ABSTRACT
The efficient planning and co-ordination of physical distribution activities will make
goods available at the right places and time or when and where needed. A well
managed physical distribution can help to stabilize price, by making use of an efficient
means of transportation and warehousing facilities, a manufacturer can make his
goods available to consumers at far and near locations and all year round. Physical
distribution also provides a very positive contribution to the value of a product, this is
because physical distribution operations provide the means by which the product can
reach the customer or end user in the appropriate condition and required location. It
is therefore possible for companies to compete on the basis of providing a product
either at the lowest possible cost, so that the customer will buy it because it is the least
expensive or at the highest possible value to the customer, if it is exactly where and
how the customer want it. However, physical distribution encompasses transportation,
inventory management, order processing and warehousing. Hence, it was therefore
pertinent to Analyze the contribution of physical distribution cost to price in marketing
in Nigeria, using two selected manufacturing firms in Enugu state Nigeria. The study
was done through the use of questionnaires with questions tailored towards:
Determining the contribution of physical distribution function to marketing
organizations overall cost in Nigeria, to ascertain the effect of environmental factors
on physical distribution cost of marketing by manufacturing firms in Nigeria; to
evaluate the impact of physical distribution function on the prices consumers pay for
their product; to determine the impact of inventory management on physical
distribution of manufacturing firms. Four hypotheses were tested using t-test, chisquare
and linear regression statistical tools. The result of the analysis revealed that
physical distribution function performed by marketing organizations contribute
significantly to firms overall cost in Nigeria, it was also found that environmental
factors do contribute significantly to physical distribution cost of marketing by
manufacturing firms in Nigeria.
The study also showed that physical distribution
function do have an impact on prices consumers pay for their product, further results
showed that inventory management has an impact on physical distribution of
manufacturing firms. To this end, the study recommended that emphasis should focus
on the total cost; reducing cost on one factor has the effect of increasing the costs of
another factor by an amount saved, this should informative to manufacturers. Again,
firms should look forth for those environmental factors that might cause an additional
cost to the distribution system and ensure that they were put in order, to minimize
cost. Also certain irrelevant charges like indiscriminate haulage expenses should be
eliminated by the government; the reason is that much charges in the process of
physical distribution often ends up increasing prices of products leaving the
consumers to suffer. Furthermore, firms should maintain standard inventory
management system, so that the need to achieve economic order quantity will be
achieved. Also efficiency and effectiveness require that management be equipped
properly with the newest technology; thus manufacturing firms should always equip
their cost monitoring and control mechanism to be able to perform creditably.
Moreover, cost of warehousing facilities can be controlled if government comes in to
either build and lease out to manufacturers or provide the good incentives to do so.
This study therefore calls on government to formulate and implement useful policy,
such that will allow for easy flow of products from the manufacturing plant to the
consumers.
