CHAPTER ONE
1.1 BACKGROUND OF THE STUDY
Regardless
of how good product may be, it is of little use to customers if it is not found
at where he wants it and when he wants it. For simplicity, we will use the term
“Place” to refers to all the thing that go into providing time, place and
possession utilities that are needed to satisfy target customer just as we use
product to mean total product offered.
Place
decision may be concerned with the location of marketing facilities and the
solution, use of marketing specification including transportation, storage
facilities, wholesalers and
retails.
There
are many definitions of channels of distribution some will be cited because
each definition in it own way conveys a bit about the concepts.
Channels
are methods or system that people use to get information or communicate it to
some specified set of people or individual.
Distribution
means distributing something to some particular set of people.
Channel
of distribution is an organized network of people or organization that performs
all the marketing functions and activities required in ensuring the movement of
good from manufacturers to consumers.
Channels
of distribution is also defined as the growth of intermediaries who move good
from producers to consumers channels are perceived by some group as made up of
intervening agents who facilitates sales.
In
our review, we shall define channels of distribution as the path taken by the
title ownership in moving goods from producer to consumer.
The
Channels of distribution of consumer goods therefore, in its most meaningful
and simple form is the course taken in the transfer of a commodity. This rate
include both the manufacturer and the ultimate consumer as well as anyone in
between this kind of channels. Goods and services cannot be marketed without
the performance of market function.
To
understood this, one has to remember that marketing is the performance of
activities to facilitate exchange processes. Whenever we are talking of
facilitating exchange process, invariably we are thinking of channels of
distribution. It is importance to keep two things in mind.
1.
Channels are coalition of marketing institutions (firms or agencies).
2.
Collectively or independently performing marketing function
(Merchandising, promotion, physical distribution) in order to move goods from
producer to target consumers.
This diagram suggested
form of possible channel.
The first channel (manufacturer to consumer) is a direct
channel of distribution such channels are established when manufacturers sell
through mail order by catalogue or with their own field sales. E.g Aven
Cosmetics.
In another channel,
producers sell to retailers who in turn sell to consumer. This channel
represent the path taken by good handles by departmental stores.
The third channel is
where wholesalers deal directly from the producers to retailer who make the
goods available to target consumer. That is the traditional method where by
goods have been distributed in many countries. It is still the prevalent
retailer such as clothing, specialist shop (hairstyle) drugs etc.
Other channel also
provide different ways of reaching final consumer. These channels suggest
possible ways which has so many possible variations too. The possible variation
should not be seen as a competitive channel. Each should be considered a
separate possible channel to reach a particular target market. Producers may
adopt any one or more to these channels to have their goods reach final
consumer as large quantity as possible. But the channel chosen must deliver
goods and provide all the marketing functions.
1.2 AIMS AND OBJECTIVES OF THE STUDY
The
aims and the project is to examine the distributions channel of consumer goods
and to be able to differentiate between the goods channels in different form.
1.3 SIGNIFIANCE OF THE STUDY
The
importance of examination of distribution channel of consumer goods is to know
how goods are getting to the consumer through the channel of distribution of
middlemen. The distributional channel are the key process through which good
are available for consumer without the channel the goods would not be realize
in so many market.
1.4 SCOPE OF THE STUDY
Perhaps
the most obvious point to note is the fact that this study is selective.
Therefore, it takes a global view of examination of distribution channels for
consumer goods, since the goods produced go through some process of
distribution and enhances distribution channel.
It is
pertinent to point out therefore, that this resulted only to the examination of
distribution channels of consumers goods.
1.5 LIMITATION OF THE STUDY
It is
very important to note that this project does not generally consider the
examination of distribution channels for all goods. But it emphasis basically
to the study of examination of distribution from channels of consumer goods.
1.6 DEFINITION OF KEY TERMS
When
carrying out the exercise of examining distribution channels, evaluation of
certain key terms are borne in mind by the term charged with the responsibility.
Among them are the following.
i. Quality
It
refers to the suitability of an item and its intended purpose. Hence, quality have
include ability and willingness of the suppliers to meet buyers specification.
This refers not only to the total amount of the goods but also the schedule
amount to which goods are required.
Thus,
a channel who might be able to provide the quantity specified would not be a
satisfactory channel from the point of view of quantity.
ii. Price
A
price is the value at which a commodity is acquired. Thus a price is good only
if it is the lowest price offered for a desire quality
and accompanied by sufficient useful services.
iii. Time
The manufacturing of consumer goods is expected to
select a reasonable channel that can meet up with the time schedule for delivery
and take every reasonable action to ensure the product reach the targeted
consumer at appropriate time.
iv. Financial Capacity
If
the supplier of goods through a chosen channel has cash flow problem he may
have difficulty in paying his account subsequently in provision of ware house
this may affect the delivery time and possibly the quality of the goods.
v. Location
The
geographical location of the suppliers is another consideration transportation
from producers to ultimate user is subjected to many risk.