IMPACT OF EFFECTIVE DISTRIBUTION SYSTEM IN AN ORGANIZATION

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IMPACT OF EFFECTIVE DISTRIBUTION SYSTEM IN AN ORGANIZATION

(A case study of Unilever Nigeria Plc. Jos)

ABSTRACT

The purpose of this research work is to give an insight on the need for effective distribution system in an organization taken Unilever Plc as a case study. the firm’s effort would be fruitless if their products fail to get to the ultimate users at the right time, right place, and in the right quantity. This however, goes to suggest that distribution is an important element in the marketing mix. The researcher try to research on the problems of effective distribution in an organization which in an organization which in most cases has to do with poor road network, inventory control, material handling, transportation, ware housing and communication to mention but few. The researchers equally try to look at the importance of effective distribution system in an organization. One of the bases of this research work is for organization to understand that effective distribution system significantly increases organization sales volume. In order to check the validity of the subject matter; data were gathered using both primary and secondary data collection method. A well-constructed questionnaire as dispatch out to respondents (i.e. staff of Unilever Nigeria Plc Jos) which were collected within four days of dispatch. The data collected was tested using chi-square test statistics and at the end it was discovered that effective distribution system that would make goods and services available to ultimate users at the right time, right place, and in the right quantity. A well design distribution system will increase the volume of sales and profit for the organization, retention of potential and existing customers and good image for the organization.

CHAPTER ONE

INTRODUCTION

1.1   BACKGROUND OF THE STUDY                                       

Marketing activities have contributed greatly to the creation of affluent society. The management of business firm usually uses the basic forms of marketing mix that is product, price promotion and place (distribution) to achieve its objectives. Place (distribution) is one of the marketing mix variables which is mainly concerned with getting goods to the end users at the right place and at the right time. The talk of distribution is to make physical goods available o buyers, this however bridges the gaps of space and time between production and use or consumption. Distribution can be viewed as a strategic managerial system since it is one component of the firms marketing mix. Thus, all the distribution activities, decisions and so on are mage to be consistent with the other aspects of the marketing program. Distribution as one of the marketing mix plays a vital role and is basically, regarded as one of the essential features of product distribution system in business organization with the fact that, production is not complete until the product and services rendered gets to the final consumers.

Physical distribution or logistic is concerned with the efficient movement of raw materials from suppliers and finished goods from the end of the production line to the customer. A number of associated activities must be performed. They are grouped under four main categories called physical distribution activity centers namely transportation, inventory, warehousing and communication. The inadequacies of marketing systems of developing economies are most glaring in the area of physical distribution and one frequently hears of distribution ‘bottleneck’ impeding the development of such economies. The important use will be dealt with in this study pack.

A starting point in the design of a physical distribution system by the producer is to set a customer service standard this includes a number of dimension and the most important is the time it takes to get the merchandise to the customers, that is delivering time. It happens that decisions that led to cost increase in another area like inventory as appropriate strategy in logistic design therefore, it is to arrange all the required activities so as to minimize the total cost of providing a desired level of customer’s service.

Physical distribution is of great importance to most firms because it accounts for 20-22% of the retail price. Part of these costs goes for movement product and the remaining part is related to inventory holding although distribution cost varies by industry.

With the above important task of distribution, the researcher is prompted to verify more on the impact of effective distribution and suggest other possible ways of distribution in an organization or firms.

1.2   STATEMENT OF THE PROBLEM

A company or organization that places its goods at the right time and place and with the right support service is able to sell more than competitors who fail to observe or accomplish these goals.

But over the years, organizations have been trying in one way or the other to bring about an effective distribution system but all to no avail. In Nigeria and perhaps throughout the world, the importance of effective distribution cannot be overemphasized.

However, market firms have been greatly affected by structural problems such as transport, warehousing, inventory management etc. which need to be addressed.

1.3   OBJECTIVE OF THE STUDY

The principal objective of this research is

1. To assess the importance of effective distribution in Unilever Nigeria Plc.
2. To assess the effectiveness of the distribution system in Unilever Nigeria Plc.
3. To examine the problems and possible solutions to effect distribution system in Unilever Nigeria Plc.
4. To find out how adequate is the staff strength of the distribution unit

1.4   SIGNIFICANCE OF THE STUDY

The researcher hopes the findings of this study will enable the management of Unilever Nigeria PLC to decide and design a better effective distribution system that will however increase the volume of sales and profit for the organization. This study will also enlighten the staff and management system in an organization. This work could also be used as source of secondary data for future researchers.

This study pack can also be useful to students of Business Administration and those of the related discipline, public oriented organization as well as any member of the public who has interest in knowing about effective distribution system.

1.5   RESEARCH QUESTIONS

What is the importance of effective distribution in an organization?

1. How effective is the distribution system in Unilever Nigeria Plc.?
2. What are the possible solutions to the problems of effective distribution in Unilever Nigeria Plc.?
3. How adequate is the staff strength of the distribution unit?

1.6   RESEARCH HYPOTHESIS

Hypothesis is a tentative statement of plausible assumption, the validity of which is yet to be known. Here statement of reasonable assumption is made and later subjected to test.

The study shall test the following hypothesis:

H_o:   Effective distribution system does not significantly increases organization sales volume.

H_i:    Effective distribution system significantly increases organization sales volume.

1.7   SCOPE OF THE STUDY

Because of the diverse nature of marketing activities, the work in this study was limited to the subject matter ‘impact of effective distribution system in an organization’ a case study of Unilever Nigeria Plc.

1.8   LIMITATION OF THE STUDY

In conducting the research work, due to time and finance constraints studying all the Unilever would be difficult but was limited to just one sector which is Unilever Nigeria Plc Jos. The following were included:

TIME: There are time constraints for the research project and within the time specified, the normal lecture was also in progress, therefore, the researcher was faced with a lot of stress to combine both the research work and the lecture together. The implication of this work was that the period the researcher was supposed to spend on findings was limited as a result more quality work may be hindered or affected.

FINANCE: Capital has been rated the most important resources to carry out a given project. Research work to this end was not left out because the information needed to write this project was not gathered in one place.

QUALITY OF INFORMATION: The analysis of the data depended largely on the information that the researcher acquired from the staff of Unilever Nigeria Plc, Jos. After administering the questionnaire it was expected that the information needed was provided by the management of Unilever Nigeria Plc., Jos.

1.9   DEFINITION OF RELEVANT TERMS

Distribution: This is the movement of goods from the point of production and the finished product to the final or ultimate users.

Promotion: These are basis used by the management to promote the standard of product for profit maximization. It could also be an advertisement or special attempt to sell something.

Marketing: Marketing is defined as human activities that are directly at satisfying needs and wants through exchange process.

Marketing mix: This is the cardinal point of all marketing activity. They are called the 4ps, product, price, promotion and place (distribution).

Media: These are means through which information are passed to the public. They include television, radio, new papers and magazines. 

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