EFFECTIVE CHANNELS OF DISTRIBUTION IN PRODUCT MARKET SHARE DEVELOPMENT IN ENHANCING ORGANISATIONAL PERFORMANCE

(A CASE STUDY OF LISABI MILLS LTD)

CHAPTER ONE

INTRODUCTION

1.1    BACKGROUND OF STUDY

In the past years, the main aim of business organization was to Manufacture and sell, but recent marketing dynamic has change this my topic notion of our poor industrialists with finding out what consumers want and buy, as only then will there be certainty that the product can be sold profitability and also offer return on investment. Previously, product departments produce what they want for marketing department, but now marketing department request for what consumers want from the company thus indicating what is to be produced.

Marketing has been defined by different authors in several ways, while Kotler, p (1984) &Bolt D.W (1987) see it as an attempt but a manufacturer of goods\provider of services, or its agent to present a product or service in a manner that will be acceptable to its numerous customers both prospective existing ones, Henry, H (1986) & Foster, D (1982) view it as the execution of those business function that direct flow of goods and services the producer to the consumer. To achieve this, the market adopts the product planning, pricing, promotion and place of marketing in a way that the product would be developed to satisfy the need of their consumers.

Appreciating these needs, marketing also provides products defined to satisfy them either in unit or in-group. As a result, consumers are faced with taking a decision on what product best suit their need. Realizing the problem of consumers, marketing managers with help of research and development, design information system and program which guides the consumers in analyzing each product and take appropriate decision on which product to purchase.

1.2    STATEMENT OF PROBLEM

It has been discovered that in-spite of efforts, human and materials put into conception and development of a product, they were still not visible on shelves and shop stands.

I this regard, the following questions come to mind of what use is good product if the questions to be answered are: after all efforts by the manufacturer in producing it acceptably, fixing a competitive price, backed up with promotion and advertising, when the product is not getting to the consumers as a result of inappropriate marketing channel I the consumers search for the product a result of ineffective management of channel mix the marketing managers?

Why are these products missing on shelves? If these are competitive product what advantages has it over the missing product on display? If it is distribution advantages, what procedure was used in channel selection for the product that is missing on shelves? What channel lines is adopted for the product? Who is responsible for the channel management and how efficient is the channel mix? How often does he evaluate the channels to monitor the performance? What alternative are available?

Answer must be sought for these questions, and related issues researched, re-assessed and address accordingly to achieve an effectives market share development for a product in the physical distribution of the product of manufacturing company.

1.3    OBJECTIVES OF THE STUDY

The main objective of this study is to study the effect of distribution channel on effective Market share development in enhancing organisation performance for a product. More specifically,the study aims at;

i.        Identifying the problem associated with channel selection and distribution of products

ii.       Ascertaining the scope and importance of distribution channel as it relates to marketing mix

iii.      Identifying the distribution channels of products in Lisabi Mills

iv.      Analyzing the effectiveness of the channels in product delivery to consumer

v.       Making recommendations/suggestions based on research finding for effective development of products market share.

1.4    RESEARCH QUESTIONS

The research among other thing will try to find out if:

1.       If channel is an important variable of distribution that aids the reach or spread of a consumer product.

2.       If improper channel management could have negative on company's market share.

3.       If poor market visibility/availability could contribute to loss of confidence of the Consumer on the manufacturer.

4.       If easy access to products contribution to consumer purchase decision at point of share (POS)

1.5   RESEARCH HYPOTHESIS

The following research hypothesis will be tested.

HYPOTHESIS 1

Ho:    Channel is not an important variable that aids or spread of production.

Hi:     Channel is an important variable that aids the research or spread of production.

HYPOTHESIS 2

Ho:    improper management of channel has negative effect on company Share.

1.6    SIGNIFICANCE OF STUDY

This study is significant in several respects. First and foremost, it seeks to highlight the important of product market through proper planning of distribution channels in the manufacturing sector. This is because an understanding of the dynamic of market channels in product distribution enables organizations to achieve their sales targets and other relatedcorporate goal and insures maximized profit vis-o-vis high sale volume and market share retention.

The study is significant also as it will enable manufacturing concerns as well as other market related corporate bodies to realize the ethical position of marketing channels identification and creation in the things in the effectiveness of operation and achievement of corporate goals.

Most importantly this study will contribute to knowledge by expanding existing literature on the subject, and provide a balanced framework for manufacturing set-ups for effective market planning and product distribution.

1.7    LIMITATION OF THE STUDY

As a result of time constraint and are of specification, this dissertation will be restricted to the finished goods distribution and will be specific about consumer goods.

The distribution of raw materials and technical materials will not be part of this dissertation so that other researchers whose specifications are relevant to it could have opportunities.

1.8    DEFINITION OF TERMS

Channel:              This is the activity that makes a product available to customers where and when they want to purchase them

Brand loyalty:     patronage of product by customers no matter the substitute and price of that product in existence.

Customer:            This is the end user of product

P.O.S:                  Point of sales.

4PS:                     This is the strategy used by marketers and its stands for product planning,pricing,promotion and place.

Marketing Mix:   The controllable variables, which company puts together to satisfy a Target group.

Market:               A group of potential customers with similar needs

Sales Decline:       product life cycle stage is when the new products replace the old ones.

Promotion:          communicating information between seller and buyer to influence Attitude and behavior.

Target Market:   This is a selection of the market segment (a group of consumers to whom the company which it appeal.

Sales:                   turnover of a particular product, exchange of goods or properties formoney.

Strategy:              This is the chosen course of action to be taken in pursuing an objective.

Distribution:        The process involved in getting products or services to the final Consumers.

Middlemen:         A person who buys goods from producers and sells them to retailers or Consumers.

Retailer:               A merchant who sells goods at retail. That is someone who sells goods in Small quantity directly to consumers.