International Journal of Sciences: Basic and Applied Research (IJSBAR) ISSN 2307-4531 http://gssrr.org/index.php?journal=JournalOfBasicAndApplied Price Competition Among Retailers Of Coca Cola Products In Ibadan Metropolis, Nigeria Agboje Ifeoma Anestina a* , Awoyomi Femi. S.O b , Yusuf Sulaiman. Adeshina c A,b,c University of Ibada, Nigeria a Email: anaestina4bubble@gmail.com b Email: ayomifemi@yahoo.com c Email: ywasiu40@yahoo.com ABSTRACT: The study was carried out on price competition among retail marketers of Coca-Cola products in Ibadan metropolis. A total of one hundred and ten retailers’ was randomly sampled from three Local Government Areas in Ibadan. Ordinary Least Square regression model was used for the analysis of the study. The findings of the study were that there were price variation in the Coca-Cola retail market that is monopolistically competitive in nature, and that these price variations were influenced by municipality characteristics, market conditions and store characteristics. It is therefore, recommended that more entries of retail marketers should be encouraged to reduce the monopolistic powers of the few retail marketers in the business. KEY WORDS: Coca-Cola retailers, competition, price variation I. INTRODUCTION Retail markets have been analysed recently on articles in applied literature because of their excellent suitability for the investigation of spatial price competition. It is obvious there are usually many outlets in a region where competition is highly localized as retailers usually compete almost entirely with their closest rivals as suggested by most spatial competition models. The retail market is usually dominated by a few large local and integrated firms present in most local markets. In general, it is found that a large number of small outlets (usually called ‘independent’ or ‘Unbranded’ outlets, compete in a few (or one) local markets. As Coca-Cola products are perfectly homogenous with respect to its chemical properties, outlets try to avoid perfect competition through product differentiation (supplying additional services like shops, attendant service, cooling technology etc.) and spatial differentiation [5] [23]. Unbranded outlets typically compete by charging the lowest price [13]. Competition and market efficiency keep pressure on prices to converge towards the lowest price levels. Competition in such retail market is highly localized, as consumers typically prefer to buy products at outlets in the vicinity of their residence/place of operations. Therefore, as in most spatial markets, sellers recognize only their nearest neighbours as relevant competitors [3]. Despite the many outlets in the sampled areas, each of these local markets can be characterized by oligopolistic interdependencies. The Nigerian Bottling Company has reinforced the monitoring and benchmarking of price differences in the retail market but this has not yielded much difference due to facility differences and other reasons not associated with brand (level of sales, locations etc.). It is paramount to explore the reasons behind the remaining price * Corresponding author. E-mail address: anaestina4bubble@gmail.com. 5