CHAPTER ONE
1.0 INTRODUCTION
1.1 BACKGROUND OF THE STUDY
An assessment of the strategies used in bottling/manufacturing industry (a case study of Nigeria bottling manufacturing company) in owerri urban with particular reference to coca-cola production. The consumption of coca-cola product cannot be over emphasized in Nigeria and also in most countries of the world as a multi-national company. Frankly speaking and in the interest of mankind. The image of soft drinks manufacturing in the country today has been nothing to be proud of. Their distribution system has been mostly chiastic marketing has this divergent processes; the first process deals with production of goods and the second process deals with physical distribution of the goods. Experience has shown that knowing the increased competition for consumer, most entrepreneurs and industries as well as their time marketing executive have devoted bulk of their time note only in the search for stimulation function in mind, their attention was focused on developing what would keep demand high and growing.
They have however, viewed logistics of getting goods to the buyers as a supportive and subsidiary activities since users of the product are prepared to spend their time and money in search for the product invariably the producers has to ensure that the product are actually available to the distribution outlets, in other wards there is need for proper management of the product from the manufacturer to the ultimate users.
Producers of mineral drinks should endeavor to discover that the users of their products are scattered all over the country. In this vein they should decide ways of moving their products to the end users the right time, right quantity and at the right place the firms decision on the distribution of its products directly. Through their own sales outlets or directly through intermediaries such as whole sellers and retailers is not enough to yet the products to the final users. The firm should also ensure that adequate cares of the product are taken to minimize losses or damages. Through the efficient planning and coordination of physical distribution activities which will make goods available at the right time, right quantity and that the right place and also help the firm to achieve their commercial goals and objectives.
Besides, the attainment of these goals and objectives falls into the realm of the assessment of strategies in the distribution system. An effective customer is nothing without physical distribution system according to management expert Peter Druker; he defined physical distribution as a management function which involves the efficiency movement of raw materials in process inventory and finished goods from source to the point of end use customers attractions and satisfaction are highly influenced by sellers physical distribution. Capacity, as such the issue of physical distribution is very crucial in business.
Because of the need of physical distribution in business many authors gave definitions and meaning according to their own understanding about it. According to American management association Inc. (1960:7) defined physical distribution as movement of finished products from the end of production line to the ultimate users. According to Kolter and Amstrony (2004; 419) physical distribution is defined as “the planning, implementing and controlling the physical flow of raw material, final goods, services and related information from point of origin to point of consumption to meet customers requirement at a profit physical distribution consists of all the activities concerned with moving the right amount of right product to the right place at the right time (Udoh 2006:8)
The set of tasks involved in planning and implementing the physical flow of materials and goods from point of origin to the point of use to meet the physical distribution in the mineral drink industries should be intensive. However soft drink producers should stock their products to many outlets for easy assessment of the product to the final consumers. Physical distribution of mineral drinks is very vital to own sales maximize profit through quick. Turnover, and also complete effectively. Failure to plan distribution will result in sub optimization of profit situation, simply because there will be reduction in sales or low pale of supply of the product to the ultimate users in other words users do not like to stress themselves in search for the product.
Furthermore, assessment of strategies used in the distribution can read to wide variation and frequent changes in price situation which discourage bland loyalty. This will result to loss of customers and is such will bring about low sales. Therefore physical distribution of mineral drinks is very important to gain sales and also should be coordinated properly to coca-cola product study the evolution of strategy used in their distribution because it is acknowledged as the leader of mineral drink since it has the largest sales share in the relevant competitive products.
1.2 STATEMENT OF PROBLEM
In Nigerian bottling company, physical distribution is a very significant aspect of the distribution activity as it set the stages of possession and little utilities all geaved towards customers satisfaction for this reason there are need for careful handing of physical distribution functions for a successful operation of soft drink industries. However, for Nigeria bottling company (NBC) physical distribution system to be near perfection, it must rate highly in it’s core activities such as transportation, warehousing, inventory management order processing and also have the ability to organize this mix of activities property and implement it efficient and effectively.
Sales men ordinarily raise the cost of the bottled drinks sold to intermediary market, therefore reducing their sales margin. Does the degree of the wholesales margin affect the final consumer?
Do customers yet enough of the products at the right time? Do the sales men direct some products already allocated to the company’s customers?
Does the distribution of mineral drink have a direct relationship with that of sales turnover? A negative response of any of those questions will indicate that there is derivation from what should be normally obtain the desires we the reasons for undertaking this research work involves
– Nigeria Bottling company (NBC) obtains a high cost at transportation
– Criticisms of the company distribution policy
– Inadequate transportation and storage facilities
– In effective distribution towards customers satisfaction
1.3 OBJECTIVES OF THE STUDY
This research has some objectives in consonance with their macro objectives to determine the effectiveness of physical distribution of coca-cola products in Owerri urban and endeavor to find out if these activities are performed as expected others are:
– To determine the nature of the market
– To determine the extent to which the distribution if coca-cola relates with the sales being made
– To find out the type of strategy that will be suitable in supply of coca-cola production to their customers
1.4 RESEARCH QUESTIONS
The research question for this work are based on the following
– What are some problems encountered in the distribution of coca-cola product within urban?
– How does physical distribution contribute in the overall growth and effectiveness of the entire operation of the company?
– What type of strategy or channel do you use when supplying finished products, and type of transportation model necessary for physical distribution of coca-cola product.
– What type of strategy structure is best for distribution of final products?
– Who controls the stores unit? To whom does the report go to after distribution (returns)
– Who initiates and in what circumstances can the exercise be carried out?
1.5 STATEMENT OF HYPOTHESIS
The following research hypothesis will be tested
1. Ho: There is no effective distribution of soft drink products to customers and consumers.
Ho: There is effective distribution of soft drink products to customers and consumers.
2. Ho: Transportation cost is not a limiting factor in
distribution of soft drinks.
Ho: Transportation cost is a limiting factor in
distribution of soft drinks.
3. Ho: Conflict between retailers and distributors has no effect on distribution channel or system in soft drink industry.
Ho: Conflict between retailers and distributors has effect on distribution channel or system in soft drink industry.
1.6 SIGNIFICANCE OF THE STUDY
The relevant of the significant of physical distribution to traceable to growing uncertainties in the world market for materials. Method must be improved because. Today’s recipe for success can be tomorrow keep abreast with economic growth and political instability in the would market as to alert product shortage to idle time and price inflation. Another dimension is that distribution decision is taken on promises of rapid technology update with distribution to the completion of distribution objective. Basically, the benefit of this study to Nigeria bottling company Owerri includes the following:
– Through this work student of purchasing and supply department will know and understand the impact of physical distribution in the achievement of distributive objectives.
– The NBC will understand the need to apply distribution activities around the company.
– To understand the distribution strategy that will help to determine good and effective supplies
– For other companies to learn and emulate the application of strategy for distribution of final product.
– It enables the company to understand the need for physical distribution function.
1.7 SCOPE OF THE STUDY
The scope of this research work was conducted in owerri urban, which is divided into various groups viz A, B, C, D, E to find out the physical distribution system for company’s products. The groups are further classified into the following
Group A – Amalum
Group B – Umuovims
Group C – Umuodi
Group D – Umuororju
Group E – Umuayache
1.8 LIMITATION OF THE STUDY
This research work “An assessment of the strategies used in distribution of coca-cola products “when being carried out had a lot of constrains on the researcher, since it is a study based purely on the company. It therefore believes on the researcher to restrict himself on this particular industry, but not within the knowledge of their various distribution and customers scattered al over its geographical areas of sales in the eastern zone.
The limitation however owing the very limited time, the present economic situation and financial problems in the country now, there were many more information which the write should have sought from distributors but due to the extent of bureaucracy or official protocols was hindra. To indicate some vital information for instance. The time it took the marketing department to issue their distribution list.
My interviews with so many officials were intermittently disrupted by occasional callers to the plant or factory: these were included among the problem the researcher encountered in the hours of carrying out this research work.
1.9 DEFINITION OF TERMS
Physical distribution: This is the movement of finished gods/raw materials from point of origin to point of consumption to meet customer’s requirements
– Transportation: Movement of goods from the point of production to the selling point.
– Per shipment: Inspection of goods is classified according to types and their rates or duty.
– Communication: The process by which information is basically by a previous accepted symbol.
– Warehousing: A place of loading and unloading of goods both in the central stores and the depots of empties and bottled products.
– Inventory: This simply is the amount of goods stored in a store house.
– Freight: The charge made on transportation of goods.
– Inter modal: Is a competition which exists between several providers of services, with a particular mode of transport.
CHAPTER ONE
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