APPRAISAL OF PHYSICAL DISTRIBUTION POLICY (A CASE STUDY OF YOYO PURE WATER ENUGU STATE)

ABSTRACT

This study appraises the physical distribution policies of Yoyo Pure Water, using a survey design. Two hundred respondents, made up of commercial staff, distributors and major retailers, were randomly drawn from a sampling frame of 400. Data were collected with structured questionnaires on a 5-point Likert scale. Cronbach's alpha showed good reliability for the staff and customer questionnaires, at 0.76 and 0.82 respectively. The data were analysed with frequencies, percentages, means, standard deviations and Pearson correlation.

The study found a significant relationship between the performance of physical distribution activities (transportation, warehousing, inventory control and order processing) and physical distribution service (product availability, timeliness, quality and flexibility). Physical distribution service was also significantly related to overall customer satisfaction. The study concludes that more effective and efficient distribution activities improve distribution service, which in turn raises customer satisfaction. It recommends that companies manage these activities effectively, since this leads to better service, higher satisfaction and a competitive advantage, and that they set service standards using the "Customer Service Mirror", the conceptual market-driven standards model developed in this study.

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

Manufacturers increasingly recognise that producing goods means little unless the goods reach consumers at the right time. Technological change, globalisation and rising customer expectations have moved organisations away from a narrow view of physical distribution toward a broader one. Logistics is now regarded as central to achieving organisational goals, profitability, growth and effective marketing.

Products have no value to consumers until time and place utilities are created. Selling is often easier than making goods available, and customer satisfaction depends largely on where and how often the product can be found. Yoyo Pure Water has treated distribution as the key to meeting customer requirements and to staying ahead of competitors.

Physical distribution has also grown beyond trucks and warehouses. It now covers planning, implementing and controlling the physical flow of materials, finished goods and related information from the point of origin to the point of consumption, in order to meet customer needs at a profit. It includes transportation, warehousing, holding of stock, order handling and distribution control. It is also among the costliest marketing functions, because it involves movement, handling, storage, inventory carrying costs and insurance.

Research supports the importance of these activities. Studies of bottled water companies in Calabar found that order processing, transportation, inventory management and warehousing each had a significant positive effect on marketing performance (Essien & James, 2024). Work on logistics service quality has also identified timeliness, availability and product condition as the key dimensions on which customers judge a distribution service (Murfield et al., 2017; Yuliawati et al., 2023). Earlier research distinguished between the service elements a firm provides, such as product availability and order cycle time, and customers' satisfaction with how well those elements perform (Rhea & Schrock, 1987).

Yoyo Pure Water is a producer of packaged drinking water in Enugu State, Nigeria. It sells its products through distributors and retailers.

1.2 Statement of the Problem

Before motorised transport, goods moved slowly and only in the quantities people could carry. People lived near the goods they needed and traded surpluses in nearby markets. As production grew, manufacturers needed faster and more reliable ways of making goods available to consumers.

Marketers eventually concluded that time and place utilities are best achieved through a systems approach that integrates all distribution activities. This reversed the traditional view that distribution starts at the factory. Modern thinking starts from the market and works backwards to the plant. Customer service and satisfaction have also become central to marketing strategy, and distribution is an important source of both winning and keeping customers.

Logistics is also a major cost. The growth in product variety and the spread of information technology, including computerised ordering, inventory control and routing, have created opportunities for large gains in distribution efficiency. Effective physical distribution is therefore essential to achieving organisational objectives through customer satisfaction. Little is known, however, about how well Yoyo Pure Water's distribution policies perform on the service dimensions customers value.

1.3 Objectives of the Study

The main objective is to appraise the physical distribution policy of Yoyo Pure Water. The specific objectives are:

1. To evaluate the relationship between the performance of physical distribution activities and perceived physical distribution service.
2. To ascertain the relationship between product availability and overall customer satisfaction.
3. To determine the relationship between timeliness of distribution service and overall customer satisfaction.
4. To examine the relationship between quality of distribution service and overall customer satisfaction.
5. To identify the relationship between flexibility of distribution service and overall customer satisfaction.
6. To determine how important each distribution service variable is to customers and compare Yoyo Pure Water's performance with that of its major competitor on these variables.

1.4 Research Questions

1. What is the relationship between the performance of physical distribution activities and perceived physical distribution service?
2. Is there a significant relationship between product availability and overall customer satisfaction?
3. What is the relationship between timeliness and overall customer satisfaction?
4. Is there a relationship between distribution service quality and overall customer satisfaction?
5. Is flexibility of distribution service related to overall customer satisfaction?
6. How important are the distribution service elements to customers, and how does Yoyo Pure Water's performance on them compare with its major competitor's?

1.5 Research Hypotheses

H₀₁: There is no significant relationship between the performance of physical distribution activities and perceived physical distribution service.
H₀₂: There is no significant relationship between product availability and overall customer satisfaction.
H₀₃: There is no significant relationship between timeliness and overall customer satisfaction.
H₀₄: There is no significant relationship between distribution service quality and overall customer satisfaction.
H₀₅: There is no significant relationship between flexibility of distribution service and overall customer satisfaction.

1.6 Significance of the Study

The study is submitted in partial fulfilment of the requirements for the award of a Higher National Diploma in Business Administration and Management Studies.

It also links physical distribution management to effective marketing in consumer goods, giving an overview of the logistics activities and systems approach needed to compete today. It highlights the importance of logistics to marketing effectiveness.

The findings will benefit Yoyo Pure Water and other consumer goods firms, because consumers are central to survival in the market and product availability raises the satisfaction they derive from products. Finally, the study contributes to knowledge by offering a basis for further thinking and research on the subject.

1.7 Scope of the Study

The study covers physical distribution activities in the consumer goods market, with Yoyo Pure Water, Enugu State, as its focus. It appraises how far Yoyo Pure Water applies physical distribution activities and how this affects the achievement of the company's objectives. In examining the link between distribution activities and customer service objectives, it concentrates on the distribution activities and the four service components of product availability, timeliness, quality and flexibility within the overall marketing customer service.

1.8 Limitations of the Study

1. Some key respondents were reluctant to provide information, probably because of company policy. The researcher therefore used the company website for some information as a last resort.
2. The study covers only Enugu State in South-East Nigeria, so generalising the findings to areas with different expectations about availability, timeliness, quality and flexibility would be inaccurate.

1.9 Operational Definition of Key Terms

Commercial staff: Staff who deal directly with customers, such as driver-salesmen and employees in warehousing, order processing, inventory control and materials handling.

Competitive benchmarking: Comparing the company's performance with competitors' on the most important service elements in order to find opportunities for improvement.

Customers: The distributors and retailers who buy directly from Yoyo Pure Water.

Customer satisfaction: The state in which perceived service performance meets customers' expectations.

Customer service: The ability of the logistics system to satisfy users in terms of time, dependability, communication and convenience. In this study it means the four physical distribution service components.

Customer service level: The firm's standards for speed and reliability in making products available.

Customer service offering: What the organisation provides in customer service, measured by the importance the company attaches to each service element.

Customer service requirement: What customers expect, measured by the importance they attach to each service element.

Physical distribution service (PDS) flexibility: The ability of the distribution system to respond to special orders or unexpected customer needs, measured by response time to such requests.

PDS quality: How well orders are fulfilled, reflected in in-transit damage, wrong items and wrong quantities, including accuracy, condition of goods and consistency.

Physical distribution challenges: The tasks of managing transportation, inventory, warehousing, order processing, materials handling and customer service effectively across the supply chain.

Product availability: The proportion of units, order lines or orders that are filled completely.

Supply chain: All the firms, facilities and logistics activities involved in obtaining materials, converting them to products and delivering them to customers.

PDS timeliness: The order cycle time, meaning the time between placing and receiving an order, including its consistency across orders.

REFERENCES

Essien, E. E., & James, E. E. (2024). Physical distribution strategies and the marketing performance of bottled water companies in Calabar, Nigeria. Gusau International Journal of Management and Social Sciences, 7(1), 76–98. https://doi.org/10.57233/gijmss.v7i1.05

Murfield, M., Boone, C. A., Rutner, P., & Thomas, R. (2017). Investigating logistics service quality in omni-channel retailing. International Journal of Physical Distribution & Logistics Management, 47(4), 263–296. https://doi.org/10.1108/IJPDLM-06-2016-0161

Rhea, M. J., & Schrock, D. L. (1987). Physical distribution implementation effectiveness: The customer perspective. Transportation Journal, 27(1), 36–42.

Yuliawati, E., Brilliana, C., Rahmawati, N., & Trihastuti, D. (2023). Performance evaluation of logistics service provider (LSP) in FMCG companies using physical distribution service quality (PDSQ) dimension: Case study. Journal of Applied Engineering and Technological Science, 5(1). https://doi.org/10.37385/jaets.v5i1.1997