Background to the Study
One of the important aspects of the production of goods and services is the proper distribution of the same in such a manner that it will reach the target consumers in the most cost-effective and expeditious manner. Marketing is an organizational function and a set of processes for creating, delivering and communicating value to customers, and customer relationship management that also benefits the organization. Marketing is the science of choosing target markets through market analysis and market segmentation, as well as understanding consumer behavior and providing superior customer value. From a societal point of view, marketing is the link between a society's material requirements and its economic patterns of response. Marketing satisfies these needs and wants through exchange processes and building long term relationships.Marketing activities have contributed greatly to the creation of affluent society.
The exact distribution mix that a company will select depends the analysis of the environment in which it is operating, the analysis of the target consumers, and the type of resources at its disposal. Manufacturers and producers depend on the availability of products to those who wish to purchase them in order for the products to move off the shelves and for the company to make profits, which shows the importance of selecting the right distribution mix. For example, an orange juice producer must select the most effective distribution mix to ensure that its products get to the right places from where customers can purchase them, a factor that is made more urgent by the short shelf life of such products.
Kaci Lane Hindman (2013), one of the factors that will be considered when coming up with the right distribution mix is the nature of the product to be distributed. For instance, in the case of a product with a limited shelf life, such as the orange juice, the distribution mix must enable a swift transfer of the products from the production plants to the warehouse and to the eventual retailers for purchase by final consumers. In the same sense, a product with a longer shelf life might benefit from the application of a different distribution mix. When considering the effect of the environment on the selection of the proper distribution mix, a lot of factors come into play, such as the state of the transportation infrastructure in place in the environment, since this can lead to different outcomes for the same product in different environments.
For instance, a company that is located in an area with good infrastructural framework in terms of good roads and reliable transportation schedules will adopt a different distribution mix that it will use in another country with a poor infrastructural framework. As such, if the orange juice company is located in a country with good infrastructure, it might use a combination of trucks, inventory and differently packaged products to distribute the finished product. If the same company is located in a country with poor roads and unreliable electricity supply, it might slightly modify the product in order to extend the shelf life, since the poor state of the roads means it cannot expect the same expeditious and reliable delivery routines that it enjoys in more developed regions.
Kotler (2000), says that Place as one of the marketing mix elements is simply getting goods to the right place at the right time in the right quality. Place is the fourth “P” which has its traditional marketing term as distribution. Product distribution (or place) is one of the four elements of the marketing mix. Distribution is the process of making a product or service available for use or consumption by a consumer or business user, using direct means, or using indirect means with intermediaries. The distribution mix is all those functions marketers perform to move goods from producers to consumers. These intermediate consumers are wholesalers and retailers. They are known as marketing middlemen because they are in the middle of a distribution network that connects producers with consumers (Nwokoye, 1980).
Clifford (1992) opines that management needs to search for distribution economics in inventory control, warehouse location and transportation modes. One problem is that distribution efficiently declines when the company did not meet with delivery date.This leads customers to “bad-mouth” the company eventually sales fall. Management responds by increasing sales force incentives to secure more orders. The sales force succeeds but once again the company slips in meeting delivery dates. Management needs to identify the real bottleneck and invest in more production and distribution capacity.
Physical distribution is an integrated set of activities that deal with managing the movement of goods within firms and through marketing channels (Kotler, 1980). Planning an effective physical distribution system can be significant decision point in developing an overall marketing strategy. A company who places the right goods in the right places at the right time, in the right quantity, and with the right support service, is able to sell more than competitors who fail to observe or accomplish some goals.
Physical distribution is of great importance to most firms because it accounts for about 19% - 22% of the retail price. Part of these cost go for movement of products and the remaining part is related to inventory holding. Although physical distribution cost vary from industry to industry. With the above importance and many others prompted the researcher to verify more on the effectiveness of distribution in an organization and suggest other possible ways of distribution in an organization.
TABLE OF CONTENTS
Title Page.............................................................................................................i
Approved Page....................................................................................................ii
Dedication...........................................................................................................iii
Acknowledgment................................................................................................iv
Table of Contents................................................................................................vi
CHAPTER ONE: GENERAL INTRODUCTION
1.0 Introduction..............................................................................................1
1.1 Background to the study.........................................................................4
1.2 Statement of the Problems...................................................................... 5
1.3 Statement of Hypothesis............................................................................5
1.4 Significant of the Study.............................................................................6
1.5 Scope and Limitation of the Study.............................................................7
CHAPTER TWO: LITERATURE REVIEW
2.1 Introduction..............................................................................................8
2.1.1 Concept of Distribution and its Nature.....................................................8
2.2.1 Physical Distribution................................................................................10
2.2.2 Objective of Physical Distribution............................................................11
2.2.3 Importance of Physical Distribution.........................................................13
2.2.4 Problems of Physical Distribution.............................................................14
2.2.5 Solution to Problems of Physical Distribution...........................................16
3 Relationship of Marketing Sales to Distribution........................................17
2.4 Relationship of Transportation and Ware-Housing to Distribution.............18
2.5 Retailing.......................................................................................................21
2.6 Channel Flow of Distribution......................................................................23
2.7 Types of Channel.........................................................................................24
2.8 Main Channel of Distribution.....................................................................26
CHAPTER THREE: RESEARCH METHODOLOGY
3.0 Introduction................................................................................................27
3.1 Research Methodology................................................................................27
3.2 Method of data collection...........................................................................28
3.3 Sources of Data Collection.......................................................................28
3.3.1 Primary Source........................................................................................28
3.3.2 Secondary Sources..................................................................................29
3.4 Method of data Analysis..........................................................................29
3.5 Method of Investigation............................................................................29
3.6 Sample and Sampling techniques............................................................30
3.7 Questionnaire Design and Collection......................................................30
CHAPTER FOUR : RESEARCH METHODOLOGY
4.0 Introduction............................................................................................31
4.1 Data Presentation and Analysis .............................................................31
4.2 Testing of Hypothesis.............................................................................36
4.3 Research Findings.................................................................................42
CHAPTER FIVE: SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
5.0 Introduction..............................................................................................44
5.1 Summary.................................................................................................44
5.2 Conclusions..............................................................................................44
5.3 Recommendations....................................................................................45
Bibliography...................................................................................46
Appendix........................................................................................47
