EFFECTIVENESS OF CHANNEL OF DISTRIBUTION IN THE SOFT DRINK INDUSTRIES
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EFFECTIVENESS OF CHANNEL OF DISTRIBUTION IN THE SOFT DRINK INDUSTRIES
ABSTRACT
The study looked at the impact of channel distribution strategy on organisational performance. It specifically looked at whether an intense distribution strategy may assist an organisation acquire a sustained competitive edge, enhance sales, and profitability.
The study used primary data acquired from 30 employees of Nigeria Bottling Company Plc in Lagos state. The primary data utilised in the study were gathered through a questionnaire distributed to respondents.
The study used descriptive statistics and the Pearson product moment coefficient of correlation. The Pearson product moment coefficient of correlation method and the t-test were also used to investigate the relationship between intense distribution, sustained competitive advantage, increasing sales, and profitability.
According to the study, the management of the Nigerian bottling company should be aware that distribution via a stockless platform is a more difficult approach for improving physical distribution than direct delivery.Chapter one
INTRODUCTION
1.1 Background of Study
Distribution refers to the flow of products and services from the producer through intermediaries to end customers. It is made up of people from the distribution routes that transport things from the assembly line (production) to the consumer (consumption).
It entails selecting and maintaining trade channels to ensure that the product reaches the proper market at the right time, as well as developing a distribution system for physically handling and transporting the goods through these channels. It also includes the physical moving of products from one location to another.
The Nigerian Bottling Company plc was established in 1953 to bottle Coca-Cola goods. This contains Coke, Fanta (orange, lemon, and pineapple), Sprite, Schweppes, and Eva Table water. It sells over 15,000,000 bottles of these items per day.
Nigerian Bottling business is a public liability business with a fully paid-up share capital of over 783,740,441, of which Molino soft drinks owns 41%. A- in trust for Leventis Nig., Plc,
with Nigerian investors owning roughly 51% and other international investors owning approximately 8% of the paid-up capital. Its board is made up of nine (9) directors, the chairman of whom is Bashorun A.A. Adesanya.
The company’s registered office is at the NBC House, behind the Mainland Hotel in Oyingbo, Ebute-Metta, Lagos, and it operates from twenty-one (21) bottling plants, thirty-four (34) bottling lines, and 250 depots across the federation. The country is divided into four regions: Lagos, East, North, and West to facilitate operations.
In addition to the aforementioned, the corporation employs over ten thousand (10,000) regular employees, over 1,000 contract workers, and maintains a fleet of 3,500 vehicles, including over 2000 sales stunts and 500 trailers. This corporation is a strong participant and, in fact, the leader in the soft drinks industry, accounting for more than 65% of the market.
Furthermore, this corporation has subsidiaries and associates, such as Delta Glass corporation Plc, which produces soft drink bottles and glassware, Crown Products Limited, which manufactures bottle crowns, and Benin Plastic Company Limited, which manufactures plastic bottle cases.
Furthermore, the company has approximately 400,000 customers (dealers) dispersed across the Federation. It is the greatest producer of carbon dioxide (Co2) gas, which is used to make soft drinks.
1.2 Statement of Problem
To gain a major competitive advantage over other enterprises, any organisation should treat its distribution chain as a whole.
This is especially crucial when the company is planning and designing distribution channels.
Nigerian Bottling Company Plc is a major participant, if not the leader, in the soft drink business (with over 67 percent market share), and there have been inherent and obvious issues with the distribution system. These problems include:
· Conflicts between distribution channels (distributors, wholesalers, and retailers).
· Conflicts arise between wholesalers and retailers.
· Distributors’ failure to follow zonal regulations can lead to conflicts.
· Salesmen divert products during busy periods or seasons.
· Salespeople overprice things during peak periods or seasons.
· Brand assortments are not completed appropriately.
· Preferential treatment and unfair advantages offered to certain channel members by Nigerian Bottling Company Plc staff/salesmen, including distribution fleet management.
1.3 PURPOSE OF STUDY
The goal of this study is to provide answers to the obvious problems that exist in Nigerian Bottling Company Plc’s distribution system. As previously stated, the following objectives will be investigated and given due consideration.
The study will look at the various routes of distribution in the soft drink sector, with a focus on Nigerian Bottling Company Plc, which will serve as the research case study.
It will also address the numerous conflicts that develop among channel members, the reasons of these conflicts, and their implications for Nigerian Bottling Company Plc’s distribution system.
It will determine whether these disagreements have any impact on the channel members themselves or the numerous product lines manufactured by the corporation.
In addition to the foregoing, this research will determine whether customers and consumers are satisfied with the company’s products in terms of quality versus flavour.
The study will also examine the relationship between product demand, pricing, and the current distribution structure. It will disclose whether the current distribution system has met consumer demand and the company’s overall expectations.
1.4 RESEARCH QUESTIONS.
The following questions will be used to evaluate the effectiveness of NBC Plc’s distribution channels. The data analysed will provide a solution to this question.
1. Does successful channel distribution have an impact on the profitability of the soft drink industry?
1.5 Research Hypothesis
Effective channel distribution has no effect on the
Ho: Profitability of Soft Drink Industries Effective channel distribution has a detrimental impact on the profitability of soft drink industries.
Hello: Profitability of Soft Drink Industries Effective channel distribution positively impacts the profitability of the soft drink businesses.
1.6 Limitations of Study
Due to financial and logistical constraints, this study will only be done for the Lagos Region. Additionally, some sellers are unwilling to answer, restricting our sample size.
1.7 SCOPE OF THE STUDY
In this study, Nigerian Bottling Company Plc and its dealers (customers) were chosen to represent the soft drink sector.The decision was made since the company is a major participant in the sector, and in fact, the market leader (with more than 65% market share).
Nigerian Bottling Company Plc is a large company with numerous bottling factories located throughout the country. Because of its huge size and the near impossibility of conducting research throughout the federation, this study will be limited to the Lagos region, which includes three (3) bottling plants: Apapa, Ikeja, and Mushin.
1.8 Significance of the Study
We want to see how important this study is to the company and the industry. After analysing the issues that impede successful product distribution in Nigeria Bottling Company Plc, the findings and following recommendations will be extremely valuable to the company in terms of enhancing its performance.
Furthermore, the study would have larger implications for the entire sector because most firms in the industry may have similar distribution patterns and reoccurring difficulties, such as Nigerian Bottling Company Plc, and the findings of the study may be used by other firms.
This work could be used to inform future research on the same or similar themes.
1.9 Definition of Terms
According to Supervising Route Distribution Effectiveness of Nigerian Bottling Company Plc. (1990), the following words will be employed in this project work:
Channels: A channel refers to merchants and agents’ business institutes that integrate physical and title flow of products to generate useful assortments for specific markets.
Distribution is the act of serving consumers and customers while driving profitable growth.
Wholesaling refers to actions that entail selling to purchasers other than the ultimate consumers.
Retailing refers to the business of selling goods and services to final consumers.
Agents are business units that negotiate the purchase and sale of goods and services.
Customer: This includes wholesalers, retailers, and agents. Consumer
This refers to the last users in the distribution chain.
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