ABSTRACT
This
study investigates the effect of physical distribution on the sale of consumable
product a study of Unilever Nig Plc. As a result of increase in competitive
activities in modern market couple with reduction in number of intermediaries,
it is important for marketing managers to know the best way to maintain their
market share, increase their profitability and product availability. In
attaining the aforesaid goal, some managers are yet to recognize the effect of
physical distribution on the sale of consumable product. This issue constitutes
problem for managers of Unilever. Then, the main objective of this study was to find out if physical distribution plays any
effect on the sale of consumable product. This study tested the vital
hypothesis which stated that warehousing does not assure time utility of
consumable products.
The
survey research design was use to carry out the study. Hand-delivered
questionnaire was use as a research instrument for collecting data. The
questionnaire was tested for validity using the expert opinion method. The
computer generated Cronbach’s alpha coefficients for the instrument was 0.7
indicating adequate reliability. The effective sample size was 50 respondents
of Unilever staff particularly
distribution and logistics and their sales department. Convenience sampling
technique was used. Statistical Package for Social Science (SPSS) version 17.0
was used to analyze the data. The entire hypotheses were tested using
chi-square at 5 percent level of significance.
From
the finding, there is relationship between warehousing and time utility of
product. This showed that warehousing assure time utility of consumable
products. In conclusion, the effective management of physical distribution led
to increase in availability of organization products and contribute to
profitability. The vital recommendation for the study is that every
organization should set up effective and efficient physical distribution
strategies in making their products available to the present and potential
customers in other to achieve organization objective.
TABLE OF CONTENTS
PAGE
TITLE
I
CERTIFICATION II
DEDICATION
III
ACKNOWLEDGEMENT IV
ABSTRACT V
TABLE
OF CONTENTS VII
CHAPTER
ONE: INTRODUCTION
1.1 BACKGROUND TO THE STUDY 1
1.2 STATEMENT OF THE
PROBLEM 3
1.3 OBJECTIVES OF THE STUDY 4
1.4 RESEARCH QUESTIONS 5
1.5 RESEARCH
HYPOTHESES 6
1.6 SIGNIFICANCE OF THE STUDY 6
CHAPTER
TWO: LITERATURE REVIEW
2.1 INTRODUCTION 7
2.2 DEFINITION
AND NATURE OF LOGISTIC 7
2.3 STRATEGIES USE IN PHYSICAL DISTRIBUTION 9
2.4 STEPS INVOLVE IN LOGICAL 10
2.5 PHYSICAL DISTRIBUTION MANAGEMENT 10
2.6 PHYSICAL DISTRIBUTION (LOGISTICS) OBJECTIVES 10
2.7 MAJOR COMPONENT OF PHYSICAL DISTRIBUTION
SYSTEM 11
2.8 CUSTOMER SERVICE 12
2.9 ORDER PROCESSING 13
2.10 INVENTORY CONTROL 14
2.11 ECONOMIC ORDER QUANTITY (EOQ) 15
2.12 STOCK RECORD 17
2.13 JUST-IN-TIME MANAGEMENT 18
2.14 WAREHOUSING 18
2.15 TRANSPORTATION 21
2.16 MATERIALS-HANDLING SYSTEM 28
2.17 CONSUMER GOODS 29
2.18
CLASSIFICATION OF CONSUMER GOODS 29
2.19 CHANNELS OF DISTRIBUTION OF CONSUMABLE GOODS 30
CHAPTER
THREE: RESEARCH METHODS
3.1 INTRODUCTION 35
3.2 RE-STATEMENT OF RESEARCH QUESTION 35
3.3 RE-STATEMENT OF RESEARCH HYPOTHESES 35
3.4 RESEARCH DESIGN 36
3.5 SAMPLE SIZE AND SAMPLING TECHNIQUES 37
3.6 DATA COLLECTION INSTRUMENT
38
3.7 QUESTIONNAIRE ASSUMPTION 38
3.8 VALIDITY OF THE RESEARCH INSTRUMENT 39
3.9 RELIABILITY OF THE RESEARCH INSTRUMENT 40
3.10 METHOD OF DATA ANALYSIS 40
3.11 LIMITATIONS OF THE STUDY 41
CHAPTER
FOUR: DATA ANALYSIS, INTERPRETATION AND PRESENTATION
4.1 INTRODUCTION 42
4.2 ANALYSIS
OF QUESTIONNAIRE 42
CHAPTER
FIVE: SUMMARY, CONCLUSION AND RECOMMENDATION
5.1 INTRODUCTION 67
5.2 SUMMARY
67
5.3 CONCLUSION 69
5.4 RECOMMENDATIONS 70
5.5 SUGGESTION FOR FURTHER STUDIES
71
REFERENCES 72
APPENDIX 74
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND
TO THE STUDY
In today’s market
place, selling a product is sometimes easier than getting it to customers. Companies have decided on the best way to
store and move their product and services so that they are available to
customer in the right assortment, at the right time and in the right
place. Kotler and Armstrong (2010)
opined that physical distribution (marketing logistic) is the process of
planning, implementing and controlling the physical flow of materials final
goods and related information from point of origin to point of consumption to
meet customer requirement at a profit.
The study of
physical distribution is concerned with the physical movement of products from
point of production to point of consumption.
It involves a system of exchange activities that gather the product of
individual producer and distribute them among various purchasers.
At a more apparent
level, you cannot satisfy consumers unless the product delivers physical
distribution and has a greater impact on the success of company.
Physical
distribution is an important element in marketing finished products or raw
materials physically present or available at the point of use or
consumption. This is achieved through
the actual movement of the products, that is transportation storing (warehouse),
logistic information until they are eventually consumed since consumption is
the essence of production, physical distribution is of tremendous importance to
the success of a company.
The economic
impact of physical distribution is enormous because it accounted for the
largest components of marketing cost, about 20% of every naira spent goes for
physical distribution, this cost (physical distribution cost) varies
dramatically from one industry to another.
Every naira saved in the course of physical distribution has the same
effect on profit.
Physical
distribution creates utility for the customers by making the products available
at the right place in the right form at the right time. Marketing logistic encompasses such
activities as order processing, inventory management, material handling, warehousing
and transportation.
1.1.1
HISTORICAL BACKGROUND OF THE STUDY
Unilever was
created in 1929 by a merger of British Soap Maker “Lever Brothers and Dutch
Margarine producer “margarine UNIC” a merger that hinged on the attractiveness of palm oil as
a commercial raw material for both margarine and soap tradable in large
amounts.
Unilever was
formerly known as Lever Brothers. It was
established in Nigeria in 1929 under the name West African Soap Company
Limited. In 1995, it changed its name to
Lever Brothers Nigeria Limited, one of the largest producers of consumer goods
operating in about seventy countries through sub-companies. At the Annual General Meeting (AGM), the
management of the company and the shareholders agreed in the change name from Lever
Brothers Nig Plc to Unilever Nig Plc and it was adopted from January 2002. The staff strength of Unilever is about 3,700
workforce spread over it four factories situated at Apapa, Isolo, Aba and
Agbara.
The head office
and its first factory are located at No 15, Dockyard Road, Apapa in Lagos State
where the under listed products are produced.
-
Soap – Asepso, Astial, Lifebuoy
-
Scourer – Vim
-
Personal product: Close Up
The Aba factory in
Abia State was built in 1959 and manufactures the following products:
-
Laundry soap: Ox, Key and Sunlight
-
Detergent: Blue, Omo and Rim
Agbara factory in
Ogun State is an ultra-modern food factory built in 1985 and produces
-
Edible fat and oil, also master line range of
products which serves as bakery confectionary for other food industries
-
Tea and coffee: Lipton Yellow Label Tea,
Bongo, Bon café
-
Drink: Tree top range of flavours
-
Bonillon: Royce cubes
Cheese brought
product factory located in Isolo Lagos state.
It came into existence in 1998 as a result of the merger between cheese
and Unilever Plc. The factory produces
toiletries and cosmetics. It is worthy
of note that as aged as Unilever is, it has a total plant capacity of about
190,000 per annum, producing less than 52 brands of item.
1.2 STATEMENT
OF THE PROBLEM
In modern day
business making product available at the right time, in the right place, in the
right form is as important as quality product, attractive price, and effective
communication, since consumption is the essence of production.
As a result of
increase in availability of different products coupled with middlemen
(intermediaries) carrying different product has led to some physical
distribution problem for Unilever Nig Plc.
In other for
organization to maintain their market share, increase their profit, and ensure
product availability, marketing managers need to find the best way to
distribute their product to present and potential customers.
Consequently,
using physical distribution in maintaining and improving organization market
share, some of the following we go a long way in achieving effective physical
distribution, among these are customer service, order processing, inventory
control, warehousing, transportation, and material handling.
1.3 OBJECTIVES
OF THE STUDY
This study aims at
highlighting the importance of physical distribution in the sale of consumable
products and identifying opportunities to be exploited by the organization as
well as threat to be prevented in their environment. However, the said objectives are stated
below:
1
To know the role of transportation in
making the products available.
2
To examine whether warehousing assure time
utility of consumable product.
3
To examine if proper inventory management
contribute to profitability of Unilever Nig Plc.
4
To examine whether effective consumer
service contribute in attaining large market share.
1.4 RESEARCH
QUESTIONS
In line with
research problems identified above by the researcher, the researcher questions
provided in this study are as follows:
1
Does transportation play an important role
in making the products available?
2
Does warehousing assure time utility of
consumable product?
3
Does inventory management contribute to
profitability of an organization?
4
Does effective customer service contribute
in attaining large market share?
1.5 RESEARCH
HYPOTHESES
1) H0: Warehousing does not
assure time utility of consumable products.
H1:
Warehousing assure time utility of consumable products.
2) H0: Effective customer
service does not contribute in attaining large market share.
H1: Effective customer service contributes in
attaining large market share.
1.6 SIGNIFICANCE
OF THE STUDY
This research work
tend to contribute to the existing knowledge of physical distribution and also
to highlight the importance of physical distribution on the sale of consumable
product (Unilever products) and to help management of Unilever Nig Plc on how
to reduce distribution cost as well as damage product through proper inventory
management, stabilize the price and determine choice of warehouse locations.
1.7 OPERATIONAL DEFINITION
OF TERMS
Consumable
product: This is referred to as the product that is not meant
for further production, but rather for final consumption.
Inventory:
Refers to the stock of the product a company is manufacturing for sale and the
component that make up the product.
Logistic:
The practical organization that is needed (Facilities) to make a complicated
planning of raw materials and goods successful when a lot of people and
equipment is involved.
Work-in-progress:
These are products that are yet to be completed or semi-manufactured goods.
Raw
materials: These are basic inputs/materials that are converted
into finished goods through the manufacturing process.
Finished
goods: These are goods that have been completely
manufactured or those that are ready for sale.
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