A STUDY OF THE EFFECTS OF DISTRIBUTION MANAGEMENT ON THE ATTAINMENT OF ORGANISATIONAL GOALS AND OBJECTIVES IN THE NIGERIA COMPANY

A STUDY OF THE EFFECTS OF DISTRIBUTION MANAGEMENT ON THE ATTAINMENT OF ORGANISATIONAL GOALS AND OBJECTIVES IN THE NIGERIA COMPANY

(A CASE STUDY OF COCA-COLA COMPANY, ABUJA)

ABSTRACT

Distribution plays a key role within the marketing mix. The companies’ effort would be fruitless if their product fail to arrive at the right targeting market place, with the right quality and quantity, this bring to opinion that the places of attainment of organizational goals and objective cannot be effective. This Work has intention on this and has ability of the effective distribution management. It is to make known that distribution as an activity is faced with effect, these include poor road network, failure in meeting delivery date and time, channel conflicts etc. however any marketing firm that embarked on effective distribution management will benefit tremendously through the following; retention of potential and existing customers, increase sales achieve target return on investment just to mention but a few. In this research primary and secondary sources of data were used which includes questionnaires, secondary information such as textbooks, journals, notebook etc. total of two hypotheses were dully subjected to test.

CHAPTER ONE

1.0  INTRODUCTION

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 products will not be delivered and the marketing mix will fail. As a result of this, firms are increasingly adopting supply chain management to reduce cost, increase market share, sales, and build solid customer relations (Ferguson 2000).

Distribution in marketing is referred to as “place”; it is concerned with the various activities involved in the transfer of ownership from the producer to the consumer. It is the transfer of goods from the point of production to the point of consumption. In other to achieve this, there are certain interface that needs to be considered, this interface is called “Marketing Channel”. Marketing channel consists of group of individuals or organizations that assists in getting the product to the right place and at the right time.

Distribution plays a vital role primarily because it ultimately affects the sales turnover and profit margins of the organization. If the product cannot reach its chosen destination at the appropriate time, then it can erode competitive advantage and customer retention.

1.0.1 BACKGROUND OF THE STUDY

Distribution from history is an integral part of any business organization. In the olden days, man provides for himself and his immediate family needs. He hunts for meat, cultivated the soil for food and takes this food home for consumption. This method can be seen as direct distribution, which is insufficient. It was later realized that specialization is more efficient and that man can’t produce all that he needed.

This took us to the exchange of goods for goods or services for services popularly known as “Trade by Barter”, this in turn marked the beginning of distribution.

The barter system was however inefficient and inadequate, for there was the problem of relative value of goods and what was needed as a medium of exchange hence, the introduction of money which made distribution more easier. As civilization developed, so also trade across the boarder region began and there was need for those products produced to reach their destinations at the right time and in the right quantity, and there was also need for facilitating the distribution of goods between channels with improved transport system (Marketing logistics).

Producing a product or services and making it available to buyers, requires building relationships not just with customers, but also with key suppliers and sellers in the company’s supply chain. Few producers sell their goods directly to the final users. Instead, most use intermediaries to bring their products to the market. They try to design a (marketing channel or distribution channel) set of interdependent organizations involved in the process of making products or services available for use or consumption by the consumer or business user.

Goods produced cannot in all cases be consumed at a time; this is why the idea of storing, handling and how to move them to their various places of needs is of great importance. A company’s channel decisions directly affect every other marketing decision, that is why, it is critically important that marketers or companies understand channel of distribution since distribution enables the manufacturers to have less stocked finished goods in their warehouses, to know the problems to be faced such as diversion cost, and to know the different channel conflicts. The advantages pave way for producers/manufacturers to have enough space to stores more of their products.

It is therefore now possible for a market to offer variety of goods from different sources and this marketed a new era in distribution. Generally, the distribution industry is expected to experience a major development in the future. In future, according to Schewe Charles D. “The future of distribution relies heavily on the retailers and wholesalers” the answer probably lies in meeting its trends like changing markets, the role of technology and competition  The movement towards computerization and automation will continue, order taking and inventory control will be handled by computer and more warehousing will be authorized.

The retail industry is responsible for the distribution of finished products to the consumer as well as the public. The retail sector comprises of general retailers (managed by individuals/families), departmental stores, specialty stores and discount stores. In practice, many organizations use a mix of different channels; in particular, they may complement a direct salesforce, calling on the larger accounts, with agents, covering the smaller customers and prospects. However, the major challenge now facing the retail industry is the power of the customers or buyers. This is because the customers are becoming increasingly knowledgeable, impatient, not wishing to wait for the suppliers’ products for any period of time. This coupled with the fact that firms are now trying to implement specific distribution strategy or practices based upon their unique set of competitive priorities and business conditions to achieve the desired level of performance, has led to an investigation into the various distribution strategies and practices available with the view to establish the strategy or practice which has the most influence on retail performance on the attainment of organizational objectives and goals in the Nigeria company.

The purpose of this study is to investigate the relationship between distribution management, strategy and practice including the performance in the marketing of Nigeria Company using Coca-Cola Company as a case study. To do this, the research work is divided into five (5) sections; the Introduction/Background of the study, the Literature review, Research design and methodology, Data presentation and Analysis, and the last section of the research work looks at conclusion and Summary/Recommendation.

1.1     HISTORICAL BACKGROUND OF COCA-COLA COMPANY ABUJA PLANT

This is a brief history of the Coca-Cola Bottling Company.

The company as a whole came into existence in 1886 at Georgia United State. It was originated as a Soda Fountain Beverage in 1886 selling for five (5) cents a glass. Its early growth was impressive, but it was only when a strong bottling system developed that Coca-Cola became the world-famous brand it is today. Coca-Cola first arrive Nigeria in 1951.

That same year, the Nigeria Bottling Company Ltd (NBC) was incorporated to bottle and sell carbonated non-alcoholic beverages. The Nigeria Bottling Company has a sole franchise to bottle Coca-Cola products in Nigeria. For some decades now, Nigeria Bottling Company has continued on its journey, keeping its promises of refreshing consumers, strengthening its communities, enriching the workplace, and preserving the environment.

In 1953, production of Coca-Cola began as a bottling facility in Ebute-Metta Lagos State.

The year Nigeria got her independence (1960), N.B.C exceeded the one million case a year mark. The following year (1961), N.B.C commissioned its second bottling facility at Ibadan, Oyo State and rapidly expanded its operation over the next couple of years.

In 1972, Coca-Cola bottling company listed its shares on the Nigeria stock exchange and became a publicity quoted company. In 1991, Coca-Cola bottling company acquired the Eva premium water and Schweppes brands.

In the year 2000 (nine years later), the Coco-Cola bottling company became a member of the newly formed Coca-Cola Hellenic Bottling Company S.A. can anchor bottling group with operation in 28 countries world wide.

In the year 2001, Coca-Cola bottling company commissioned the first ultra-modern fully automated N.B.C. plant in Benin.

In 2003, they lunched the five alive juice brand. In the following year (2004), the  launched PET packaging for its sparkling soft drinks categories.

In 2006, Coca-Cola Bottling Company launched the energy drink called “Burn”. In 2007, Coca-Cola Bottling Company launched on-the-go-can packaging for core brands Coca-Cola, Fanta and Sprite in 2006.

In 2008, they eventually introduced the more environmentally friendly “ultra” glass packaging for its Returnable Glass Bottle Product segments.

In 2010, Coca-Cola operations stands at 13 facilities and 59 depots across the country.

In 2011, the company was recognized for it’s organizational goals and “most environmental friendly company at the Social Enterprise Reporting Awards. The company obtained Nigeria’s first Food Safety Systems Certificate (FSSC).

Currently, Coca-Cola Bottling Company have established and maintained approximately 800 independent strategic distribution centres across the country “Nigeria”. This distribution centres have distribution equipment and facilities that will enable them reach smaller customers in congested or outlying areas more efficiently.

1.2     STATEMENT OF THE PROBLEM

Marketing of goods and services need to be effective, this is achieved when various marketing activities are put together in accordance. Especially getting the goods and services to the consumers at the right place, at the right time, in the right quality and quantity, and until this is done companies cannot sell more than its competitors. But the attainment of this has been constrained by:

1. Poor State of Road Network
2. Conflicts over Channel
3. Decision and goods management regarding channel and product characteristics.

1.3     OBJECTIVES OF THE STUDY

This research is aimed at:

1. Finding out the prospects of distribution management and logistic in the marketing of goods and services.
2. To bring to our knowledge the meaning, the distribution channel and the customer, Physical Distribution Management (PDM), and the types of channel in the distribution of goods and services.
3. Finally to make recommendations based on the findings especially in the areas or aspect of problems.

1.4     SIGNIFICANCE OF THE STUDY

Distribution management is of great significance to the marketing of goods and services, because it enables goods and services produced to get to the final stage which is the “consumers” or “end users” at the right time, right place, right quality and quantity.

After a product has been produced, promotions made and also setting of affordable price without distribution, the organization can never achieve its set target.

Also this study is of tremendous significance, because it will enable companies to be conversant or familiar with the problems likely to be encountered during or in the process of performing this marketing function and in essence being able to tackle the problems when faced with it, so as to come out with good and effective distribution management and to also meet customers’ expectations in respect to delivery and also to outshine their competitors.

 1.5     LIMITATIONS OF THE STUDY

The project work was undertaken with some hindrances though, it has accomplished the purpose which it was set out to achieve.

Such limitations/hindrances are:

1. The research was carried out with other academic work at hand; and thus it made the researcher have insufficient time in carrying out the research work.
2. Project cost is another limitation to this research as the price of everything is drastically increasing in the market.
3. The attitude of the marketing manager of Coca-Cola Company Abuja towards answering Questions was also a limitation; there was the suspicious that information revealed could be used to detriment of the company, or revealed to its competitors despite assurance from the researcher that all information provided will be treated with utmost secrecy.
4. Finally not all questionnaire disposed to respondents were returned to the researcher.

1.6     STATEMENT OF HYPOTHESIS

A hypothesis is a tentative statement of plausible assumption the validity of which is yet to be known.

Here, statements of reasonable assumption are made and later subjected to test. The study shall test the following hypothesis.

HYPOTHESIS I

Ho: That the poor state of roads and company channel of distribution pattern don’t constitute a problem in the distribution of goods and services

Hi: that the state of roads and company channel of distribution pattern constitutes problems in the distribution of goods and services.

 HYPOTHESIS II

Ho: That channel conflicts do not negatively affect the effectiveness of distribution  on the attainment of company goals and objectives.

Hi: that channel conflicts negatively affect the effectiveness of distribution on the attainment of company goals and objectives.

1.7     DEFINITION OF TERMS

The following terms are defined below for clear understanding of the topic in this project work.

1. Distribution: This is referred to as the movement of goods from the point of production to the point of consumption.
2. Logistics: This is also known as physical distribution and other detailed of the companies exercise (transportation).
3. Marketing channel: The routes which good and services flow directly from the point of production to consumption.
4. Marketing: The process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual need and organizational objectives
5. Consumer: A person who buy goods for final consumption or for household uses.
6. Distribution Agent: These are persons through which products follow to reach the end users.
7. Marketing Intermediaries: Middlemen linking producers to other middlemen or Ultimate consumers through contractual arrangements or through the purchases and resale of products.

END NOTES

3^rd Edition. (London: Macmillan Press Limited) Pg. 101 Philip Kotler (1989) Principles of Marketing.

Lecture Note: Mr. Itopa Jafaru – Fundamentals of Marketing & Marketing Management I.

Lecture Note: Mr. Kufre Inyang – Marketing Management II

Philip Kotler (2000) Marketing Management 10^th Edition (New Delhi: Prentice Hall Inc.) Pg. 205, Pg. 400 – 497.

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