Examination Of Distribution Channels For Consumer Foods

Introduction

1.1 Background of the Study

Regardless of how good product may be, it is of little use to customers if it is not found at where he wants it and when he wants it. For simplicity, we will use the term “Place” to refers to all the thing that go into providing time, place and possession utilities that are needed to satisfy target customer just as we use product to mean total product offered.

Place decision may be concerned with the location of marketing facilities and the solution, use of marketing specification including transportation, storage facilities, wholesalers and retails.

There are many definitions of channels of distribution some will be cited because each definition in it own way conveys a bit about the concepts.

Channels are methods or system that people use to get information or communicate it to some specified set of people or individual.

Distribution means distributing something to some particular set of people.

Channel of distribution is an organized network of people or organization that performs all the marketing functions and activities required in ensuring the movement of good from manufacturers to consumers.

Channels of distribution is also defined as the growth of intermediaries who move good from producers to consumers channels are perceived by some group as made up of intervening agents who facilitates sales.

In our review, we shall define channels of distribution as the path taken by the title ownership in moving goods from producer to consumer.

The Channels of distribution of consumer goods therefore, in its most meaningful and simple form is the course taken in the transfer of a commodity. This rate include both the manufacturer and the ultimate consumer as well as anyone in between this kind of channels. Goods and services cannot be marketed without the performance of market function.

To understood this, one has to remember that marketing is the performance of activities to facilitate exchange processes. Whenever we are talking of facilitating exchange process, invariably we are thinking of channels of distribution. It is importance to keep two things in mind.

Channels are coalition of marketing institutions (firms or agencies).

Collectively or independently performing marketing function (Merchandising, promotion, physical distribution) in order to move goods from producer to target consumers.

This diagram suggested form of possible channel.

The first channel (manufacturer to consumer) is a direct channel of distribution such channels are established when manufacturers sell through mail order by catalogue or with their own field sales. E.g Aven Cosmetics.

In another channel, producers sell to retailers who in turn sell to consumer. This channel represent the path taken by good handles by departmental stores.

The third channel is where wholesalers deal directly from the producers to retailer who make the goods available to target consumer. That is the traditional method where by goods have been distributed in many countries. It is still the prevalent retailer such as clothing, specialist shop (hairstyle) drugs etc.

Other channel also provide different ways of reaching final consumer. These channels suggest possible ways which has so many possible variations too. The possible variation should not be seen as a competitive channel. Each should be considered a separate possible channel to reach a particular target market. Producers may adopt any one or more to these channels to have their goods reach final consumer as large quantity as possible. But the channel chosen must deliver goods and provide all the marketing functions.

1.2 Aims and Objectives of the Study

The aims and the project is to examine the distributions channel of consumer goods and to be able to differentiate between the goods channels in different form.

1.3 Significance of the Study

The importance of examination of distribution channel of consumer goods is to know how goods are getting to the consumer through the channel of distribution of middlemen. The distributional channel are the key process through which good are available for consumer without the channel the goods would not be realize in so many market.

1.4 Scope of the Study

Perhaps the most obvious point to note is the fact that this study is selective. Therefore, it takes a global view of examination of distribution channels for consumer goods, since the goods produced go through some process of distribution and enhances distribution channel.

It is pertinent to point out therefore, that this resulted only to the examination of distribution channels of consumers goods.

1.5 Limitation of the Study

It is very important to note that this project does not generally consider the examination of distribution channels for all goods. But it emphasis basically to the study of examination of distribution from channels of consumer goods.

1.6 Definition of Key Terms

When carrying out the exercise of examining distribution channels, evaluation of certain key terms are borne in mind by the term charged with the responsibility. Among them are the following.

i. Quality

It refers to the suitability of an item and its intended purpose. Hence, quality have include ability and willingness of the suppliers to meet buyers specification. This refers not only to the total amount of the goods but also the schedule amount to which goods are required.

Thus, a channel who might be able to provide the quantity specified would not be a satisfactory channel from the point of view of quantity.

ii. Price

A price is the value at which a commodity is acquired. Thus a price is good only if it is the lowest price offered for a desire quality and accompanied by sufficient useful services.

iii. Time

The manufacturing of consumer goods is expected to select a reasonable channel that can meet up with the time schedule for delivery and take every reasonable action to ensure the product reach the targeted consumer at appropriate time.

iv. Financial Capacity

If the supplier of goods through a chosen channel has cash flow problem he may have difficulty in paying his account subsequently in provision of ware house this may affect the delivery time and possibly the quality of the goods.

v. Location

The geographical location of the suppliers is another consideration transportation from producers to ultimate user is subjected to many risk.