IMPACT OF PHYSICAL DISTRIBUTION ON CUSTOMER SATISFACTION IN SEVEN-UP BOTTLING COMPANY

ABSTRACT

This study is a research work on the Impact of Physical Distribution in Customer satisfaction. It is aimed at understanding how physical distribution contributes to customer satisfaction. Physical Distribution is very important when we understand that customers are always demanding quick and ever-ready delivery of goods and services. Hence, it is important to create better product and service offerings through physical distribution. Chapter one deals with the identification of problems  that the research study tends to find solutions to, chapter two deals with the review of related literature, chapter three deals with the procedures adopted in studying the research problem. The case under study is Seven-up Bottling Company Aba with Aba as the area of study. The field survey method was employed with the use of questionnaires. Chapter four deals on the analysis of data, the chi-square statistics was used in testing three hypotheses, the result indicates that Just-in-time and inventory management contributes to customer satisfaction; also, the application of physical distribution contributes to customer satisfaction. Conclusively, chapter five deals with summary of findings, recommendations and conclusions. The researcher recommends that companies should improve on their physical distribution activities as it is paramount to ensuring customer satisfaction.

TABLE OF CONTENTS

Title                                                                                                                              i

Declaration                                                                                                                 ii

Certification                                                                                                                iii

Dedication                                                                                                                        iv

Acknowledgement                                                                                                    v                                                                                                  

Table of Contents                                                                                                       vi

Abstract                                                                                                                        x

CHAPTER ONE:  INTRODUCTION

1.1  Background of the Study                                                                                   1

1.2  Statement of Problem                                                                                        2

1.3  Objectives of the Study                                                                                      2

1.4  Research Questions                                                                                             3

1.5  Research Hypotheses                                                                                         3

1.6  Significance of the Study                                                                                    3

1.7  Scope of the Study                                                                                               4

1.8  Limitations of the Study                                                                                     4

1.9  Definition of Terms                                                                                              4

CHAPTER TWO:  REVIEW OF RELATED LITERATURE

2.0 Introduction                                                                                                                 5

2.1 Conceptual Framework                                                                                             5

2.1.1 Physical Distribution Concept                                                                              5

2.1.2 Physical Distribution System Concept                                                               6

2.1.3 Physical Distribution Service Concept                                                              6

2.1.4 Customer Satisfaction                                                                                            7

2.2 Theoretical Review                                                                                                     7

2.2.1 Definition of Scope of Physical Distribution                                                     8

2.2.2 Importance of Physical Distribution                                                                   10

2.2.3 Physical Distribution Management Activities                                                  12

2.2.4 Objectives of Physical Distribution                                                                     14

2.2.5 Customer Service                                                                                                    15

2.2.5.1 Importance of Customer Service                                                                     15

2.2.6 Customer Satisfaction                                                                                            16

2.2.7 Inventory Management                                                                                         17

2.2.7.1 Just-In -Time and Stockless Distribution                                                        17

2.2.8 Transportation                                                                                                         18

2.2.9 Order Processing                                                                                                     19

2.2.10 Material Handling                                                                                                 20

2.2.11 Barriers to Effective Physical Distribution                                                      20

2.2.12 Distribution Channels Major Decision Areas                                                 21

2.3 Empirical Studies                                                                                                         23

2.4 Summary                                                                                                                       24

2.5 Company Profile                                                                                                          25

CHAPTER THREE:  RESEARCH METHODOLOGY

3.1 Research Design                                                                                                          26

3.2 Area of Study                                                                                                               26

3.3 Population of Study                                                                                                    26

3.4 Sample and Sampling Technique                                                                            26

3.5 Sources of Data                                                                                                            27

3.6 Instrument of Data Collection                                                                                 27

3.7 Validity of Instrument                                                                                                28

3.8 Reliability of Instrument                                                                                           28

3.9 Administration of Instrument                                                                                  28

3.10 Method of Data Analysis                                                                                        28

CHAPTER FOUR: DATA PRESENTATION, INTERPRETATION AND ANALYSIS

4.12 General Description                                                                                                 30

4.2 Hypotheses Testing                                                                                                    37

4.2.1 Test of Hypothesis One                                                                                          37

4.2.2 Test of Hypothesis Two                                                                                         39

4.2.3 Test of Hypothesis Three                                                                                      41

CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1 Summary of Findings                                                                                                 43

5.2 Conclusions                                                                                                                  43

5.3 Recommendations                                                                                                      43

References

Appendix 1

Appendix 2

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

It is sometimes said that the role of physical distribution is to provide time and place utilities in the transfer of goods and services between and sellers. Put in another way, there is no value in a product or service until it is in the hands of the consumer. It follows that making the product available is what in essence the distribution function of the business all about (Kotler 2003).

Armstrong and Keller (2009) averred that customers want more frequent delivery so that they do not have to carry much inventory; they want higher promised delivery times. The first objective of physical distribution can be summed up in one word “service”. That is the reason why physical distribution is to ensure that the right products are available when consumers want them, in the right place and at the right time. The overall goal of service has several aspects and they include availability of product, accuracy in filling orders, safe service and so on. Availability is in itself a complex concept impacted upon by a galaxy of factors. Indeed, it could be said that ultimately customer satisfaction is determined by the interaction of all the factors that affect the process of making goods and services and services available to the consumers.

Customer satisfaction is a marketing term that measures how products or services supplied by a company meet or surpass a customer expectation Ahmet Nuri (2010). However, most companies are blissfully unaware of the importance of customer satisfaction. Consumers are becoming increasingly demanding, this development is usually customer-led demand for improved services, customers are demanding ever quick delivery and ever-more added value from their products, which increasingly demand “Just-In-Time” distribution.

In a thorough understanding of this project topic, it is necessary to have a definition of physical distribution. Nnabuko (1998) as cited in Ebitu (2003) defines physical distribution to involve the movement of products through various intermediaries to customers. Its main elements include; transportation, warehousing, order processing, inventory controls and customer service. An efficient coordination of these various elements provides an avenue for improved customer satisfaction and vice versa. A company’s successful stay in business and its ability in maintaining high standard decision and physical distribution capabilities rely on a great extent at ensuring customers attraction and satisfaction. 

1.2 Statement of Problem

In spite of the emphasis many firms place on marketing mix (4ps), the role of place in the marketing mix has somewhat been neglected. While it is true that customer satisfaction is the result of the total marketing effort, industries have generally failed to recognize the importance of customer satisfaction as provided by physical distribution and has not effectively integrated physical distribution into their marketing functions. Customer satisfaction is not adequately met in the developing economy because companies do not have efficient infrastructure which usually help n providing adequate customer service. Customers’ complaint range from late delivery of products, inconsistency in delivery, lack of credit financing, defected or broken goods on delivery, no information on delay, imbalance of brand, attitude of salesmen etc. These  customers complaints which has some negative impacts on companies that experiences it leads to customers dissatisfaction and frustration leading to poor company sales.

1.3 Objectives of the Study

 The main objective of this study is to examine the physical distribution system that exists in 7up Bottling Company in the provision of efficient customers’ satisfaction.

The specific objectives are to:

1)      Ascertain the effect of order processing technique on customer satisfaction.

2)     Determine the effect of proper warehousing on efficient customer satisfaction.

3)     Ascertain customer satisfaction with the level of customer service.

4)     Determine the role of inventory management on customer satisfaction.

5)     Evaluate the importance of proper warehousing towards improved satisfaction of customers.

1.4    Research Questions

The following research questions will guide the researcher in this study

1)    What is the effect of proper warehousing towards efficient customer satisfaction?

2)    Are customers satisfied customer service being delivered?

3)    What role does transportation play in efficient customer satisfaction?

4)    How does order processing effect customer satisfaction?

5)    What role does inventory management play on efficient customer satisfaction?

 1.5     Research Hypotheses

           The following research hypotheses will guild the researcher in this study.

H₀₁:  The application of physical distribution does not contribute to customer satisfaction

H₀₂: Customers are not satisfied with the level of customer services being delivered

H₀₃: Inventory management does not have any significant role on efficient customer satisfaction.

H₀₄:  Order processing technique has no effect on customer satisfaction.

1.6   Significance of the Study

     It is expected that at the end of this research, the study will contribute immensely to the 7up Bottling Company and consumers of the product equally. The study at the end will also be beneficial to the students who will find it useful as a reference material. To the academia, it is expected to be an addition to the body of knowledge that already exists. The society will also benefit from the study as it is expected that good policies will be formulated by the company through this study.

1.7 Scope of the Study

     This study is limited in scope to the impact of physical distribution on customer satisfaction in 7up Bottling Company Aba, Abia State.

1.8        Limitations of the Study

   In this study, the researcher anticipated some critical challenges in the following area;

Time: time constraint is a very critical area that the researcher will be confronted due to the fact that the study has to be combined with other academic exercise.

Respondents: the researcher envisages challenges from the respondents as many may not be willing to co-operate with the researcher instructions resulting in delays.

Finance: the researcher has already stated facing challenges on this as area.

Inaccessible relevant materials: having to do with a company that is operating in a competitive market, there is every tendency that the officials of the company will not be willing to release some vital information/material for fear of competitor’s invasion in their strength area (competitive edge).

1.9      Definition of Terms

Physical distribution: the movement of products through various intermediaries to customers.

Customer satisfaction: this is a measure of how products or services supplied by a company meet or surpass customer expectation.

Transportation: an act of conveyance or movement of goods from one place to another.

Warehousing: an act of using warehouses for storing large amounts of products by manufacturers before going to retailers.

Customer service: a strategically designed standard for customer satisfaction that the business intends to provide to its customers.

Order processing: designed to take customers orders and execute the specifics the customer has purchased.

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