Full Project – Impact of physical distribution on the performance of diary firms

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CHAPTER ONE

1.1     INTRODUCTION

The emergence of physical distribution as a special field of study occurred around 1960s in response to both environmental and conceptual developments.

Physical distribution is the set of activities connected with efficient movement of finished goods from the end of the production operation to the consumer. Physical distribution takes places within numerous wholesaling and retailing distribution channels, and includes such important decision areas as customer services, inventory control, material handing protective packaging order processing transportation warehousing, site location and warehousing. Physical distribution is part of a larger process called “distribution” which includes wholesales and retailing marketing as well as the physical movement of products.

Distribution is a stream, a flow of products and services from the producer through intermediaries, to the end users, (Szopa & Pekata, 2012). Producing products that customers want, pricing them correctly and developing well designed promotional plans are necessary but not sufficient conditions for customer satisfaction. The final part is distribution, the “place” element of the marketing mix. Product need to be available in adequate quantities, in convenient location and at the right time. Distribution can be done directly or indirectly. Direct distribution has to do with the producer selling directly to customers and indirect when a producer sells through intermediaries, (Kotler& Keller, 2006).

Physical distribution activities have recently received increasing attention from business managers, including small business owners. This is due to large part to the fact that these functions of ten represent almost half of the fact that these functions of ten represent almost half of total marketing function cost of a product. Impact research studies indicate that physical distribution cost nationally amount to approximately 20% of the country’s total gross national product (GNP). These findings have led many businesses to expand their cost-cutting efforts beyond their historical focus in production to encompass physical distribution activities. The importance of physical distribution is also based on the relevance to customer’s satisfaction. By storing goods in convenient location for shipment to wholesalers and retailers and by creating fast, reliable means of moving goods, business owner can help assure continued success in a rapidly changing competitive global market.

The diversity of terms designating the field of study reveals the following tiles physical distribution, physical distribution system, physical distribution management, logistic management, marketing logistics, distribution planning, and principle of logistic management. The fabric of logistic though was a mesh of distribution activities interview with interdisciplinary perspectives.

The list of manageable activities grew include the following: order processing transportation, containerization, manufacturing and converting capacity information flows, storage, freight transportation, market forecasting, supply scheduling packaging, transit insurance, communication control, customer service, materials handling, movement service order processing.

As one of the component of marketing system, distribution has taken a prominent role since any marketable item has to reach the consumer to complete the selling process. Physical distributing is the broad range of activities concerned with the efficient movement of raw materials and finished products from the suppliers to the consumers. These activities of physical distribution include consumer service, market forecasting and analysis of demand; they further include inventory controls, protective packaging and transportation. Channel and the act of distribution were quite natural and interrelated. Certain middlemen, for example, a wholesaler will perform most of the distribution function while other agents for example, will provide few others services. This, the producer must see how a choice of channel member will be determined the function the producer must perform on his own. Distribution could be carried out either intensively, exclusively or selectively.

It was in view of these that the researcher intends to identify the impact of physical distribution with reference to Maidabino Yoghurt Katsina.

1.2     STATEMENT OF PROBLEM

Distribution activities cannot be carried out efficiently due to some militating factors, these factors include the following:

Packaging Specialist: Lack of adequate packaging specialist who package raw materials and finished product for easy handling, storage and transportation drastically affect the distribution channels.

Storage  Facilities:  Inadequate modern storage facilities for the  efficient preservation of perishable and finished product hinder effective distribution activities.

Fuel Scarcity: fuel scarcity has drastically effect even if it’s available the organization to spend heavily in order to get the fuel from the filling station or from the black market.

Transportation network: Lack of good road network has affected the efficient distribution activities of goods and services.

Modern Communication Network: are often too small in scope to make any real impact on business transaction as sometimes the postal system work will at other times it may be grossly inefficient the telephone services tend to be confined to the urban centers, the lines are too few and the quality of service offered is open poor. Modern Inventory Management: is rarely practice due to insufficient storage facilities and inappropriate storage methods, spoilage and wastage of product tending to be high.

Warehousing: A few and far between materials handling equipment is very unsophisticated, with the exception, perhaps, of what is structures like large storage tanks for petroleum or silos for gain are either too few or no existence.

1.3   PURPOSE OF THE STUDY

The purpose of this research work is:

• To identify the impact of physical distribution on the performance of Maidabino Yoghurt.
• To identify the strategy use in the distribution of Maidabino Yoghurt.
  • RESEARCH QUESTIONS

1. What strategies are used in the distribution of Maidabino Yoghurt?
2. What is the impact of physical distribution system to Maidabino Yoghurt?

1.5    STATEMENT OF HYPOTHESIS

Hi:    Physical distribution have impact on the performance of Maidabino Yoghurt.

Ho:   Physical distribution does not have impact on the performance of Maidabino Yoghurt.

1.6     SIGNIFICANCE OF THE STUDY

This write up is expected to enrich the researcher’s knowledge on the impact of physical distribution in the diary industry. The study is also expected to assist those industries on physical strategies to be adopted for them to improve on their distribution activities.

Government may equally find it helpful and informative to protect and re-address some of the problems facing organization in the area of distribution activities in the diary industry.

It may also educate business students, markets and the general public; likewise serves as reference for further researcher work.

Policy and physical distribution embrace the principle of physical objective.

1.7     SCOPE AND LIMITATION OF THE STUDY

The researcher limits his scope of study on the impact of physical distribution in the dairy industry a case of Maidabino Investment because the researcher cannot investigate the distribution activities of all diaries industries in Katsina State and Nigerian at large.

This limitation encountered in the course of undertaking the research work includes the following:-

Time factor:   the available to undertake this project is not enough for an extensive research work.

Financial problems: Financial constraints are another factor which hinders effective and efficient research work.

Biasness by some respondents: some of the respondents, interviewed hardly provide the researcher with accurate and adequate information (data).

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Full Project – Impact of physical distribution on the performance of diary firms