If a company has a good product, well branded and priced, required
and proper promotion done but could not get to the users as and when
required, the company has succeeded in achieving nothing.
Therefore, the objective of this study is to ascertain
whether the company has sufficient number of functional distributors,
dependable source of raw materials and good distribution network.
Chapter one contained a general discussion on
distribution. It went further to find out if the company have
dependable source of raw materials and from the objectives of the study
four hypothesis were formulated.
Literature review tried to examine both the empirical and non-empirical works available on the subject of the study.
Chapter three dealt with the design of the study. The
methods of relevant data collection, distribution and treatment of data
were also discussed.
The data collected from the survey were analyzed and interpreted in chapter four,
Finally, the summary of findings, conclusion and
recommendations were contained in chapter five. It is the belief of the
researcher that if Nigerian Brewery and other brewery industries would
put the recommendation given in the study to use that there would be a
drastic charge in the services offered and continuous increase of
profitability on the side of the company.
TABLE OF CONTENT
1.1 Background of the study
1.2 Statement of the problem
1.3 Companies profile
1.4 Research objectives
1.5 Formulation of hypothesis
1.6 Significance of the study
1.7 Scope and limitation of the study
1.8 Definition of terms
REVIEW OF THE RELATED LITTERATURE
METHODOLOGY FOR THE STUDY
3.1 Development of research materials
3.2 Population for the study
3.3 Sample size
3.4 Questionnaire design
3.5 Treatment of data
PRESENTATION ANALYSIS AND INTERPRETATION OF DATA
4.1 Analysis of data
4.2 Testing of hypothesis
5.1 Summary of findings
1.1 BACKGROUND OF THE STUDY
Production is the creation of goods and services, the goods and
services can be produced in factories, industries, firms or companies.
Production is not complete until the products / services get to end user
or consumer. This can be obtained through the distribution process and
that complete the production cycle. The distribution activity is
equally referred to as physical distribution management (PDM), Marketing
logistics and material management. Physical distribution system
includes; transportation, material handling, order processing, inventory
control, warehousing and packing into a complete distribution strategy.
Mccarthy, described the place component of marketing mix
(distribution) as “the situation and use of marketing specialist
middlemen, transportation and storage agencies to provide target
customers with place and possession utilities. Distribution channel is
regarded as a bridge that spans various gaps between producers and
Kolter on his own stated that physical distribution is defined as the
planning, implementing and controlling the physical flows of materials
and final goods from point of origin to point of use to meet customers
needs at a profit. It is concerned with the efficient movement of raw
materials, from the suppliers to the factory site where they are
processed into finished product and passed to the final consumers.
The procedure of getting the right quantity of the right product to
the right place at the right time and at the least cost is no simple
job because companies like the brewery industries with their great
diversity of customers spread over vast geographical areas must
integrate the systems components to avoid dissonance.
(dissatisfaction). As stated earlier, there exist a gap in the firm of
place and time between manufacturer and the ultimate consumer or user
for whom the manufacturer is producing, and this gap can only be bridged
Many problems are confronting the distribution system of brewery
industries, these problems ranges from lack of channel members, to
physical distribution problems such as lack of adequate transportations,
poor inventory management, inadequate warehousing facilities and lack
of sophiolicated method of communication. The problem in distribution
network starts with selection of mode of distribution, selection of
inexperienced personnel’s with little or no business acumen as
distributions. The continuous increase in the cost of transportation
due to decoration of our roads, high cost of vehicles and spare parts
and currently increase in cost of petroleum products poses a serious
problem in the effective coverage of territories in the distribution of
bear both in rural and urban areas in the country.
In the area of inventory, modern management is rarely practiced; this
is partly caused by insufficient storage facilities and inappropriate
storage methods which invariably results to high rate of spoilage,
breakage and waste of products. Besides, warehouses are very few and
far, sophisticated material handling equipments like fork lift, cranes,
conveyor machines etc are lacking in some of these companies.
So in the light of these marginal of problems and the fact that there
are so many brands of bear in the market from which the consumer has to
choose with little or no difference among them in terms of quality and
other characteristics. It then follows that there is a need for the
individual brewing firms to manage the physical distribution system and
engage in proper manipulation of other marketing mix variables in order
to keep afloat in the present day competitive beer market in Nigeria.
In this study, the researcher shall consider the physical
distribution management from the point of view of NIGERIAN BREWERIES
PLC, NINTH MILE, ENUGU, ENUGU STATE.
STATEMENT OF THE PROBLEM
There is a common problems in the brewery industries, (Nigeria
brewery Plc inclusive) which hampers the effective and efficient
movement of their products from point of production to the final
consumers, this is the problem of physical distribution which if not
attended to may be a bailer to a company’s effort to satisfy its
customers as well as meeting its marketing goals and objectives.
A well modeled distribution channel is basically a
prerequisite for proper integration of the activities that will
eventually lead to attainment of the organizational goal. When the
consumers are not well linked through an organizational distribution
channel, the problem of where, when and at what price the company’s
products will be available will be difficult to ascertain.
The price of products of the Nigerian breweries plc
trench to be higher in towns far from the location of the plant and it
is also known that the warehouse in the plants location are often
overstocked whereas the product experiences sporadic shortages.
The problems to be addressed includes;
1. Do Nigerian Breweries Plc have warehouse outside their plants location.
2. Do they have sufficient number of functional distribution vans or trucks?
3. Do Nigerian Breweries have dependable source of raw materials.
PROFILE OF NIGERIAN BREWERIES PLC
Nigerian Breweries is a public limited liability company with
registered head officer in Lagos. The company is owned by Nigerians and
minimum representation of foreign interests.
Nigerian Breweries limited as it was then called was
established in November 1946 for the main purpose of brewing. It is the
first brewing firm to be set up in the country. In 1949 the company
started operations in Lagos with single product line ‘star larger
beer”. But today, it has brewing plants in Aba, Kaduna, Ibadan and
Enugu with a wider verities of product which includes Gulder, Maltina,
Legend extra stout, Amstel etc.
The Enugu plant was bought over from monarch breweries
limted on September 1992 and is sited at 9th mile in Ngwo. Recently,
the company had a new site at the same venue just some poles from the
former plant. The new site went into full operation in 2003 and was
built to international standard.
Today, Nigerian Breweries Plc is one of the leading name
in the financial market. The new site is where production takes place
while the former site is where the warehouse is located.
The primary needs for the study are;
1. To find out if the Nigerian Brewery Plc have warehouses outside their plant location.
2. To ascertain whether the company has sufficient number of functional distribution vans.
3. To determine if the company have dependable source of raw materials.
4. To proffer recommendations that are in line with the researchers objectives.
FORMULATION OF HYPOTHESIS
HO 1: The company has warehouses outside their plant location
HO2: They have sufficient number of distribution van
HO3: The company has dependable source of raw materials.
HO4: The physical distribution management of the company is effective.
SIGNIFICANCE OF THE STUDY
The study of channels of distribution of Brewery industries and its
associated problems would be of benefits to brewery industries and
Nigerian brewery Plc in particular.
This research is aimed at finding the suitable situation
that will guide the members of the industries in designing effective and
efficient channels of distribution to effectively reach the target
consumers. The research is also aimed at providing Nigerian Breweries
plc management with important and identified variables that are
necessary to the development of good channels.
The alarming rate of physical distribution cost in the
brewery industries made this study more significant as the researcher
tends to determine the possible way of reducing the cost and providing
effective and efficient solution to the problem of physical distribution
The coordination of the activities of physical
distribution are indispensable to any firm that is engaged in production
of goods or services because distribution is a course that must be
managed effectively and efficiently to control an organizational
system. The significance of this study is more apparent and appreciated
when we understand the importance of physical distribution in the
brewery industries like Nigerian Breweries. Moreover, in the brewery
industries, distribution cost is the Killer cost or the Killer disease
variable cost. Since profit is the goal of every busies, this important
variable cost has to be intensively managed in order not to eat deep
into the company operation cost. Marketing managers and the management
in general must give high level of attention to physical distribution
because its cost alone can detrimental to the entire organization.
DEFINITION OF TERMS
The following terms used in this study should be taken to mean the following.
PHYSICAL DISTRIBUTION CHANNEL
The movement of goods from the point of production to point of consumption.
This implies to the procurement of souring of raw material to the
production unit, movement of the finished goods to the warehouse then to
the distribution intermediaries before the final consumers.
EFFICIENT AND EFFECTIVE
This means being able to achieve a company’s goals and objective as at when required at the minimum expenses.
This is the adoption of an appropriate means of distribution that
will serve efficiently and effectively from the available distribution