STUDY OF EFFECTIVE DISTRIBUTION CHANNEL, ITS EVALUATION AND IMPORTANCE ON MANUFACTURING GOODS
Need help with a related project topic or New topic? Send Us Your Topic
DOWNLOAD THE COMPLETE PROJECT MATERIAL
STUDY OF EFFECTIVE DISTRIBUTION CHANNEL, ITS EVALUATION AND IMPORTANCE ON MANUFACTURING GOODS
CHAPTERONE
INTRODUCTION
1.0 Background for the Study
Customers are getting difficult to please. They are wiser, more price concerned, more demanding, and less forgiving, and they are contacted by far more competitors with comparable or superior offers.
According to Jeffery Gitomer (2004), the task is not simply to make things or deliver one service, but rather to get these commodities or services closer to consumers in a more satisfactory manner than competitors can.
Companies looking to increase their earnings and sales must devote significant time and resources to finding new clients. To produce leads, the company creates tools and distributes them in ways that reach new items, current buyers, and so on.
However, the necessity of good distribution channels in today’s corporate environment, particularly in the manufacturing industry, cannot be overstated. The challenges of distribution have plagued man for aeons; the problem is so general that it cuts across industries and firms, despite management’s efforts to fix it.
Although the physical transfer of merchandise can be traced back to the most primitive peoples, there was no widespread need to overcome the special separation between production and consumption until labour specialisation became common, and it did not become a priority until the industrial revolution.
On the other side, the producer may want to view the entire route as an offshoot of itself. Distribution refers to the process by which a commodity flows from producer to consumer. Every concept of distribution raises a lot of discussion.
The National Council of Physical Distribution Management of America defines “a term employed in manufacturing and commerce to describe one broad range of activities concerned with the efficient movement of finished products from one end of the production line to the consumer and,
in some cases, the movement of raw materials from the source of supply to the beginning of the production line.” The distribution channels are as follows:
Agents are people who buy or sell on behalf of a company without selling or buying anything other than what the company and the agent agreed upon. They typically make money by accepting commission payments in exchange for arranging business transactions.
Wholesalers are independent traders who sell wholesale to other businesses, either for resale or for business purposes.
Retailers are independent traders who sell or operate “selling at retail” stores to household consumers. Source: American Marketing Association (2006): Mark’s Journals.
1.1 Statement of the Problem
Effective distribution of goods is critical if the country is to run properly. The issues that directly or indirectly affect the distribution system are as follows:
First, the price of things rises as they migrate from manufacturers to consumers. They are handled by a variety of distributors due to the costs involved, such as transportation and handling, as well as the distributive profit.
In addition, bad economic conditions have an impact on the manufacturing sector’s distribution system. However, there is a lack of raw materials, which are required by the manufacturing sector to produce the items that will be distributed.
As a result, it is critical that these issues confronting an effective distribution system be addressed and recommendations made to improve the distribution system. The study attempted to identify the most successful distribution channels, as well as their appraisal and importance in the creation of goods.
1.2 Research Aims and Objectives
The purpose of this study is to investigate and assess the impact of distribution channels on manufactured items. However, the objectives of this study are to:
i. Investigate and critically assess the various avenues of distribution for the firm’s products.
ii. Determine how successful distribution affects the company’s productivity.
iii. Determine what characteristics encourage the effective distribution of the company’s product.
iv. Identify shortcomings in the company’s distribution system and implement corrective measures.
1.3 Research Questions.
This study was aimed to investigate the following research questions:
i. What is the respondents’ profile for an effective distribution channel?
ii. According to the respondents, which are the most effective distribution channels?
1.4 Justification for the Study
The study is not only intended to ensure the successful completion of this initiative, but also to educate the manufacturing sector on the need of effective distribution channels for manufactured goods.
The research study is also significant because:
1. The study will look at how manufacturers are addressing the problems posed by the usage of effective distribution channels.
2. The study will look into the importance of efficient distribution of manufactured items.
3. The study will look into the usefulness and importance of distribution in maintaining the company’s production level.
4. The study will allow us to closely analyse the issue of effective distribution channels for manufacturers.
5. The study will look into the activities of the middlemen (distributors) in connection to manufactured items.
1.5 Scope of Study
This study will be limited in scope to examine the relevance of a successful distribution system for manufactured goods, using Nestle Food of Nigeria Plc as a case study due to its dominant position in the sector.
It is anticipated that the results of the selection of NESTLE FOODS OF NIGERIA PLC will be fairly reflective of the distribution systems of other manufacturing companies.
In light of this, the study will focus on the investigations of:
i. Distributing diverse products from their company to ultimate customers.
ii. The route of distribution being used to influence and improve the distribution system.
1.6 Distribution Assumptions
The following assumptions will be considered when conducting the study on the influence of distribution channels on manufactured items.
1. When used effectively, the distribution channel improves customer demand.
2. When an effective distribution channel is in place, consumers are pushed to become involved with the manufactured items.
3. Effective distribution channels facilitate trade agreements between producers’ items and end customers.
4. Effective distribution channels establish the greatest approach for acquiring trial among non-users, ensuring widespread trial usage of the product.
1.7 Definition of Terms.
The terminologies used in this study have the following definitions:
a. Channels:- This refers to the method or system by which commodities flow from the original producer to the final consumer. It can be defined as the movement of products and services from one location to another.
b. Distributors: These are organisations that have a contract to purchase a company’s goods and services and resell them to third parties.
c. Distribution: The transmission of products from producer to consumer. It can be defined as the movement and handling of things from point of production to site of consumption or usage.
d. Agent:-These are people who buy or sell on behalf of a company without selling or buying anything other than what the company and the agent agreed upon. They typically make money by accepting commission payments in exchange for arranging business transactions.
f. Retailer: These are independent traders who sell or operate “selling at retail” stores to household consumers.
f. Wholesalers: These are independent traders who sell wholesale to other businesses, either for resale or for commercial use.
g. Evaluating: This refers to determining the influence of various distribution channels on manufactured items.
h. Effective: The term “effective” refers to having the desired effect or delivering the anticipated result, hence leaving a lasting imprint on something.
1.8 Overview of Nestle Foods Nigeria plc.
Prior to July 1991, Nestle Foods Nigeria Plc traded under the name Food Specialist (Nigeria) Ltd, according to the organization’s corporate presentation booklet.
The organisation is part of the Nestle group, which is known worldwide for its high-quality products and began simple trading operations in Nigeria over 50 years ago.
Today, the organisation manufactures and markets a variety of food items, including Mico, Nutrend, Cerelac, Golden Morn, Nescafe, Nescao, Maggi Cubes, and Maggi Chicken.
Nestle Foods Nigeria plc’s headquarters are located at 20-24 Industrial Avenue, Ilupeju. The organization’s primary factory is in Agbara, Ogun State. The organisation maintains a distribution hub in Otta, Ogun State. Nestle Foods Nigeria Plc has a national distribution network with headquarters in Lagos and Sokoto.
This organisation appears to have distribution outlets in almost every state in the country. Nestle Foods Nigeria Plc’s products reach the end consumer via a network of registered distributors.
Nestle Foods Nigeria PLC has undergone backward integration and currently generates a significant portion of its raw materials through its agricultural business, Agro Development Nigerian Ltd, Kaduna.
Nestle Foods Nigeria Plc is a joint venture between Nigerians, who control 60% of the company’s shares, and Nestle S.A. Switzerland, which owns 40%.
The organization’s staff headcount as of October 31st, 2000, was 10,371. The organisation maintains an apprenticeship training school in Agbara, Ogun State, where its main factory is located.
Organisation of Nestle Foods Nigeria PLC
Nestle Foods Nigeria Plc’s organisational structure is as follows:
Need help with a related project topic or New topic? Send Us Your Topic