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THE EFFECT OF PHYSICAL DISTRIBUTION ON THE SALES VOLUME OF BEVERAGE

ABSTRACT

The aim of this research work is to know the effect of physical distribution on sales volume of beverages in Enugu Metropolis. It is also aimed at ascertaining the performance of physical distribution on seven up product/ drink. The objective of the researcher is to address the following: to find out the distribution strategy employed by the company to get its product to the ultimate consumers, to determine the efficient and profitability of physical distribution in the company operation. To find out how often the consumer has been disappointed by unavailability of the product. This issues were addressed through theoretical and empirical help approach within help of secondary and primary data collection method, related literature were reviewed to ascertain what various authors have to say on the topic. The question is; how do you assess the effect of physical distribution on the performance of seven up product. The researcher found out that physical distribution have a very positive effect on sales volume of beverage. The researcher made the following recommendations, the company should engage in effective distribution strategy, they should increase its effort toward the integration for the range of the physical distribution activities. 

A

CHAPTER ONE

INTRODUCTION

1.1     BACKGROUND OF THE STUDY

    In any economic system there are always the basic element of production and consumption. In such a business environment physically distributed problem has received an increasing emphasis.

     The table of matching the technical excellence of mass production with parallel progress in mass distribution becomes crucial. Consumers and customers cannot enjoy the benefits of mass production without efficient distribution system.

     Getting the productions to customers as viewed by management is the concern of other. The distribution activity of the firm is as such a part marketing mix as pricing, promotions and product decision. Indeed some market the impact of the distribution effort upon sales can exceed that of other mix element. The distribution channels provides the link between highly specialized and geographical dispersed produces of goods and the demand of millions of purchasing units seen as the means whereby the products reaches the successful development of the firms distributive effort is the adoption of total systems approach, whereby an integration view is taken of the various activities involved in the distribution effort.

     The physical distribution channels structures represent a network of specialized institution that exist for the purpose of physically delivery products assortment to purchase the physical   distribution channels consists of institutional arrangement between specialized intermediaries engaged in the fiction for whom in the manufacturer producing. Physical distribution activities have recently received increasing attention from business management including small business other. This is due to the fact that these functions often represent almost half of the marketing cost product. In fact researcher’s indicate that physical distribution cost nationally amend to approximately to percent of the country’s total gross national product (GNP)

               These finding have led to many small business to expand this cost cutting effort beyond their historical focus on production to encompass physical distribution activities.

BRIEF HISTORY OF THE COMPANY

Seven-up bottling company is one of the largest manufacturing companies in Nigeria. They produce and distribute the favorite brand of soft drink, Pepsi, Miranda, Seven-up and Mountain Dew.

     Their brands are popular and widely consumed across the length bread of Nigeria. Seven-up bottling company has well Coordinated distributed networks over 200 distribution centers. Located across Seven-up bottling company was incorporated in November 1951 as subsidiary of centers group. Their production began in 1953 at a bottling factory in Ebute Metta in Lagos State.

     Since production started the company has the largest bottle of non-alcoholic beverage in the country in terms of sales volume with about 1.8 million bottles sold per year, making it the second largest market in Africa.

1.2               STATEMENT OF PROBLEM

Physical distribution is a component of distribution which one of the four element of marketing mix without physical distribution the production of an organization cannot get the consumer. This shows the important of physical distribution  in the saves of a products.

     A lot of money has been spent on physical distribution by some organization, but the effect of physical distribution by some organization, but the effect of physical distribution on sales is still questionable thus, the aim of this study is to ascertain the effect of physical distribution on the sales volume or beverages.

1.3               OBJECTIVE OF THE STUDY

The objective of this study is to fulfill the following

1.  To examine Seven-up bottling company’s physical distribution objectives and policies. And to determine at what level they are set and how the company is organized to achieve these objectives.

2.  To find out the distribution strategies employed by the company to get it’s products to the ultimate consumers.

3.  To determine the efficient and profitability of physical distribution in the company operation.

4.  To find out its physical distribution has any effect on the company’s sales volume.

5.  To ascertain the performance of physical distribution on the Seven-up often the consumer has been disappointed by unavailability of the product.

1.4               SIGNIFICANT OF THE STUDY

The end product or otherwise the finding of this research work will be useful to different categories of people and organized normally students of marketing and related fields, other researches corporate organizations (especially business institutions) Seven-up bottling company government and the society at large.

1.5               RESEARCH QUESTIONS

1.  To what extent does physical distribution interface the performance of Seven-up product?

2.  Does physical distribution has any effect on sales volume of Seven-up drink?

3.  Is the cost of carrying out physical distribution high?

4.  How many of the production line did you carryout physical distribution activities?

5.  Did you still make much gain after the physical distribution expenses?

6.  How often have you (consumers) been disappointed by unavailability of the products?

1.6               SCOPE OF THE STUDY

In this study the researcher focus his study on the part of the company business portfolio where physical distribution is actually practiced. Hence the researcher narrows the study to cover zones/territories at Ninth Mile, Abakpa, Enugu Ngwo (All within Enugu State). In order to see how the product get to the ultimate consumer and the sales representatives of Seven-up bottling company Enugu State.

1.7               DEFINITION OF TERMS

1.  TRANSPORTATION: This serves as a link between the manufacturers and the suppliers and also between the manufacturers and the final consumer. It bridges the spatial gaps among the fixed factory and the market. Therefore transportation increases the value of the product by creating time and place utilities and at the same time promoting possession utility.

2.  INVENTORY MANAGEMENT AND CONTROL

INVENTORY MANAGEMENT: Inventory management is one of the major centers of physical distribution. It involves aimed at ensuring maximum customer’s service at minimum cost. It also involve the maintenance and storage of optional cycle and safety stock level in order to ensure a minimum stock out situation.

3.  WAREHOUSING: Warehousing involves the physical facilities used primarily for storage within a distribution channel, therefore, warehousing is one of the physical distribution activities involved in increasing goods, storing them and holding them till they are further processed. It involves receiving finished goods from the production line arranging sorting and keeping them in good condition to facilitate their transfer to distribution channel.

4.  PCKAGING: Packaging is one of the physical distribution activities designed to provide wrapper or container for the finished goods. The major function of packaging is to protect finished goods from damage and also to keep them in good condition till they are needed by the final consumers. It also facilitates sales through promotions, products differentiation, labeling and provision of infrastructural materials. Packaging help in achieving the physical distribution activities of providing adequate consumer service at minimal cost through protection of goods from damages and provision of the goods in good condition to the final consumer.

5.  MATERIAL HADLING: In order to achieve the physical distribution of objective of providing adequate customer’s services at a minimum cost, management has to ensure that materials and component part are efficiently handled right from the time materials and component part enters the factory gate till they are processed and ready for delivery to consumer in form of finished goods.

6.  ORDER PROCESSING: This involves the activities undertaken from the point of receipt of order till the warehouse is notified to ship the orders. It involves the collection and processing of all document relating to internal and external transaction. Such document include: customer’s order, shipping manifest, involves loading from payment receipt, warehouse storage data and pallet collection. The range activities involves in order processing include receipts and documentation of order, ascertaining the credit worthiness of the customers, creating the sales person that get the order with the sales reflecting the order in the customer account notifying the account department.

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