Project Materials

 EFFECTIVE CHANNELS OF DISTRIBUTION AS A STRATEGIC TOOLS IN PURCHASING OF TECHNICAL GOODS

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

For any business to be productive there needs be effective distribution channel or method to transport finished items from the maker to the ultimate consumers. This is because without distribution the best product will not be provided and the marketing mix will break down and fail.

As a result of this, enterprises are increasingly adopting supply chain management to minimise cost, improve market share and sales, and develop excellent customer connections (Ferguson 2000).

The idea of using an effective channels of distribution as a strategic tool in purchasing of technical goods can be viewed as a philosophy based on the belief that each firm in the supply chain directly and indirectly affects the performance of all the other supply chain members, as well as ultimately, overall supply chain performance (Cooper et al, 1997).

The efficient implementation of this philosophy requires that functional and supply-chain partner activities are connected with firm strategy and harmonized with organizational structure, processes, culture, motivation and people (Abell 1999).

Distribution channel consists of a network of individuals or organizations who aid in getting the goods to the right place at the right time. Distribution plays a key role, principally because it eventually affects the sales turnover and profit margins of the firm.

If the product cannot reach its selected destination at the proper time, then it can diminish competitive advantage and client retention.

The retail industry is responsible for the distribution of finished items to the consumer as well as the public. The retail sector comprises of general retailers (run by individuals/families), departmental stores, specialised stores and discount stores.

In practice, many firms utilise a mix of multiple channels; in example, they may complement a direct sales-force, calling on the larger accounts, with agents, covering the smaller clients and prospects.

However, the primary difficulty today facing the retail industry is the power of the customers or purchasers. This is because buyers are growing more knowledgeable and impatient, refusing to wait for the suppliers’ products for any length of time.

This, combined with the fact that firms are now attempting to implement specific distribution strategies or practices based on their unique set of competitive priorities and business conditions in order to achieve the desired level of performance

has resulted in an investigation into the various distribution strategies and practices available with the goal of determining which strategy or practice has the greatest influence on the purchase of technical goods in Nigeria.

1.2 Statement of the Problem

Most producers need middlemen to get their products to market. They leverage a network of interdependent organisations to make a product or service available for consumer or corporate use.

This procedure is known as the distribution channel (Philip Kotler, 2001). Distribution refers to the logistics involved in distributing a company’s products or services to the right place, at the right time, and at the lowest possible cost. In the never-ending quest to achieve these objectives, a company’s chosen channel of distribution is critical.

A well-selected channel provides a major competitive advantage, whereas a poorly conceived or chosen channel can cause even a superior product or service to fail in the market.

1.3 Objectives of the Study

The aims of this investigation are as follows:

1. Investigate the procedures involved in a successful channel of distribution.

2. Identifying the most effective method of distribution can be used strategically when purchasing technical goods.

3. Identify the things to consider while acquiring technical items.

1.4 RESEARCH QUESTIONS.

1. What procedures are involved in an effective channel of distribution?

2. Can an effective channel of distribution be used strategically when purchasing technical goods?

3. What factors should be addressed when purchasing technological goods?