An Evaluation Of The Distribution Channel In The Cosmetic Industry In Nigeria (A Case Study Of Selected Cosmetic Companies In Anambra State, Nigeria)

Project and Seminar Material for Business Administration and Management BAM

An Evaluation Of The Distribution Channel In The Cosmetic Industry In Nigeria (A Case Study Of Selected Cosmetic Companies In Anambra State, Nigeria)


Abstract


This study focused on the evaluation of the distribution channel in the cosmetic industry in Nigeria (a Case Study Of Selected Cosmetic Companies In Anambra State, Nigeria). The study is was specifically focused on appraising the company’s product and its various distribution; determining the effective and profitable form of sales in organizations; identifying the means and processes of transportation and selecting the caliber of distributing agents and determining the effectiveness of distribution channel. The study adopted the survey research design and randomly enrolled participants in the study. A total of 75 responses were validated from the enrolled participants where all respondent are staff of Fidex Cosmetics Limited.


Table of Content


  • Title Page
  • Certification
  • Dedication
  • Acknowledgement
  • Table of Content
  • List of Tables
  • Abstract

Chapter One:

Introduction

  • 1.1 Background of the Study
  • 1.2 Statement of the Problem
  • 1.3 Objective of the Study
  • 1.4 Research Questions
  • 1.5 Research Hypothesis
  • 1.6 Significance of the Study
  • 1.7 Scope of the Study
  • 1.8 Limitation of the Study
  • 1.9 Definition of Terms
  • 1.10 Organisations of the Study

Chapter Two:

Review of Literature

  • 2.1 Conceptual Framework
  • 2.2 Theoretical Framework
  • 2.3 Empirical Review

Chapter Three:

Research Methodology

  • 3.1 Research Design
  • 3.2 Population of the Study
  • 3.3 Sample Size Determination
  • 3.4 Sample Size Selection Technique and Procedure
  • 3.5 Research Instrument and Administration
  • 3.6 Method of Data Collection
  • 3.7 Method of Data Analysis
  • 3.8 Validity of the Study
  • 3.9 Reliability of the Study
  • 3.10 Ethical Consideration

Chapter Four:

Data Presentation and Analysis

  • 4.1 Data Presentation
  • 4.2 Analysis of Data
  • 4.3 Answering Research Questions
  • 4.4 Test of Hypotheses

Chapter Five:

Summary, Conclusion and Recommendation

  • 5.1 Summary
  • 5.2 Conclusion
  • 5.3 Recommendation
  • References
  • APPENDIX
  • QUESTIONNAIRE

Chapter One


Introduction

1.1 Background to the Study

One of the important aspects of the production of goods and services is the proper distribution of the same in such a manner that it will reach the target consumers in the most cost-effective and expeditious manner. Marketing is an organizational function and a set of processes for creating, delivering and communicating value to customers, and customer relationship management that also benefits the organization. Marketing is the science of choosing target markets through market analysis and market segmentation, as well as understanding consumer behavior and providing superior customer value. From a societal point of view, marketing is the link between a society’s material requirements and its economic patterns of response. Marketing satisfies these needs and wants through exchange processes and building long term relationships. Marketing activities have contributed greatly to the creation of affluent society.

The exact distribution mix that a company will select depends the analysis of the environment in which it is operating, the analysis of the target consumers, and the type of resources at its disposal. Manufacturers and producers depend on the availability of products to those who wish to purchase them in order for the products to move off the shelves and for the company to make profits, which shows the importance of selecting the
right distribution mix. For example, an orange juice producer must select the most effective distribution mix to ensure that its products get to the right places from where customers can purchase them, a factor that is made more urgent by the short shelf life of such products.

Kaci Lane Hindman (2013), one of the factors that will be considered when coming up with the right distribution mix is the nature of the product to be distributed. For instance, in the case of a product withalimitedshelflife, suchastheorangejuice, the distribution mix must enable a swift transfer of the products from the production plants to the warehouse and to the eventual retailers for purchase by final consumers. In the same sense, a product with a longer shelf life might benefit from the application of a different distribution mix. When considering the effect of the environment on the selection of the proper distribution mix, a lot of factors come into play, such as the state of the transportation infrastructure in place in the environment, since this can lead to different outcomes for the same product in different environments.

For instance, a company that is located in an area with good infrastructural framework in terms of good roadsandreliable transportationschedules willadopta different distribution mix that it will use in another country with a poor infrastructural framework. As such, if the orange juice company is located in a country with good infrastructure, it might use a combination of trucks, inventory and differently packaged products to distribute the finished product. If the same company is located in a country with poor roads and unreliable electricity supply, it might slightly modify the product in order to extend the shelf life, since the poor state of the roads means it cannot expect the same expeditious and reliable delivery routines that it enjoys in more developed regions.

Kotler (2000), says that Place as one of the marketing mix elements is simply getting goods to the right place at the right time in the right quality. Place is the fourth “P” which has its traditional marketing term as distribution.Product distribution (or place) is one of the four elements of the marketing mix. Distribution is the process of making a product or service available for use or consumption by a consumer or business user, using direct means, or using indirect means with intermediaries.

The distribution mix is all those functions marketers perform to move goods from producers to consumers. These intermediate consumers are wholesalers and retailers. They are known as marketing middlemen because they are in the middle of a distribution network that connects producers with consumers (Nwokoye, 1980).

Clifford (1992) opines that management needs to search for distribution economics in inventory control, warehouse location and transportation modes. One problem is that distribution efficiently declines when the company did not meet with delivery date.This leads customers to “bad-mouth” the company eventually sales fall. Management responds by increasing sales force incentives to secure more orders. The sales force succeeds but once again the company slips in meeting delivery dates. Management needs to identify the real bottleneck and invest inmore production and distribution capacity.

Physical distribution is an integrated set of activities that deal with managing the movement of goods within firms and through marketing channels (Kotler, 1980). Planningan effective physical distribution system can be significant decision point in developing anoverall marketing strategy. A company who places the right goods in the right places at the right time, in the right quantity, and with the right support service, is able to sell more than competitors who fail to observe or accomplish some goals.

Physical distribution is of great importance to most firms because it accounts for about 19% – 22% of the retail price. Part of these cost go for movement of products and the remaining part is related to inventory holding. Although physical distribution cost vary from industry to industry.With the above importance and many others prompted the researcher to verify more on the effectiveness of distribution in an organization and suggest other possible ways of distribution in an organization.


1.2 Statement of the Problems

As earlier mentioned in our introduction, it was said that a company places the right goods in the right places, at the right time, in the right quantity and with the right support services and is therefore able to sell more than competitors who fail to observe or accomplish some goals. But over the years, organizations have been trying in one way or the other to bring about an effective distribution but still most organizations lack these areas of marketing mix element.

The present research work is an attempt of finding answers to the above questions that will lead to an effective distribution in an organization especially in Fidex Cosmetics Limited.


1.3 Objectives of the Study

The magnitude of the problems associated with the importance of effective distribution in an organization has reached an unacceptable proportion as many sectors of the society begin to show negative attitude towards it and to make derogatory statements about it.The principal objective of this research is to assess the importance of effective distribution with particular reference to Fidex Cosmetics Limited.

Other objectives of this study are as follows:

  1. To appraise the company’s product and its various distribution channel.
  2. To be able to determine the effective distribution channel and profitable form of sales in organizations.
  3. To identify the means and processes of transportation and selecting the caliber of distributing agents.
  4. To determine the effectiveness of distribution channel.

1.4 Research Question

The various questions one would ask here are:-

  1. What are the distribution channels and how effective are the physical distribution activities in areas such as transportation, warehousing, communication and inventory management?
  2. Does distribution channel creates any impact on sales of organization product?
  3. Are there lack of incentives of any kind by the company to its distributing agents?
  4. Is the design of channels of distribution enough to reach the potential customers?

1.5 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:

  • Ho: That the poor state of roads has no significant impact on effectivedistribution channel of goods.
  • Hi: That the poor state of roads has significant impact on effective distribution channel of goods.

1.6 Significance of the Study

The researcher hopes that the findings of this study will help distributors and marketing managers appreciate the role of distribution, that distribution is an essential tool in the marketing world to enhance efficiency, effectiveness and profitability. The work also could be used as a source of secondary data for academic work for future researchers.


1.7 Scope of the Study

The limited coverage and scanty materials for references have created a serious limitation for the researcher. Most of the relevant facts and information are based on very few published materials and questionnaires.

In the light of the above reasons and others, therefore, it is however not possible for the researcher to design her study to cover the entire branches of Fidex Cosmetics Limited. due to some other unavoidable circumstances such as financial constraints and the time limited which the work ought to be done. For these reasons the study has limited to Fidex Cosmetics Limited. as a true representative of all other branches of Fidex Cosmetics Limited. and to be generalized to cover the number of branches all over the country.


1.8 Limitations 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.


1.9 Definition of Terms

i. 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.

ii. 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.


1.10 Organizations of the Study

The chapter one consist of the introductory part of the study which includes the study background, the statement of the research problem, the study objective and scope of the study.

The second chapter is a critical review of other literatures relevant to the study and its objectives including the theoretical framework for the study. While the third chapter is methods of data collection, sampling and data analysis used in conducting the study. The fourth chapter centres around the research findings including an analysis of how it relates to previous findings. The fifth chapter consists of the summary of findings, conclusion and recommendations base on the study objectives.


Chapter Five


Summary, Conclusion and Recommendation

5.0 Introduction

This is the last chapter of this survey research. The major highlight of each chapters that form the bedrock of this study will be summarized, while the conclusions will be drawn thereof and recommendations are given based on the outcome of the findings.


5.1 Summary

This project is concerned with an evaluation of the distribution channel in the cosmetic industry in Nigeria (a Case Study Of Selected Cosmetic Companies In Anambra State, Nigeria) pricing and promotion are basically essential features of product distribution system in business organization with the fact that, production is not complete until the product and service rendered, gets to the final consumer.

The distribution mix is all those function marketers perform to move goods from producers to consumers. These intermediate consumers are wholesalers and retailers. They are known as marketing middlemen because they are in the middle of a distribution network that connects producers with consumers.


5.2 Conclusion

From the findings so far, the researcher discovered that, distribution efficiency declines when the company fail to meet with delivery date. This leads to customers “bad-mouth” the company and eventually sales fall.When management responds by increasing sales force incentives to secure more force succeeds but once company slips in meeting delivery dates the sales force declines.


5.3 Recommendations

One of the problems identified in the impact of effective distribution system in an organization is their failure in meeting delivery date. In this instance, the researcher hereby suggest that management should search for and employ distribution economies in inventory control, warehouse location, and transportation modes so as to meet delivery dates as at when due.

Another findings in relation to the hypothesis, to alleviate the problem of distribution system in an organization, the researcher recommends that there should be increase in the number of workers in distribution section so as to meet delivery dates of the numerous customers available.

In respect of poor road network, organization should construct road leading to her major market to ease distribution. Federal government should also encourage companies by improving on the road network of the country to allow free movement of goods from the factory to customers.

Research and development department should be established so as to furnish information to the management about problems facing any department in the organization.

Finally, remuneration should be increased to equate the responsibilities as motivation leads to increase productivity.


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