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AN APPRAISAL OF THE DISTRIBUTION STRATEGIES OF ICE CREAM FIRM

CHAPTER ONE

INTRODUCTION

1.0   BACKGROUND OF THE STUDY

This project tends to explore the distribution strategies of ice cream firms with reference to fan milk Nig Plc Owerri. Distribution in its broader interpretation means the management of the movement of goods and material from theIR original sources to utilization point. Distribution system has been an important factor which organizations depends on as a means of increasing their wealth, it is said to be so concerns it self with channeling of goods and materials from production point to utilization point. On this premise, it becomes necessary or important for firms or organizations to map out strategies on how their goods or products should be distributed as well as controlling the distribution cost in other to achieve a favourable organizational goal and objectives. Also, there should be a predetermined decision by the firms on the choice or mode of its distribution operation, i.e a particular system of distribution have to be adopted

1.1    HISTORICAL BACKGROUND OF THE STUDY

Fan milk Nig Plc Owerri was incorporated in Nigeria in 1963 as a subsidiary of the Holland fan milk Ltd. The Holland fan milk (Nig) Plc is an indigenous owned company, i.e, Nigeria’s share and voting right.With the indigenization decree of 1972, Nigerians now controls over 51% of the company’s total management position, living a small a proportion to foreign base expatriate managers in the company.The company has its headquarter at Ibadan and office in Lagos. The company has two factories, one at Ibadan which was founded in 1963 and the other in Kano in the year 1982. also, it has its depots all over the states of the federation. In Imo States it depot is located at Rotibi Street, Owerri. It operates through division which can be categorized into:

Manufacturing division

Technical division

Trading division

Service division

Presently, the depot has many distributors (agents) throughout the state which makes use of buses motocycle and bicycle as a means of distribution.

1.2    STATEMENT OF THE PROBLEMS

Poor transportation system which exis in the state tends to be the major hinderance in the distribution of the Ice cream product from one depot to another.

Constant power failure which leads to meltage of the ice cream also affects the distribution as they are better sold when block.

Lack of storage facilities is another problem. This occur when there is low demand on the product which takes much time to distribute, and if the facilities i.e not enough to store the ice creams it may lead to damage.

Lack of training and retraining of workers core equally problems affecting the distribution network of ice cream in different parts of the state.

1.3    PURPOSE AND OBJECTIVE OF THE STUDY

Specifically, the project work is aimed at achieving the following:

To generally appraise the distribution strategies of fan milk Nig Plc.

To identify the defects in its current distribution network.

To identify the problems that fan milk usually encounter in distributing its products.

To establish the impact of effective management of its distribution network of its sales volume.

To establish the decree of intensity of distribution of its product in different parts of the state. Finally to recommend the appropriate distribution that should be adopted by fan milk to achieve increased market

1.4    SIGNIFICANCE OF THE STUDY

This study will be significant to the following groups

Shareholders

Management

Investors

Students and

Further researcher.

To the shareholder, the study has made them to retain their shares and also gave them assurance on payment of dividend as it shows various means of distributing the company’s products thereby improving profitability.To the management, the study helped them towards their decision making in other to achieve their organizational goal and objective.To the investors the work has entered their knowledge about the company’s activities and operation so as to them invest in the company.To the student, the work was embarked upon as part of partial requirement for the department of marketing for further researcher, this study shall be used for frontiers of knowledge

RESEARCH QUESTION

To find solution to the problems conceived above, research question are articulated to enable the researcher to suggest a sound distribution system or network to the company. These are:

Does the company have a sound distribution parttern of ice cream in Owerri?

Does the company encounter any problem when distributing their product?

What are the defects in its current distribution network or strategies?

Of what relevance is effective distribution system to the achievement of increased sales volume?

Does your organization contribute to the development of good transport system so as to enhance your distribution system?

RESEARCH HYPOTHESIS

To product a reliable result at the end of this research study, the hypothetical statements, which will be tested to show the validity of the research study are here under stated:Ho:   effective management of the distribution network does not have any significant impact on the company’s sales volume.

Hi:    effective management of the distribution network has significance position impact on sales volume.

Hi:    the high price of ice cream was as a result of poor distribution network.Ho:   the high price of ice cream was not as a result of poor distribution network.

SCOPE OF THE STUDY

The nature of the study is to appraise the distribution strategies of ice cream firms, the study extensively examined the distribution network and limited to fan milk Nig Plc in Owerri metropolis.

DEFINITION OF TERMS

Distribution: this simply means the act of extending or delivering something to a number of people in different areas.

Strategy: this means a process of planning something or carrying out a plan that is intended to achieve a particular purpose.

Company: this means a business organization that makes money by producing or selling goods or services.

Depot: this simply means a place where large amount of goods or equipment are stored.

Data: is a raw fact that needed to be processed so as to generate information

Distributor: this simply means a person or company that supplies goods to shops or stores.

Retailing could be define as business activities that involve the direct sale of goods and services to ultimate consumers for personal, household or non-business use.

Retailer: can be see as marketing intermediary who transact the business of title transfer on products to the final consumer.

Marketing: is the process in the society by services is anticipated or enlarged and satisfied through the conception promotion, exchange and physical distribution of goods and services.

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