3.6 Validity 53
3.7 Methods of Data Analysis 54
3.8 Model Specification 54
CHAPTER 4
DATA PRESENTATION, ANALYSIS AND INTERPRETATION
4.1 Questionnaire Distribution and Returns 57
4.2 The Transportation and Warehousing Systems mostly Practiced by the Flour 60
4.3 The Nature of Relationship Existing between Transportation and
Warehousing of the Flour Distributors in the Study Area 62
4.4 Effect of Transportation and Warehousing costs on Marketing Performance
(Sales Volume, Market Share) of Flour Distributors in Abia State, Nigeria. 63
4.5 Factors that affect the Choice of Transportation and Warehousing in the Study Area 65
4.5.1 Factors that affect the choice of transportation in the study area 65
4.5.2 Factors that affect the choice of warehousing in the study area 67
4.6 Discussion of Findings 68
CHAPTER 5
SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.1 Summary 70
5.2 Conclusion 73
5.3 Recommendations 75
5.4 Suggestion for further studies 75
References 77
Appendices 88
LIST OF TABLES
3.1: Distribution of flour Distributors 52
4.1: Distribution and Return of Questionnaires among Flour
Distributors in the Study Area 57
4.2 Distribution of respondents’ based on educational background 58
4.3: Distribution of respondents according to Years of Existence (Experience) 58
4.4: Distribution on factors considered when choosing
Transportation Modes 59
4.5: Distribution on Transportation Modes used by the Respondents 60
4.6: Distribution on Warehousing Type used by the Respondents
in storing their goods 61
4.7: Karl pearson correlation Matrix showing the nature of relationship between
transportation and warehousing 62
4.8: Regression estimates showing the effect of transportation and warehousing on
Marketing Performance (sales volume, market share) of Flour Distributors
in Abia State 63
4.9: Logit regression results showing the factors affecting the choice of
transportation systems of the flour distributors in the study area 65
4.10 Logit regression result showing the factors that affect choice of warehousing
systems of the flour distributors in the study area 67
LIST OF FIGURES
1: The 7 R´s of Logistics 10
2: Evolution of logistics integration 15
3: Three dyadic relationship 16
4: Logistics Management Chart 17
CHAPTER 1
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
Distribution in marketing has lots of programs anchored on physical flow of goods, services and data collection. Previously, the word distribution was used only to the outbound side of supply chain management, but currently the word in function includes inbound and outbound (John, 2003). Management of inbound flow involves material planning and control, purchasing, receiving, warehousing and storage, material handling while outbound flow involves order processing, shipping and transportation.
Anthony (2004) noted that the central focus of every distributor is to improve the time, place, form and delivery utility efficiency. When a distributor fails to meet these objectives the essence upon which the distributor exists is defeated as such the distributor cannot remain relevant in distribution (Emmanuel, 2010). Movement of goods and services from the manufacturer to the retailer is a critical function of a distributor. Delivery encompasses those activities that are necessary to ensure that the desired product is available to the consumer at the desired time and place. This means that a central, branch, and field warehouses geographically situated in the appropriate locations are needed to achieve optimum customers’ service.
Products are stored in warehouses in four circles (receiving, store, pick and ship). A distributor may choose among different specialized strong facilities, and the right choice might assist the distributor in reducing cost and serving customers better (Higginson and Bookbinder, 2005). The use of specific type of these storage facilities is aimed to reduce/cut costs, smoothing the distribution as well as operation and to enhance service level to the customer.
Transportation and warehousing management systems are integral functions performed by distributors. They are pivotal for effective and efficient marketing in any organization. The ever increasing trend towards more prudent variety and short times has placed a huge emphasis on the ability to establish smooth and efficient logistics operations. These operations play vital role in determining a distributor’s competitiveness, since logistics cost constitute an integral part of overall costs. The positive impact of any distribution network is mainly ascertained by the process of the nodes in such a network (Rouwenhorst, et al 2013).
Basic aim of transportation is to guarantee that goods are placed properly in the channel in a speedy, cost – effective, and reliable manner as outbound flow while warehousing exist as one of the inbound flow to provide access to sufficient stock in order to satisfy anticipated customer requirements, and act as a buffer against supply and demand uncertainties. Since demand is often located far from the source (manufacturer), warehousing can provide a broad variety of market places that distributors can take advantage.
Distribution business in Nigeria is complex and requires high level of skills and experience due to inadequate infrastructure and other factors that endanger the operations. The efficiency of moving the product from the producer to the consumer is the main reason distributor exists while transportation and warehousing become paramount for moving products (Scrinivas and Screenivas, 2009). The key element in logistics chain is transportation systems, which joins the separated activities. Transportation and warehousing occupy almost half of the amount in the logistics costs and they influence the performance of logistics system hugely (Emeka, 2014). New cars can be stored external on the dealers’ lot, gas oil can be stored in specially planned tank, energy and other raw material can be stored in open pits but a large amountof products will be stored inside shielding building (Perreault and McCarthy, 2003).
Transportation and warehousing management systems among the distributors and sub – distributors are the crucial functions performed by these sub distributors in order to make the products available to consumers. The essence of a distributor in distribution business is to create efficient and effective goods delivery, the researcher investigated the role warehousing and transportation play and its effect on the marketing performance of the distributors.
1.2 STATEMENT OF PROBLEM
Distributors’ managers appreciate that their challenge is to minimize the total cost of distribution system, rather than the cost of a particular element they tend to employ the total concept. To this end, managers of these distributing firms do not either have the requisite skills or employees who can calculate the trade – offs between three categories of cost which are transportation costs, order processing cost and stockholding costs. Because of economies of scale, large warehouses can be operated at lower cost than several other smaller warehouses. This particular fact remains a catalyst that can drive a distributor’s business which is most often neglected by distributors. The fact that larger warehouses are often better able to achieve better utilizations of space and equipment, overheads incurred in a large warehouses are spread over a higher through put of stock items and the amount of money tied up in stock tend to be less for a large depot than for several smaller warehouses.
Transportation system and costs are requisite as well as warehousing systems and costs are to a distributor but most often one is usually neglected by distributing firms. The increase in storage cost may be offset, either in whole or in part, by savings made in transportation cost as the number of warehouses increases, unit transport cost decline due to lower mileages being traveled by delivery vehicles but the techniques required to coordinate these activities are found wanting either in the employees or distributors managers and as such they do not give these factors their place of priorities in their day- to-day running.
Taking goods to distributor’s warehouse, dealers, and consumers, the distributor can choose among five main transportation modes such as truck, rail, water, pipeline and air along with an alternative mode for digital products - the internet. Since these modes are available for a distributor, in choosing a transportation mode for a product, distributors must balance many considerations such as speed, dependability, availability, cost, and others. Thus, most often, distributors do not identify at the point speed, dependability, availability and others could be most desired by their customers because that will give them the opportunity to prioritize the most needed for their customers.
There are number of challenges faced by distributors when it comes to transportation and warehousing. Transportation which aids in moving the finished goods from the plants to the warehouse or distribution centers and to the customers must meet the time and place utility and possession utility which the later utility “possession” utility is facilitated by warehousing. More so, there are lots of flour distributors in the study area which have gone moribund, some folded, the surviving ones are still struggling with epileptic sales and market shares. This is a great concern to the researcher. There are research works done on supply chain, distribution, transportation, warehousing and logistics but rarely has any research looked into the effect of a part of the outbound side of logistics and inbound side of logistics with respect to marketing performance as regard to independent distributor which is the main worry of this work.
1.3 OBJECTIVES OF THE STUDY
The broad objective of the study is to ascertain the effect of transportation and warehouse systems on marketing performance of flour distributors in Abia State, Nigeria. The specific objectives of the study to:
i) ascertain the transportation and warehousing strategy mostly practiced by Flour distributors in the study area.
ii) ascertain the nature of relationship existing between transportation and warehousing of the distributors.
iii) ascertain the effect of transportation and warehousing costs on marketing performance (sales volume, market share) of flour distributors in Abia State, Nigeria.
iv) identify those factors that affect the choice of transportation and warehousing types used in the study area.
1.4 RESEARCH QUESTIONS
The following research question would guide the study.
i) What are the transportation and warehousing system most practice among flour distributors?
ii) What is the nature of relationship between transportation and warehousing strategy of the distributors?
iii) What are the effect of transportation and warehousing costs on the marketing performance (sales volume, market share) of flour independent distributors?
iv) What are those factors that determine the choice of transportation and warehouse types used in the study area.
1.5 RESEARCH HYPOTHESES
The following null hypotheses were tested in the study:
H01: There is no linear relationship between transportation and warehousing systems.
H02: Transportation and warehousing costs do not significantly affect the marketing performance (sales volume, market share) in terms of their profit making.
H03: Cost is not a major determinant of choice of transportation systems among flour distributors.
1.6 JUSTIFICATION OF THE STUDY
This study enhanced the scope of knowledge in the management of transportation and warehousing issues as it affects distributors’ business especially in a developing country like Nigeria. It touches burning issues in transportation and warehousing to distributors. In this study, the relationship between transportation, warehousing and sales volume with market share were determined which bridged the gap neglected on transportation and warehousing importance.
The vital revelations that were made by this research was the importance of transportation in the economic activities as well as warehousing business in the storage of goods. As fragile as the economic situation of developing country is, this study pin pointed the better strategy and means to succeed amidst these challenges facing warehousing and transportation of a distributor mostly in these countries. This work thus serves as a reminder to marketers on the importance of transportation systems and warehousing management.
This study also stand as a guide to those who may wish to further the investigation on transportation and distribution business in developing countries like Nigeria and also serve as a reference materials to other researchers and students of marketing or related discipline and marketers (distributors).
1.7 SCOPE OF THE STUDY
This study focused mainly on effect of transportation and warehousing systems on the marketing performance of distributors of flour in Abia State, Nigeria. This was achieved by knowing the relationship existing between transportation and warehousing systems on the sales volume and market share of the distributors, analyzing effect of transportation systems on the market share of distributors, identifying problems facing transportation and warehousing systems in the study area, analyzing the effect of warehousing systems on the sales volume of the independent distributors and identifying determinants of choice of transportation and warehousing systems in the study area.
The study was done in Abia State and its coverage is exclusively to distributors of Flour products. More so, the work extensively discussed every facet of product transportation and warehousing activities done by a distributor, the cost and other factors that can determine the choice of particular transportation systems was be x-rayed and determined. Related distributors of products of other products were used in drawing inferences but they were not used during the empirical study. Suffice it to say here that any other distribution factors that affect marketing performance measured by sales volume and market share, may be highlighted but shall not be extensively discussed as this work strictly researched and focused on effect of transportation and warehousing systems on the marketing performance.
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