Full Project – An evaluation of the role of distribution channel on the sales volume of soft drinks

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CHAPTER ONE

INTRODUCTION

1.1    BACKGROUND OF THE STUDY

Experience has shown in business world that many project work or research programme is embarked upon in most cases to analyze one business problem or the other. To most effects, this particular project work is not expectation; hence it is a study that aims at the evaluation of role of distribution channel on the sales volume of soft drinks in Delta State.

This study therefore is to examine the new method of distribution that have sprung up over the years and how they have contributed to the efficient distribution of soft drinks. Different company has different ways of distributing their products. The choice of how company should pass their product to their consumers’ depends upon number of factor. In this study, attention will really help to determine channel of distribution to adopt. Most so, the criteria for selecting intermediaries and member of the distribution channel will not be left out in the research.

Middlemen are criticized of reaping the profit of the products that was not produce by them. It is therefore the aim of the research to examine the issue carefully so as to ascertain if this is a justification for their existence. This research work also to uncover the problem encountered by Nigeria baffling company on trying to channel their product through the middlemen to where they are needed.

Commerce could be referred to as “trade” which means buying and selling. In this process of trading, the distribution of goods is carried out. This research will examine low important in distribution to trade.

1.2    STATEMENT OF PROBLEM

In the Nigeria context middlemen (wholesalers and retailers) are somewhat blurred, since there is a lack of function specification because of the very long channels of distribution, that is many layers of middlemen, we found the wholesalers sell to retailers and final buyers and retailers sell to other retailers as well to final buyers.

The major problems which this study is designed to research into are as follows;

1. Is the involvement of middlemen responsible for high of soft drinks.
2. What are the technical and economical methods used by the company to distribute their soft drinks.
3. Does effective distribution of soft drinks requires the service of wholesalers than retailers.

1.3    OBJECTIVE OF THE STUDY

1. To determine the role of distribution channel on product price.
2. To examine the role of distribution channel on consumer satisfaction.
3. To examine the role of distribution channel on place and time utility.

1.4    RESEARCH QUESTIONS

1. To what extent done channel of distribution affect the product price?
2. Does channel of distribution affects consumer satisfaction?
3. Does channel of distribution affects place and time utility?

1.5    HYPOTHESIS FORMULATION

Based on the following hypothesis of the problem of the study, the following hypothesis has been formulated.

HYPOTHESIS I

H₀: Activities of middlemen does not lead to prices increase.

H₁: Activities of middlemen lead to price increase.

HYPOTHESIS II

H₀: Middlemen activities do not facilitates place time utility.

H₁: Middlemen activities facilitate place and time activities.

1.6    SIGNIFICANCE OF STUDY

This research project is significant because it device much into an important aspect of the marketing mix-place (distribution). This is also because nothing is produced except what is produced gets to the ultimate consumer or users.

This research is also important because it helps the company to know that the desired level of market penetration has not been archived and the persistent upward trend in the prices of soft drinks. The level of profitability attained by every business organization is determined through the research of this nature.

1.7    SCOPE OF THE STUDY

The research is on the importance of effective channel of distribution in the soft drinks industry. It therefore gives an overview of distribution system in a production company. The study will cover the problems encountered in the distribution of soft drinks by both company and users.

The following areas will also be examined critically as related to distribution.

1. The factory’s distribution system and types of middlemen used by the company.
2. The importance of distribution to commerce.
3. Selecting, motivating and evaluating distributors.
4. Distribution channel management.

The above areas will be examined with Nigeria bottling company, chosen as cases study. They are marketers of what soft drinks in Benin City.

1.8    LIMITATION OF THE STUDY

Despite all the precaution taken before and during this study, the investigation encountered almost all the problem weren’t on all marketing research programmes. The dynamic of the environment and the more uncertain nature and position of Nigeria’s economy were the factor responsible for some of the problem encountered in the study.

First and foremost, the limitation of this research was the time allowed, it was so short and this affects  the thoroughness with where this type of investigation is recognized. In light of this, the limited time allowed was likely influenced the result of the investigation as there was no other way of testing the response which in ideal situation would have for a longer period.

Finance was another obstacle of this research, marketing researchers requires huge amount of money. This explains why some companies in Nigeria do not carry out researches at all and why some do it adequately. The fact that the researcher is a student without any money accepts gifts the absence of any person to sponsor the research made it unbearable burden for me.

1.9    DEFINITION OF TERMS

1. CHANNEL OF DISTRIBUTION

It can be viewed as set of independent organizations involved in the process of marketing a product or service available for use or consumption.

2. INTERMEDIARIES

Middlemen in the distribution is a form of individual that specialized in the providing operation or services that are directly involved in buying and selling of goods more from the producer to consumers intermediaries include wholesalers, retailers, agents, brokers,  facilitators and such related jobbers.

3. FACILITATOR

These are personnel that do not directly involved involve in directing the flow of goods through the channel. But they perform specialized assistance to the regular channel members such agencies include insurance companies, financial institution, advertising agencies and transportation agencies etc.

4. LOGISTICS

The aspect of military science dealing with the procurement,                             maintenance and transportation of military material, facilities and                   personnel.

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Full Project – An evaluation of the role of distribution channel on the sales volume of soft drinks