Improving Distribution Effectiveness In Marketing Operations ( A Case Study Of Coca Cola Company In Lagos )
ABSTRACT
This research examines improving distribution effectiveness in marketing operations usins Coca Cola company in Lagos. The objectives of the study includes ascertaining the effect of government policy on the distribution effectiveness of Coca Cola, the effect of channel members on the distribution effectiveness of Coca Cola and the effect of poor road network on the distribution effectiveness of Coca Cola. Literatures that gave thorough insight into the concept of distribution, types of distribution, the channels of distribution, transportation, the soft drinks industry and an overview of the Coca Cola company were reviewed in chapter two. Survey research design was used for this study, a sample size of 40 respondents was chosen from the population, data was collected with the use of questionnaires administered using purposive sampling and the data collected was analyzed using the simple percentage method. The findings of the study show that government policies, channel members and poor road network do affect the distribution effectiveness in marketing operations. And finally the researcher recommended that the company should have warehouses spread across the country for easy distribution, channel members should be motivated to do more with gift or discounts and government should construct and repair bad roads and also formulate policies that can help companies distribute their products with ease.
TABLE OF CONTENTS
TITLE ——————————————————– i
CERTIFICATION ————————————————– ii
DEDICATION ————————————————– iii
AKNOWLEDGEMENT ——————————————– iv
ABSTRACT ——————————————————– v
TABLE OF CONTENTS ——————————————– vi
CHAPTER ONE: INTRODUCTION
1.1 Background of the Study ————————————- 1
1.2 Statement of the Problem ————————————- 4
1.3 Research Questions ——————————————- 4
1.4 Objective of the Study ————————————– 5
1.5 Significance of the Study ————————————- 5
1.6 Scope of the Study ——————————————- 6
1.7 Limitations of the Study ————————————- 6
References ——————————————————- 7
CHAPTER TWO: LITERATURE REVIEW
2.1 Introduction ————————————————– 8
2.2 Distribution ————————————————- 8
2.3 Types of Distribution ——————————————- 11
2.4 Distribution Channel ——————————————- 15
2.5 Transportation ————————————————- 18
2.6 The Soft Drinks Industry ————————————- 19
2.7 Overview of Coca Cola —————————————— 20
References ——————————————————- 21
CHAPTER THREE: METHODOLOGY
3.1 Introduction ————————————————– 24
3.2 Research Design ——————————————– 24
3.3 Population of the Study ————————————- 25
3.4 Sample Size ————————————————– 25
3.5 Sampling Technique ——————————————- 25
3.6 Sources of Data ————————————————- 26
3.7 Method of Data Collection ————————————- 26
3.8 Data Analysis Technique ————————————- 27
References ——————————————————- 28
CHAPTER FOUR: RESULTS, FINDINGS AND DISCUSSION OF FINDINGS
4.1 Introduction ————————————————– 29
4.2 Results ——————————————————– 29
4.3 Findings ——————————————————– 39
4.4 Discussion of Findings ——————————————- 39
CHAPTER FIVE: CONCLUSION AND RECOMMENDATION
5.1 Introduction ————————————————– 41
5.2 Conclusion ——————————————————– 41
5.3 Recommendations ——————————————– 42
5.4 Suggestions for further studies ——————————— 43
Bibliography ————————————————– 45
Questionnaire ————————————————– 48
CHAPTER ONE: INTRODUCTION
- Background of the study
The American Marketing Association defines marketing as an organisational function and set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organisation and its stakeholders. Thus, marketing starts with identifying consumer needs, then plan the production of goods and services accordingly to provide him the maximum satisfaction. In other words, the products and services are planned according to the needs of the customers rather than according to the availability of materials and machinery. Not only that, all activities (manufacturing, research and development, quality control, distribution, selling etc.) are directed to satisfy the consumers. In the theory of marketing mix, place (distribution) determines where the product will be sold and how it will get there (Kotler, 2001). Griffith and Ryan (1996) hold that distribution channels evolved through the utilization of national resources contained within an area of trade. The need to move the resources to other areas where they were in demand brought about the need for distribution channels. A channel of distribution comprises a set of institutions which perform all of the activities utilised to move a product and its title from production to consumption.
Distribution is the process of planning, implementing and controlling the physical flow of materials, final goods and related information from point of origin to point of consumption to meet customer requirements at a profit (Phillip Kotler & Amstrong 2001). It is the marketing function responsible for movement of products to the final users. It could be said that production is not complete until the goods reach the final users and for this to be accomplished, manufactured goods have to pass through distribution channels. For any organization to be effective there should be effective distribution management process to convey finished products from the manufacturer to the final consumers. This is because without distribution the best product will not be delivered and the marketing mix will break down and fail. Distribution also involves the planning and implementation of physical flow of materials and final goods from the point of production to the point of use to meet consumer needs at a profit on the side of the marketer (Gong, Law, Chang & Xin, 2009). The link between entrepreneurship and distribution is that any production without effective distribution system is useless because the produced goods do not gain any utility until the final consumer derives some level of satisfaction after using them. Researchers have credited distribution channels with the following roles: promotion (Jantan, Ndubisi & Ong, 2003); matching (Kearney, 2000a); negotiation (Ndubisi, Jantan & Ong, 2003); financing (Jantan, Ndubisi & Ong, 2003); and risk-taking (Ndubisi, Jantan, & Ong, 2003; Kearney, 2000a;). The level of the economy has put distribution into a less important position and scarcity or short supply of products. Most management today are interested on profit maximization without due attention to the effect of distribution on the company and economy as a whole. This calls for the need for this research work to research intensively on the assessment of the effectiveness of the distribution strategies of the coca cola company. Coca cola has made considerable progress in the area of products development to meet international standard and effective marketing to meet customers taste satisfactorily at reasonable profit. The distribution channel of the company need to cover areas/markets not yet served and under-served by current efforts (current level of distribution) with the aim of improving market potentials and market share. Infact, marketing channel decisions are among the most important decisions that management faces. A company’s channels decisions are linked with every other marketing decision. Companies often pay too little attention to their distribution channels, however, sometimes with damaging results. Therefore, management must design its channels carefully with an eye on tomorrow’s likely selling environment as well as today’s. The importance of distribution cannot be over-emphasized no matter how the economic position of the country looks like.
Transportation is the pivot of the successful operation of any physical distribution system. Choice and type of transportation therefore becomes very important since the objective is to make the products available to consumers as at the right time. The poor road network has hampered the effectiveness of distribution and railway mode of transportation which would have provided an alternative transportation, has not been functional for sometime now which contributes to the high transportation cost. Therefore, this research work will be to “Assess the effectiveness of distribution strategies of Coca cola and recommend ways to improve it.
1.2 Statement of the Problem
This study investigated the distribution effectiveness in the marketing operations of Coca Cola company in Lagos which was used as a case to accomplish this study. The effect of government policy, channel members and poor road network on the distribution effectiveness of Coca Cola company was investigated.
Coca-Cola is faced with both a competitive and dynamic market setting, though the company is doing many things to maintain its leadership role in the industry. The company has also adopted both direct and indirect distribution channels as the basis for its sales operations. It has become necessary for the company in order to continue informing and reminding its customers on how its services are different from the others in the market. As a result, the management of distribution strategies (both direct and indirect) for carbonated soft drink businesses is a daunting task in today’s environment. The problem assumes even greater importance given that distribution spending is typically the largest non-production expense that Coca-Cola experience. According to East Africa business journal (2012), distribution accounts for nearly 17% of non-operating expenses. Distribution spending varies significantly by industry, and the customer base in relation to geographical distribution.
1.3 Research Questions
This study seeked answers to the following research questions:
- Does government policy influence the company’s distribution effectiveness?
- How does the channel members affect the company’s distribution effectiveness?
- Does poor road network affect the company’s distribution effectiveness?
1.4 Objectives of the Study
The main objective of the study was to investigate and improve the distribution effectiveness in the marketing operations of Coca-Cola company. Thus, the specific objectives of this study were:
- To assess the effect of government policy on the company’s distribution effectiveness.
- To determine the effect of channel members on the company’s distribution effectiveness.
- To assess the effect of poor road network on the company’s distribution effectiveness.
1.5 Significance of the Study
This study determined the distribution network created by the Coca Cola Company. It gave an idea on improving the distribution channels in order to improve the efficiency of the distribution network, in creating awareness and customer loyalty. Coca Cola management and stakeholders can benefit from the study as it will shed light on the distribution system of the company. This could guide them as they improve the distribution channel management and operations.
Researchers and scholars can use this information to add to their understanding of distribution channel systems. The study provides foundation and material for further related research. It also contributed to the growing body of knowledge in the field of marketing. The study could also provide a good basis for future research on distribution channel activities of the industrialists.
1.6 Scope of the study
This study focused on improving the distribution effectiveness of the coca cola company in Lagos state. This study was restricted in scope to a survey of the opinion of the following target group:
- Management and staff of the coca cola company in Lagos State.
1.7 Limitations of the study
In the process of this study, the researcher encountered some challenges that affected the overall outcome of this work. These problems included insufficiency of secondary data, lack of sufficient fund, inability to access the required offices for the collection of necessary materials, inability to access some relevant but encrypted sites online due to high cost of online registration, poor response from respondents, insufficient time and other unexpected distortions that surfaced during the course of the study.
References
Griffith D.A. & Ryan J.K., (1996). “Natural channels in global marketing” Journal of Marketing Practice, 1, (4), 52-53 Vol 1.
Gong, Y., Law, K. S., Chang, S., & Xin, K. R. (2009). Human resources management and firm performance: The differential role of managerial affective and continuance commitment. Journal of Applied Psychology, 94, 263-275.
Jantan, M., Ndubisi, N.O. & Ong, B.Y. (2003). Viability of E-commerce as an alternative distribution channel, Logistics Information Management, 16(6), 427-439.
Kearney, A.T. (2000). Consumers, retailers, manufacturers in the Economy, http://www.atkearney.com/main.taf
Kotler, P. & Armstrong, G. (2001), Principles of Marketing, 9th Ed, New Jersey: Prentice – Hall Inc.
Kotler, P. (2001). Marketing management: Analysis, planning and control. New Jersey: Prentice Hall, Engle Wood Cliffs.
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