PHYSICAL DISTRIBUTION OF MINERAL DRINKS IN ENUGU STATE ( A CASE STUDY OF NIGERIA BOTTLING COMPANY ENUGU)

(Business Administration and Management)

PHYSICAL DISTRIBUTION OF MINERAL DRINKS IN ENUGU STATE

( A CASE STUDY OF NIGERIA BOTTLING COMPANY ENUGU)

ABSTRACT

            This term paper is about physical distribution or logistics is concerned with the efficient movement of raw materials from suppliers, that is finished goods from the end of the production line to the customers, in order words channel of distribution.

            Physical distribution system is design by the producers to set customer service standard. A distribution channel is typically a condition of independent business entities that co-operates for mutual benefits.

            The research of these work is generally aimed to identify problems that mighty be peculiar to various areas of physical distribution and how best to tackle these problems and make a success in business operation as well as making sufficient and effective contribution to the country’s economy and industrial development.

TABLE OF CONTENTS

CHAPTER ONE

1.0       Introduction                                                  

1.1         General background to the subject matter

1.2         Problems associated with the subject matter

1.3         Problem(s) that the study will be concerned with

1.4         The Importance of Studying the area

1.5         Definition of important terms                                

1.6         Chapter reference (using APA method) 

CHAPTER TWO

2.0       Literature review                                         

2.1         The origin of the subject area                   

2.2         Schools of thought within the subject area       

2.3         The school of thought relevant to the problem of study

2.4         Different methods of studying the problem

2.5         Summary                                                                  

2.6         References                                                              

CHAPTER THREE

3.0       Conclusion                                                              

3.1         Data presentation (Highlighting of the study)   

3.2         Analysis of data                                          

3.3         Recommendation                                       

3.4         Conclusion                                                              

3.5         References                                                              

CHAPTER ONE

INTRODUCTION

            Physical distribution or logistics is concerned with the efficient movement of raw materials from suppliers that is finished goods from the end of the production line to the customers. In order words channel of distribution.

            A number of associated activities must be performed, these are grouped under four main categories, warehousing and communication.

            The starting point in the design of physical distribution system by the producers is to set consumer service standard. This has a number of dimensions and the most important of all is time it takes to get the merechandise to the customers it happens that what lead to cost reduction in another area e.g. inventory. An appropriate strategy in logistics design, therefore is to arrange all the required activities so as to minimize total cost of providing a desired level of customer service.

            However, since the major test of physical distribution is to make goods physical available to ultimate consumers. It helps to bridge the gap of space and time between production and consumption. Distribution can be viewed as a strategic managerial tool since it is one component of the forms. Marketing mix and all the decision of channels distribution selection and so on are made to be consistent with the other aspects of the marketing programme for production. For instance a high quality, high priced product may be selectively distributed through a limited number of outlets.

            It is vital to understand that for physical distribution to be efficient and effective that distribution channels are established to ensure its success.

GENERAL BACKGROUND TO THE SUBJECT MATTER

            A distribution channels is typically a condition of independent business entities that cooperate for mutual benefits. They include wholesalers, agents, retailers distribution who contributes in so many ways within the channel to assist the manufactures in ensuring that the goods gets to their consumers as and when due. They also assist them in disseminating important information to their customers and got feed back to the firm, gives financial assistance, help in the packaging and breaking of bulk goods for supply to consumers.

            The neglect, stick of responsibilities, non-challent attitude to customers, self centredness in addition to the inadequacies of marketing  system of developing economics are most gearing in a society like Nigeria and this results in distribution bottlenecks. Due to insufficient storage facilities and inappropriate storage methods, spoilage and waste of products tend to be warehouses are for and for between material handing equipment is very unsophisticated, with the  exception of, perhaps of which is available in the warehouses at the seaports. Specialized storage structures like large storage tanks for petroleum products or silos for grains are either to few or non existence.

            Modern communication networks are often too small to scope to make any real impact on business transaction sometimes the postal system works well at other times it may be grossly insufficient, the telephone service tends to be confirmed to the urban centers, the lines are too far and the quality of service offered is poor.

            The above inadequacies merely indicate that marketing system of a developed, reflecting the general development in the physical distribution sector has to be unliked to or more in pari-passu with developments in the allied sector of the economy.

            The most important point or rather a lamentation is that development planners can offer engineer rapid increase of commodity suppliers in the economy, such as massive importation or by  a big push in agricultural production and distribution of essential commodities and locally produced goods without planning for any prior investment in the logistics system headen for effective distribution of the stock. The result is confusion.

            The research work is generally aimed to identify these problems and some others that might be peculiar to their various areas of physical – distribution and how best to tackle these problems and make a success in their business operations as well as making sufficient and effective-contribution to the country’s economy and industrial development.

            The marketing and distribution of soft drinks started in Nigeria with Coca-cola, Mirnda and others being more popular than few others. The ownership of the manufacturing firms we foreigners, but they were able to make their product available to other parts of the country even though the plant was situated in Lagos the consumption were reasonably not high as it is today due to the level of our economy and spendable income of the majority of our people then. However all the end of civil war, pepsi, coke, gave to only coca-cola assorted brands such as sprite, fanta lemon, tonic and others also the east central state established the unity soft drinks at Onitsha the A.G. Leventis also built a branch at 9th Mile Corner Enugu producing coca-cola, fanta lemon, and others. They were followed by others. For the purpose of their study coke, soft drink is manufactured and bottled by Nigeria bottling company Plc at 9th mile corner Ngwo-Enugu known as Enugu plant.

            The Nigeria bottling company manufacturers of coca-cola drinks had brands such as coke, fanta, sprite, lemon and host of others. The coca-cola products and its brands are distributed through so many outlets. The major channel of distributing the products in Enugu State are diagrammatically show below.

 

Coca-cola Manufacturers

Depot

Distributors wholesale Route Orders

Retailers

Consumers

 

            It could be observed that there are at times when the production is halted with the reason that the raw materials is not available and therefore no production. The cause of this may not be far from poor forecasting and unrealisitic economic order quantity. Unfair base stock and insufficient safety stock to take care of their set customer services.

            There is always much delays in the depots and factory plants allocating goods to the distributors and yet there are supposed to be distribution centers privately owned or public to enhance and facilitate the easy flow and distribution of coca-cola drinks to meet u with the set delivery time.

            A good communication system is needed for effective co-ordination of logistics activities and other activity centers. Inventory, transportation, and warehousing, the information system requires that present stock level at each storage location should be known future commitments for supply to customers and sources of inventory replenishment be known.

            The Nigeria bottling company are distributed through the following channel members as shown in the diagram overhead. They include manufacturers distributors, wholesalers, route carders and retailers who then sell to the consumers.

            The research is aimed to investigate the activities of these distributors and other channels members in the distribution of the Nigeria bottling company in Enugu State. The research is going on to identify such marketing problem of physical distribution on coke in Enugu State as it concerns the manufacturers, distributors and retailers, since all these people are involved in the physical distribution of coca-cola drink with a view to make useful suggestions and recommendation based on the finding of researcher.

PROBLEMS ASSOCIATED WITH THE SUBJECT MATTER

            The diagrammatic nature of the nature of the channel of distribution network may be seen as being smooth and hitch free and the sales supervisor of the industry will not easily accept that there is distributors problems since Nigeria is sellers market but one witnessed that many a times the distributors and other member of the channels wait for hours to collect their own allocation instead of the goods being delivered to them. This is due to insufficient lorries to evacuate these goods for deliver to their respective customers. Sometimes the distributors wait all day long without having their allocating made available to them either due to insufficient goods at the warehouse or plant. The problems stated above cause delays in delivery of the products to their required channels. It always results to price increase. Inspite of the above transport system and delays in supply a lot of some stock  that is been stored service for this emergency period and who one witness has proved that there is increase in the prices of the brand available.

            One can observe there are times when production is halted. The reason is that the raw material and chemical that is been ordered has not arrived, it results to no production. Additionally, transportation companies are regularly needed to bridge the gap between the sellers and buyers. The need for information exchange among the three parties is obvious.

            The distributor, retailers and sellers, people and field sales supervisors suppose to have adequate flow of information to improve and facilitate distribution of coca-cola. In view of the above, the research is aimed at studying the marketing problem of physical distribution of coca-cola in Enugu State with the aim of identifying problem and marketing recommendation based on research findings.

PROBLEMS THAT THE STUDY WILL BE CONCEIVED WITH

            The research is aimed at identify the problems of physical distributions of coca-cola drink in Enugu State with a view to make useful suggestions of solving such problems based on the researchers findings.

            The research will examine critically how these physical distribution problems of coca-cola drinks and inadequate infrastructures contributes in the usual scarcity of coca-cola drinks in Enugu State which is supposed to be its major market area in the country. Coca-cola drink plant located in Enugu State product in most cases is out of stock or yet to be supplied to most shops and retail instructions in Enugu State apart from its acceptability to the consumers due to its high quality and low priced nature.

            The researcher also intends to study the standing arrangements by the Nigeria Bottling Company Plc to meet emergencies like strike, plant breakdown, late arrival or delivery of ordered raw material and other components.

            The level of performance of the middlemen will also be studied since these groups helps finally to make the goods available to the ultimate consumers. The degree of the plan of the marketing concept will be amongst the channel participant will be examined, the researcher also intends to find out the communication system used by NBC to disseminate information to suppliers, distribution sales people and public at large since effective information flow is highly needed in the physical distribution network.

            The material handling equipment will be examined. Observed and its operation and location in the plant, depot, warehouse also observed and assessed.

            The efficiency and effectiveness of the material handling equipment of coca-cola in the plant, depot, distributors warehouse will be observed.

THE IMPORTANCE OF STUDYING THE AREA

            The study will help the Nigeria Bottling Company Plc to know the various problems existing in the physical distribution marketing area. This will be as a result of the finding of this research work and possible suggestions will be available to them in solving the problem, the activities of the distributors, agents retailers and other members of the channels of distribution will be examined and whether many arise as conflicts amongst them will be identified with necessary recommendations to solve the conflicts the area where the distributors and other channel members should improve and vigorously supervised will be made known if more methods should be adopted the organization will be informed adequately with reasons. The need for customer service and high practice of business concept will be emphasized as well as the causes of scarcity of their product due to physical distribution problems as well identified.

            To establish the importance of effective communication network in the distribution area of their business system and the organization as a whole for promptness of other fulfillment and delivery its importance to the organization image and to public at large.

            To enlighten the very many who engages or intends to go into physical distribution business but lacks the necessary equipment, skilled labour and managerial ability the right steps to take for the survival and progress of the business in our growing economy and how best to stand the challenge of the future.

            To make the government realize where they are failing in the provision of essential infrastructure and amenities for the effective contribution to the much needed industrial development and progress of nation.

            The research will enable our numerous businessmen and women who are involved in distributive business to see it as a way to improve their existing business to understand and be equipped with necessary information that will help them succeed. To ascertain the various methods used by coke to take care of emergency periods in demand for their products and how their salesmen are selected, motivated and supervised.

DEFINITION OF IMPORTANT TERMS

A.           PHYSICAL DISTRIBUTION: This is the efficient movement of raw materials from suppliers to the consumers.

B.           ROUTE CARDERS: These are the people with their distributors cards. They buys directly from the salesmen.

C.           RESEARCH: The gathering of information necessary for planning and facilitating.

D.           PROMOTION: The development and disseminations persuasive communication about offer.

E.           CONTACT: The searching out and communication with prospective buyers.

F.            MATCHING: The shopping and fitting of the offer to the buyers requirements, includes such activities as manufacturing, grading assembling and packaging.

G.           FINANCING: The acquisition and dispersal of fund to cover the cost of the channel work.

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