DISTRIBUTION CHANNEL INTENSITY AMONG SACHET WATER PRODUCERS IN EDO STATE - Project Topics & Materials - Gross Archive
DISTRIBUTION CHANNEL INTENSITY AMONG SACHET WATER PRODUCERS IN EDO STATE
ABSTRACT This research sought to examine distribution channel intensity among sachet water producers in Edo state. The main aim is to find out the variables that significantly predict distribution intensity among the firms in the sachet water industry in Edo state.
Using a survey research design, the data generated for this study was obtained through a convenience sample of 110 sachet water firms within the three senatorial district in Edo State. The data obtained were presented and analyzed using the Statistical Packages for Social Sciences (SPSS).
The findings revealed that manufacturer’s target focus, support program, brand quality and level of firm’s technological advancement were significant predictors of distribution channel intensity among the industrial players in sachet water industry in Edo state. Thus these variables accounted for the differences in the distribution intensity among the various sachet water brand in the state.
Based on the findings the study recommended thatsachet water firms within the state can secure a competitive edge over their fellow counterpart in the industry by designing an optimal distribution intensity that will meet up their marketing objectives. And that such optimal distribution intensity could be achieved not by mere imitation of their counterpart but through a care definition and analyses of their target focus, support programs, quality of their brand, as well as the level of technological advancement of the firm in marketing and distribution.Finally the study suggested that further studies be done on the subject matter to confirm the findings of the study with respect to other industries in the consumers market, as well as an examination of the relationship between the distribution intensity and distribution efficiency among the firms in the industry.
TABLE OF CONTENTS
CHAPTER ONE: INTRODUCTION
Background to the Study - - - -
Statement of the Problem - - - - -
Research Questions - - - - - - -
Objectives of the Study - - - - -
Research Hypotheses - - - - - -
Scope of the Study - - - - - -
Significance of the Study - - - - - -
CHAPTER TWO: LITERATURE REVIEW.
2.1 Introduction - - - - - - -
2.2 Theoretical review - - - - - -
2.2.1 Concept of Distribution Channel Intensity - - -
2.2.2 Types of Distribution Intensity - - - - -
2.2.3 Distribution Channel Structure - - - - -
2.2.4 Challenges in Distribution Decision - - - -
2.2.5 Characteristics of Good Distribution System - -
2.3 Determinants of Distribution Channel Intensity - -
2.4 Empirical Review - - - -
2.5 Theoretical Framework - - -
CHAPTER THREE: METHODOLOGY
3.1 Introduction - - - - - -
3.2 Research Design - - - - - - -
3.3 Population and Sampling Technique - - - -
3.4 Sources of Data - - - - - - -
3.5 Operationalization and Measurement of Variables
3.6 Data Collection Instrument and Validation - - -
3.7 Model Specification - - - - -
3.8 Method of Data Analyses - - - -
CHAPTER FOUR: DATA PRESENTATION, ANALYSIS AND INTERPETATION.
4.1 Introduction - - - - - - -
4.2 Demographic Characteristics of Respondents - - - -
4.3 Data Analyses for Dependent and Independent Variables
4.4 Hypothesis Testing - - - - - -
4.5 Discussion of Findings - - - - -
CHAPTER FIVE: SUMMARY OF FINDINGSCONCLUSION AND RECONMMENDATION
5.1 Introduction - - - - - - -
5.2 Summary of Findings - - - - - -
5.3 Contribution to Knowledge - - - - - -
5.4 Conclusion - - - - -
5.5 Recommendations - - - - - -
5.5.1 Suggestions for Further Studies - - - -
BIBLOGRAPHY - - - - - -
APPENDIX I - - - - - -
LIST OF TABLE
Table 3.1 Population of registered sachet water producers in Edo state - -
Table 3.2 shows how the demographic variables in the study are measured -
Table 3.3 shows how the dependent and independent variables in the study are operationalized and measured - - - -
Table 3.3: A priori expectations for distribution channel intensity -
Table 4.1: Demographic characteristics of the respondents - -
Table 4.2 Distribution channel intensity - - - - -
Table 4.3 Manufacturer Target focus - - - - - -
Table 4.4 Manufacturer support programs - - - -
Table 4.5 Manufacturer coordination effort - - - -
Table 4.6 brand quality - - - - - -
Table 4.7 Brand sales volume - - - - - -
Table 4.8 technological advancement - - - - -
CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
Marketing managers of modern day organizations are faced with variety of challenges one of which is the decision about the distribution of the organization’s product (Hamid &Seydeh 2014). Planning for, and making reasonable decisions regarding reaching the target market with an organization’s product is a critical task on the part of management, which involves a careful evaluation and selection of its channel structure and intensity. Getting the right product produced, with the right market price, and backed up with an effective promotional strategy are quite necessary for sustainable competitive advantage. However, these do not guarantee maximum customer satisfaction without these product being delivered optimally and timely to the customer at the right location (Jobber 2009). Thus the central role of distribution within the marketing mix cannot be overemphasized since the inability to get the product to the desired destination will result in loss of customer retention. Given this as the case, the competitive dynamics in emerging and existing markets has moved organizations to direct their focus on the management of their distribution channels as a means of competitive edge (Cônsoli&Neves, 2008).
While channel design and structure may be a major concentration in the course of channel management for most firms, a critical decision that may remain challenging is the determination of the number of intermediary that should be used in the channel, which defines its intensity. Others may include optimum determination of the channel mix, analyses of a channel member contribution, as well as synergies in the channel mechanism (Rosen bloom, 2007). Also the choice of distributors, agents, retailers, franchisers and even the sales force which may be regarded as easy going task has actually become difficult in distribution planning (Yaday&Varadarajan 2005). Planning for all these must be done in the context of the adopted channel intensity (Cho &Ogwang 2007). Distribution channel intensity defines the number of intermediaries in the channel mechanism through whom the product are moved from the point of production to the location of final consumption. Furthermore, the consideration of channel intensity will call for a careful examination of the fitness of individual member in the distribution mechanism. According to Celly and Frazier (1996) “marketing intermediaries must have great market knowledge and be flexible. They must be able to contribute to the manufacturer’s cost and investment”. Undoubtedly, complexities in channel decisions are inevitable for any organization as a result of the divers’ cultural, economic, social, and political variables in place (Seifert & Ford 1989). Nevertheless with the right distribution strategy in place, that is with the right mode of delivery the right speed of delivery to the appropriate place of purchase, customer satisfaction can be significantly increased. Failure to deliver these practical points will result in the loss of orders and income to the company as well as long term decline in customer loyalty (Drummond & Ensor 2001).
Over the past decades the intensity of competition in the sachet water industry has been on a geometric increase. Threat from close substitute such as tap water and juice tend to intensify the competitive tension (Ombui, Kagiri&Assumpta2013), since the producers of these substitute serve similar need of the target market being served by the industrial players of the sachet water industry. Apart from the heated competitive rivalry present in the sachet water industry mainly as a result of new entrants, a competitive advantage on the part of the tap water producers lies in the fact that more quantities of water are being offered in gallons for the same or lower price than that offered by sachet water producers. Given this as the case, a possible weapon that may be used by most producers to secure position, remain operative, and stand tall in the face of competition toward fellow industrial players and substitute product may be through the techniques of distribution.
Studies relating to channel of distribution are numerous in the literature, but only few researchers have paid attention to channel issues relating to intensity and structure (Frazier &Lassar 1996;Gattorna 1978; Rodriguez 2005; Rangan, 1992).Following their respective features in terms of product classes which are categorized into shopping, convenience and specialty product; a selective, intensive, and exclusive distribution are respectively required. Although these classification of product in accordance with their respective distribution intensity approach is highly espoused by most marketing literature, but the issue of heterogeneity in distribution intensity among brands within a single category of consumer goods still remain a vacuum to be filled empirically. Rather researchers in marketing discipline are committed to distribution areas of interest such as conflict in the channel mechanism, customer satisfaction, channel member performance (Gaski; 1996),leaving behind few empirical work on intensity level and channel structure which constitute the backbone of distribution network. Hence this study focuses on the intensity of distribution and develop a framework based on few related empirical studies in existing literature
1.2 Statement of the Research Problem
Within a broad range of consumer goods, producers vary significantly in their approach to distribution of their brands through intermediaries. In other words, for manufacturers of consumer goods within the same product line, the level of intensity used by a producer for his brand differs significantly from one producer to another, irrespective of the fact that the same channel structure may be adopted. While several studies have elaborated on distribution decision of established domestic and multinational companies, as well as the dynamics and causes of multichannel conflicts (Cunningham, 2013;&Gaski, 1984), there is only very limited knowledge on what factors determine the level anddifferences in distribution intensity among producers, in distributing their product. In other words, why are brands within a single category of a given consumer good differ significantly in their distribution intensity? This portrays a significant research gap in the literature indicating the little attention which has been given to channel intensity in academic research. To fill this gap, this study centers on empirically testing a set of antecedents based on previous studies that predicts the degree or level of a distribution channel intensity among selected manufacturers of a product line of consumer goods intensively distributing their brands in a geographical area. Empirical studies in existing literature proposed variables such as target focus, support programs, and coordination effort of manufacturers; as well as the quality and sales volume of the brand as likely determinants (Frazier &Lassar1996). The essence of this study is to ascertain in an empirical manner if, and to what extent these variables have both singularly and collectively predict the level of channel intensity among producers of sachet water in Edo state.
1.3 Research Questions
Based on the above problem statement, this study seeks to give answers to the following research questions;
1. Is manufacturer’s target focus a significant predictor of distribution channel intensity among sachet water producers in Edo state?
2. Is manufacture’s support programs a significant predictor of distribution channel intensity among sachet water producers in Edo state?
3. Does manufacturer’s coordination effort significantly predict distribution channel intensity among sachet water producers in Edo state?
4. Is brand quality a significant predictor of distribution channel intensity among sachet water producers in Edo state?
5. Is brand sales volume a significant predictor of distribution channel intensity among sachet water producers in Edo state?
6. Does technological advancement of a firm significantly predict distribution channel intensity among sachet water producers in Edo state?
1.4 Objectives of the study
The main aim of this study is to examine the distribution channel intensity among sachet water producers in Edo state. The specific objectives are:
1. To ascertain if manufacturer’s target focus is a significant predictor of distribution channel intensity among sachet water producers in Edo state.
2. To find out if manufacture’s support programs significantly predict distribution channel intensity among sachet water producers in Edo state.
3.To investigate if manufacturer’s coordination effort is a significant predictor of distribution channel intensity among sachet water producers in Edo state.
4. To find out if brand quality is a significant predictor of distribution channel intensity among sachet water producers in Edo state.
5. To determine if brand sales volume is a significant predictor of distribution channel intensity among sachet water producers in Edo state.
6. To investigate if technological advancement is a significant predictor of distribution channel intensity among sachet water producers in Edo state.
Research Hypotheses
This study proposes to test the following hypotheses:
1. Manufacturer’s target focus is not a significant predictor of distribution channel intensity among sachet water producers in Edo state.
2. Manufacturer’s support programs is not a significant predictor of distribution channel intensity among sachet water producers in Edo state.
3. Manufacturer’s coordination effort is not a significant predictor of distribution channel intensity among sachet water producers in Edo state.
4. Brand quality is not a significant predictor of distribution channel intensity among sachet water producers in Edo state.
5. Brand sales volume is not a significant predictor of distribution channel intensity among sachet water producers in Edo state.
6. Technological advancement does not significantly predict distribution channel intensity among sachet water producers in Edo state.
1.6 Scope of the Study
This study seek to examine the variables that significantly predicts distribution channel intensity among producers of sachet water. In the course of this research, the researcher tends to limit the geographical coverage of the study on producers of sachet water in Edo State. The proposed time frame for the completing the study was 7months from January to July. This time period was considered by the researcher to be long enough to embark on the study and analyses of the related sets of variables that will enable the achievement of the objectives of the study.
1.7 Significance of the Study
The findings of this study will be of a priceless benefit to various producers of sachet water in Edo state and other producers operating on different lines of product in the consumers market. The generated results and their corresponding interpretations will make room for these industrial players to fully exploit their competitive advantage by developing appropriate distribution strategies that will optimize operations and facilitate customer loyalty, and enhance profitability; whileensuring best environmental practices are maintained. Furthermore the findings are also intended to identify areas where correctiveaction will be necessary particularly with reference to strategic and tactical decisions being considered regarding channel structure and intensity for existing and potential brands.
Finally the study will also be of immense benefit to potential researchers by providing background material for future research in other sectors or industries, highlighting current trends on distribution practices, and constitute an appropriate source of secondary data for literature review.
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