Published Article

ABSTRACT

The purpose of this research paper is to analyze the extent of buyer power in determining wholesale prices in fragmented markets, taking into consideration the case of the Ladipo wholesale market in Lagos. This research is justified because the informal/semi-formal wholesale markets do not necessarily use prices posted for pricing decisions but instead consider other factors such as bargaining, previous experiences between buyer and seller, quantity demanded, and market information. The approach of this research involved the design of a pre-tested questionnaire based on three objectives that were to analyze the effect of buyer power on wholesale price determination, the effect of fragmentation on price dispersion, and lastly, the effect of market information and relational networks on price determination. A working sample of 120 respondents was used in the research. The methods of collecting data included the use of descriptive statistics, frequency distributions, and multiple regressions. The findings of this research revealed that buyer power, fragmentation, and market information/relational networks have a positive and significant effect on price determination in fragmented markets. Specifically, the findings reveal that the effect of buyer power is the highest as compared to the effects of other variables, indicating that buyer power factors have a lot of impact on pricing decisions.