LITERATURE REVIEW

COMPONENTS AND DEFINITIONS OF DISTRIBUTION

According to Philip kotler & Armstrong 2001, Distribution is the process of planning, implementing and controlling the physical flow of materials, final goods and related information from point of origin to points of consumption to meet customer requirements at a profit.

Schewe and Smith (1980) defined distribution as the physical movement of products to the ultimate consumers. Production is not complete until goods reach the final consumers and products are worthless until they are made available to those who need them. It is this process of making goods available to those that need them that gives rise to distribution basis in a marketing strategy.

Achison (2000) defined distribution as the process of getting products and services from producer to consumer or users, when and where they are needed. It provides time, place, possession utility and the transfer of ownership.

Revzan (1971) defined distribution as managerial battle field in which marketing strategy and tactics either succeed or fail. It is imperative to make a thorough study of available alternatives before choosing one. This is because distribution system is a key external resources which normally takes years to build and can not be easily changed.

According to him distribution involves two aspects: Physical distribution and channels of distribution. Physical distribution involves the physical flow of products from the producer to the consumer while channel of distribution involves the flow of title of goods from the producer to the consumer.

Achison (2000) denoted that unless products are distributed and delivered in the right quality, at the right time, in proper condition and at the right price; buyers may be reluctant to buy. He stressed further that distribution is regarded as a major consideration in strategic planning because it is an important marketing function that is responsible for making goods and services available to the consumers.

According to John O’ Shaughnessy (1992) in his book competitive marketing. A Strategic Approach denoted that a distribution system is the network of people, institutions or agencies involved in the flow of a product to the consumers, together with the informational, financial, promotional and other services associated with making the product convenient and attractive to buy and re-buy.

 PHYSICAL DISTRIBUTION

Physical distribution is often regarded as “logistics”, logistics refers to the interrelation and management of all the key element or activities involved in providing both raw materials and finished products to customers.

According to Kotler & Armstrong (2001) Physical distribution is the task involved in planning, implementing and controlling the physical flow of materials, final goods and related information from point of origin to points of consumption to meet customer requirements at a profit.

Traditionally, Physical Distribution typically started with products at the plant and then tried to find low-cost solutions to get them to customers. However, today’s marketers prefer market logistics thinking, which starts with the marketplace and works backward to the factory. Logistics addresses not only the problem of outbound distribution (moving products from the factory to customers) but also the problem of inbound distribution (moving products and materials from suppliers to the factory). It involves the management of entire supply chains, value-added flows from suppliers to final users. Thus, the task of logistics manager’s is to coordinate activities of suppliers, purchasing agents, marketers, channel members and customers. These activities include forecasting, information systems, purchasing, production planning, order processing, inventory, warehousing and transportation planning.

It has been discovered that customer service and satisfaction are the cornerstones of marketing strategy and distribution is an important customer service element. So many companies have discovered that they can attract and keep customers by giving better service or selling at lower prices through better physical distribution.

Secondly, logistics is a major cost element for most companies more importantly NNPC Petroleum Products Limited. Poor Physical distribution decisions result in high costs. Improvement in physical distribution efficiency can yield tremendous cost savings for both the company and its customers.

Thirdly, the explosion in product variety has created a need for improved logistics management.

Finally, improvements in information technology have created opportunities for major gains in distribution efficiency. The increased use of computers, point-of-s

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