Demand Factors in the Rice Industry of Ghana

When a customer walks into the supermarket and makes their way down the aisle, they are confronted by at least ten different brands of rice. The question is, what draws the person to pick a particular brand? Many times in a store I have witnessed people pick up an item, put it back on the shelf and then move to pick a different brand. It’s easy to rule out what just happened and say that market factors are involved, but in truth, as an entrepreneur, retailer or producer of a product, it is key to understand what makes up these market factors. The market factors that influence the demand of a product are as follows:

  1. Price of the product—this can be briefly described as a negative relationship between the price of a product and the amount of the product that consumers are willing and able to buy (Experimental Economics Center, 2006). As an entrepreneur in the market, it is easy to align the price of your rice to others in the market and you may even try pricing it lower to attract customers. However, it must be noted that customers sometimes associate the low price of a good with poor quality.
  1. Income of the people—the greater the incomes of the people, the greater their demand for goods (J.Singh, n.d.). Although this is a factor clearly out of your control as the entrepreneur producing or retailing in rice products, you may note that this factor does not affect you as much. This is because rice has become a necessary staple in the houses of many Ghanaians and hence many of them will still strive to purchase it even on low incomes.
  1. Quality—an increase in the quality of a good, e.g. better quality digital cameras, encourages people to buy one (Pettinger, 2019). The quality of the product is really up there in the list as to what will influence a customer’s buying decision. This is easy to tell as even in a retail outlet customers can be seen questioning each other on the quality of a particular brand. This in itself is an advertisement of the product as referral clients are attained.
  1. Advertising—increased brand loyalty to goods increases demand (Pettinger, 2019). For a small entrepreneur, this is an expensive cost and entrepreneurs may not be willing to part with their dollars to advertise on television or radio. However, technology has made it much easier for all of us as it costs next to nothing to post advertisements on social media platforms like WhatsApp, Facebook, Instagram and Twitter. The mistake I have seen most entrepreneurs make is posting poor quality photographs and writing the dreaded statement “inbox for price.” This statement is an absolute no, as potential clients are lost because not everyone has the time or leisure to inbox you for a price. It is important that you post the prices of your products alongside good quality photographs that allow the person viewing them to be attracted to purchase the item. The packaging of a product is another form of advertisement because if the product looks good and attractive it will draw the eye of the customer to buy. I have noticed that whenever I am confronted with a choice among alternatives that I have never bought before, I always choose the ones that have good quality packaging because I expect the quality on the outside to reflect what is on the inside.
  1. The number of consumers in the market—more or fewer consumers entering the market has a direct effect on the amount of a product that consumers (in general) are willing and able to buy (Experimental Economics Center, 2006). This refers to the target market as a producer or retailer. You may have only one branch or you may be supplying to a small grocery outlet and production will have to increase as you expand.
  1. The tastes and preferences of consumers—An important factor that determines the demand for a good is the tastes and preferences of the consumers (J.Singh, n.d.). People’s tastes and preferences for various goods often change and as a result there is change in demand for them. (J.Singh, n.d.). This factor in particular cannot be controlled by the entrepreneur or the producer of rice. Researchers have noted that there is a cultural preference in Ghana for imported rice, as it is seen as being better quality (Oxford Business Group, 2020). The idea that as Ghanaians our own local produced products don’t seem to be good enough for us is a serious problem.

The rice produced locally is just as good as that produced in foreign markets and this we know because under the Planting for Food and Jobs (PFJ) programme, the government supplied quality inputs to farmers in 2017 (Oxford Business Group, 2020). This begs the question that as an entrepreneur, how can I sway the preference of the customer when they walk into the shop? How do I present my product so that it can be seen on the same scale as those that are foreign products?

The simple answer I have for the entrepreneur who may be asking these questions is that as rice producers, we should implement third order control mechanisms to change the perception and preferences of customers. Third order controls are defined simply as training of community members to be aware of their interpretations or ways of understanding events and thereby enhancing their ability to change these interpretations (Bartunek & Moch, 1987).

To implement these third order controls, we as local entrepreneurs should move away from employing only our relatives. We should expand and, instead of having your child as the manager of the business, have a community member become a manager. People will generally always support you if you are one of their own. Let us understand that the idea of social responsibility affecting the customer’s reception to the product is not a myth—it is real. The interpretation of the value of your entity to local customers will cease from being “they just want to become rich through us” to “we are aiding our own selves.”

Hence, as an entrepreneur you must know and understand the market you are entering and the factors that will affect the demand of your products. If you as the entrepreneur understand these factors, you will rightly be able to tailor your products to the needs of the customer and achieve success.

Works Cited

Experimental Economics Center. (2006). EconPort. Retrieved October 24, 2020, from

Bartunek, J. M., & Moch, M. K. (1987). First-Order, Second-Order, and Third-Order Change and Organization Development Interventions: A Cognitive Approach*. The Journal of Applied Behavioral Science, 483-500.

J.Singh. (n.d.). Economics Discussion. Retrieved October 24, 2020, from

Oxford Business Group. (2020). Oxford Business Group. Retrieved October 24, 2020, from,a%20deficit%20of%20580%2C300%20tonnes.&text=Domestic%20rice%20production%20grew%20fr

Pettinger, T. (2019, November 28). Economics Help. Retrieved October 24, 2020, from


My name is Siphiwe Ndlovu. I was born on 30 May 1998 and reside in Zimbabwe. I am a graduate from the National University of Science and Technology, having studied a Bachelor of Commerce Degree in Finance. At the same time, I have pursued writing as a hobby. I published an article in the March 2018 issue of Campus Moments. I also won the 2017 BAA non-fictional literary work award as a short story author for the book A Students Eye Perspective.

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