Examination Of Distribution Channels For Consumer Foods (A Case Study Of Okin Biscuit Off)

Project and Seminar Material for Business Administration and Management BAM

Examination Of Distribution Channels For Consumer Foods (A Case Study Of Okin Biscuit Off)

Chapter One


1.1 Background of the Study

Regardless of how good product may be, it is of little use to customers if it is not found at where he wants it and when he wants it. For simplicity, we will use the term “Place” to refers to all the thing that go into providing time, place and possession utilities that are needed to satisfy target customer just as we use product to mean total product offered.

Place decision may be concerned with the location of marketing facilities and the solution, use of marketing specification including transportation, storage facilities, wholesalers and retails.

There are many definitions of channels of distribution some will be cited because each definition in it own way conveys a bit about the concepts.

Channels are methods or system that people use to get information or communicate it to some specified set of people or individual.

Distribution means distributing something to some particular set of people.

Channel of distribution is an organized network of people or organization that performs all the marketing functions and activities required in ensuring the movement of good from manufacturers to consumers.

Channels of distribution is also defined as the growth of intermediaries who move good from producers to consumers channels are perceived by some group as made up of intervening agents who facilitates sales.

In our review, we shall define channels of distribution as the path taken by the title ownership in moving goods from producer to consumer.

The Channels of distribution of consumer goods therefore, in its most meaningful and simple form is the course taken in the transfer of a commodity. This rate include both the manufacturer and the ultimate consumer as well as anyone in between this kind of channels. Goods and services cannot be marketed without the performance of market function.

To understood this, one has to remember that marketing is the performance of activities to facilitate exchange processes. Whenever we are talking of facilitating exchange process, invariably we are thinking of channels of distribution. It is importance to keep two things in mind.

  1. Channels are coalition of marketing institutions (firms or agencies).
  2. Collectively or independently performing marketing function (Merchandising, promotion, physical distribution) in order to move goods from producer to target consumers.

This diagram suggested form of possible channel.

The first channel (manufacturer to consumer) is a direct channel of distribution such channels are established when manufacturers sell through mail order by catalogue or with their own field sales. E.g Aven Cosmetics.

In another channel, producers sell to retailers who in turn sell to consumer. This channel represent the path taken by good handles by departmental stores.

The third channel is where wholesalers deal directly from the producers to retailer who make the goods available to target consumer. That is the traditional method where by goods have been distributed in many countries. It is still the prevalent retailer such as clothing, specialist shop (hairstyle) drugs etc.

Other channel also provide different ways of reaching final consumer. These channels suggest possible ways which has so many possible variations too. The possible variation should not be seen as a competitive channel. Each should be considered a separate possible channel to reach a particular target market. Producers may adopt any one or more to these channels to have their goods reach final consumer as large quantity as possible. But the channel chosen must deliver goods and provide all the marketing functions.

1.2 Aims and Objectives of the Study

The aims and the project is to examine the distributions channel of consumer goods and to be able to differentiate between the goods channels in different form.

1.3 Significance of the Study

The importance of examination of distribution channel of consumer goods is to know how goods are getting to the consumer through the channel of distribution of middlemen. The distributional channel are the key process through which good are available for consumer without the channel the goods would not be realize in so many market.

1.4 Scope of the Study

Perhaps the most obvious point to note is the fact that this study is selective. Therefore, it takes a global view of examination of distribution channels for consumer goods, since the goods produced go through some process of distribution and enhances distribution channel.

It is pertinent to point out therefore, that this resulted only to the examination of distribution channels of consumers goods.

1.5 Limitation of the Study

It is very important to note that this project does not generally consider the examination of distribution channels for all goods. But it emphasis basically to the study of examination of distribution from channels of consumer goods.

1.6 Definition of Key Terms

When carrying out the exercise of examining distribution channels, evaluation of certain key terms are borne in mind by the term charged with the responsibility. Among them are the following.

i. Quality

It refers to the suitability of an item and its intended purpose. Hence, quality have include ability and willingness of the suppliers to meet buyers specification. This refers not only to the total amount of the goods but also the schedule amount to which goods are required.

Thus, a channel who might be able to provide the quantity specified would not be a satisfactory channel from the point of view of quantity.

ii. Price

A price is the value at which a commodity is acquired. Thus a price is good only if it is the lowest price offered for a desire quality and accompanied by sufficient useful services.

iii. Time

The manufacturing of consumer goods is expected to select a reasonable channel that can meet up with the time schedule for delivery and take every reasonable action to ensure the product reach the targeted consumer at appropriate time.

iv. Financial Capacity

If the supplier of goods through a chosen channel has cash flow problem he may have difficulty in paying his account subsequently in provision of ware house this may affect the delivery time and possibly the quality of the goods.

v. Location

The geographical location of the suppliers is another consideration transportation from producers to ultimate user is subjected to many risk.

Chapter Five

Summary, Conclusion and Recommendation

5.1 Summary of Finding

This chapter is structured to give general influence on the proceeding chapters and to give recommendations based on the statistical analysis of data to Okin Biscuits offa, as well as the general public.

Distribution function lies in the fact that how does the goods move from the producer to ultimate consumer. Therefore to have effective distribution channel it is pertinent to consider the activities of middlemen that would make the foods available to users wherever they might be. Thus creating utilities of marketing i.e. time, form, place and ownership.

From the result obtained from the analysis of data, most of the product are dispersed through the activities of middlemen with their standing relationship with Okin Biscuit offa.

Inability of the effective distribution through the available outlets in all the state of the nation give rise to it slow market demand. Though they have outlets scattered in kwara state, lagos etc.

The extension of credit facilities to middlemen is not adequate or almost not existing. It has been disconcerted that trade discount (sometime called functional discounts) are not forthcoming.

The prevailing economic condition in Nigeria greatly affects production and distribution activities in general all marketing activities. The management of Okin Biscuit Offa agreed that they are currently encountering difficulty in maintaining production capacity and reducing costs. In relation middlemen distribution costs are on the increase which eventually leads to an increase in the final prices of goods and services.

It is noteworthy to state that Okin Biscuit offa is one of the leading marketing oriented organization in Nigeria today. A visit to offa provision will best illustrate this points. The marketing department stood solitary from other prominent department like administration production. In the marketing department one will find among them, the marketing manager, marketing research manager, marketing manager national sales, production manager etc.

5.2 Recommendations

The aim of this project is to examine the distribution channels for consumer goods, it has been observed that the establishment of channel of distribution is meant for the concession for some financially. Weak distributor to carry out effectively by providing training and effective information to those selected middlemen and managerial assistance to check them functions.

Those that are involved in distribution of goods and services should be checked regularly to see that they provide for effective distribution to consumers, so that they have goods ‘enough’ to distribute to the consumer at the right time and avoid unnecessary inflation on the prices of the goods so that consumer are not cheated. By armed bandits this has seriously affected distribution of goods in Nigeria.

The last is the fact that there are numerous middlemen nowadays in Nigeria almost every person in traded goods passed through numerous middlemen before reaching the final consumer.

5.3 Conclusions

Distribution is an inter-organization system comprising of a set of inter dependent institutions and agencies. These bodies leave themselves with task of marking goods available from the point of production to the point of consumption.

Consumer goods are those goods that an individuals purchase to satisfy his personal needs. Consumer goods are generally required by the public in general. It is important for the society standard of living. Consumer goods includes fruits, drinks, ingredient, fresh meat and other essentials like palm oil, milk, groundnut and so on.

All these are so essential that people try to satisfy them before embarking or searching for other needs. Wholeselling retailing distribution system is the best method appropriate for effective distribution of goods and other information to the public.

Wholesaling-retailing distribution system makes the import and export of goods available. An effective distribution provides for allocation of available resources provide efficiency in production and delivery within the participants.
The recommendation requires adequate planning and personal dedication. That is it adopted they will go along way in contributing to the economic and social development of a country.

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