CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
For
any organization to be effective there should be effective distribution
channel or process to convey finished products from the manufacturer to
the final consumers. This is because without distribution the best
product will not be delivered and the marketing mix will break down and
fail. As a result of this, firms are increasingly adopting supply chain
management to reduce cost, increase market share and sales, and build
solid customer relations (Ferguson 2000). The idea of using an effective
channels of distribution as a strategic tool in purchasing of technical
goods can be viewed as a philosophy based on the belief that each firm
in the supply chain directly and indirectly affects the performance of
all the other supply chain members, as well as ultimately, overall
supply chain performance (Cooper et al, 1997). The effective use of this
philosophy requires that functional and supply-chain partner activities
are aligned with company strategy and harmonized with organizational structure, processes, culture, incentive and people (Abell 1999).
Distribution
channel consists of a group of individuals or organizations that assist
in getting the product to the right place at the right time.
Distribution plays a vital role, primarily because it ultimately affects
the sales turnover and profit margins of the organization. If the
product cannot reach its chosen destination at the appropriate time,
then it can erode competitive advantage and customer retention. The
retail industry is responsible for the distribution of finished products
to the consumer as well as the public. The retail sector comprises of
general retailers (managed by individuals/families), departmental
stores, specialty stores and discount stores.
In practice, many
organizations use a mix of different channels; in particular, they may
complement a direct sales-force, calling on the larger accounts, with
agents, covering the smaller customers and prospects. However, the major
challenge now facing the retail industry is the power of the customers
or buyers. This is because the customers are becoming increasingly
knowledgeable, impatient, not wishing to wait for the suppliers’
products for any period of time. This coupled with the fact that firms
are now trying to implement specific distribution strategy or practices
based upon their unique set of competitive priorities and business
conditions to achieve the desired level of performance, has led to an
investigation into the various distribution strategies and practices
available with the view to establish the strategy or practice which has
the most influence on the purchase of technical goods in Nigeria.
1.2 STATEMENT OF THE PROBLEM
Most
producers use intermediaries to bring their products to market. They
use a set of interdependent organizations in the process of making a
product or service available for use or consumption by the consumer or
business user. This process is what has been known as distribution
channel (Philip Kotler 2001).
Distribution describes all the
logistics involved in delivering a company’s products or services to the
right place, at the right time, for the lowest cost. In the unending
efforts to realize these goals, the channel of distribution selected by a
business play a vital role in this process. Well-chosen channel
constitute a significant competitive advantage, while poorly conceived
or chosen channel can doom even a superior product or service to failure
in the market.
1.3 OBJECTIVES OF THE STUDY
The following are the objectives of this study:
To examine the processes involved in the effective channel of distribution.
To ascertain in effective channel of distribution can be used as a strategic tool in purchasing technical goods.
To identify the factors to be considered in purchasing technical goods.
1.4 RESEARCH QUESTIONS
What are the processes involved in the effective channel of distribution?
Can effective channel of distribution be used as a strategic tool in purchasing technical goods?
What are the factors to be considered in purchasing technical goods?
1.6 SIGNIFICANCE OF THE STUDY
The following are the significance of this study:
The
results from this study will educate business managers on the processes
involved in the effective channel of distribution. It will also educate
on how to use effective channel of distribution as a strategic tool in
purchasing of technical goods.
This research will be a contribution
to the body of literature in the area of the effect of personality trait
on student’s academic performance, thereby constituting the empirical
literature for future research in the subject area
1.7 SCOPE/LIMITATIONS OF THE STUDY
This
study will cover the approaches involved in using effective channel of
distribution as a strategic tool in purchasing technical goods in Jewaco
limited.
LIMITATION OF STUDY
Financial constraint- Insufficient
fund tends to impede the efficiency of the researcher in sourcing for
the relevant materials, literature or information and in the process of
data collection (internet, questionnaire and interview).
Time
constraint- The researcher will simultaneously engage in this study with
other academic work. This consequently will cut down on the time
devoted for the research work.
REFERENCES
Abell, L. (1999) Cited in Piercy, N. (2002), Market-Led Strategic Change, 3rd edition, Oxford: Butterworth-Heinemann.
Ferguson, R.H(2000) Business Logistics Management, 3rd ed. Englewood
Kotler, P(1999) Principles of Marketing, second edition, Prentice Hall USA,