CHAPTER ONE
- Introduction
According to professor NonyeluG. Ninokoye ‘Distribution channels are virtually similar for the brewers. Typically, major distributors collect their allocations either from the plant or at depots. Then there is another layer of middlemen called ‘attaches’ who are sub-distributors attached to major distributors
There are also retailers-stores, hotels and beer parlour operators. In practice, you find distributors engaging in retailing and the implied channel linkage are not strictly followed. Because of the scarcity of beer in the late seventies to early eighties, beer distribution became a very lucrative and highly popular economic activity, attracting all manner of people including civil servants, academician, politician and house-wife.
The distribution of a product from the manufacturer to the end user has been receiving much attention in marketing oriented companies and organizations. It has been pointed out several times that a manufacturer to the end user has been receiving much attention in marketing oriented companies and organization. It has been pointed out several times that a manufacturer has not actually achieved his aim until the product produced is at the ‘right place’ for a potential customer today.
The right place means any available outlet in the market where the product can be only sale. This is why distribution has become one of the marketing strategies in the marketing mix.
A properly organized distribution strategy ensures availability of the product at the consumers do not have to wait necessarily for the product. The working might force the consumer to buy an alternative or competitors` product.
In the light of the above facts and the lueratureness of brewery industries, there is a great need to study the trend in the role played by distribution strategy in marketing of brewery product in Nigeria.
This brings us to the distribution of beer at Ilesa international Brewery limited. The issue becomes compounded when one considers the growth in the number of brewery industries in Nigeria and the channels of distribution through which the brewery products get to the ultimate consumer.
Among e parties are the retailing, middleman who solely depend on the profit realized from the sakes of the brewery products. That is the profit realized is a functions of the volume of sales.
From the foregoing, there is evident that the channel selected or distribution strategy applied is based on the expected sales return provided the selection involved in the process is justified. If upon all, the distribution strategy turns to be very unfavorable, a critical analysis of its ineffectiveness for such a industries is necessary.
It was against the background that this research was undertaken. Also findings and recommendations were based on this premise.
- Historical Background
International breweries limited, Ilesa was incorporated as a private limited liability company on December 27, 1979, but it did not commerce production until December 8, 1978. The factory was declared open on April 7, 1979 by col. Paul tarfa then military administrator of Oyo state.
International breweries limited, ilesa, whose establishment of the brain-child of Dr. Lawrence Omole is the first tily large – scale industry to be established in Ijesaland. The goal of the founder Dr. Lawrence Omole who, apart from being a renowned businessman, is also a well known philanthropist. Transcended social identification. He perceived the establishment of the industry not only as a logical progression, of his business and investment activities. But also a further avenue for providing more employment opportunities for vesa sons and daughters, crating gainful avenues for the local traders and projecting the Ijesas generally as achievers in the business world.
To Dr. Lawrence Omole, the availability and ease of assembling raw materials played the crucial role in the decision to establish the brewery industry. The raw material include mainly water, bottles and container s. locally obtainable, and male, yeast , and sugar which could then be imported relatively easily
GMBH is a technical partner to international Breweries Limited; the technical management agreement was signed on April 17, 1979.
development ofinfastructural facilities and production:
The foundation of the factory complex was laid soon after the signing of the first agreement in 1977 but work did not start in earnest until the latter part of the year, and it was completed in December1978 simultaneously with the construction of the building the necessary machineries and equipment were being installed.
Production commenced in early December 1978 with an initial capacity of 200,000 Hectolitries(32,000,000 bottles) per annum of larger beer with the brand name TROPY. The beer was launched at Kekedome within the cocoa House complex at Ibadan on December 9, 1978. The brewery was formally declared open on Saturday, April 7, 1979. The company has since come out with two more products major larger beer and Betamalt produced largely from locally sourced raw materials
The company commissioned the building of its own permanent administrative office in 1980; work was completed in October 1984. The office building , a staff canteen and a healthy bay. The new office complex has, however proved inadequate to accommodate all members of the administrative and sales staff with the result that the company commissioned an additional ultra-modern office complex adjacent to and linked with the existing office. This came into use in 1986.
1.3 STATEMENT OF PROBLEMS
Distribution channels are virtually similar for the brewers. However, a selected channels of distribution is accepted as useful tool in marketing, there are many who attach or no importance to its suitability.
Generally, many people belief that channels of distribution has same influence in determination of market price; this view has to be looked into.
Whether the selected channel of distribution being used by the company under research in marketing beer and allied products available to the consumer has to be investigated.
Moreover, the general price fluctuation and variation in retail price from one store to the other are often blame on cost of marketing activities mostly physical distribution the cause of this will also be looked into.
In summary, the study will seriously concern itself with the activities of the middlemen who are effectiveness of the selected channels, the role played by the price fluctuations and variation in retail prices from one store to the other.
1.4 RESEARCH QUESTION
This research attempts to give answer to the following question
- What are the contribution of distribution strategy to success of company?
- How effective is the organization to the distribution strategy?
- How can the problems of distribution strategy be solve?
1.5 OBJECTIVES OF THE STUDIES
- To determine the suitability of distribution channels of brewery products.
- To identify yet unexpected segments of the market, which is not covered by the selected channel of distribution.
- To investigate the contribution made by the selected distribution channels(s) in face variations.
- To determine the activities of the distributors in marketing of brewery products.
- To evaluate the effectiveness of the distribution channels of brewery products.
1.6 SIGNIFICANCE OF THE RESEARCH STUDY
Apart from being an aid to the marketing activities of international brewenes limitedIlesa, this piece aims at serving the following :
In the first instance, would serve as a useful point to the reference to other breweries and allied firms in the country, especially those firms that have been experiencing some problems in other distribution strategy.
Secondly, it would also serve as an essential guide to prospective industrial list who would wants to invest in brewery business.
In addition, this would also aid in ascertaining the role of brewery industry during this period of depressed economic situation that the country is going through.
Moreover, this research study would be of importance to Nigeria populana who desire to engage in beer business to sustain their living. This is said because it would go to a long way to fostering and exposing such people to the nature and importance of brewery industry.
Lastly, this research study would be useful to students and marketers who wish to carry out feasibility studies or give professional advice to brewery firms in the country, and particularly in Ilesa international breweries limited.
1.7 SCOPES AND LIMITATION OF STUDY
The research work is directed mainly towards the role of distribution strategy in marketing – a case study of international breweries limited Ilesa.
In the course of the research, the following limitation were encountered
- This is due to the fact that marketing strategies are very vast that on one research can effectively do justice to it especially when it is realized that such a research is carried out under many constraints like time and finance.
- In some of their answers, facts and important information were reluctantly given out in form of summaries and approximations.
- Finance was a serious contains in view of the prevailing high transportation cost and the dire need for the researcher to travel to many towns and cities in the course of the research works to administer questionnaires.
- The time factor was also another constraint. But with the god’s mercy, who directed some of my friend to come to my financial and, I was able to put a finishing touch to the research work.
Performance Awards:
With its introduction of the state-of –the-art technology and advanced brewing techniques and with emphasis on quality control, it is little wonder that the I.B.L won Gold medal Award in marid. Spain in October 1984 of the best lager beer in quality taste. It has subsequently won the N.I.S. Award in 1985, 1987 given by the Nigerian standard council in recognition of the company’s products-TROPY-mark of quality and for conforming to the Nigerian standards organizations specifications. In 1988, the company’s two new production, MAYOR AND BETAMALT, won Gold in Athens, Grace. Apart from these, the company also won the Oyo state merit Award for1987 as the industry these made use of highest percentage of locally sourced materials.
Financial And Organizational Structure OF I. B. L.
The company was incorporated as a private limited liability company on December 27, 1971 with the objective of carrying on business as brewers. Distillers and manufacturers of and merchants and dealers in beer, stout, wines, spirits, aerate waters and liquors of every description whether intoxicating or not, of corks, bottles and other receptades for the same, and of malt, hops, grain, meal, yeast, and all other materials and things capable of being used in connection with any such manufacturing or business.
As at 1978, when the industry was established and the factory commenced production, the authorized share capital of the company which was fully subscribed was #4,500,000.
At the inception of the company, it raised a loan of about #5.7 million. The loan which was due for total liquidation on December 8, 1985, was fully retired in April 1985.
By 1988, the authorized share capital of the company had been raised to 20,000,000 and 18,000,000 had been fully subscribed and paid.
As the board meets only periodically, the day-to-day administration of the company is vested in the managing Director, marketing manager, technical manager and others, in addition to his overall supervisory role, the managing Director retains ultimate responsibility for audit, public relations, secretary is responsible to the Board.
Job Opportunities:
International Breweries Limited started operation in 1971 with only eight employees, the first canteens of beer were produced in the factory in December 1978, and the staff strength had increased to above 1,000 in 1978. Despite the current downturn in the national economy. The company had of retrenched a single worker.
As of 1988, the company has about 1,010 distributors spread all over Oyo, Ondo, Ogun, Lagos, Bendel, kwara, Niger state and federal capital territory with about 50% in Oyo state. A total of about 4,800 estimated employments has generated by these distributors.
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