In the first part of this Perspective piece, Biniam Mesfin argued that Ego or gura was responsible for the irrationality of the average Ethiopian consumer. I agree with Biniam but would like to suggest that ignorance plays as important a role as gura in the life of the Ethiopian consumer with consequences just as detrimental.
What separates one of these products from the other? About 1 km on Bole Road. Which should be enough to convince most consumers to go for the one that's priced 20% less.
A striking instance of the ignorance of the Ethiopian consumer is the remarkable apathy shown when he/she is presented with inferior and/or overpriced products along with poor service. Rather than seek out the best place to spend his hard-won money, the average Ethiopian consumer will keep going to the same most convenient outlet to purchase the same inferior goods delivered with the same sub-standard service even as he/she might express outrage at being ‘forced’ to accept less perceived value for the money that is paid.
The habit of attempting to research or find out the market value of a certain product is simply not developed in the average Ethiopian consumer who is always happy to blame the provider while remaining blissfully ignorant of the fact that the problem could lie with a lack of knowledge and unwillingness to do anything about it.
Research in consumer buying, is clearly of great value to help understand what differentiates one product from another so that we obtain the best possible goods and services at the most satisfactory prices. A good example of the general lack of such research by Ethiopian consumers may be found in the supermarkets beneath the newly populated condominiums. These establishments rent space beneath one of the condominium buildings and they provide the inhabitants with all the goods and items that are also available elsewhere in the city at prices that are often considerably cheaper. A kilo of sugar in a condominium shop may cost 13 to 15 Birr whilst in a “suk” (kiosk) down the road it costs 11 Birr. Convenience can certainly be a commodity in and of its own right but there are certainly many buyers of ‘expensive’ sugar when they would be happy to buy the less expensive version a few blocks away perhaps.
Another good example can be found in the Ethiopian Shoe Industry. Export standard Ethiopian shoes until very recently were struggling to survive since consumers here tended to associate Ethiopian products with low quality, opting to buy imported shoes from China instead. In fact, it would certainly make much more economic sense to purchase domestically made shoes that can be of much better quality and offered at lower price points too. But this does not happen because the Ethiopian buyer will not go to the distance of actually researching the quality vs price ratio of Ethiopian made shoes, and as such tends to buy either poor quality that are unhealthy or overvalued.
Addressing the Ethiopian’s gura or status seeking drive is one step towards a more rational Ethiopian consumer, but it is equally as important to address the other deadly enemy that currently seems to affect this consumer as well…ignorance.
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... written by dona , April 27, 2010
I find the whole topic unworthy of time and web space.one fundamental fact the writer ignores is the rights of customers.what a customer decides to do with his/her money is not the business of others.I have seen ethiopians in low paid jobs in europe buying expensive/designer lable attires,but the same people hardly afford to pay their bus fares. what a poor man wants to do with his dollar is his own business.
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... written by Alex , June 19, 2010
Thank you guys for the two articles on the Ethiopian consumer. Unlike Dona above, I believe these are valuable articles. As the purchasing power of the average Ethiopian rises, businesses will do well to study the spending habits of their customers. In developed economies, this is part of the job of the marketing department of businesses to which huge budgets are allocated. Just as it is the customer's right to do what s/he pleases with her/his hard-earned money, it is also the journalist's right/obligation to report when the customer is being taken for a fool or to inform the consumer about her/his choices.
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... written by tariku , August 12, 2010
I think informing the consumers and influencing their choices are two different things.the average ethiopian is not in a position to flaunt when it comes to money nor affected by ego and ignorance. the topic is all about ethiopians who don't spend their money wisely , are concerned chiefly how they look in front of others , pretentious and stupid. economists can advise customers but don't solve problems.
what a poor man wants to do with his dollar is his own business.