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CHAPTER ONE
INTRODUCTION
BACKGROUND OF THE STUDY
As the
economy advances, there is a restaurant widening of the gap between
producers and consumers, the increase in output of goods and services
necessitates. The development of channel of distribution they provide
time, place and convenience utility for the goals and services provided.
In
the view of Adirika, Ebue and Nnolin (2001) distribution is demand
creation and satisfaction and both directly and indirectly brings down
the total cost of marketing organization. Apart from producing the goods
and services required by buyers, pricing and promoting them (i.e.
informing buyers about them) marketers have to make these goods and
services available to the buyer, that is, place them at his or her
convenience, in order to make them seen or perceived, admired, accepted
and purchased by them.
Thus, effective and efficient distribution
flow will not only make goods available, but will also do so at the
cheapest possible price to the consumer, at the lowest possible cost to
the consumer, at the lowest possible cost to the producer or supplied.
Accordingly the distributional strategy and channel employed greatly
influences the economic value of goals, both to the distributor and to
the consumer especially when and it it’s selection is carefully
considered.
A manufacturer has the option of selling either directly
to the ultimate consumer of it’s products, or through the use of
intermediaries in realizing the same objectives considering present
marketing environmental factors such as the location of the market, the
undulating economic conditions within the Nigerian economy as a whole,
together with consumer requirements by way of varieties, quantities and
time of product requirements, most manufactures prefer reaching their
customers through the use of marketing intermediaries.
With regard to the use of marketing intermediaries in reaching
ultimate, consumption targets, there are two important end related
decision areas having marketing implications and of relevance to the
producer or supplier. The first is a decision on whether or not the use
intermediaries for distribution. The second which option to be adopt,
follows only if the decision to the first problem called for the use of
intermediaries.
In deciding the types and nature of the distribution
channel options to be adopted, the action is usually given to such
important factors as the cost of the channel to the user, the efficiency
of the channel, the type and nature of the product. The type of target
market to be saved, the size, location, and purchasing pattern of
potential and present customers, availability of alternative marketing
intermediaries. The type of channel options adopted by competitors and
the manufactures available resources.
In the bread industry, and
considering the nature of the product, channel of distribution channel
becomes a very important marketing decision. Also in this industry, the
different marketing utilities of distribution economy, market coverage,
channel control and adaptation to changing environments, interplay and
influence the choice decision. According, the distribution channel and
strategy option adopted by any producer should contribute to the
achievement of the overall marketing objective, and therefore meet the
company’s objective and the consumer’s requirement in the sale.
It is
a fact that the bread industry has assumed importance in the Enugu
State today. In this state, bread is one of the staple food items
consumer by most people. The demand for bread and its frequency of
consumption is high. This high rate of bread consumption in this state
is accounted for by a number of factors.
In Enough State, it is
usually hot because it is not far from the northern part of the country
there by making people to sweat which bring about hunger which makes
most of the inhabitants of the state to go for solid and strong foods
that will give them strength for instance cold minerals are frequently
taken during the hot period irrespective of the time of the day. And
cold drinks have a complementary demand for bread, which goes to explain
the wide acceptability of the product in the state. The character of
the people occupation which among the rural population is mainly farming
and white color jobs also contributes to the high demand for bread.
These occupation require long hours in the field as well as food that is
light to carry and can be easily and quickly consumed. In these
circumstances, bread comes in very hurdy. Among the light food is ideal
for breakfast other reasons for the holf demand for bread can still be
mentioned among unmarried people, bread is regarded as very difficult
duty also at ceremonies like birthday, sandwich, prepared from bread has
become a popular entertainment diet of the people. As bread has assumed
prominence as a food item, so also has it’s industries importance. It
is because of distributions in making this important stable food (bread)
available that the research examines distributions channel
options/strategies for bread industries in Enugu state.
STATEMENT OF PROBLEM
Discussion with some
retailers (vendors and hawkers) of bread in Enugu state indicates that
supplies of the product are often not delivered on schedule, others
complain of occasional damage to the product before arrival at their
store. Still, some are of the opinion that prices charged them are
higher than those changed customer purchasing from the producer
compares. On further investigation, it was realize that delay, in
deliveries could result in damage to the product considering the
perishable nature of bread. The condition of most road in enugu is very
deplorable where there are road at all. They are either met properly
maintained or they are completely neglected. These bad roads has
consequently reduced the efficiency of available delievery vehicles
since they put them in poor working condition and equaling increase
their maintenance cost. Among other problem inhibiting distribution
effectiveness are such variable as the area, covered by most produce /
companies distribution network which in most cases is generally large
and geographically scattered. Added to this, the number of delivery
vehicle covering these points are not large enough to ensure
distributions effectiveness. The scheduling and routing plans of most of
the producer / companies distribution processes are anything but
inadequate. In some companies, salesmen combine the duties of selling
with that of delivery and to complicate matters some companies even
surcharge them for damage and losses. Investigation also reveal that
increase in delivery cost and over head expenses including fuel cost,
vehicle maintenance and repair expenses, as well salesmen allowances,
have forced up distribution cost. In some areas major producers
experiences weak or no competition for there products in respect of
quality, taste, bread performance in addition to these, salesmen have
been found to sell over and above prices fixed by their respective
companies without any approval. Finding a solution to the above problem
becomes the central task of this research work.
OBJECTIVES OF THE STUDY
Base on the research problems the following hypotheses are formulated.
1.Example
and analyse the present distributional strategies and channel options
available to bread in enugu state with a view determining the of their
efficiency.
2. Investigate other distributional strategy and other channel options that are available for use by the bread industry.
3.Formulate,
on the basis of finding most efficient distributional strategy and
channel options for the bread industry in order to reduce costs damages
and delays of supplies to consumers.
4. Examine the reasons for scarcity of bread especially during festive period.
5. Critically hawk at the impact of warehousing inventing control customer services on the marketing of bread.
RESEARCH QUESTION
1.Are consumers satisfied with the present distributional options / strategies employed by the bread in Enugu state?
2.Consumers
buy more if alternative distribution channel option that ensure quick
delivery at lowest cost and with less damage to the product are
employed?
3.To what extent are bread available in Enugu state?
4. Does distribution options / strategies employed in Enugu state impact positively on consumers patronage.
5.
Does distribution option / strategies adopted by bread industries Enugu
State leads to increase in profit of the organization?
SCOPE OF THE STUDY
This study concentrate on
distributional option / strategy for bread in enugu, however in of time
money and other constraints emphasis was placed on ten selected bakeries
in enugu metropolises. The ten bakeries are :
Omachi food Nigeria limited
Patey baking
Onyeze baking
Ify bakery
Flore bakery
Uncle Jones bakery
Chibueze bakery
Super Joe bakery
SIGNIFICANCE OF STUDY
This study is justified by the fact that:
1.Bread
is consumed by most people within the area of study and the selected
organizations are major suppliers in their respective areas. This study
will be of help to both consumer and suppliers of bread.
2. An
efficient distribution strategies channel / option for bread would
reduce the cost of damage and delayed delivery, and consequently, the
market price to the consumer. It is contented that efficient
distribution for bread will ensure maximum satisfaction to both the
ultimate consumer on the one hand and the producer / company on the
other, without any party to the transaction being cheated in the
process.
3. A reduction in the price of bread will contribute in
small way to the achievement of the federal military government
objective of bringing down the price of essential commodities, and so
help to minimize the consumer’s cost of living.
4. It is also
expected that since the companies selected for study are privately owed
small scale indigenous establishments within the town, the consult of
their study will equally go a long way argument the operational of the
small scale in particular and the nation in general. Above all this
study will be of beneficial to both the research and the reader as the
study will provide an indebt knowledge and understanding in the area
which could stay up further study.
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