnings realized by Nigeria from exporting non-oil products from 1986 to 1991. Other strategic importance of non-oil export to the Nigerian economy is also revealed from what NEPC called benefits of exporting non-oil products. The benefits include: i. The export of non-oil products increase the foreign exchange earning of the country, which assist in the financing of other economic sector of the nation. ii. Export of non-oil products create employment and reduce un-employment problem in the country. iii. The living standard of the people in the exporting country will improve, or be better. iv. The export of non-oil products may bring about increase in sales and profits to firms that export market their products. v. Foreign trade may also improved product quality, and reduction in production cost, which may be brought about by mass production for export. vi. Business expansion is another benefit that may also result from export marketing. vii. Recognition and Reputation of firms may also be enhanced when quality, quantity, and reliability of the firm are considerably improved as the firm successfully engages in export marketing. It is important to state that all the above discussed benefits that may accrue to Nigerian firms that engage in non-oil export (although not exhaustive), are by extension beneficial to the country where the exporting products are destined/consumed, and will have positive spread effect on both countries economies and the well-being of the citizens. Prospect of Nigerian Firms Export Marketing Product selection or sourcing for Nigerian firms export marketing is usually based on the individual companies comparative advantage to either produce/manufacture or procure goods for supply in foreign market. The Nigeria export promotion council (NEPC), surveys on the various export potentials, and the foreign market opportunities of the country for industrial goods, according to Ogunnusi (1986), revealed products such as Aluminium, household utensils, paper products, biscuits, confectionery carpets, wire-nails, nuts and bolts, mango-juice, coca-based beverage, instant yam-flour, beer, African phonographic records, wood products, African prints and handicrafts. The study also confirmed that Nigerian firms can export agricultural and livestock products like cashew-nuts, chillies,
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Arabic-gum, tropical fruits, vegetables, livestock by-products, cashew nuts, chilies, Arabic gum, tropical fruits, vegetables, hooves and horn bones. The NEPC survey further informed that Nigeria has a comparative advantage to produce and supply the above products not only to other African countries, but also to other countries of the world, such as ECOWAS countries, U.S.A, and other developed countries. The author concluded that the immense opportunities and prospects that await Nigerian exporters in ECOWAS, Cameroon and U.S.A., were evidenced by the fact that over N50 million worth of tentative export orders were generated within a space of six weeks from both countries missions. Export market opportunities for Nigerian non-oil exporters were also identified by Ogwo (1998), as European Union, Eastern Europe, South and North America, Asia, ECOWAS, sub-Saharan African, North African, Middle East and Mediterranean countries. Nigeria is yet to fully exploit this comparative advantage to a meaningful non-oil export economic growth. However, the study (NEPC 1996), also noted that in spite of the countrys product advantage and various export potentials some exporting firms have problems of what product to offer for export, how to source/manufacture the product, to which market to export, how to finance export, and cope with Nigerian export procedures and documentations? Another problem associated with the countrys product exporting is the consumer perception of made-in-Nigeria goods by local and foreign consumers. It is argued that a nation without a pride in its goods is a nation, which has not discovered itself. Iwok (1986) remarked that; such lack of pride in home made goods is an indication of immaturity and underdevelopment. I see the possession of great pride in home made goods as a prerequisite for the attainment and sustenance of economic progress by any developing country. Today a nation can earn the highest level of respect and good image by possessing pride in its goods; it must determine its destiny by developing pride in its goods. The first step in enhancing Nigeria firms product advantage in export marketing is to overcome the age-old colonial mentality of assigning superiority to foreign made goods and regarding Nigerian products as inferior. The citizens need to convince other countries as to the quality of the products made in Nigeria. This is because Nigerians themselves ought to be the salesmen in terms of the support which they give to made-in-Nigeria goods. Nwakanma (1986) asserts that with adequate research on the products, diligence and painstaking care in the handling of the products, especially with respect to the aesthetic quality, physical appearance, beautiful designs, packaging and labeling, madein-Nigeria goods will have enhanced comparative advantage in terms of perception, market opportunities and competition in the world market. Characteristics and Challenges of Nigerian Firms Export Marketing Historically we can recall Nigerias export involvement, before the discovery of crude petroleum (oil) in the early 1950s. Before then, Nigerias export trade was centered on the countrys traditional agriculture, mining and other related products. These products include: cocoa, palm produce (Oil and kernels), groundnuts, rubber, cotton, ivories, elephant-tusks, tin, coal, hides and skins. The above products constituted Nigerian main export products then, and it is important to note that these products were unprocessed, and have little or no value added to their raw state before exporting them. No wonder the later exporters who processed the products earned better revenue or profit than the primary producers. Despite the above, agriculture still provided about 85 percent of total export earnings and accounted for not less than 63 percent of the countrys Gross Domestic Products as at 1960. The unhealthy experience of Nigeria Government as a result of Oil glut in the world market in the 1980s was discouraging and heightened the Nigerian ever-growing import bills, and balance of payments issue. The result of this economic imbalance, which is structurally deficient with its attendant consequences, is that Nigeria began to encourage other alternatives to oil as sustainers of its economic growth and development. Government therefore began to place emphasis on export promotion, especially that of manufactured goods from Nigeria.
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However, the earnings realized from manufactured and semi-manufactured products were insignificant relative to the Countrys foreign exchange earnings as at 1980s (Ogunnusi, 1986). These trends, of course, still existed up till the late 2000s. Petroleum crude dominated Nigerian export trade and accounted for 95% of foreign exchange as at 1979. This false wealth enhanced the structure of Nigerian economy up till 1990s, and encouraged Nigerians to be more consumption oriented and import dependent. The declining role of the agricultural export sector in Nigeria economy in the 1970s, was the beginning of the countrys later economic problems, because the agricultural export sector which contributed an annual average of 58.4 percent of total foreign exchange earnings in the 1960s, declined to 5.2 percent annually between 1971 and 1985, according to CBN economic and financial review (1989). Export crop-sub sectors downward contribution was also noted in the fourth National Development Plan (1981-1985) and was identified as a major problem of the manufacturing sector which resulted from shortage of industrial raw materials, especially agricultural raw materials. This problem led to many industrial projects, which were planned for execution in the third plan, but could not take off. Apart from the problem resulting from inadequate or poor quality land resources, labour and manpower shortages, insufficient capital investment and technological inadequacies, are some other important problems of the export agricultural sector. There was also persistent decline in the prices of primary commodity in the world market. Nigeria as a matter of fact lost her competitive position in the production and export of some of the commodities to Malaysia and Cote dIvoire, which produce the same commodities with the country. Some challenges have been identified as being responsible for not achieving the desired economic development through export marketing. One of such problems is exporting raw agricultural commodities by Nigerian exporters, and these commodities are processed and sold to Nigerian consumers at a higher price. Nwakama (1986) noted that the absence of forward integration in the Nigerian agricultural sector is largely responsible for the failure of the Nigerian agricultural sector to expand, and make meaningful progress. Lack of backward integration is also accused of been responsible for the industrial sectors low growth and expansion. To have insight to the performance of the Nigerian export promotion programmes, the number of participants and the total sum paid to beneficiaries with respect to duty drawback scheme and export expansion grant fund between 1988 to 1996 was inadequate. Hence the desired objectives could not be achieved. Okeke (1990), also stated, that the drawback schemes elaborate administrative procedures gave rise to what the author called undesirable situations. Another example of Nigerian export performance can be seen from the total export expansion grant disbursed to companies from 1989 to 1996. The grant ranged from 1.7 million naira to 79 million naira. Considering the capital-intensive nature of expanding manufacturing companies, it will be correct to state that the above sum disbursed is insignificant to make meaningful impact in the export expansion scheme of most companies within the given period. Examining the broad nature of the Nigerian assistance programs, and their good intentions as briefly stated above, the programmes could be described as laudable, although some of the assistance programmes appear not to be in operation, because the scheme are largely on paper. Iyanda (1982) similarly, argued that the Nigerian governments approval of export credit guarantee scheme was more on paper, since it is yet to be operated. In the same manner, the commercial banks failed persistently to comply with CBN guidelines on credit to the export sector, while it was also noted that successive governments were simply paying lip service to the promotion of non-oil export. The usual complaints of NEPC since its establishment in 1976, has been that of inadequate funding. The gross inadequate funding of NEPC may have also been responsible for its ineffectiveness and inefficiencies. Similarly it was remarked that; owing to the ineffectiveness of existing package of export incentives as well as constrains, the orders received in some of its missions overseas could not be executed (NEPC 1989, p.9). This is coupled with some administrative bottle-necks placed
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on the part of exporters which resulted in the inability of Nigerian exporters to respond urgently and successfully to the over fifty million Naira tentative orders received during the trade missions embarked upon in the past. Other challenges of exporting and non-exporting firms include: Government restrictions (political/legal factors), Cultural and social factors, Economic barriers, Technological Barriers. Rasesham and Soutar (1996), also identified the following export barriers: companies ability to finance export marketing expansion, ineffective government assistance programs, procuring exchange rates, interest rates, trade regulations, import restrictions, ability to read, speak and understand the language of potential markets, ability to locate reliable agent/distributor, deterioration of products during transportation, understanding price mechanism, ability to meet quality and quantity on continuous basis, competition from other domestic and foreign producers in potential markets. It was to solve some of the above challenges that the Association of Nigerian Exporters (ANE) was formed in 1984, (Ogunquit 1986). The ANE is a private sector, non-profit organization that liaises with relevant government agencies over export matters. From the above analysis, we can infer that the Nigerian firms export performance was below expectation in the attainment of the countrys export and industrial policy objectives resulting from the countries inability to effectively checkmate most of the export challenges and take advantage of the potentials. Study Methodology This study primary database was drawn from sixty firms participating in export and located within Port Harcourt. These firms were selected from list of functional exporting companies as published by Nigerian export promotion council NEPC (1996). Structured questionnaire was our primary data collection device, and it was administered to the most Senior Marketing Managers of the firms involved. Chi-Square distribution was employed to test the null hypothesis on the impact of export marketing opportunity on firms export involvement, while F-test was used to determine the impact on the three levels of firms. Data Analysis and Discussion The primary data are herein under presented and analyzed:
Table 1:
S/NO A B C

Companys degree of Export involvement (N=60)


Degree of Export Involvement Experimental Active Committed Characteristics New in Export, few markets, entry through unsolicited orders, export less than 10% of total sale and little attention to export. Appreciate importance of export to firms goals, experienced in export, plan for export, may have export dept etc. Research an create export opportunities, invest in foreign markets, establish overseas divisions etc.

Source: Research data, 2009.

Table 1 above shows exporting firms degree or extent of export marketing involvement or manifest behaviour of respondents. In other words respondents were asked to identity under what category of exporting firms or their companies can be classified (that is, Experimental, Active or committed firms).

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Table 2:

Shows respondents (firms) responses (N=60)


No. of firms 20 28 12 Percentage 33.3% 46.7% 20.0%

S/No. Degree of Export involvement 1. Experimental involvement 2. Active firms 3. Committed firms Source: Research data, 2009.

The table above shows Experimental firms as 20 or 33.3%, while Active firms are 26 or 46.7% and committed firms as 12 or 20%. The data on the degree of export involvement of Nigerian manufacturing firms above show more Active and Experimental exporting firms than committed firms. This data confirms that Nigerian manufacturing firms can be classified into the three categories of Experimental, Active and Committed firms.
Table 3:
S/No.

Market opportunities impact on firms Export involvement (N-57)


Responses Experimental Firms No % 17 30 3 5 Active Firms No % 20 35 7 12 Committed Firms No % 5 9 5 9 0

1. Yes 2. Somewhat 3. No Source: Research data, 2009.

The preceding Table 3 revealed that 57 firms responded to this question item, and that 17 (30%) Experimental firms are influenced by Market Opportunities in their export marketing involvement. While 20 (35%) Active and 5(9%) committed firms are attracted to export marketing by market opportunities. The Table also shows 3(5%) for Experimental, 7(12%) for Active, and 5 (9%) for Committed firms having somewhat impact in the respondents export marketing involvement. No respondent of the three levels of exporting could identify that market opportunities do not influence its export marketing involvement. Testing of Hypothesis The research data generated is tested in this section of this study. The null hypotheses were subjected to acceptance or rejection, using the chi-square (X2) statistical test of significance. H01: Market opportunities do not motivate export marketing involvement. In computing this test, we used the chi-square test statistics, c r (oij Eij )2 2 X = j =i j =i Eij Where Oij are observed responses and Eij the expected responses. The test statistics above follows chi-square distribution with (r-1) (C-1) degrees of freedom, where r is the number of rows and C is the number of columns as shown in table 1 which is derived from Table 1.

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Table 4:

Data Analysis (N=60)


Yes 17(14.7) 20(19.9) 5(7.4) 42 Somewhat 3(5.3) 7(7.1) 5(2.6) 15 No -(0) --(0) --(0) 0 Total 20 27 10 57

S/No. Degree of exporting 1. Experimental 2. Active 3. Committed 4. Total Source: Research data, 2009.

Computing the test statistics, (17-14.7)2 (3-5.3)2 2 X = + 14.7 5.3

++

(5-2.6)2 2.6

X2cal = 4.35 At = 5% and with 4df We have: X2 0.05, 4 + 0.711 Since X2cal = 4.35 exceeds X2 0.5, 4 = 711 We reject H01, and conclude that market opportunities motivate export marketing involvement of Nigerian manufacturing firms. In other words, market opportunities positively impact on Nigerian manufacturing firms exports marketing involvement. This finding tends to reinforce earlier studies of Ogwo (1998) Harafakioghi and Harcar (1990), Dekaser and Little (1994), Ogunnusi (1986), Buzzell (1968), among others. These studies found that market opportunities abroad have positive influence on exporting firms export marketing involvement.
Table 5: F-test Analysis on Difference among Firms
Sum of Squares 2.838 2.838 2.838 29.895 32.733 Degree of Freedom 2 2 2 57 59 Mean Square 1.419 1.419 1.419 0.524 0. 555 F-Test 2.706 2,706 2.706 Prob. 0.07 0.07 0.07

Source of variation Main Effects Variable 1 Explained residual Total

From the preceding table 5, F-ratio 2.706 is greater than critical value of 1.419, at 2 degree of freedom (F0.05, 2), with 0.07 probability. We conclude that there is no significant difference among the three levels of firms perception of the influence of market opportunities on their export marketing involvement.

Conclusion
In this study we examined and documented the immense derivable benefits from engaging in Non-oil export and the emerging business opportunities worldwide which are associated with the current international trends in global trade liberalization in most nations. It noted that Nigerian exporting firms can be classified into Experimental, Active and Committed; and that exporting Non-oil products offer a greater viable alternative to oil in export earning and economic development for Nigeria. Therefore, for Nigerian companies to prosper in international trade, and manifest the desired economic transformation, they need to key-in and exploit the market opportunities which the strategic Non-oil export tends to offer.

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