THE PROBLEMS AND PROSPECTS OF DISTRIBUTING PAINTS IN NIGERIA
(A CASE STUDY OF BERGER PAINT NIGERIA PLC)
ABSTRACT
This study explores the problems and prospects of distributing paints in Nigeria with Berger Paint Nigeria Pic, as its “case study. The study considers whether the middlemen shouldbe influenced to avoid undue charging of high prices and hoarding, whether selection of the night middlemen has relevance in the effectiveness of the company’s distribution system, whether nearness to depot location should be considered in appointing distributors and whether the concept of order processing cycle satisfies the requirement of an effective distribution system. The tests of hypotheses conducted reveals that the distributors should be influenced, effective selection of the distributors should be conducted, location of depot should be considered in appointing distributors while the concept of processing cycle satisfies the requirement of a good distribution system. The study recommends that the financial capability of the applicants for, distributorship of the company’s paints should be considered before appointments are made. The study also notes that depotlocation, knowledgeable and financially strong distributors are essential for profitable performance.
TABLE OF CONTENTS
Title Page i
Certification ii
Dedication iii
Acknowledgement iv
Abstract vi
Table of Contents vii
CHAPTER ONE: INTRODUCTION
1.1 Background of the study 1
1.2 Purpose of study 2
1.3 Research of hypotheses 2
1.4 Significance of the study 3
1.5 Scope of study 4
1.6 Research problems 4
1.7 Foreseeable limitation 4
1.8 Historical background of the company 5
1.9 Definition of terms 7
CHAPTER TWO: LITERATURE REVIEW
2.1 Introduction 8
2.2 Definitions of salient terms 8
2.3 The need for distribution channel 9
2.4 The nature of distribution channel 11
2.5 Middlemen selection and performance evaluation 14
2.6 Conflicts and cooperation in the distribution channel 18
2.7 Distribution channel policy decision 20
2.8 Reference 22
CHAPTER THREE: RESEARCH METHODOLOGY
3.1 Introduction 23
3.2 Research design 23
3.3 Sources of data 24
3.4 Sample plan 26
3.5 Sampling procedure 29
3.6 Research instrument 30
3.7 Reference 36
CHAPTER FOUR: DATA PRESENTATION
4.1 The summary of the questionnaire 37
4.2 Test of hypotheses 43
4.3 Research finding 52
CHAPTER FIVE: DISCUSSION OF FINDINGS, SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.1 Discussion of research findings 55
5.2 Summary 56
5.3 Recommendation 57
5.4 Conclusion 60
BIBLOGRAPHY 60
APPENDICES
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Distribution involves the transfer of goods and their title to the ultimate buyers by the manufacturer.
This is a research work, which aims at analyzing the distribution system of Berger Paints Nigeria Pic. The task of distribution is to make goods physically available from the producers to the buyers and this bridge the gap of space and time between the production process and the consumption process.
Hence, the selection and efficiency of the distribution channel of a firm is one of the most critical factors that determine the company’s marketing success. In fact, the importance of distribution cannot be over emphasized as one of the marketing mix because without this, anything produced by the producers cannot get to the final consumers. With differentlines of paints produce by this company this study intends to pay attentions to the distribution of decorative paints.
Since distribution brings goods and service nearer to the markets, it therefore means that it plays a vital role in profit level of any organization. Distribution of product is important and necessary for a company’s existence because it also prevents products obsolescence overstocking and under stocking.
1.2 PURPOSE OF STUDY
The purpose of carrying out this study is to emphasis on importance of distribution in Berger Paint Nigeria Pic, the problems and prospects of distributing paint in Nigeria.
Also, to examine how effective distribution provide sound and authentic solution to the problems.
It is also important to identify the factors influencing the company’s choice of distribution channel for its product in spite of the numerous ones.
1.3 RESEARCH HYPOTHESES
The following hypotheses shall be tested in other to provide sound and authentic bases for identifying the problems and proffering relevant solutions.
a. That the middlemen be better motivated, so that effective control be taken in order to reduce high prices and hoarding.
Ho= That motivation of middlemen is not a factor to make them avoid charging high prices and hoarding.
Hi= That the middlemen will avoid charging high prices and hoarding if well motivated.
b. That selection and functions of the wholesalers have any effects on distribution system.
Ho= That effective selection of the middlemen will has no relevance to the effectiveness of the organizational distribution system.
Hi= That effective selection of the middlemen will enhance the effectiveness of the company’s distribution system.
c. That depot location be consider when selecting distributors
Ho= That nearness to depot location is not relevant in the selection of distributors.
Hi = That nearness to depot location should be considered in the selection of distributors.
d. That the order processing cycle satisfies the requirement of distribution system.
Ho= That the order processing cycle does not satisfy the requirement of distribution system
Hi= That the order processing cycle satisfied the requirement of distribution system.
1.4 SIGNIFICANCE OF THE STUDY
This research study is important because of the benefits to be derived by the company in question to correct the anomalies that their distribution system might sufferin determine the strategies to be adopted in locating their depots all over the parts of the country, know whether the selection and function of marketing intermediaries have any effecton distribution system and finally, to know whether the order processing cycle satisfies the requirement of channel system.
1.5 SCOPE OF STUDY
The study will be dealing with the problem and prospects of distributing paints in Nigeria. This study will cover only Decorative Division of Berger Paints Nigeria Plc and their distribution system of this paints to the various parts of the country.
Berger Paints Nigeria Pic make use of various channels of distribution. Therefore, distribution policy decision, mode and pattern of distribution network they adopt and how these affect the effectiveness of distributing paints in Nigeria will be examined.
1.6 RESEARCH PROBLEMS
The statement of problems of this research study are discussed as follows
i. Do the middlemen be better motivated so that an effective control be taken in order to reduce high price?
ii. Does the selection and function of marketing intermediaries (wholesaler, retailer) have any effect on distribution system?
iii. Should the depot location be considered when selecting distributors?
iv. Does the order processing cycle satisfies the requirement of distribution channel system?
1.7 FORESEEABLE LIMITATIONS
Like most of the researchers, there is no doubt that the research will depend mostly on money, time and personal capability to carryout the research.
i. Time is one of the most great limitation so far because the time scheduled for the project work or the research will not be enough or sufficient for the effective research work.
ii. Personal capability, the inability of the personal of Berger Paints Nigeria Plc to art with vital information about the company that might be needed for the research project or research work.
iii. Cost of traveling from Ilaro to Lagos might be quite high considering the economic situation of the country.
iv. Restrictions from getting to strategic department from where necessary information can be gathered.
1.8 HISTORICAL BACKGROUND OF THE COMPANY
Berger Paints Nigeria Plc is a subsidiary of Julius Berger International. The company commenced its operation in Nigeria 1962 as British paints (W.A. Limited).
The company was acquired in 1969 by Berger Jenson and Nicholson, the company’s name was then changed to Berger Paints Nigeria Plc. The company is the largest producer of paints product in Nigeria and now have two factories, with the Head Office, and factory at Port-Harcourt and other one at Oba Akran Avenue, Ikeja, Lagos State which is the headquarter.
Berger paints products provide colour protection and durability for an infinite variety of application throughout the world. Colour to improve safety in order to aid recognition and durability in buildings, vehicles and ships protection. The company also serves householders, industries and communities’ professional decorators rely on Berger Paints products to produce paints for every kind of job on every kind of buildings, vehicles and ships almost everywhere in the world.
For the smooth and improvement of the company’s Berger Paints Nigeria Pic have a large number of depots or distributors all over the country and even proposing to have new factory.
Berger paint products are as follows:
i. Automotive
ii. Decorative
iii. Marine, and
iv. Industrial.
They also provide some ancillary service like
i. Technical services
ii. Chemicals, and
iii. Equipments.
Thus, the product of Berger Paints Nigeria can be listed as below in the product range.
· Luxol
· Wood finishes
· Chemical pre-treatments
· Show finishes
· General metal finishes/printers
· Domestic appliance finishes
1.9 DEFINITION OF TERMS
i. Risk Taking: This is the assumption of risks in connection with carrying out the channel work.
ii. Middlemen: It refers to as an individual or business firm operating between producers and the final consumer for the purpose of transferring tittle to goods.
iii. Depots: It refers to a place where paints or goods are stored outside the company premises to ensure ease of reaching the consumers in time.
iv. Distribution: This refers to as the movement of goods or paints from the points of production to the final points of consumption.
v. Paints: These are solid colouring matter to be mixed with oil or other liquid and used to give colour to a surface.
vi. Users: Users refer to as an individuals that make use of the paint or product.
vii. Financing: This is the acquisition and dispersal of funds to cover the cost of
the channel work by the company involve.
viii. Channel members: These are the set of people or institutions which performs all the functions needed to move a products and its title from the point of production to the point of consumption.
xi. Physical distribution: This is the transportation of the product or paint and storage of the product itself.
x. Channel of distribution: This is the route taken by the product as it moves from the point of production to the point of consumption.
Producer Retailer Consumer
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