CHAPTER ONE
INTRODUCTION
1.1
BACKGROUND OF THE STUDY
Production is uncompleted until the
good get to the final consumer whom they are meant. A typical firm will deliver or discover that
the consumer for its products are scattered abroad.
The firm decision to distribute its
products directly through own sales outlets or indirectly through marketing
intermediaries such as wholesale and retailers alone is not enough to get the
goods to the consumers. The firm has to ensure that the product are actually
available or make available to the distribution at lets.
Adequate core has to be taken of
the products minimize losses or damages, and commensurate customer service have
to be given in order to achieve customer satisfaction and increase patronage.
In order management of the flow of
products from manufacturer to consumer with aim to achieve consumer
satisfaction and goal of the firm, physical distribution must be properly
channeled to this respect. The increase emphasis given to the concept of the
1950,s is a practical example of its immense contribution to the successful
achievement of marketing goals. Physical distribution is just how companies
store; handle more goods so that they will be available to consumers at the
right time and place.
Consumers attraction and
satisfaction are highly influence by the seller physical distribution
capabilities. As such the issue of physical distribution is important in
business endeavour. An executive physical distribution which result to a
reduction in cost of physical distribution will lead to a reduction in
production cost or product price, which will invariably head to the attraction
of many price conscious consumers.
In Nigeria and as well as most
other nations, industries are localized or concentrated in few industrial
cities or layout wile the consumers or their products are scattered abroad.
Efficient transportation and
location of sales outlets will enable industries to make their products
available to consumer living very far. Efficient transportation and physical
can give a company advantage in being close to these consumers.
For example, vita malt drinks
produced by Associated Breweries Ltd. In Ogun State of Nigeria compete
favourably with other malt drinks in virtually all ports of the country as a
result of the efficient planning and coordination of physical distribution
activities which make goods available at the right place and time or where
right place and needed.
Expert believe that substantial
savings can be gain in the physical distribution area which has been describe
as “the last frontier for cost economics” (Journal of marketing April 1962:15)
Physical distribution in the sachet
industries should be intensive they should stock their products in as outlet
are possible. The goals must have place utility. Cigarette for example, since
over one million outlets to maximized brand exposure and convenience.
Physical distribution should be
intensive because consumers are not efficient distribution of the product is
very important to gain marketing goals and to compete efficiently and
effectively too.
1.2
HISTORICAL BACKGROUND OF THE COMPANY
Charis sachet water industry one of
the leading name in sachet water industry in Enugu Metropolis. The company is
located in heart of the commercial city of Enugu J.E Collince company was
establishes over a decades with improved capacity physical distribution of
their products.
The company has so many distribution
outlets and target geographical areas. The J.E. Collince the makers of Charis
sachet water was among the largest sale sachet water in the industry in Enugu.
The profitability and success of
the company can be clearly traced as they are heavily patronized in the
competitive business.
The company is located in heart of
Enugu metropolis (River Asata layout). The company have a brand name Charis
water which the production site is in No. 3 Mildland Avenue, Asata River layout
Enugu.
1.3
STATEMENT OF PROBLEMS
Physical distribution is a very
important aspect of distribution activity as it creates place and time utility
and set the stage for possession and title utility. All gained towards
customers satisfaction.
Based on this therefore, there is
need for a careful handling of the physical distribution functions for a
successful operation of sachet water industries.
However, for
Nigeria sachet water industries physical distribution system to beat lest near
perfection. It must rate highly in its care activities such as transportation,
warehousing, inventory management, and others.
Processing
also have the ability to organize these price of activities properly and
implement them efficiently and effectively, at time the salesman are not
efficient in carrying out their physical distribution activities.
More so, the
salesmen arbitrarily raise the cost of each buy of sachet water sold to
intermediary, market thus reducing their margin some times the degree of the
wholesalers margin affect the final customers. In some cases, the customers do
not get enough of the products at the right time and in the right quality.
In the case of
Charis sachet water industry they don’t have enough outlets for their product.
Nevertheless, for them to compete effectively and efficiently with other sachet
water company’s they need to have enough outlets for their products.
In most cases,
the salesman direct some products already allocated to the company’s customers.
More so, the distribution of Charis sachet products have a direct relationship
with sales turnover it enjoys.
A negative
response to any of these points will indicate that there is deviation from what
should normally obtain. The desire to find out if any of such problem exist,
their cause effect and what may be done to resolve such problems are the
reasons for undertaking this research work.
1.4
OBJECTIVE OF THE STUDY
In consonance with the macro
objective to determine the effectiveness of physical distribution of Charis
product in Enugu metropolis, this research has some objective which includes;
To study the physical distribution
activities of Charis sachet water in Enugu and try to find out if these
activities are well performed as expected.
Analyzing the present physical
distribution system with the aims to accessing its level of efficiency is
another point.
To determine the nature of the
market; if it diffused, concentrated or dusted.
To also determines the extent to
which the distribution of Charis dates with the sale being made.
1.5
SIGNIFICANCE OF THE STUDY
It is important to study the
effectiveness of physical distribution because without distribution companies
cannot make sales.
The old buying in marketing was,
that when you produce the product the whole world will bit a part to your door.
In the modern time, it dose not apply because the place utilizing must be
incorporated. This means that in addition to producing the best product, the
customers must be communicated and they may want it delivered at a given time,
place and form and such it the function of physical distribution.
Non- durable products such as
Charis sachet water have to be supplied as at when needed. Any short fall in
performance will reduce the level of customer service.
Thus it become important to study
the physical distribution system and benefit from this effective they are and
uncover and defects inherent within the system and then recommend measures to
reduce or eliminate these defects.
Furthermore, it is expected that
findings of this study will help the management and distribution of this
company in improving their business activities. Customers will also benefit
from this efficient physical distribution in that Charis product which will be
made more ready available to them at all time.
1.6
LIMITATION OF THE STUDY
There is the problem of lack of
time. The work is very elaborate yet we have very limited time to accomplish it
and with other tight schedules. However, because of the importance of the
subject matter, we are able to carry out a justifiable work from where
dependable generalizations could be made again, there was there problem of
financial constrain of the nations economic crunch.
The high cost of transportation to
this company under study was also hindrance in the sense that most time the
researcher had to repeat his visit twice or thrice a week before getting the
information required. Also the consideration.
1.7
RESEARCH QUESTIONS
The research question for this work
will be base on the following.
What is the size of demand for
Charis waters? Are customers satisfied with the present level of physical distribution
service of Charis?
Does Charis has enough distribution
outlet to satisfy the customers. What is the distribution objective of Charis?
What presentation of market is Charis serving? What is the type of Channel
structure used by Charis? Is it from the produceto the customers or with the
use of intermediaries? Does the distribution strategy questionnaire regular and
fulfill the issue of time lines is it effective in terms of cost and
distribution objectives.
1.8
STATEMENT OF HYPOTHESIS
THIS WORK IS BASED ON THE FOLLOWING HYPOTHESIS:
1.
H0: Charis water has very wide demand in Enugu
metropolis.
Hi: Charis water dose not have wide
demand in Enugu metropolis
2.
H0: Charis water are distributed to every point where
they are needed at the right time and quantity.
Hi: Charis water are not
distributed to every point where they are needed at the right time and
quantity.
3.
H0: Customers are satisfied with the present level of
physical distribution service they receive.
H1: Customers are not satisfied
with the present level present level of physical distribution service they
receive.
1.9
DEFINITION OF TERMS
TRANSPORTATION: Is the movement of goods from the point pf
production to the point of sale.
STORING:- Is the marketing function of holding goods. It
provides time utility.
INVENTORY: Is the amount of goods being stored.
PHYSICAL DISTRIBUTION: The
transportation and sorting of the goods.
WAREHOUSING:- Is a place for load
and unloading of products both in the central stores and the depot of Charis
waters.
COMMUNICATION:- It is the process
by which information is passed by a previously accepted symbol.
CONTACT:- The searching out and communication with
prospective buyers.