New Product Distribution System And Customer Patronage Of Food And Beverages Firms

Project and Seminar Material for Marketing

New Product Distribution System And Customer Patronage Of Food And Beverages Firms


Abstract


This study was carried out to examine the impact of new product distribution system and customer patronage of food and beverages firms in Rivers State. Specifically the study was carried out to examine the types of distribution system commonly adopted by food and beverages firms in Rivers State, determine whether the distribution system adopted by food and beverages firms influences the acceptance and survival of their new products in the market space, find out whether there is a significant relationship between distribution system and consumers patronage of new products, and find out the distribution systems which effectively facilitate consumers patronage of new product. The survey design was adopted and the simple random sampling techniques were employed in this study. The population size comprise of staff of some selected food and beverages firms in Rivers State. In determining the sample size, the researcher conveniently selected 59 respondents and 50 were validated. Self-constructed and validated questionnaire was used for data collection. The collected and validated questionnaires were analyzed using frequency tables and mean score. While the hypotheses was analysed using Pearson correlation SPSS v23. The result of the findings reveals that distribution system adopted by food and beverages firms influence the acceptance and survival of their new products in the market space. The study also revealed that he distribution systems that effectively facilitate consumers patronage of new product includes: retail distribution strategy, depot distribution strategy, online distribution strategy, personal distribution strategy. Therefore, it is recommended that distributors of beverages should use a combination of more than one distribution strategy. This will help to improve the availability of new products to the customers. To mention but a few.


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 of the Study

Distribution can be described as the controlling, moving of physical goods within industrial firms and through channel systems. Distribution envelops the planning and implementation of physical movement of materials and finished goods from the production point to the point where it will be used to meet consumer needs at a profit on the side of the marketer. The connection between manufacturing and distribution is that any production without progressive, impressive distribution system is 100 percent useless. This is because the produced goods do not gain any utility until it attracts consumers patronage. According to Anoraga,(2005), distribution channel is the route through which our goods and services cross as they travel from one hand to another (from producer to the consumer).

Distribution is all about getting your products/services to the right people at the right time with special consideration for profit and effectiveness. Successful marketing does not end when a business has developed a product/service and has found its appropriate target audience with a view to selling it at the ‘right price (Global Research Society, 2011). The next issue that needs to be faced is how manufacturers are going to distribute and sell these products/services to the consumers. When a product/service is purchased by a consumer, it may have been bought directly from the business itself, or it may have been bought through a number of intermediaries (Hunt &Nevin, 1998).

Marketing Mediums stand in place of organized network of agencies and institutions which combine to carry out all the activities required to merge producers with consumers or vice-visa in order to meet the marketing goals by delivering products and their ownership titles to consumers at the right time, marketing channels thus, perform a special kind of service to the society by creating time, place and ownership utilities. Marketers are on a daily basis turning into channels for a competitive advantage. This increases to maximum control over service level/output, improves the image of a product and generate higher markups, advances dealers loyalty, better future planning, better inventory and merchandising control and stops or prevents resellers from carrying competing brands.
In a typical distribution strategy for new consumer goods, for example, manufacturers sell to retailers, which sell to consumers in markets. Retailers break bulk, holds inventory, provide shelf space, create promotional displays and advertising, create one-stop-shopping convenience and a pleasant shopping environment, all of which increases demand for the manufacturer’s new product (Desiraju and Moorthy, 1997). Retailers gain a central position in many industries thanks to their increasing degree of concentration and internalization, successful launching of retailer brands and by controlling more and more of the value-adding functions with the distribution supply chain (Elg, 2003).

The existence of distribution strategies has helped to make society more efficient in resource allocation. Most producers use intermediaries both to acquire raw materials for production and to bring their new products to market. They try to forge distribution strategies to facilitate the process of making a new product or service available for use or consumption by the consumer or business user (Henderson, Dooley&Akridge, 2000). Bagozziet al., (1998) assert that intermediaries create savings, which becomes more dramatic as the number of consumers increases. Armstrong and Kotler (2003) pointed out that intermediaries play an important role in matching supply and demand, while Waxman (2000) argued that by servicing the thousands of indirect partners who were the customers, midrange distribution added true value.

The goal of a distribution system is to make goods to be physically available to the ultimate consumer and buyers at considerable prices. Thus, it is very imperative that the products are distributed in the most efficient manner to reach the ultimate consumer whose patronage ensures the survival of the organization. By so doing, the organization will take pleasure in the consistent high sales turnover and subsequently high profit delivery.


1.2 Statement of the Problem

Distribution of products usually involves some form of vertical system where transaction and logistics responsibilities are transferred through a number of levels, Ian (2005). Davidson (2000), argued that distribution is part of merchandising and must be considered in any merchandising system. Distribution management involves; merchandise replenishment, transportation management and distribution center facilities management. The type of distribution system a beverage firm needs for new products is influenced by the buying system the beverages uses. Some of the distribution systems employed by the companies are; store direct systems, vendor pre-pack through distribution center systems, the stocking distribution center system, multiple and master/ satellite distribution center system. Companies use distribution systems to ensure that their new product reaches customers at the right time and at convenient location. Distribution channels involve intermediary organizations that help in a process of delivering products to end customers (Wong & Saunders, 2008). It is a system that influences consumers patronage of new and existing products.

The poor patronage of new products in Nigeria has been a cause for serious concern. It has led to the constant poor and under performance of companies; this is because effective patronage is a panacea for growth and development in any organization as no organization grows or develops without patronage of her new and existing products. On the basis of the above, this study seek to the impact of new product distribution system and customer patronage of food and beverages firms in Rivers State.


1.3 Objectives of the Study

The major of this study is to critically examine the impact of new product distribution system and customer patronage of food and beverages firms in Rivers State. By extension, this study will specifically;

  1. Examine the types of distribution system commonly adopted by food and beverages firms in Rivers State.
  2. Determine whether the distribution system adopted by food and beverages firms influences the acceptance and survival of their new products in the market space.
  3. Find out whether there is a significant relationship between distribution system and consumers patronage of new products.
  4. Find out the distribution systems which effectively facilitate consumers patronage of new product.

1.4 Research Question

The study will be guided by the following questions;

  1. What are the types of distribution system commonly adopted by food and beverages firms in Rivers State.
    1. Manufacturers – Consumers,
    2. Manufacturers – Retailers – Consumers,
    3. Manufacturers – Wholesalers – Retailers – Consumers.
    4. Manufacturers – Agents – Retailers – Consumers
  2. Does the distribution system adopted by food and beverages firms influence the acceptance and survival of their new products in the market space?
  3. Is there is a significant relationship between distribution system and consumers patronage of new products?
  4. Which distribution systems effectively facilitate consumers patronage of new product?
    1. Retail distribution strategy
    2. Depot distribution strategy
    3. Online distribution strategy
    4. Personal distribution strategy

1.5 Research Hypothesis

  • Ho: There is no significant relationship between distribution system and consumers patronage of new products.
  • Ha: There is a significant relationship between distribution system and consumers patronage of new products.

1.6 Significant of the Study

This study will benefit scholars by providing background material for future research in other sectors or industries, highlighting current trends on distribution practices for new products. They will use the findings for reference purposes in future related studies. The study is also important to both existing distributors and customers since a defined channel of distribution will be created for an efficient flow of new products. The findings will help customers understand the role of intermediaries in providing them with a broader range of new and existing products. It also points out the importance of taking a holistic perspective when redesigning distribution strategies.


1.7 Scope of the Study

This study will critically assess new product distribution system and customer patronage of food and beverages firms in Rivers State. The study will be delimited to some selected food and beverages firms in Rivers State.


1.8. Limitation of the Study

Like in every human endeavour, the researcher encountered slight constraints while carrying out the study. Insufficient funds tend to impede the efficiency of the researcher in sourcing for the relevant materials, literature, or information and in the process of data collection, which is why the researcher resorted to a limited choice of sample size. More so, the researcher simultaneously engaged in this study with other academic work. As a result, the amount of time spent on research will be reduced.


1.9 Definition of Terms

Product:

This is anything of value offered to a market for attention, acquisition and consumption that may satisfy needs.

Consumer:

Individuals who purchase for personal or domestic consumption.

Distribution:

This is the process of planning, implementing and controlling the physical flow of materials, final goods and related information from point of origin to points of consumption to meet customer requirements at a profit.

Distribution System:

System of distribution is simply the way or mode through which goods and services are made available to the market.


1.10 Organization of the Study

The study is categorized into five chapters. The first chapter presents the background of the study, statement of the problem, objective of the study, research questions and hypothesis, the significance of the study, scope/limitations of the study, and definition of terms. The chapter two covers the review of literature with emphasis on conceptual framework, theoretical framework, and empirical review. Likewise, the chapter three which is the research methodology, specifically covers the research design, population of the study, sample size determination, sample size, and selection technique and procedure, research instrument and administration, method of data collection, method of data analysis, validity and reliability of the study, and ethical consideration. The second to last chapter being the chapter four presents the data presentation and analysis, while the last chapter(chapter five) contains the summary, conclusion and recommendation.


Chapter Five


Summary, Conclusions and Recommendations:

5.1 Introduction

This chapter summarizes the findings on the impact of new product distribution system and customer patronage of food and beverages firms in Rivers State. The chapter consists of summary of the study, conclusions, and recommendations.


5.2 Summary of the Study

In this study, our focus was to examine the impact of new product distribution system and customer patronage of food and beverages firms in Rivers State. The study was specifically set to examine the types of distribution system commonly adopted by food and beverages firms in Rivers State, determine whether the distribution system adopted by food and beverages firms influences the acceptance and survival of their new products in the market space, find out whether there is a significant relationship between distribution system and consumers patronage of new products, and find out the distribution systems which effectively facilitate consumers patronage of new product.
The study adopted the survey research design and randomly enrolled participants in the study. A total of 50 responses were staff of some selected food and beverages firms in Rivers State.


5.3 Conclusions

In the light of the analysis carried out, the following conclusions were drawn.

  1. The types of distribution system commonly adopted by food and beverages firms in Rivers State includes: Manufacturers – Consumers, Manufacturers – Retailers – Consumers, Manufacturers – Wholesalers – Retailers – Consumers, and Manufacturers – Agents – Retailers – Consumers.
  2. Distribution system adopted by food and beverages firms influence the acceptance and survival of their new products in the market space.
  3. There is a significant relationship between distribution system and consumers patronage of new products.
  4. The distribution systems that effectively facilitate consumers patronage of new product includes: retail distribution strategy, depot distribution strategy, online distribution strategy, personal distribution strategy.

5.4 Recommendation

Based on the findings the researcher recommends;

  1. The beverages sector should focus on adopting appropriate distribution strategies especially for new products.
  2. Distributors of new products should choose a distribution strategy that bests serves their customers.
  3. Distributors of beverages should use a combination of more than one distribution strategy. This will help to improve the availability of new products to the customers.

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