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A STUDY OF THE PRODUCT DISTRIBUTION SYSTEM IN THE BREWERY INDUSTRY

CHAPTER ONE

INTRODUCTION

1.1   BACKGROUND OF THE STUDY

Looking at the topic “A study of the product distribution system in the brewery industry”. A case study of consolidated breweries plc. Breweries of the famous “33” Export large Beer. Shows that it is topical both in time and place. To be candid the image of our breweries is not what one should the proud of when compared to what is seen in the advanced countries.

The distribution system has been the most chaotic and to a large extent responsible or the increasing prices of beer. Marketing of products has two divergent but related processes the first of those processes deal with the search for and stimulation of the buyers while the second deals with the physical distribution of goods. Experience has shown that due to increased competition for market entrepreneurs and their marketing  execution have assigned most of their time not only in search and stimulation of goods with this function in mind. They are focusing their attention on developing a mix of products, prices, promotion and channels that would keep demand high, they have viewed physical distribution activity of making goods available to the buyers  supportive and subsidiary. An effective customers services physical distribution, a public limited liability company like the consolidated breweries plc is a weak position or state when it receives order for beer but no means of deliver them.

A BEER HOSTORY AND BACKGROUND IFORMATION OF  CONSOLIDATED BREWERIES PLC WITHY PARTICULAR REFERNCE TO “33” EXPORT LAGER

The research choose the above heading in order to differential between the two division the constitute the vast consolidated breweries plc.

Namely:

Beer division (“33” export lager beer).

the soft drink division (Hi- malt)

The reason for the differentiation is to create the beer division, while the research does not intend to neglect the importance of soft drink industry and its distribution system for fear  of inflating the research paper, I feel that the out come of my criticisms on the distribution system in the beer section will also be beneficial to the soft drink division. The consolidated breweries plc is a public limited liability company formed since 1983 under levities groups of companies management.

The Brewery is located at Km 24 Owerri/ Onitsha feral High way. The first chairman of the company was Chief J.O Udorji (CFR). The retired from the board with effect from December 31 1996 after piloting the affaires to this company for twelve (12) eventful years including 4 years after it’s merger with continent breweries ltd.

In those 12 years, the company had witnessed tremendous growths.

For instance, turnover has risen from less than N 26  million in the first year of operation to N1. 66 billion in December 1996, while profit before tax rose from less than N 4 million to N 90.39 million. The current chairman of the company’s prof (Mrs) Oyin Odutola OlUrin. The company’s raw materiel procurement is 60% locally and 40% foreign and has a normal production capacity of ill, 520 creates prepay.

There is a marketing department with a well defined organizational structure. The consolidated breweries plc has different sections which effect their sales.

They include empties cash product allocation and customers legislation sections.

Qualified sales representatives of the the company’s are posted on the basis. These sales representatives are in charge of various depots on their areas of operation. The company has many distributors all over the country. The fo0rm the core of the company’s distribution network which aimed at ensuring a steady supply of “3” export larger beer to customers their depots are located at owerri, Aba Onitsha, Port- Harcourt etc. they have fleet vehicle ranging from steer 3 tons vehicles, Mercedes 911 trucks and long trailers. The beer division of consolidate breweries plc force of over 400 employees.

MISSION STATEMENT OF THE COMPANY.

The main objective of the company is to industrialize the rural areas consequently offer employment to the teaming rural population. It is the wish of the company to develop the economy of the state and the nation in general. The company also wishes to render efficient services to it’s customers and what is more,. Make profits.

STATEMENT OF THE PROBLEMS

The need for efficient beer distribution within the system and the growing need for proper logistic have become very necessary. The consolidated breweries plc is operating in a competitive marketing environment with other breweries in the same industry and as such is confronted with a lot of internal and external problems on economic social, political factors. These problems which the encountered is found under he broad aspect of distribution method and distribution logistics

They includes:

the problem of inadequate transportation and storage facilities for effective distribution.

The problem of total neglect of marketing research as it absence militates against the standard markets, consumers and tier needs.

The problems of cushioning the staff competition in the beer markets due to proliferation and consequent over floating of the produce by other breweries plants in the country.

The problem of making their beer available in every part of the country rather than concentrating in those areas where the market had been established.

The problem of relegating the marketing concept to the background and adopting the sales concept which is unorthodox (marketing concept aim at customers satisfaction which sales concept is for profit maximization).

The problem of organized marketing department which can boast of adequate and right caliber of human resources with suitable experiment and transparent honestly.

The problems of the machine breakdown die to lack of spare parts of machines and adversely affected the company.

The problem of increasing cost of raw materials in the run affects the production cost and services like distribution.

It is note worthy to mention here that the research does not intend to claim that these are the only problems existing in the company. But since the aim of this project is not for a mere identification of the problems but to find the possibilities of getting consolidated breweries plc play the role in the high of those problems as their origin and that of those yet to be identified will be traced in the data analysis with their solution offered in the section dealing with recommendations.

OBJECTIVES OF THE STUDY.

Marketing concept is gaining in Nigeria positive realization of this world involves our paring way for its entrance and total practice.

This is seen from the face that competitive market is gradually taking the place of sellers market.

This is a result of the nation’s productive capacity growth in certain product categories like beer.

To achieve this marketing concept an effective distribution system will be necessary. This demands paying attention to the decisions relating to it.

These decisions depend on the product demand consideration, cost consideration and competition the purpose of this study therefore is.

To identify the problems and prospects of distribution management of consolidated breweries plc.

To assess the distribution systems in the consolidated breweries plc as regards the sales of its lager Beer with a view to determine whether they are keeping with the modern marketing concept.

To highlight the possibilities of structuring the present distribution structure and operations with a view to ensuring consumers sovereignty and a reasonable return on investment.

To highlight the likely problems encounter in the distribution for “33” (double three) export Beer.

RESEARCH QUESTIONS

Are yours sales people and channels member given the right to supervision and motivation?

Does your company maintain adequate distribution facilities?

Does consolidated breweries plc engages indirect sales to final consumers?

Looking at the number of depots consolidated breweries maintain are they sufficient or are you advocating for more depot?

Do you think there is need for distribution or sellers in your locality?

SIGNIFICANCE OF THE STUDY.

This study apart from helping the researcher meet up with his academic programme, would also expose him to real practical experienced and training in the field of research for the purpose of problem solving.

Besides, it would for further improvement on their method of distribution.

SCOPE OF THE STUDY

The work which is aimed at accessing analytically the distribution system consolidated breweries plc is a study based purely on the company.

Therefore the researcher restricts himself of this particular industry but no with the knowledge of their various distributors and consumers scattered all over its geographical area of sale in the North and in the south.

Owing to very limited time the present economic situation and finance available for the study, the write instead of traveling to the far north and south for information from some of the distribution from that geographical area relied on information from distribution from these are who were incidentally present in the brewery at the time the researcher went  there to collect data relevant foe this research.

It was it really possible for the researcher to collect all the study because in most in cases.

The statistical figures required were said to be “classified matters” even my request for the company’s 1998 annual was not granted. To a large extent official redtops was a  hindrance to the elicitation of vital information for instance, the question of the marketing department giving me their list of distributors was met with such a fate.

My interview with the special assistance of the managing director were intermittently disrupted by occasion callers to the brewery.

Theses difficulties encountered necessitate the researcher to solely depends on answer obtained from the interview with the personal assistant to the managering director.

On the part of ht consumers, three towns (Owerri) Aba and port-Harcourt) in the different states of Imo, Abia and Rivers states were mainly used as a based for ascertaining. It is however believed these towns represent the whole of such town in Nigeria and at the same time serve for the general of the purpose for which the research is intended.

1.7 LIMITATIOIN OF THE STUDY

The main limitation of the research is on the product system of the brewery and that of the entire workers respondent, to accept and answer the research  questionnaire as most of them were into answer the questionnaire.

Time constants also involved in preparing for the final examination cover many of the area of the study.

Writing material was a source of limitation of the was a source of limitation of the study material and books were scarce and the available ones are very expensive and lack of finance constituted a great deal of limitation to the study.

1.8 DEFINITION OF TERMS.

Product: it can defined as anything that has value and capable of satisfying needs and wants of individual it is anything offered to the market for attention consumption or acquisition product is a big umbrella in which commodity are accommodated. It can also be referred to as embodiment of goods and services and is not only physical or tangible product know as commodity.

Distribution system: there could be said to be the flow of title to goods and services as they move along, the channel of distribution from point of product to point of consumption in an attempt to more these goods and services marketing middle mar assist on exchanging tittles and possessions, should range from wholesalers, retailers distributors dealers etc. these are used because they provide financial support to the brewings. Company.

iii. Brewery industry: or industry itself these could be said to be numbers benefit  that exist as a result of the presence of physical distribution. In the field of marketing some of them could be seen as the product movement storage production of marketing cost information availability alternative and promotion through all these the industry production input will be a career opportunities and stability of the Nigeria brewery plc.

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