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Full Project – The importance of effective channel of distribution in an organisation

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CHAPTER ONE

INTRODUCTION

BACKGORUND 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 an expectation; hence it is a study that aims at the importance of effective channel of distribution in life flour mills company, Sapele.

This study therefore is to examine the new method of distribution that haves spring up over the years and how they have contributed to the efficient distribution of flour.

Different company has different ways of distributing their products. The choice of how companies should pass their products to the consumers’ depends upon number of factor. In this study, attention would really help to determine channel of distribution to adopt. Most so, the criteria for selecting intermediaries and members of the distribution channel will not be left out in the research.

Middlemen are criticized of reaping the profit out of the products that was not produce by them.

It is therefore the aim of this research to examine the issues carefully so as to ascertain if this is justification for their existence. This research work is also to uncover the problem encountered by flour industries in 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 is 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 specialization because of the very long channels of distribution, that is, many layers of middlemen, we find the wholesalers sell to retailers and final buyers and retailers sells to other reseller as well as to final buyers.

The major problems which this study is designed to research unto are as follows:

Is the involvement of middlemen responsible for high prices of flour?
What are the technical and economical method used by the company to distribute their flour?
Does effective distribution of flour requires the services of wholesalers than retailers?

1.3 OBJECTIVE OF THE STUDY

To find out whether the activities of middlemen is responsible for high price of the company’s product.
To determine whether the company has a technical and economic method of distribution.
To ascertain whether effective distribution of flour requires the service of wholesalers than retailers

1.4 SIGNIFICANCE OF THE STUDY

This research project is significant because it dives 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 consumers or users.

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

1.5 RESEARCH QUESTIONS

To what does middlemen activities leads to price increase?
To what extent do middlemen activities create place and true utility or satisfaction?

1.6 HYPOTHESIS FORMULATION

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

HYPOTHESIS 1

Ho: Activities of middlemen does not lead to price increase

Hi: Activities of middlemen lead to price increase

HYPOTHESIS II

Ho: Middlemen activities do not facilitate place and time utility.

Hi: Middlemen activities facilitate place and time utility.

1.7 SCOPE OF THE STUDY

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

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

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

The above areas will be examined with flour mill limited Sapele, chosen as case study. They are marketers of what, life flour in Sapele Local Government. Area of Delta State Nigeria.

1.8 LIMITATION OF THE STUDY

Despite all the precaution taken before and during this study, the investigation encountered almost all the problems inherent in all marketing research programmes . The dynamic of the environment and the more uncertain nature and position of Nigeria’s economy were the major factors responsible for some of the problems 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 which this type of investigation is recognized. In the light of this, the limited time allowed was likely to influence the result of the investigation as there was no other way of testing the response which in ideal situations 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 and the absence of any person to sponsor the research made it unbearable burden for me.

1.9 DEFINITION OF TERMS

CHANNEL OF DISTRIBUTIONS

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

INTERMEDIARIES

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

FACILITATORS

These are prodents that do not directly 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 institutions, advertising agencies and transportation agencies etc.

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Full Project – The importance of effective channel of distribution in an organisation

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Full Project – The importance of effective channel of distribution in an organisation

Full Project – The importance of effective channel of distribution in an organisation

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