CHAPTER ONE

1.0

Introduction

1.1

Background of the Study

The distribution function is one of the marketing variables in the

marketing mix. It is therefore, a marketing function, which aims at getting

goods and services from the manufacturer to the ultimate consumer,

transferring titles and physically moving the products in the process

(Adirika, 2001:193).  Distribution is the process of getting products and

services from producers to consumer/user, when and where they are

needed.  It creates time, place and possession utilities and the transfer of

ownership utility for the consumer or users to enjoy the form utility. “It is

often said rightly that production remains incomplete until goods or

services concerned reach the final consumer.

Again, unless products are

distributed and delivered in the right amount, at the right time, in proper conditions, buyers may be reluctant to buy” (Achison, 2000:180).

The unprecedented growth witnessed in the paint industry in Nigeria since the last two decades has led many Nigeria paint manufactures to show more concern for the market of their products. Unless a product is properly channeled, it cannot reach its target market/customers, it cannot achieve the required sales volume, the planned market share and profit goals of the firm may not be realized too. It is the facilitation of this sort of accessibility that is the major function of a firm’s channel of distribution.

Distribution system is a set of facilitating agency including order processing, material handling, warehousing, inventory management, clearing and forwarding companies and transportation used in the movement of products from producers to consumers and end users. Planning an efficient and effective distribution system can be a significant decision in developing an overall marketing strategy.

A company that places the right products in the right place, at the right time, in the right quantity and price and with the right support services is able to sell more than competitors who fail to accomplish these goals or objectives. These apart, distribution is an important variable in marketing strategy because it can decrease costs and increase customer satisfaction. Infact, speed of delivery along with services and dependability is often as important to buyers as price of products. In order to obtain better result, physical distribution activities should be integrated with marketing channel decision. This research work which is on the distribution system of some selected Made in Nigeria Paints in Onitsha, Anambra State was conducted with the objective of evaluating how paint manufacturers move their end products to the final consumer or users. The selected paint manufacturers which the researcher based on include Citizen Chemical Industries Nig. Ltd, Ages Enterprises Nigeria Ltd and Jacbon Industries Ltd. A survey

conducted by the researcher shows that the distribution of paints by the manufacturers in Anambra State is mostly through marketing intermediaries and channel members who constitute the distributors and retailers of the paint products. Such method of distribution makes the products to be available only at strategic locations in towns and industrial markets within Onitsha, Anambra State. This promotes competition, making the industry to be highly competitive. As a result, it becomes proper and necessary for every paint manufacturer to formulate and adopt a cost effective distribution system that will guarantee better customer patronage through improved customer services in order to secure vantage competitive edge over other competitors. The fundamental questions at this juncture are: Do these adopted means of distribution offer the best services to the customers? And how efficient are these in terms of total cost minimization?

Most paints producers came into existence sequel to the ban placed on importation of paints and allied products into the country. In addition, the introduction of Structural Adjustment Programme (SAP) and availability of the basic raw material gave an added impetus to the establishment of the industry.

The selected paint makers make the following kinds of paints: Duntop Coat, Gloss or Oil Paints, Textured Coating (Texcote), Emulsion Paints, and Wood Finishing. The three selected paints makers are: Citizen Chemical Industry Nig. Ltd. This was established in 1980’s and today has largest share of paint market in Onitsha – Anambra State. The factory is located at KM2 Nkpor/Obosi Road Onitsha. Its products are Dunlop Coat, Citizen Gloss Paint, Citizen Texcote, Citizen Emulsion, Citizen Wood Vanish and Citizen Glue.

Ages Enterprises Nig Ltd is the producer of Home Pride Super, Delux Emulsion and Home Pride Executive. Its factories are located along

Enugu – Onitsha Road near New Motor Parts Market, Nkpor, and Odume Layout Obosi.

Jacbon Industries Ltd is the producer of Bonalux Paints and its factory is at Obosi Road, Onitsha.

With regard to the profile of these companies, one can see that they offer the same lines of products. The difference is only on the brand names. They are therefore, engaged in competing for customers patronage and for any of them to achieve competitive advantage over the others, it has to improve its distribution system strategy.

Therefore, the makers of paint products should gear efforts towards seeking information about the consumers needs, designing appropriate paints products of different sizes, properly packaged in the manner most acceptable to the consumer, promoted through appropriate media, get them to the points where the consumers will buy with ease using appropriate channels at a price agreeable and affordable to the potential consumers.

1.2        Statement of the Problem

In carrying out this study, some problems were identified from the background and they include: Inadequate provision of the customer services by paint manufacturing companies; There is problem of inadequate coverage of the target market; There is inadequate physical distribution network of paint companies; There is problem of low demand of the product and poor patronage; Inadequate application of Inventory Control Measures.

1.3        Objectives of the Study

1.                  To identify if the paint customers are satisfied with the product and distribution policy.

2.                  To evaluate the physical distribution strategy adopted in the marketing of paints by the companies of study.

3.                  To determine the physical distribution network of the three selected paint companies.

4.                  To determine the extent of demand of the paint products and patronage.

5.                  To know if the Inventory Control Measures are applied.

6.                  To make recommendations that will help to improve the distribution system and marketing of made in Nigeria Paints.

1.4        Research Questions

1.                  What type of Distribution Systems are adopted by the three selected paints companies?

2.                  Is the physical distribution network of the three selected paint companies efficient?

3.