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THE EFFECTIVENESS OF PHYSICAL DISTRIBUTION OF CHARIS SATCHET WATER IN ENUGU METROPOLIS (A CASE STUDY OF EJ COLLINCE COMPANY)

CHAPTER ONE

INTRODUCTION

1.1   BACKGROUND OF THE STUDY

Production is uncompleted until the good get to the final consumer whom they are meant.  A typical firm will deliver or discover that the consumer for its products are scattered abroad. The firm decision to distribute its products directly through own sales outlets or indirectly through marketing intermediaries such as wholesale and retailers alone is not enough to get the goods to the consumers. The firm has to ensure that the product are actually available or make available to the distribution at lets. Adequate core has to be taken of the products minimize losses or damages, and commensurate customer service have to be given in order to achieve customer satisfaction and increase patronage.

In order management of the flow of products from manufacturer to consumer with aim to achieve consumer satisfaction and goal of the firm, physical distribution must be properly channeled to this respect. The increase emphasis given to the concept of the 1950,s is a practical example of its immense contribution to the successful achievement of marketing goals. Physical distribution is just how companies store; handle more goods so that they will be available to consumers at the right time and place.

Consumers attraction and satisfaction are highly influence by the seller physical distribution capabilities. As such the issue of physical distribution is important in business endeavour. An executive physical distribution which result to a reduction in cost of physical distribution will lead to a reduction in production cost or product price, which will invariably head to the attraction of many price conscious consumers.

In Nigeria and as well as most other nations, industries are localized or concentrated in few industrial cities or layout wile the consumers or their products are scattered abroad. Efficient transportation and location of sales outlets will enable industries to make their products available to consumer living very far. Efficient transportation and physical can give a company advantage in being close to these consumers. For example, vita malt drinks produced by Associated Breweries Ltd. In Ogun State of Nigeria compete favourably with other malt drinks in virtually all ports of the country as a result of the efficient planning and coordination of physical distribution activities which make goods available at the right place and time or where right place and needed.

Expert believe that substantial savings can be gain in the physical distribution area which has been describe as “the last frontier for cost economics” (Journal of marketing April 1962:15). Physical distribution in the sachet industries should be intensive they should stock their products in as outlet are possible. The goals must have place utility. Cigarette for example, since over one million outlets to maximized brand exposure and convenience. Physical distribution should be intensive because consumers are not efficient distribution of the product is very important to gain marketing goals and to compete efficiently and effectively too.

1.2     HISTORICAL BACKGROUND OF THE COMPANY

Charis sachet water industry one of the leading name in sachet water industry in Enugu Metropolis. The company is located in heart of the commercial city of Enugu J.E Collince company was establishes over a decades with improved capacity physical distribution of their products. The company has so many distribution outlets and target geographical areas. The J.E. Collince the makers of Charis sachet water was among the largest sale sachet water in the industry in Enugu.

The profitability and success of the company can be clearly traced as they are heavily patronized in the competitive business. The company is located in heart of Enugu metropolis (River Asata layout). The company have a brand name Charis water which the production site is in No. 3 Mildland Avenue, Asata River layout Enugu.

1.3   STATEMENT OF PROBLEMS

Physical distribution is a very important aspect of distribution activity as it creates place and time utility and set the stage for possession and title utility. All gained towards customers satisfaction. Based on this therefore, there is need for a careful handling of the physical distribution functions for a successful operation of sachet water industries. However, for Nigeria sachet water industries physical distribution system to beat lest near perfection. It must rate highly in its care activities such as transportation, warehousing, inventory management, and others. Processing also have the ability to organize these price of activities properly and implement them efficiently and effectively, at time the salesman are not efficient in carrying out their physical distribution activities. More so, the salesmen arbitrarily raise the cost of each buy of sachet water sold to intermediary, market thus reducing their margin some times the degree of the wholesalers margin affect the final customers. In some cases, the customers do not get enough of the products at the right time and in the right quality.

In the case of Charis sachet water industry they don’t have enough outlets for their product. Nevertheless, for them to compete effectively and efficiently with other sachet water company’s they need to have enough outlets for their products. In most cases, the salesman direct some products already allocated to the company’s customers. More so, the distribution of Charis sachet products have a direct relationship with sales turnover it enjoys. A negative response to any of these points will indicate that there is deviation from what should normally obtain. The desire to find out if any of such problem exist, their cause effect and what may be done to resolve such problems are the reasons for undertaking this research work.

1.4  OBJECTIVE OF THE STUDY

In consonance with the macro objective to determine the effectiveness of physical distribution of Charis product in Enugu metropolis, this research has some objective which includes;

To study the physical distribution activities of Charis sachet water in Enugu and try to find out if these activities are well performed as expected.

Analyzing the present physical distribution system with the aims to accessing its level of efficiency is another point.

To determine the nature of the market; if it diffused, concentrated or dusted.

To also determines the extent to which the distribution of Charis dates with the sale being made.

1.5     SIGNIFICANCE OF THE STUDY

It is important to study the effectiveness of physical distribution because without distribution companies cannot make sales. The old buying in marketing was, that when you produce the product the whole world will bit a part to your door. In the modern time, it dose not apply because the place utilizing must be incorporated. This means that in addition to producing the best product, the customers must be communicated and they may want it delivered at a given time, place and form and such it the function of physical distribution.

Non- durable products such as Charis sachet water have to be supplied as at when needed. Any short fall in performance will reduce the level of customer service. Thus it become important to study the physical distribution system and benefit from this effective they are and uncover and defects inherent within the system and then recommend measures to reduce or eliminate these defects.

Furthermore, it is expected that findings of this study will help the management and distribution of this company in improving their business activities. Customers will also benefit from this efficient physical distribution in that Charis product which will be made more ready available to them at all time.

1.6    LIMITATION OF THE STUDY

There is the problem of lack of time. The work is very elaborate yet we have very limited time to accomplish it and with other tight schedules. However, because of the importance of the subject matter, we are able to carry out a justifiable work from where dependable generalizations could be made again, there was there problem of financial constrain of the nations economic crunch.

The high cost of transportation to this company under study was also hindrance in the sense that most time the researcher had to repeat his visit twice or thrice a week before getting the information required. Also the consideration.

1.7    RESEARCH QUESTIONS

The research question for this work will be base on the following.

What is the size of demand for Charis waters? Are customers satisfied with the present level of physical distribution service of Charis?

Does Charis has enough distribution outlet to satisfy the customers. What is the distribution objective of Charis? What presentation of market is Charis serving? 

What is the type of Channel structure used by Charis? 

Is it from the produceto the customers or with the use of intermediaries? 

Does the distribution strategy questionnaire regular and fulfill the issue of time lines is it effective in terms of cost and distribution objectives?