ASTRACT

This research on Evaluation of Distribution Channel on Consumer Goods (A case study of Nestle Food Plc), is a very critical study for the food industry. This study focused on the task of carrying out a thorough strategic and empirical research and investigation that would come up with practical and   solutions to the problems of challenges of how to design, select and manage distribution channels that will ensure maximum savings in distribution costs, enhance product availability and effective co-ordination of channel activities. In carrying out this task, attempts were made to: 1. Determine whether there is any significant relationship between distribution intensity and cost of distribution in Nestle Food Plc. 2. Ascertain whether the higher is a brand’s level of distribution intensity, the higher is the manufacturers support programs for his customers. 3. Find out whether co-ordination of marketing functions is best achieved through vertical integration or competitive markets. 4. Determine whether it is more profitable to the manufacturer of Nestle Food Plc to by pass the wholesaler and sell directly to the retailers and finally to determine whether more sales volume will be achieved by selling through sales agency or manufacturer’s representatives. Survey research method was adopted to sample opinion of managers in the marketing, distribution and finance departments of Nestle Food Plc. for this study. Questionnaires and oral interviews were the main instruments used in collecting in collecting primary data for study. While secondary data was obtained from text books, journals and materials from the internet. The primary data were used in analysing the research questions and testing the research hypothesis. Data were analysed through the use of tables, simple percentages, charts and means. Multiple linear regression, t-test and Z-test were used as appropriate in testing the research hypothesis.

TABLE OF CONTENTS

Title Page i

Project Assessment ii

Declaration iii

Certification iv

Dedication v

Acknowledgements vi

Table of Contents vii

List of Tables xi

Abstract xii

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study 1

1.2 Statement of the Problem 2

1.3 Objectives of the Study 4

1.4 Research Questions  4

1.5 Research Hypotheses 5

1.6 Significance of the Study 5

1.7 Scope of the Study 6

1.8 Operational Definition of Terms 6

CHAPTER TWO

REVIEW OF RELATED LITERATURE

2.1 Background of the Study 7

2.2 The Concept of Distribution In Marketing 8

2.3 Distribution Channel Structures 11

2.3.1 Channel Service Levels 13

2.4 Marketing Flows 13

2.5 Challenges of Distribution Channels 14

2.6 Marketing Distribution Structure 16

2.6.1 Management of Distribution Structure 21

2.7 Designing the Channel System 22

2.7.1 Developing Channel Strategy and Consideration 25

2.7.2 Channel Functions 27

2.8 Conflict: Definition in Marketing Channel 30

2.9. Channel Conflict 30

2.10 Innovation in Relationships with Final Demand 31

2.10.1 Innovation in Channel Relationships 33

CHAPTER THREE

METHODOLOGY

3.0 Research Methodology 36

3.1 Research Design 36

3.2 Source of Data 36

3.3 Population of the Study 36

3.4 Sample Size Determination 37

3.5      Method of Data Collection 38

3.6 Validity of Instrument 38

3.7 Reliability of Instrument 38

3.8 Method of Data Analysis and Presentation 38

CHAPTER FOUR

PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA GENERATED

4.1 Data Presentation 39

4.1.1 Return Rate of Questionnaire 39

4.1.2 Distribution of Respondents by Sex 40

4.1.3 Companies Distribution and Support Services 41

4.14: Relationship between Distribution Intensity and Cost of Distribution 43

4.1.5: Relationship between Programs and Distribution Channel Level 45

4.1.6 Co-Ordination of Marketing Function via Vertical Integration or

 Competitive Market 47

4.1.7 Profitability of Direct Sales to Retailers 49

4.1.8 Impact of Company’s Trade Force on Sales Volume 52

4.2 Test of Hypotheses 53

4.2.1 Test of Hypothesis 53

4.2.2 Test of Hypothesis Two 54

4.2.3 Test of Hypothesis Three 54

4.2.4 Test of Hypothesis Four 56

4.2.5 Test of Hypothesis Five 57

CHAPTERFIVE

SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATION

5.1 Summary of Findings 59

5.2 Conclusion 59

5.3 Recommendations 59

REFRENCES

APPENDIX

QUESTIONNAIRES

LIST OF TABLES

Table 4.1:Return Rate of Questionnaire 39

Table 4.2: Level of Distribution Channel used by Company 41

Table 4.3: Nature of Product Delivery to Customers 42

Table 4.4: Support Services rendered by companies to their channel members 42

Table 4.5: Control Measures on Channel Members 43

Table 4.6: Distribution Intensity and Cost Distribution 44

Table 4.7: Manufacturer’s Support Programs and Distribution Channel Levels 45

Table 4.8: Vertical integration/ Competitive Market Impact on Marketing Function Coordination 47

Table 4.9: Profitability of Direct Sales to Retailers 49

Table 4.10: Impact of Company’s sales Force on Sales Volume