Physical Distribution

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Physical distribution is the set of activities concerned with efficient

movement of finished goods from the end of the production operation to the

consumer. Physical distribution takes place within numerous wholesaling

and retailing distribution channels, and includes such important decision

areas as customer service, inventory control, materials handling, protective

packaging, order procession, transportation, warehouse site selection, and

warehousing. Physical distribution is part of a larger process called

"distribution," which includes wholesale and retail marketing, as well the

physical movement of products.

Physical distribution activities have recently received increasing attention

from business managers, including small business owners. This is due in

large part to the fact that these functions often represent almost half of the

total marketing costs of a product. In fact, research studies indicate that

physical distribution costs nationally amount to approximately 20 percent of

the country's total gross national product (GNP). These findings have led

many small businesses to expand their cost-cutting efforts beyond their

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historical focus on production to encompass physical distribution activities.

The importance of physical distribution is also based on its relevance to

customer satisfaction. By storing goods in convenient locations for

shipment to wholesalers and retailers, and by creating fast, reliable means

of moving the goods, small business owners can help assure continued

success in a rapidly changing, competitive global market.

Marketing in Nigeria beginning to occupy its proper position in the Nigeria

economic set up. The current economic recession is ushering in more

marketing activities necessary to ensure economic development and

national growth. The importance of physical distribution to organization

individual and the economic as a whole can never be overemphasized;

physical distribution therefore is the actual increase of goods and services

from their sources and place of production to when they are needed for

industrial use or final consumption. Without physical distribution,

organization will not be met because goods produced will not be physically

available for consumer use. Thus to achieved a good market share the

company should have a good distribution network. That is ways and means

where goods and services is very crucial for promoting its sales, market

share and its effective transportation to the various points up purchases or

distribution. Also the cost of distributing some consumer durable, forms a

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major elements of the total cost and any inefficiency at this level is likely to

make the product uncompetitive as the cost of distribution will finally

reflect in the unit price of the product.

1.2 HISTORICAL BACKGROUND OF THE CASE STUDY

Coca – cola Nigeria Plc Kaduna is a multinational company housing its

head office in Lagos. This company has its operation in various countries

worldwide with some in Africa particularly in Nigeria, which was

established in the year 1953 in Lagos. It incorporated in Kaduna branch,

Kaduna state in the year 1980 under the same name (coca-cola plc) for the

purpose of manufacturing mineral water, can drink, table water and five

alive fruit juice which comes in three flavours namely: any initially has a

staff of about 264 workers when it started production in 1980, but of recent

the company have a staff of about 397 workers. The company’s branch in

Kaduna, make a direct supply to the deports under it, which in turn make

direct sale to distributors, retailers and final consumer in their domain.

1.3 STATEMENT OF THE PROBLEM

This could be approached from this perspective. Transportation: How

developed is the transportation network in the country? Do we have

adequate means of transportation and infrastructural facilities? Inventory

(storage): what is the level of inventory (storage) how are they managed.

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How effective is our communication network warehousing. Are our

warehouse develop and up to standard? Are there enough warehouse to

stock goods.

1.4 OBJECTIVES OF THE STUDY

The purpose of the study is to determine the importance of physical

distribution in the marketing of consumer goods. We concentrate in the area

of transportation inventory, communication and warehousing. The aim of

production is not complete if goods do not reach the ultimate consumer or

end user. These activities help in getting goods produced to consumers or

end users. The attempt of the problem of physical distribution is to balance

the level of service to consumer against the most of doing. So also to

examine the extent to which the existing problems in the country have been

solved.

1.5 SIGNIFICANCE OF THE STUDY

With the recent downward trend in the economy, an increase in population

growth in recent times and some government policies relating to the

importation of both raw materials and finished goods which has made it

difficult and expensive for most firms and manufacturers who rely imported

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raw materials to obtain and the indecencies involved in moving both raw

materials and finished goods from one place to another. Capitalizing in the

scarcity of goods due mainly middlemen have restore to hoarding such

items, even in areas where they are available, instead of distributing them as

required with intention of marking more perfects. The effort therefore is to

suggest ways of arresting the problems with the country is facing due to

inefficient and insufficient physical distribution system.

1.6 SCOPE AND LIMITATION OF THE STUDY

The scope of this project work will be the importance of physical

distribution in the marketing of consumer goods. Also, the study will focus

mainly inadequate state being the immediate environment of the study. A

number of problems contributed constraints in the process of this project

work, lack of enough textbooks and journals in the subject of the study. The

research of the nature should have covered every corner of Kaduna but it

was not so due to the above mentioned problem. The researcher had to go to

coca-coal to get information. Transportation and financial problems

encounter by the researcher serves as the limiting factor for this project.

Time was also a limiting factor for this project. The time given was too

short which of course meant that researcher that have to be made on the

stud has to be short to do the limited time.

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1.7 STATEMENT OF HYPOTHESIS

Ho: That effective distribution does not enhance significantly an

organizations marketing of goods and service.

H1: That effective distribution enhance significantly an organizations

marketing of goods and service.

1.8 DEFINITION OF TERM

Certain terms used in the study need to be defined to avoid difficulties and

enhanced better understanding. Such terms includes:

DISTRIBUTION: Is an important element of providing satisfaction in the

market place. Distribution involves the physical movement of product to

ultimate consumer.

PHYSICAL DISTRIBUTION: Physical distribution involves “planning”

implementing and controlling the physical flow of materials and furnished

goods from point of origin or production to point of use to meet the needs

of consumer at a profit.

CHANNEL OF DISTRIBUTION: This refers to the medium/channel use in

the transfer of goods from producer to consumer. The channel refers to the

system of marketing. It involves all the intermediaries thus perform the

function, the serve to put the product into the hand of consumers.

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CUSTOMER: the customer represent the peoples that buy goods from the

producer whether for industrial use or for final consumption while.

CONSUMER: is the final user of the product.

NEEDS: this refers to the necessary things consumers can not do without

e.g. toothpaste, cloth etc.

WANTS: Are as a result of positive charges incomes thus consumer will no

necessarily buy what he need but what in want.

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END NOTES

Amarchand, Detail: (1979): An introduction to marketing Vikas Publishing House, Delhi.

Nnolim D.A (1979): Marketing as a too for economic development in Nigeria carsell Ltd.

Philip Kotler: (1988): Marketing management analysis planning implementation and control Sixth Edition

8

CHAPTER TWO

LITERATURE REVIEW

2.0 INTRODUCTION

This chapter will review comments, statement and opinions made mainly by

previous person or groups of persons as contain in books, newspaper and

magazines and journals having direct bearing on the topic of this thesis.

2.1 WHAT IS MARKETING

The institute of marketing, define marketing as the creative management of

resources which promote trade and employment of assessing consumer

needs and initiating research and development to meet them. Considering

the word marketing from the logical aspect of life, we can depict clearly

that, marketing principles and activities have helped greatly in the

development and advancement of world economy. The course try to

practically establish an harmonious relationship between two important

component of the world which is people (human beings) and its

environment. Marketers operate in a complex environment which require

proper understanding and analysis for effective control, planning and

implementation that will commensurate with the consumers needs and

want. Hence providing profitable satisfaction which serves as the

paramount aim of marketing.

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Marketing activities embraces those activity engaged into satisfy the

economic needs and want. Its root can be traced to the early existence of

man, when trade by barter was the chief means by which people satisfy

their needs and wants of the people. The problems associated with barter

system leads to the emergence of scholars to deliberate on how to solve this

related problems and promote human economy. This result to the

innovation and invention of some organization that assist in coordinating

human and environmental resources identification of consumers needs and

wants, determine demand and market offering, promote exchange and

relationship establishing market, and creating customer value and

satisfaction. Today, the organization that carry out the above activities is

termed MARKETING.

The word “marketing has in recent time, gain widely usage and acceptance,

yet it means different thing to different people. It is most often not

understood and misinterpreted. Some marketing definition includes:

DEFINITIONS

According to Kotler and Armstrong (2015): Marketing is a social and

managerial process by which individuals and organization obtain what they

need and want through creating and exchanging value with others.

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According to PRIDE and FERREL (1993) define marketing as consisting of

individual and organization activities aimed at facilitating and expediting

exchanges within a set of dynamic environmental factors.

To Stanton (1983): Marketing is a total system of business activities design

to plan, price, promotes and distribute one’s satisfying produce and services

to present and potential customers.

According to the institute of marketing (Uk marketing manual 1998):

Marketing is the management process which identifies, anticipates and

supplies customers requirement efficiently and profitably.

2.2 WHAT IS DISTRIBUTION

Distribution refers to a set of interdependent organization that help make a

product or services available for use or consumption by the consumer or

business user. Distribution which is also known as marketing channel assist

in company’s value delivery network. A company’s channel decision

directly affect every other marketing decisions.

Companies often pay too little attention to their distribution channels,

sometimes with damaging results, in contrast, many companies have used

imaginative distribution systems to gain a competitive advantages.

Distribution is important to marketers as it helps in concluding the process

of production, which is achieved by getting the right set of products to the

right place at the right time. It importance is reflected in the fact that

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distribution costs emerge from 10% to 25% of sales revenue. Therefore,

management must design its channel carefully, with an eye on tomorrow’s

likely selling environment as well as today’s.

2.2.1 DETERMINING THE INTENSITY OF DISTRIBUTION

As earlier mentioned, a producer must consider the nature of the product,

the characteristics of the individual buyer, the buying habits of the buyer,

and the competition he faces, among others, before he determines what he

can or should do. This includes selective distribution, executive distribution

and intensive distribution.

a. SELECTIVE DISTRIBUTION: This is a policy of a producer who

selects a limited number of wholesales and retail distributors and

works closely with them to further the sale of his mechanize.

Generally, this is done on a carefully worked out plan. Selective

distribution can be used on any type of product, even with

convenience goods, but such a policy will restrict the distribution.

The idea is to select the best distributor available, concentrate efforts

on them, an thus obtain a greater selling effort for the products.

Normally, the volume of business desired is important in appointing

selective distributors. Fewer distributors may mean fewer sales and

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fewer contacts with prospective buyer. (customers and clients). There

are distinct advantages, however, in appointing selective distributors,

the producer can pick the outlets he wants. He can concentrate on

them, and eliminate some of the marketing problems, which beset

almost all marketers who sell on a local or national basis.

Generally, selective distribution lends itself better to shopping goods

which carry a higher unit price, and which are not purchased as

frequently as convenience goods.

b. EXCLUSIVE DISTRIBUTION: This refers to the practice of

selecting and giving a distributor on exclusive territory. The producer

agrees to sell to no one else in that territory. This is called an

exclusive selling agreement. The distributor in turn agrees not to

handle or to deal in any competing products. An exclusive

distributorship limits the contacts with the buying public, and thus

the total volume of possible sales. In return, the producers gains by

knowing that his products will be featured and, if the dealership has

been chosen with care, the producer acquires a degree of prestige

because of having an exclusive dealer. It is to the advantage of the

exclusive distributor to push the merchandise because he is not only

protected as far as competitors in the area are concerned, but he is

protected against any price cutting if the price reduction are made,

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the manufacturer makes them by fully protecting the dealer’s margins

and profits as he does so.

c. INTENSIVE DISTRIBUTION: Producer of consumer goods mostly

adopt intensive distribution policy. Consumers demand immediate

satisfaction with this class of product and will not defer purchases to

find a particular brand. Retailers often control the extent to which the

policy of intensive distribution can be implemented. For example, a

new producer of toothpaste may want distribution in all Nigeria

supermarkets, but the retailers may limit their assortment to the

fastest – selling toothpaste brands. Intensive distribution places must

of the burden of promotion on the producer. Retailers will not pay to

advertise a product that is sold by all their competitors, rather spent

their money on product that is able to gain market share.

2.3 PHYSICAL DISTRIBUTION AS A MARKETING FUNCTION

In today’s global market place, selling a product is sometimes easier than

getting it to customers. Companies has to decide on the best way to store,

handle, and move their products and services so that they are available to

customers in the right assortment, at the right time, and in the right place.

Physical distribution has a major impact on both customers satisfaction and

company cost.

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Also, physical distribution serve as one of the decision area in the

distribution management process, which encompasses planning,

implementing and controlling the physical flow of materials, final goods

and related information from points of origin to points of consumption to

meet customers requirement at a profit. The consequent activities include

handling, transportation, warehousing, communication, inventory

management, packaging and other processes all of which are inter-related.

Therefore, the logistics manager task is to co-ordinate activities of

suppliers, purchasing agents, marketers, channel members, and customers

in order to achieve channel functions.

Planning an effective physical distribution system can be a significant

decision in developing a marketing strategy. It places a company in a better

competitive position among it’s competitors, by using improved logistics to

give customers better service or lower prices.

In this context, we shall examined or review some authors comment and

definition on the subject matter.

According to Philip Kotler and Gavy Armstrong (2015): Physical

distribution involves planning, implementing and controlling the physical

flow of goods, services and related information from point of origin to point

of consumption to meet customer requirement at a profit.

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According to Ayuba (2005): Physical distribution is the physical movement

and storage of products and suppliers both within and among market

channel members. It also refers to transportation, handling and storage of

product in the process of moving them from where they are to where they

are needed.

According to Nwokoye (2003): Physical distribution or logistics is

concerned with the efficient movement of raw materials from suppliers and

finished goods from the end of the production line to the customers.

According to Akpan (2003): Physical distribution involves the actual

movement and storage of goods after they are produced and before they are

consumed, its goal is therefore to get the right goods to the right place at the

right time for the least cost.

According to Osuagwu (2002): Physical distribution refers to a series of

marketing institution through which title to or control of a product, services

or idea is transferred from producer to customers, clients, or business users.

According to Sanusi (2000): Physical distribution is the broad range of

activities within a company concerned with the efficient movement of

goods and materials both inward to the point of manufacture, and outward

from the end of production line to the consumers.

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2.4 OBJECTIVES OF PHYSICAL DISTRIBUTION

The main goal of physical distribution is to ensure that the right products

are available to consumers in the right place at the right time. i.e. timely and

accurate delivery of customer needs and want at a profit (customer

satisfaction and company cost). Hence, these overall goals and objectives

have several aspect that we should examine more closely:

a. AVAILABILITY

The most basic objective of physical distribution is to ensure that

suppliers met customers demand in order to maintain and establish

good customer relationship that has a long run effect. To achieve this,

most companies employ the services of marketing intermediaries i.e.

middlemen to perform the task of effective movement of goods and

services from the producer to the end users.

b. CHANNEL MANAGEMENT

During distribution process, managers must implement and manage

the chosen channel. This call for selecting, managing and motivating

individual channel members and evaluating their performance

overtime. They are linked together through the exchange process in

order to cerate time and pace utilities to meet its goal. Channel

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management means the activities involved in independently to ensure

effective and efficient distribution of goods and services to the end

users.

c. DELIVERY OF UNDAMAGED GOODS

Physical distribution must also pay attention to all activities that

cause damage of goods. Material handling, product packaging,

storage and mode of transportation must be carefully watch to ensure

safety of goods till it reaches the desire or final destination.

d. SPEEDY AND RELIABLE DELIVERY

Physical distribution must be perform between the time a need for

product is recognized by a channel member and the time when those

product are received, closely aligned with the speed of services and

the channel member dependability. Thus, channel member must be

keenly aware of their customers location and their demand schedule

in order to meet up with consumer requirement. Timeliness and

reliability is of high important in physical distribution because it is

used as a yardstick for measuring the performance of the channel

member in delivering and satisfying consumers needs and want.

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2.5 IMPORTANCE OF PHYSICAL DISTRIBUTION

The importance of physical distribution in a company’s marketing strategy

can be seen in the following instances:

i. it help in bridging the major time, place and possession gaps that

separate goods and services from those who would use them.

ii. Physical distribution increases customers satisfaction by making

product available at the right time, and at the right place, ensuring

efficient order processing, sizeable inventories, availability of

product for emergency shipments.

iii. Producers and customers are often located several kilometers away

and products must be transported and stored at points more accessible

to them.

iv. Manufacturers often produce in anticipation of market demand, they

must therefore hold inventories until orders are received and filled.

v. Speed of delivery, dependability along with services is often as

important to buyers as cost.

vi. The use of efficient transportation reduces costs.

2.6 CHANNELS OF DISTRIBUTION AND IT IMPORTANCE

The term channels of distribution refers to the system of marketing

institution through which goods or serves are transferred from original

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producer to ultimate consumer. The channel is made up of all the

intermediaries that performs the functions that help to put the product into

the hands of customers. In some cases, the part or route taken by the

product itself may differ from that taken by ownership of the product of

title. This happens because some intermediaries do not take title to the

product but simply facilitate exchanges. Types of channel member

employed depend on some certain factors vis a vis the type of goods and

services to be transferred to the customers.

CHANNEL STRUCTURE

As the product move from producer to ultimate consumers, various

exchange transaction take place in the process, a number of tangible and

intangible items are passed from one channel members to the next. The

channel structure shows the kind of participants involved in the production,

distribution and ultimate use of the product, it shows the nature of the

linkages connecting the producer, the middlemen and consumers. A

producer can distribute his product through a variety of channels.

DISTRIBUTIONS CHANNEL FOR PRODUCT

There are numbers of alternative routes or nature of intermediaries through

which products travel on their way to final users. Depending on the

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marketers objectives and choice of route to be used. Different routes offer

different advantages. The most frequently used channel for distributing

goods are shown in the figure below:

A TYPICAL DISTRIBUTION CHANNEL FOR PRODUCT (GOODS)

A) PRODUCER TO CONSUMER: This is the shortest, the simplest to manage

and often the quickest way to distribute consumer products. Here producer

sells or distribute its product directly to the consumer without involving any

intermediaries. The system is regarded as a direct channel.

B) PRODUCER – RETAILER – CONSUMER: This is the type of channel

that is most visible to consumer producer find this channel to be economical

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Producer Producer Producer Producer Producer

Agent Agent

Wholesaler Wholesaler

Retailer Retailer Retailer Retailer

Consumers Consumers Consumers Consumers Consumers

to them because it help them reduce the cost of inventory. Some producer

also have their own retailer store e.g. coca-cola Nigeria plc.

C) PRODUCER – WHOLESALER – RETAILER – CONSUMER: This is

often referred to as the traditional channel for most goods. This channel is

most often used by producer of drugs, hardware and final items. Product

that do not have market, need such a channel, since producer often don’t

make large enough sales force to reach the mass market effectively.

D) PRODUCER – AGENT – RETAILER – CONSUMER: This channel shows

that some producer by pass wholesalers and employ agents to sell to

retailer. Most of the time, producer prefer to use their agents or broker to

reach retail market. Example ca be seen in the food and beverages industry.

E)PRODUCER – AGENT – WHOLESALER – RETAILER – CONSUMER:

This is the largest and the most indirect of the frequently used distribution

channels. The agent provide yet another layer of intermediaries with an

even more extensive network of contact within an attempt to reach the

small retailers producers often use agent middlemen who in turn go through

wholesalers to reach small stores impulse items have the advantage of this

channels as there are many potential buyers.

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2.7 MANAGEMENT OF PHYSICAL DISTRIBUTION

Physical distribution is the term used in describing the integration of two or

more activities for the purpose of planning, implementing and controlling

the efficient flow of raw materials, goods and services from point of origin

to the end users.

The development of physical distribution system to support modern

marketing is a dynamic aspect for management, because an organization

constantly change part of its marketing strategy in an effort to gain and hold

a competitive advantage in the market place. In the distribution of consumer

goods for example, consumers add to his stocks by buying from retailer.

This reduces retailers inventory and eventually they place replenishing

orders with wholesalers, wholesalers in turn replenish their stock by placing

orders with manufacturers.

Thus, while products are flowing forward to the final buyers, there is a

reverse flow of orders which causes an alternating subtractions from an

addition to inventories held at each level. Each time a manufacturer ships an

order, he initiates this chain reaction in the performance of transportation

and storages. A manufacturer may centralize warehousing and shipping

activities at one or a few locations, or he may decentralize them through

warehouse operations or the use of public warehouse.

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The development of physical distribution system to support modern

marketing is a dynamic aspect for management, because an organization

constantly change part of its marketing strategy in an effort to gain and hold

a competitive advantage in the market place. In the distribution of consumer

goods for example, consumers add to his stock by buying from retailer.

This reduces retailers inventory and eventually they place replenishing

orders with wholesalers, wholesalers in turn replenish their stock by placing

orders with manufacturers.

Thus, while products are flowing forward to the final buyers, there is a

reverse flow of orders which causes alternating subtractions from an

addition to inventories held at each level. Each time a manufacturer ships an

order, he initiates this chain reaction in the performance of transportation

and storage. A manufacturer may centralize warehousing and shipping

activities at one or a few locations, or he may decentralize the through

warehouse operations or the use of public warehouse. Furthermore, in

moving goods from one distribution point to another, these factors present

to some extent in any distribution system, make managing physical

distribution an extremely challenging task within the framework of

marketing management. The solution is the one that strokes an optimum

balance between cost incurred for physical distribution activities and

expectations of end buyers and users of the product. Managing physical

24

distribution, may be thought as a balance of distribution cost against an

acceptance of customer satisfaction.

Physical distribution management is concerned with the flow of goods from

the receipt of an order until the goods are delivered to the customer. In

addition to transportation, physical distribution management involves close

liaison with production planning, purchasing, order processing, material

control and warehousing. All these areas must be managed so that they

interact efficiently with each other to provide the level of service that the

customers demands and at a cost that is affordable.

2.8 COMPONENTS OF PHYSICAL DISTRIBUTION

Physical distribution consists of a set of activities that serve to move

product in such a way as to create time and pace utility. These activities

involves the movement of product from manufacturer to consumers. They

also include the movement of raw materials from originators to processors.

Although a long list of activities could be prepare, it is convenient to group

the activities into four areas or activity centre. Physical distribution

therefore seems to consist of four major components. These four elements

are inter-related and what occurs transportation, inventory, communication

and warehousing.

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TRANSPORTATION

Transportation involves the physical movement of goods from the end of

production to the market. It is a necessary and important marketing activity

because it address time and place utility to a product by moving it from

where it is made to where it is purchased and used. The choices of

transportation carriers affect the pricing of product, delivery performance

ad condition of the goods when they arrive, all of which affect customer

satisfaction. In shipping goods to its warehouses, dealers and customers, the

company can choose among four main transportation modes each with

distinct cost and service characteristics such as capability, capacity,

dependability, reliability and damage accessibility are issues that should be

taken into consideration.

RAIL ROADS

Rail rods usually carry heavy, bulky items over fairly long distance. Their

predominant charges been coal, farm and forest product. They can carry

items that won’t fit in trucks or that exceed highway weight limits and their

routes are more extension than those of water carrier or air carrier.

ROAD CARRIER (TRUCKS)

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A lot of shippers are increasingly using motor trucks, motor truck account

for the largest portion of intercity transportation, trucks are an efficient

mode of transportation, they are often faster than rail especially for short

distance but are sensitive to interrupting bad weather. Trucks are highly

flexible in their routing and time schedule.

AIR CARRIERS

Air carriers transport less goods than any of the transportation modes. They

are an important transportation mode. Air freight rates are much higher than

rail and trucks rates, but air freight is idea when speed is needed or distant

market have to be reached. Among the most frequently airfreight products

are perishables (fresh fish, cut flowers) and high value, low bulk items

(technical instrument, jewelry). Companies find that air freight also reduces

inventory levels, packaging costs and number of warehouses needed.

WATER CARRIERS

A substantial among of goods are moved by ships, largely on coastal and

inland waterways. Although the cost of water transportation is very low for

shipping bulky, low – value, non-perishable products such as sand, coal,

grain, oil and metallic ores. Water transportation is the slowest mode and

may be affected by the weather.

INVENTORY

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Inventory level represent another major type of physical distribution

decision affecting customer satisfaction and transaction. Here, managers

must maintain the delicate balance between carrying too little and carrying

too much. With too little stock, the firm risks not having products when

customers little stock, the firm risk not having products when customers

want to buy. To remedy this, the firm may need costly emergency

shipments or production, carrying too much inventory results in higher than

necessary inventory carrying costs and stock obsolescence. Thus, firms

must balance the costs or carrying larger inventories against resulting sales

and profits. Inventory management decisions must make two considerations

i.e. sales considerations and cost considerations.

COMMUNICATION

Communication could be said to be the flow of important and meaningful

information, perception and understanding between various parts of an

organization channel networks. Companies manage their supply chains

through information. Channel partners often link up to share information

and to make better joint logistics decisions. From a logistics perspective,

information flows such as customer transactions, billing, shipment,

inventory levels and even customer data are closely linked to channel

performance. The company aim to design a simple, accessible, fast and

accurate process for capturing, processing and sharing channel information.

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The type of communication system installed will depend on the available

technology and in the volume of goods flow.

WAREHOUSING

Production and consumption cycles rarely match. So most companies must

store their goods while they wait to be sold. The storage function

overcomes differences in needed quantities and timing, ensuring that

products are available when customers are ready to buy them. A company

must decide on how many and what types of warehouses it needs and where

they will be located. The firm might use either storage warehouses or

distribution centre. Some advantages inherent with warehouses area; to

even out the seasonal factor in production or sales, to obtain economies in

other business operations, and to improve product quality and value.

Warehousing is not entirely about storage, other functions performed by

warehouses includes:

a) Receiving goods and assuming responsibility

b) Identifying goods by keeping appropriate records of goods received,

and marking with a physical code, tag or label

c) Sorting goods into appropriate areas of storage

d) Marshaling shipment

e) Dispatching the shipment

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REFERENCES

A.B AKPAN (2003): Introduction to marketing 1st edition, published by

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A.B Akpan (2005): Marketing strategy concepts and application, 2nd

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A.K Arowomole, C.A Ademola (2000): Theory and practice of modern

marketing. Published by; Sodipe Nig. Ltd. Mushin, Lagos State.

Ayuba Bello (2003): Marketing principles and management: Shukrah

Kaduna 2nd edition.

J.U Anyaele (2002): Comprehensive economics for senior secondary

schools, glance series, A. Johnson publishers Ltd.

Osuagwu (2002): Marketing principles and Management 2nd

edition.

M.O Sanusi (2003): Fundamentals of modern marketing publishing:

Hamby trends Nig. Ltd. Offa, Kwara State.

N.G Nwokoye (2003): Modern marketing for Nigeria principle and

practice. 2nd edition, Africana best publisher Ltd.

P. Kotler and G. Armstrong (2015): Principles and Marketing 13th

edition, Pearson prentice hall.

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P. Kotler and K.L Keller (2006): Marketing management 12th edition,

Prentice hall, New Delhi, India.

Santo J. (2000): Fundamental of marketing principles and application.

2nd edition, John Maxwell publisher.

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CHAPTER THREE

RESEARCH DESIGN AND METHODOLOGY

3.0 INTRODUCTION

This chapter deals mainly with the various data collection, procedures and

statistics to the research. Other area looked into the sources of data,

population of the study, sample size, research instruments, questionnaire

design and collection.

3.1 SOURCES OF DATA COLLECTION

The two basic types of data collection method used by the researcher in this

research work are primary and secondary sources.

PRIMARY SOURCES: For the purpose of this project, the primary data

collected was through interview, observation and administering

questionnaire. This method was used because it is first hand information

that contained original works.

SECONDARY SOURCE: This project work also used the secondary

source of data collection because it is not costly. It is reliable, consistent

and above all, it is quickly available. This secondary source of data are

second hand information that are modified, selected and re-arranged for the

32

purpose. They involve government publication, periodicals and articles on

various business concert.

3.2 RESEARCH INSTRUMENTS

The researcher had used various instrument in his attempts to gather

relevant data to the scope of the study and the limitation posed by the

process of data collection questionnaire tends to serve as the more creative

instrument in this research. The researcher, however, did not undermine the

significant application of interviewing and survey which he put into use

effectively.

3.3 QUESTIONNAIRE DESIGN

The researcher designed a questionnaire in designing the questionnaire used

in this study, the researcher applied the use of closed form of questionnaire

for the purpose of simplicity and conciseness the researcher restricted the

questionnaire in this study to areas of question when

- Respondent must be able to understood

- Respondent must be willing to provide the information

A questionnaire is a document used in survey comprising some series of

question aimed at a licit certain required information. It is a method of

obtaining specific information about a defined problem so that the data after

33

analysis and interpretation of result are in a better appreciation of the

problem.

3.4 POPULATION AND SAMPLING

The term population in the content of this project works means or refers to

the entire individuals or event to which generalization are to be made.

Therefore the target population for this work is coca-cola plc Kaduna.

SAMPLE SIZE

Sample size involves taking part of the population for study in order to

drew conclusion in the entire population. This sampling techniques used for

the purpose of this project is random sampling, where every staff has an

equal chance of being chosen.

3.5 QUESTIONNAIRE DISTRIBUTION AND COLLECTION

The questionnaire designed was distributed to customers and staff of coca-

cola Plc. A total of fifty (50) questionnaire were distributed in twenty for

the staff and thirty (30) to the customers but only forty five (45) were filled

and returned to the researcher.

34

END NOTE

John A. Eze, V.A Onodugo (2002)Business Policy and strategic

management 1st Edition. (new York prentice Hall)

Philip Koltler (1991): Principles of marketing 6th edition (New York:

Prentice Hall).

Philip Kotler (1998): Marketing management analysis planning

implementation and control 6t edition (New York Prentice Hall).

35

CHAPTER FOUR

DATA PRESENTATION AND ANALYSIS

4.0 INTRODUCTION

In order to uphold some of the hypothesis already done in chapter one (1).

This chapter is devoted for the presentation and analysis of this project

work is based on the data collected from the field through primary source of

data collection, which involve the use of questionnaire. In conducting the

study, questionnaire were distributed to the sample population.

4.1 INTERPRETATION OF DATA

To test the validity or invalidity of the investigation carried out, the

interpretation of data is designed to interpret the question contained in the

questionnaire already distributed.

RESEARCH QUESTION

Table 1: Age of respondent

Option No. of respondent Percentage

20 – 29 10 22.2%

30 – 39 15 33.3%

40 – 44 13 28.9%

50 and above 7 15.6%

Total 45 100%

Source: Survey data 2015

36

RESEARCH QUESTION

Sex of respondent

Table (2)

Options No. of respondents Percentage

Male 25 55.6%

Female 20 44.4%

Total 45 100%


RESEARCH QUESTION

Marital status

Table 3

Option No. of respondents Percentage

Single 19 42.22%

Married 26 57.78%

Total 45 100%


37

The table above shows that 42.22% (10) of the respondent are Single

57.78% (26) of the respondent are Maried.

RESEARCH QUESTION

Highest educational qualification.

Table 4

Option No. of respondents Percentage

WASC/ SSCE 2 5%

ND 8 18%

HND 10 22%

BSE 15 32%

MBA 7 12%

Others 3 7%

Total 45 100%


The tables above shows there Highest academic qualification of

respondents.

RESEARCH QUESTION

38

Years of job experience.

Table 5


Below 10 15 33.3%

10-20 15 33.34

20 above 15 33.4

Total 45 100%


The table above shows that 33.34% (15) of the respondent said mode of

said below 10 years, and 33.34% (15) of the respondent said mode of said

10-20years, while 33.33% (15) have worked for 20 years and above.

RESEARCH QUESTION

Cadre in the company.

39

Table 6


Top Management 8 17.8%

Middle management 12 26.7%

Lower management 25 55.5%

Total 45 100%


The table above shows that 17.8% (8) of the respondent said Top

Management, 26.7% (12) said middle management, 55.5% (25) Said lower

management.

RESEARCH QUESTION

Despondences responses on The distribution method the firm should use

more

40

Table 7


Distribution through depots 36 80%

|Distribution through

resellers

9 20%

Total 45 100%


The table above shows clearly that 80% (36) of the respondents said

Distribution through depots, while 20% (9) of the respondent said

Distribution through resellers.

RESEARCH QUESTION

Despondences responses’ on how the mode of distribution affected product

sales.

Table 8


Positively 36 80%

41

Negatively 9 20%

Total 45 100%


The table above show clearly that 80% (36) of the respondents said

positively, while 20% (9) of the respondent said negatively

RESEARCH QUESTION

The present sales in greater than the past sales?

Table 9


Yes 36 80%

No 9 20%

Total 45 100%


The table above show clearly that 80% (36) of the respondents said their sale

increase compare to the past sales, while 20% (9) of the respondent said

their sale not increase in the recent year.

RESEARCH QUESTION

42

Responses to the relationship between intermediaries and company sales

forces?

Table 10


Very good 18 40%

Good 15 33.3%

Cordial 12 26.7%

Fair - -

Total 45 100%


The above table shows that 40% (18) of the respondents said they are

having very good relationship with the company sale force, 33.3% (15) said

the relationship is good, while 26.7% (12) said the relationship that they an

having cordial relationship with the company sales forces.

RESEARCH QUESTION

The responses in the quality of coca-cola plc product compare to that of

competitors?

Table 11


Very good 16 35.6%

43

Good 22 48.8%

Fair 7 15.6%

Poor - -

Total 45 100%


The table above shows that 35.6% (16) of the respondents, said coca-cola

product is very good compare to competitors, 48.8% (27) said their product

is good compare to competitors while 15.6% (7) said coca-cola product in

fair compare to other competitors.

RESEARCH QUESTION

Respondents responses’ on How the Price of the product farced in the

market

Table (12)


Quite competitive 12 26.&

Just competitive 27 60%

At per with others 4 8.9%

44

Undecided 2 4.4%

Total 45 100%


The above table shows that 26.7% (12) of the respondents said Quite

competitive, 60% (27) said Just competitive 8.4% (4) said they at per with

others, while 4.4 (2) an undecided.

RESEARCH QUESTION

Respondents Responses on how the company should improve on its

distribution.

Table (13)


45

Open more sale deports 7 15.6%

Increase numbers of major

distributors

18 40%

Increase the first size 9 20%

undecided 11 24.4%

Total 45 100%


The table above shows that15.6% (7) of the respondent said the Open more

sale deports 40% (18) said Increase numbers of major distributors, 20% (9)

said Increase the first size, while 24.4% (11) said undecided.

RESEARCH QUESTION

Respondents’ responses on the way effective distribution enhance

marketing of goods and services

Table (14)


Quiet significantly 36 80%

46

Significantly 9 20%

Total 45 100%


The table above shows clearly that 80% (36) of the respondents said Quiet

significantly, while 20% (9) of the respondent said significantly.

RESEARCH QUESTION

Effective distribution does not enhance significantly an organizations marketing

of goods and service

Table 15

Opinion Top

management

Middle

management

Lower

management

Total

Yes 13 7 10 30

No 7 5 3 15

Total 20 12 13 45


4.2 TEST OF HYPOTHESIS

With proper understanding and careful analysis of the previous researcher

test of hypothesis and facts put together by the researcher to make the study

more clear. The question are laid into hypothesis, as can be seen in chapter

one (1).

47

In testing hypothesis, the researcher assumed 5% (0.05) level of

significance and chi-square distribution used as test statistics.

HYPOTHESIS

This hypothesis state that effective distribution does not enhance

significantly an organizations marketing of goods and service.

. To test this hypothesis table (4.15) is hereby reproduced to show the level

of responses.

Table 16

Opinion Top

management

Middle

management

Lower

management

Total

Yes 13 7 10 30

No 7 5 3 15

Total 20 12 13 45


X2 = (O – e)2

e

Where:

X2 = chi-square

= summation sign

O = observed frequency

48

e = expected frequency

Expected frequency = row total x column total Grand total

For “Yes” row

X2 = 30 x 20 45 = 13.33

X2 = 30 x 13 45 = 3.67

For “No” row

X2 = 15 x 20 45 = 6.67

X2 = 15 x 13 45 = 4

X2 = 15 x 13 45 = 4.33

CONTINGENCY TABLE

Opinion Top management Middle

management

Lower

management

Yes 13(13.33) 7(8) 10(8.67)

No 7(6.67) 5(4) 3(4.33)

49


Observed frequency = X2 = (O – e)2

e

X2 = (13 – 13.33)2 13.33 = 0.081

X2 = (7 – 8)2

8 = 0.125

(10 – 8.67)2

8.67 = 0.204

(5 – 4)2

4 = 0.25

(3 – 4.33)2

4.33 = 0.408

X2 = 2.39

Degree of freedom:

(r – 1) (C – 1)

r = No. of rows

C = No. of columns

D.F = (3 – 1) (2 – 1)

D.F = (2) (1)

50

D.F = 2

DECISION RULE

Since the calculated value of X2 is 2.39 which is greater than critical value

of 5.99, we reject the null hypothesis (Ho) at 95% confidence and accept

the alternative hypothesis (Hi) and then conclude that; physical distribution

increase an organization market share.

4.3 RESEARCH FINDINGS

Having analyzed the data and tested the hypothesis the following findings

were made.

a. The result of the analysis has indicated that physical distribution

helps in increasing sales volume.

b. Physical distribution should be properly maintained, this will lead to

increase in efficiency, effectiveness and productivity.

c. There should be proper and adequate supervisions of physical

distribution as this lead to their development and expansion of the

organization.

d. There is clear indication that the relationship between the sales force

and middlemen is very cordial.

51

e. It has also indicate in the analysis that coca-cola plc, uses marketing

intermediaries in distributing their product.

f. Customers are satisfied with the price of the coca-cola plc product.

52

CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATION

5.0 SUMMARY

Business organization comes in different nature. Whatever the native, form

or size their most important task is satisfying the wants and needs of

customers. The entity must at all times try to identify the wants, needs and

interest of the target market and their determining ways and means of

satisfying them to yield benefit to both the customer and the organization.

This project work was written is chapters. There are five chapters in all,

chapter one dwelled on the background and nature of physical distribution

and market share, it also include statement of the problem, the objectives of

the study, others areas discussed in this chapter includes; scope and

limitation of the study, significance of the study and statement of

hypothesis.

Chapter two deals with literature review, which review comments,

statement and opinions made by previous person or groups as contain in

books, journals, article etc.

Chapter three highlighted the research methodology viz-a-viz population

and sample size, method of data collection, method of data analysis.

53

Chapter four deals with data presentation and analysis, finally in chapter

five, the entire research work are summarized, findings of the research are

stated and recommendation are made.

5.1 CONCLUSION

Throughout this study, physical distribution and market share has been seen

as a major component in increasing and lifting organization to the next level

in the market place. The aim of physical distribution is gathering the right

goods to the right place at the right time for the least cost. Goods have to be

moved from place of origin to the place of use or consumption. The

appropriate channel of distribution used either for consumer or industrial

goods are carefully chosen so that goods reach their destination on time and

free of damage and we have seen this example with coca-cola plc, which is

our case study.

Based on the literature review, data presentation and analysis and the

researcher personal observation, the following are the conclusion of the

study.

Physical distribution has a temporary effect in sales volume in coca-cola plc

or soft drink industry.

Physical distribution increase sales volume.

54

Coca-cola plc product are accepted and consumed by all categories of

people in the country and has it market in all communities all over the

country.

Physical distribution serves as a vital link between the manufacturer and

distributors as well as the consumers.

Physical distribution assist organization to provide time and place utility

and convenient value to present and prospective customers.

5.2 RECOMMENDATIONS

As in the case with small or developing countries today, their major

problems is insufficient and inefficient planning, organizing and

management of physical distribution activities. Based on the finding of the

research, the following recommendation are made.

The management of the coca-cola plc should invest resources in physical

distribution activities as the case will increase the sales volume of the

company thereby meeting the company objective of increasing market

share.

The company (coca-cola plc) should engage in social responsibilities or

provide some infrastructural facilities, this will give the consumer of the

product a sense of belonging thereby patronizing the coca-cola product

more.

55

The company should constantly service their truck to avoid breakdown on

the road to ensure safe delivery of goods.

The intermediaries should be given a lift or encouragement and certain

incentives to boost product in a targeted market.

However, further research can be conducted in other peculiar area with

specific reference to the distribution policies of developing companies.

Similarly research could be conducted in the area of the practice of

inventory (storage) management as it affect physical distribution of

essential consumer products in the economy.

56

BIBLIOGRAPHY

A.B Akpan (2003): Introduction to marketing 1st edition, published by

Isola Ola and sons, Zaria.

A.B Akpan (2003): Marketing strategy concepts and application 2nd

edition, published by Isola Ola and sons, Zaria.

A.K Arowole, E.A Ademola (2000): Theory and practice of modern

marketing 1st edition, Sodipe publisher Nig. Ltd. Lagos.

Ayuba Bello (2003): Marketing principles and management, 2nd

edition, Shukrah Kaduna.

E.O Oni, L.O Adedeji (2006): Research methodology in the social and

management science 1st edition, Adlek printer Iree, Osun State

J.U Anyaele (2002): Comprehensive economics for senior secondary

schools, Glance series. A Johnson publishers Ltd.

Luis Osuagwu (2002): Marketing principles and management, 2nd

edition.

M.O Sanusi (2003): Fundamentals of modern marketing 1st edition,

Hamby trends publisher Nig. Ltd. Offa, Kwara State.

N.G Nwokoye (2003): Modern marketing for Nigeria principles and

practice, 2nd edition, African best publisher Ltd.

57

P. Kotler, G. Armstrong (2015): Principles of marketing 13th edition,

Pearson’s prentice hall

William J. Stanton (1982): Fundamental of marketing 2nd edition,

Grain hall book company, New York.

58

APPENDIX A

Department of Marketing,Federal Polytechnic,P.M.B 001, Nasarawa Nasarawa StateJuly 10, 2015

Dear Sir/Madam

This questionnaire is designed to find out the essence of physical distribution in

extension of market share (a case study of coca-cola plc Kaduna). It is purely an

academic exercise in partial fulfillment for the award of national diploma in

marketing from the federal polytechnic Nasarawa. The data will be used for the

purpose of research towards the advancement of knowledge.

Yours faithfully

MUSA ABDULRAHMAN

59

APPENDIX B

Please tick ( ) as responses to questions except where title comment might be

necessary.

1. Age of respondent (in years)

a. 20 – 29 [ ]

b. 30 – 39 [ ]

c. 40 – 49 [ ]

d. 50 – and above [ ]

2. Sex of respondents

a. Male [ ]

b. Female [ ]

3. marital status

a. single [ ]

b. married [ ]

4. Highest educational qualification?.

a. WASC/SSSC [ ]

b. ND [ ]

c. HND [ ]

d. BSC [ ]

e. MBA [ ]

f. Other [ ]

60

5. Years of job experience ?

a. below 10 years [ ]

b. 10-20 years [ ]

c. 20years above [ ]

6. Cadre In The Company?

a. Top management [ ]

b. Middle management [ ]

c. Lower management [ ]

7. which distribution method do you think the firm should use more?

a. distribution through deport [ ]

b. distribution through resellers [ ]

8. how has your mode of distribution affected products sales?

a. Positively [ ]

b. Negatively [ ]

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9. Is your past sales greater than your present sales

a. Yes [ ]

b. No [ ]

10. How is your relationship with the company’s sales force?

a. Very good [ ]

b. Good [ ]

c. Cordial [ ]

d. Fair [ ]

11. How would you compare coca-cola with that of competitors?

a. Very good [ ]

b. Good [ ]

c. Fair [ ]

d. Poor [ ]

12. How has the price of the product fared in the market?

a. Quite competitive [ ]

b. Just competitive [ ]

c. At per with others [ ]

13. How should the company improve on its distribution?

a. Open More sales Depot [ ]

b. Increase numbers of major distributors [ ]

62

c. Increase the firs size [ ]

d. Undecided [ ]

14. In which way should effective distribution enhance marketing of goods and

services?

a. Quite significantly [ ]

b. insignificantly [ ]

63

Physical Distribution

Documents

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