AN APPRAISAL OF DISTRIBUTION STRATEGIES OF AUTOMOBILE INDUSTRIES (A CASE STUDY OF ANAMMCO EMENE ENUGU)
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AN APPRAISAL OF DISTRIBUTION STRATEGIES
OF AUTOMOBILE INDUSTRIES (A CASE STUDY OF ANAMMCO EMENE ENUGU)
CHAPTER ONE
INTRODUCTION
Marketing channel decisions are among
the most important decisions that management faces. A company’s channel
decisions are linked with every other marketing decision. The company’s pricing
depends on whether it uses mass merchandisers or high quality specialty stones.
The firm’s sales force and advertising decisions depend on how much persuasion,
training, motivation, and support the dealers need. Whether a company develops
or acquires certain new products may depend on how well those products fit the
capabilities of its channel
Companies often pay too little
attention to their distribution channels, however, sometimes with damaging
imaginative distribution systems to gain competitive advantage. Distribution
channel decisions often involve long-term commitments to other firms.
Distribution is the process or moving
goods from producers or manufacturers to the consumers and users. All over the
world, the distributor is regarded as very essential and fundamental link in
the process of transforming goods that are produced by the manufacturer /
producers to the consumers and users. The distributor therefore performs
productive marketing function by ensuring that goods produced get to the
ultimate consumer.
The effort of the producers to ensure
that their goods reach the market place are likely to be illusive and a pipe
dream unless they are supported by effective distribution. It must be noted,
and this is very vital that the marketing process is an interwoven system in
the marketing which several components have separate but complimentary roles to
play which the distribution function is the last stage.
More so the marketing concept is
based on the orientation of finding consumer’s needs and wants and filling them.
These wants and needs are only deemed to be satisfied when goods produced get
to the final consumer or target market. It is a popular assertion that goods
produced have little or value to the consumer until they are transferred or
moved to places where there is demand for them. And here in lies the relevance
and crucial role of the distributor who transfer these goods to the consumers
along side, some value added to it in form of place, time possession and
utilities.
According to Wilson, (1979 P. 37)
distribution broadly is concerned with the most profitable lowest risky way,
short and long term of getting goods to the end users. That is to say,
distribution encompasses both, the channel of distribution takes care of the
number of marketing institutions linked so that title and product can flow to
consumers facilitators and their selection is based on sales communication and
contractual consideration. Physical distribution on the other hand deals with
the logistical transfer of goods and includes activities such as warehousing,
product handling, material handling transportation etc.
The objective of distribution is to
get goods to the right place, at the right time and at a reasonable cost.
Little wonder Cunditt, still and Govon: (1980, P 10) looked at distribution as
encompassing activities involved in transferring goods from producers to final
buyers and users, not just activities, cost elements are involved. The ill
defined nature of distributive systems in automobile industries can be traced
to the nation’s economy not being mass productive. It is still a developing
economy and possesses all the characteristics of a developing economy.
Marketing is usually identified with an economy of abundance where a nation
produces far beyond the subsistence needs. Because our economy is under
producing, existing automobile industries such as ANAMMCO who find their market
in Nigeria assume that mechanisms exist and will continue to more their
products from factory to their customer. They seldom plan changes in
distribution system as they would plan in details for changes in population
pattern, consumer buying habits and product technology. To this end
distributors have come under great criticism and are labeled all sorts of names
like exploiter “parasite” saboteur and sometimes as someone who services no
useful purpose in the economy.
For the fact that distributors in
this state do not perform their functions effectively in light of inadequate
infrastructive, like
a. Poor Warehousing facilities
b. Deplorable road networks and
transportation etc, developing nation including Nigeria are examining
principles to see how their distribution strategy can be see how their
distribution strategy can be improved and how they could be to enhance
efficient distribution of their products.
c. It is a yardstick to provide basis
information on effect of distribution in our economy.
d. It will enable further research work to be
carried on the same field of the study.
e. It will contribute to the body of
knowledge about distribution strategy
f. It will benefit marketing companies who
will have a chance between setting up a distribution company and being a
representative of major marketer.
g. It will also benefit distributors and
final users.
1.1 SCOPE OF THE STUDY
This study
is hurtled to an appraisal of distribution strategies of automobile industries
with reference to Anambra Motor Manufacturing Company (ANAMMCO) Eneme in Enugu
State.
1.2 LIMITATION OF THE STUDY
This project is focused on an
appraisal of distribution strategies of automobile industries with a case study
of ANAMMCO.
The area covered in this study is
ANAMMCO this is as a result of time and financial constraint considering the
economic crunch around the corner. It is pertinent to mention 2here that the
researcher did not collect all the data and information for this thesis because
in most cases, the statistical figures were withheld by ANAMMCO employers and
employees.
1.3 STATEMENT OF THE PROBLEMS
They are as
follows
1. We work on the assumption that
the company fail to take into consideration which channel of distribution
strategies and intermediaries will provide for the considered services
requirement.
2. Failure to put into
consideration which channel of distribution strategies and intermediaries will
be most profitable in the foreseeable future
3. Another factor that poses a
problem is the inability of the company to determine which channel of
distribution strategies and intermediaries will provide for the relative cost
advantage.
4. Failure to understand, comprehend
and leact to certain problems encountered by consumers on consumption of their
product.
5. Poor implementation of
effective institutional advertising such as direct marketing relation public
awareness, communication budget.
1.4 FORMULATION OF HYPOTHESIS
1. ANAMMCO do not study and appraise
warehousing system.
2. ANAMMCO do not appraise the existence of
distributive chains
3. ANAMMCO do not appraise the role of the
distributor in ANAMMCO
4. ANAMMCO do not found out whether
distribution strategy is utilized in the company
5. ANAMMCO do not ascertain whether the
evaluation of distribution strategies has improves the company.
6. ANAMMCO do not examine the company’s
direct or indirect distribution to the customers.
7. ANAMMCO do not determine whether the
company has quality control department.
The null hypothesis below clearly
reflect the research objective of the study to guide this study, seven null
hypotheses were formulated they are as follows;
H0: ANAMMCO do not study and appraise
warehousing system
HI: ANAMMCO study and appraise warehousing
system
H0: ANAMMCO do not appraise the existence
of distributive chains
HI: ANAMMCO appraise the existence of
distributive chains
H0: ANAMMCO do not appraise the role of
distributor in ANAMMCO
HI: ANAMMCO appraise the role of distributors
in the company
H0: ANAMMCO do not found out whether distribution strategy is utilized in the company.
HI: ANAMMCO fin out whether distribution
strategy is utilized in the company.
H0: ANAMMCO do not ascertain whether the
evaluation of distribution
strategies has improved the company
HI: ANAMMCO ascertain whether the evaluation
of distribution strategies has
improved the company.
H0: ANAMMCO do not examine the company’s direct
or indirect distribution to the customers
HI: ANAMMCO examine the company’s direct and indirect distribution to the customers
H0: ANAMMCO do not determine whether the
company has quality control department.
HI: ANAMMCO determine whether the company
has quality control department
1.5 SIGNIFICANCE OF THE STUDY
The
importance of this study cannot be overemphasized when one think about the
significance of role of distribution on the demand of goods and services in the
automobile industries and the society at large. Furthermore, the producer of
merchandise destined for industrial markets should be alive to this fluid
situation and maintain a constant review of in distribution policy (Elvy (1980:
149).
The gap between the producer and
consumer is bridged by distribution channels. The do this by providing ultimate
users with a convenient means of obtaining the goods and services by desire.
Distribution strategy therefore are comprised of the marketing institutions and
the inter-relationships responsible for the physical flow and the flow of goods
and services from producer to the industrial users, marketing intermediaries or
middlemen are the marketing institutions in the distribution channel, that is
firms that operate between producers and customers or industrial purchasers.
Most automobile industries distribute
by direct selling or direct marketing strategy through contracts between the
buyer and seller in the regards, direct channels are considerably more
important in the industrial market as the producer could be installed or giving
the directive of use by the manufacturer. Agents are used in the industrial
market when small producers attempt the market their offering to large
wholesalers. The agent, wholesaling intermediary, often called a manufacture’s
representative serves as an independent sales force in contacting the
wholesaler buyers where the unite sale is large and transportation accounts for
a small percentage of the total cost, the producer – agent – industrial user
channel is usually employed. The agent wholesaling intermediaries in affect
because the company’s industrial sales force, Ecloyce and Ani (2000: 212 – 213)
The importance of this study is to
contribute to the following:
a. It will improve social-economic growth
rate of the company
b. It will help the automobile industries to
make use of effective distribution strategy, marketing research, advertising
and pricing to increase their effectiveness in planning and distributing goods.
Furthermore, an appraisal of distribution strategies of automobile industries
will be a lift to improve the strategic distribution of the industries product
and evaluate the distribution process of the industry as the corporate
objectives of the company has mostly on the proper integration of marketing
information system (MIS).
In the research work, the researcher’s
aim of embarking on this study is to know whether distribution strategies of
automobile industries had utilized the effect of distribution in an industry.
The priority of the researcher is to investigate and bring to light as well as
evaluate distribution strategies impact to the manufacturing.
OBJECTIVE OF
THE STUDY
The
researcher believes that it is pertinent to point out that marketing
distribution strategy makes an impact in the consumer and producer. It has
therefore becomes necessary to find out the strength and weakness of
individuals, groups and organization involved in the activities with view of
appraising critically their activities toward the realization of the consumer
goal
Therefore,
the objective of this study is to: -
a. To determine the study and appraise the
warehousing in ANAMMCO
b. To determine the appraise of the existing
distributive chains
c. To determine the appraisal of the role of
distributors in ANAMMCO
d. To find out whether distribution strategy
is utilized in the company.
e. To ascertain whether the evaluation to
distribution strategies has improve the company
f. To examine whether the company’s direct
or indirect distribution to the customers
g. To determines whether the company has
quality control department.
DEFINITION
OF TERMS
1. Commission Agent: - an agent
who has a monopoly over the sale of
commodity who only sells to others on
payment of a commission.
2. Retailer: - A merchant or sometimes an agent whose
business is to sell directly to the ultimate user.
3. Advertising: - Use of
communication to make people know about the existence of a company and its
s services.
4. A Marketing: - Marketing is a
human activity directed at
satisfying needs and wants through exchange process
5. Marketing Concept: - Marketing
concept holds that the key to
achieving organizational goals consists in determining the needs and wants of
target markets and delivering
the desired satisfactions more effectively and efficiently than competitors.
6. Services: - These are
separately identifiable intangible activities which provide want satisfaction
when marketed to customers and or industry users and which are not necessarily tied to the sale of
a product.
7. Distribution Channel: - This
is a set of interdependent organizations
involved in the process of making a
product or service available for use or consumption by the consumer.
8. Wholesaler: - A firm engaged
primarily in wholesaling
activity.
9. Marketing Strategy: - The
marketing logic by which the business
unit hopes to achieve its marketing
objectives.
10. Marketing Research: - The systematic design, collection, analysis, and reporting of data
relevant to specific marketing situation
facing an organization
11. Target Market: - A set of buyers
sharing common needs or
characteristics that the company decides to serve.
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