Product Planning Management, and Distribution Problems in Soft Drink Industry.

Product Planning Management, and Distribution Problems in Soft Drink Industry.

Product Planning Management Distribution  – Product is the most importance aspect of the marketing mix price, place and promotion this is time for the fact that decision to be taken by the management in the other three area of the marketing mix are all dependent on this vital area of the marketing mix “the product”

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There are various definition of product;

A product has been defined by Stanton (1981,.161) as ‘ asset of legible attributes including packaging coloring price, manufacturing prestige, retailers service, which the buyer may accept as offering want satisfaction” product pinning comprise of all the activities product it will market.

Planning is preparing for tomorrow. It involves decision making on where a business wants to be tomorrow and how the business intends to get there. There are short- range and long range plains short range plans usually cover five, ten or more year while longer range cover five ten or more years and address themselves to broader issues in much general terms.

The first step in any planning endeavors is the establishment of clear goals effective tools or strategies for attaining those goals. Planning is deciding in the present what is to be done or under taken in the further.

Okonkwo, there is a newly manufactured cancer drug in Germany; the problem is how to get this during into Nigeria. If the drug can get you your distribution in any economy is sometimes overworked. It has previously been neglected to the advantage of other marketing areas. Business manager and former scholars had previously concentrate most of their energies and resources to such area of marketing as marketing research, product planning and development, pricing and promotion.

Johnson and wood (1982) defined distribution as “ integration of two or more activities for the purpose of planning, implementing and controlling the efficient flow of raw material service, in process inventory and finish goods form the point of origin to the point of consumption.

Physical distributions cover mostly the movement or tangible goods. Intangible in the form of services cannot be qualified. Physical distributions are not only the loading unloading and movement of finished goods from the producer to the final destinations. In it self distribution deals with the whole process of getting what is produced to be conveyed from the producer whale house to the final customer. It is only a part of activities in the total marketing system. Nnadozie and Nwana (1993:50). “That distribution deals with market coverage which includes retailing and wholesaling structure and also channels used in sending the products.

Distribution has its functions as follows

Transfer of tittle of goods from one person to another.

Physical movement from the place of production to that of consumption.

Storage of the goods until the time they will be conveyed to another person or place.

Communication of information about the availability, price and characteristic of the goods.

The financing of the goods in transit inventory as well as purchasing.

This is to say that there can not be buying or selling if there is no system of distribution because the function or distribution is to more goods from the producer to the consumer. Distribution is not complete until it has channels that are avenue open to any producer where by he can get his product, into the hand of those who need them. According to Nnadozie and Nwana (1995:53) these channels must not be haphazardly and must follow these features.

Begin with the consumer and work up to the producer.

Must be flexible enough that the use of one channel does not permanently block the other channels.

Must be totally appropriate to the basic objectives of companies programmes.

The channel must provide the firm with access to a predetermined share of market

There is a high degree of inter dependence among all firms in the industry.

However, before making this choice, one must consider:

Which market to be used, whether consumer or individuals market the size of the market and order of size? The product consideration involving the technical nature and perishability. of the product.

Service provided by middleman, their attitude towards the producer polices and the availability of the desired middlemen.

The distribution outlets for consumer’s goods producer to ultimate consumer.

Producer to merchant whole sale to consumer,

Producer- merchant whole saler through retailer to consumer.

Producer-agent-whole saler retailer.

Channels for industrial good;

Producer industries

Producer-industrial distribution to the users.

Producer-agent user.

Management is a process by which system are administered, when we think in terms of system we are suggesting a process that uses inputs to produce outputs. The transformation of resource inputs to produce output gives a logical reason for the existence of management.

Management many represent a district and an organized body of knowledge a discipline, or all those who are charge with responsibility of supervising the work of others traditionally, management have also been defined as representative what managers do in general, they plan, organize staff influence and control at their levels in organization.

Definition of management also stresses on process of a social and technical process that utilizes resources and charges human behaviour in the desired direction in order to elicit contribution that will accomplish the objectives of the organization.

Product management is a dynamic full time job for product managers. Once the new product has been introduced into the market the task of managing the new product and existing once through it is entire life cycle then rest on the marketing team. To be able to manage very well, the manger needs ample supply of information of the right quality quantity. To be able to also manage the new product, the market practitioner needs to have at his finger tips relevant information of what is likely to hamper to new product at the different stage of life cycle of the product.

It is only when the market knows in advance what is likely to the new product, then he can be prepared with solution s to take care of that thing known to always happen to newly developed products at the different stages of the products life cycle. It they became imperative that in order to be able to manager a new product effectively, present and future marketers should endeavor to be master what normally take place at different stage of the product life cycle.

THE MARKET MIX (PRODUCT)

The product is the most important aspect mix. This is true for the fact that what decision needs to be taken by management in the other three aspects of the marketing mix are all dependent on this vital area of the marketing mix” the product,”

An organization can either in business for the provision of the tangible product; or intangible products usually known as services.

Modern A.R (1987) “No product, no sale wrong product, no sale, long, support, no sale”. We refer to both tangible and intangible offering of firms as products.

Bush and Houston (1985) “Decisions on pricing channels or of distribution and promotion all depends on the product.

We shall start by having certain definitions of what a product is all about.

PRODUCT DEFINITIONS:

Stanton W.D (1981: 161) defined a product as a set of tangible attributes including packages, Colour, price, manufactures prestige, retailers service which the buyer may accept as offering want satisfaction.

Modern. A.R (1987) a product is also defined as something that is capable of satisfying customer need or want; modern went further to note that, the need or want may already exist r it may be late that is, aviating the development of the right product to meet this need.

Kotter. P(1980) defined product as anything that can be offered to a market for attention, acquisition or consumption. It includes physical objects, service personalities, place organization and idea. It is worthy to note kotters comprehensive definition of a product. Human waste can be a product. Provided there is need for it in the absevice of fertilizer or in a situation of a very high cost f fertilizer, human waste can be a product used as manure for agricultural purposes.

A.l.  Okafor (1995) ma product is anything for which there is a need for and whose purchase, sales or consumption is not punishable by the law”

Nonyehi .G. Nwokoye-“A product is the offer that the market makes to buyers and it is of central importance in the marketing effect. it is defined as a bridle  of physical and psychological satisfaction that a buyer receivers from a purchase. It includes the tangible object, but also, such supportive element as post sale services and other that buyer’s value.

According to pride ferrel “A product is everything (both favorable and unfavorable) that is received in an exchange “it is complex of tangible and intangible including functional, social and psychological utilities or benefits. A product ca be an idea, a service, a good or can be an idea, a service, a good or any combination of these three.

PRODUCT CONCEPT:

Product or the total product is more than just the physical product, which we normally see with our named eyes. It many go further than the physical product to incorporate certain vital area such as installation instruction manuals prestigious bread name that carries with it some psychological satisfaction, guaranty or warranty after sales service and availability of spare parts.

It is very necessary, when looking and taking decision on the purchase non purchase of the product. They should remember that there are other thing that go to compliment the physical product, and which makes a particular manufacturer product in the market.

PRODUCT CHARACTERISTICS:

The product characteristics or attributes are synonymous with total product concept already discussed. The product characteristics or attributes cover such areas as brand name, Colour product design, guarantee-labeling packaging, product quality, servicing and characteristics association with good is due to their  relatively low unit price, and they are available in almost all retail outlet, moreover the profit per unit of convenience goods terid to  be usually low, convenience goods can further be subdivided into

Staplers

Impulse goods

Emergency goods

Staplers are item such as food and drugs that are regularly purchased and used in most houses.

Impulse goods are item that customer pick up in retails outlets ( such as chewing gum, sweet and cookies) without an initial plan to buy the item before going into the retail outlets. Most impulse goods are usually not included in customers shopping list.

Emergency goods are item when there need for an urgent need, they include such item as fire chains ambulance services bandages and retails outlets located in rural areas. Price of these items sold as emergency goods tend to be higher than what they are normally sold under normal condition.

Shopping goods: these are products that a customer is milling to allocate a reasonable shopping time and effort while comparing the available breads before he finally settle for a particular brand shopping goods includes furniture, bicycles, dishes etc, quality and style tend to be very importance in considering which brand to choose then price in trying to promote the sale of shopping goods market usually rely more on the use of person selling than advertising.

Specialty goods these are product that a reasonable percentage of buyer want and willing a lot consideration in trying to buy. In specialty good, customers willingness to search or look for specialty product is what differentiates a specialty product from shopping goods; moreover customer are normally unwilling to accept substitutes in place of specialty product. Any banded product peak mike, coca-Guinness) may be termed as a specialty product. Other specialty product in the Nigerian market is D.V.C products, song electronics, cannon films and cameras etc.

Product line and product range: these two terms have the same meaning. the Britain calls it product range while Americans call it product line.

Morden AR. (1987) defined “ A. R. product line or range as products, or range of products aimed at any are target or customer type”

W.D ‘ A product line is a broad group of produce

Interred for essentially similar users and possessing reasonable similar characteristics”

Bush and house (1985) p.35.8) defined” A product live as a group of product within a product line that are  closeting relatively either because they function in a similar manner are sold to the same customer groups are marketed through the same type of outlets or fall with given price ranges.

A typical product line of Nigeria bottling company plc. Are fanta orange, fauta club soda fanta ginger ale, quinine, a line within the organization of lever brother Nigeria Plc. Is the edibles line comprising of the following products blue-band planter holsum in Oraoyo vegetable oil etc.

Also in the product line the toilet pipeline the toilet line consist of closed tooth past, pepsodent toothpaste. The combination of this product line level bother Nig  Plc goes to form part of the company total product line.

PRODUCT MIX MORDEN A.R. (1987) ‘ product mix is the complete range of the company’s product service and brands aimed at the relevant target markets and market segments.

 

Bush and Houston (1987) in their definition saw product mix as the of all product line and item that a particular seller offer for sale to buyers’

PRODUCT DEPARTMENT: This is the number of department within a particular product line. A product item is that particular product within a product line that can be distinguished from the other products within the line either by price appearance or size.

MIX CONSISTENCY: tends to establish the relationship (if any) that exist between all the producer lines, making the product mix of a particular organization

NEW PRODUCT DEVELOPMENT/PLANNING

Stanton W.D. 1981; the watchword for management must often be” innovation or death” and this innovating attitude can become a philosophy almost parallel to the market concept.

For organization that already have one or few product in the market, there is one thing that is certin to happen one day that fast selling product of their will either die a natural dean in the market or have to be withdrawn from market  due to a serious shift in consumers taste  and preference like human being. All products to travel through a well-defined life cycle from research and development to decline and possible withdrawal stage.for this reason firm normally want to develop new product in order to have replacement  for existing product as the existing product more near the end of their life cycle. Before we move into the planning of a new product it may be adequate to pause a while by asking.

(bush and Houston 1985) defined a new product as “ something that the company is producing for the first time.

Stanton W.D. (1981,P162) said that if buyers perceive that a given item is significantly different (from competitor goods being replaced in some characteristics appearance, performance) then it is a new product,.

MC carthyet (1979p. 247) said it is very important to note that a new product do not remain new most developed nations six mouths is the maximum time that a product should be called new.

The term new product can be looked at from any dinvension. An already existing product taken to new market will make the product to be looked as a new product” depends the view of the company concerned what the leader in the industry may not look as a new product, may be referred to as”New by some other companies of that particular industry,

TYPES OF NEW PRODUCTS:

In the discussion of type of new products; Busch and Houston(185p. 376) classified new product into three;

Discussions innovation

Dynamically continuous innovations

Continuous innovation.

Discontinuous: this is the development of new product that results to new patterns of consumer behaviour for instance introduction of television and computers.

Dynamically continuous innovation: this is there are some drastic and major products charges resulting to the development of some new products.

Continuous innovation: there are minor charges to the product feature that do not charge known consumer behaviour.

PRODUCT PLANNING AND DEVELOPMENT

Product planning and development embraces all the activities that enable a company to determine what product it will market.

Planning is preparing for tomorrow. It involves on where a business wants to be tomorrow and how business intends to get there.

There are short-range and long-range plans.  Short-range plans usually cover one operating year while long-range plans cover five ten or more years and address themselves to broader issues in much general terms.

Product development, the idea on paper from planning from the researcher is giver to production department with specific instruction to manufacture proto-type of the new product according to specifications.

Product planning: two types of product planning are: executive and operational product planning they are illustrated below;

A.

. Executive- level

. Planning

. (Decisions)

B.

. Operational-level

. Planning (Decision)

MARKETING/ PRODUCTION OR BUYING/ FINANCE/ PERSONNEL.

The executive level planning is board in shape long range and thus more abstract. This level of planning goes beyond the future, it entails selecting and developing a product that will sell now, in the future and beyond. And mapping out strategy, programme and procedures for achieving these aims.

Operational level planning involves solving drug to day problem that are associated with production buying and marketing of new products. It also includes immediate finance and arrangement of personnel that will take part in production of the new product. Development. The structure uses depends on the importance of new product to the firm. No single a dopts a structure or combination of structure to best meets its needs.

New product committee; this is probably the most common new products the committee is formed from top management ranks; make up or area functional mangers.

Research teams are responsible for idea generation.

Screening teams charged with evaluation of profit proposals.

Product teams entrusted with controlling and co-ordinate the development of ideas into full fledge products product teams in charge of test marketing and introducing new product

New product managers: they assume the responsibility for planning and development. For many categories of consumer goods, new product are simply minor modifications of existing products. The product manager for the original brand could effectively manage that new product since they require only minor product package and advertising charges.

New product department: This is common in firm that asigns priority to new product development as a corporate goal. This department may be called growth and development or market development). The new product department may be structured as either a line or a staff unit. The functions of the new product department may be structured as either a  line or a staff unit. The functions of the new product objectives planning exploration of new product ideas screening  new product ideas, assisting in development of new product specification.

Venture team? This approach is used by firms to develop product or service that are entirely new to the firm and are to be sold to markets which the firm has never served. They are organization separated from the existing structure of the firm. This fosters a spirit of creativity and innovation. The team members are drawn form various functional area of the firm and remain together until the teams assigned objectives are achieved.

THE PRODUCT DEVELOPMENT   PROCESS

Once an organization has identified a need for a particular new product or services, the firm has to pass through eight steps or process towards the development of the desired product/service, they are;

Idea generation

Screening ideas

Business analysis

Concept testing

Product development

Product task

Marketing testing

Commercialization.

Idea generation: Information or data  towards the development of the much needed product can comes from either internal or external sources. Internal data sources include the following: company research and development department employees, customers, managers, sales representative, market research finding etc. while external data sources are made up of product development agencies, sponsored investors, licensing from other companies, joint development programmes with companies.

Screening of ideas : each of this ideas collected are to be screend by the product development committee the company  may not have the adequate resources and manpower to manufacture those product ideas met with each product idea throughout the individual product lift cycle differs.

The firm will always want to go for those ideas which they have the resource and manpower to produce and which will give them the greatest return on their investment.

Business analysis: The organization is mainly concerned with financial aspects associated with new product idea. Should it be manufactured inter a physical product cost benefit analysis is carried out based on determination of the payback period arrange rate of  return and present value towards the  rating of the ideas that passed the idea screening stage.

Concept testing: Philip kotter (1976) defines product concept as the subjective meaning about a product that the company tires to communicate to the consumer.

It can be a prototype or written description of the new product in pipeline, is shown to some selected consumer to rank a number of product concept. The main purpose of product concept test is:

To determine respondents effect or a like or dislike for the concept.

To measure the likely intention of respondent for purchase or non- purchase of product.

To give answer why respondent are willing or not willing to buy the product. Where the the result of the product concept test is positive, the product team take the product to the  product development stage.

Product development: the idea on paper is given to production with specific instruction to manufacture prototype of the new product according to specification at the product development stage. There is need for the various departments like engineering, market to co-ordinate their efforts toward the realization of the much desired product. If the result it is positive, the new product development team them advances to the next stage.

Product text: Product testing is the detailed testing and evacuation of prototypes of the new product. This exercise is very vital during the production stage some in built faults may exist with the new product. during the product testing stage it is exposed to the likely environment under which . it will finally be utilized if there is a minor fault, the product is taken back to the production department for the problem to be rectified.

Text Market: (Busch and Houston 1985) define market testing as “the introduction of a product in limited geographic area to determine if the product should be introduced to the national market”. It then becomes very necessary that a test market activity be carried out to enable the firm to estimate the demand for the new product in the new product in the entire market

Commercialization:  This is the last the struggle towards the development of new product. It is also referred to as the lunch for the new product before the commercialization stage, serious co-ordination is required to have taken place between the organization and all channel intermediaries immediately the new product will be introduced into the marketing team that sees to the management of the new product along the entire period of the products life cycle.

 

CHANNELS OF DISTRIBUTION:

A.R. Morden 1987 ‘ Give me a firm place to stand and I will move the earth’ channels of distribution are one of the tools in marketing distribution normally serves as a bridge between the gap in time and  space where goods are produced to the period of consumption of the products.

The channel of distribution makes it possible for a product to be moved form the producer to the ultimate user or industrial users.

Philip kotter (1984) further highlighted that distribution function create, form time, place and possession utilities to products and services. In the discussion of channel of distribution the American market association defined the distribution channel as, the structure of intra company organization units and extra company agents and dealers, wholesalers and retails, through which a commodity product on service is marketed. In this definition, they divided the channel of distribution into district units. Those units or aspect owned by the organization, which they referred to as  “intra company organization units and those aspects owned by outside which they referred to as “ extra- company” (not directly under the control of the firm).

According to Morden A.R. (1987 234) channels of distribution is seen as the link between production or supply and consumption.

Stanton (1981) defined channel of distribution for a product as, the route taken by the title to the product as it moves from the producer to the ultimate consumer of industrial user.

Okafor A.I (1995 153) defined channels of distribution as both the internal and external structure  used to pass ownership to a product from the producer/ supplier to the user or buyer.

CHANNEL ALTERNATIVES FOR CONSUMER GOODS 

The channel of distribution for consumer marketing are seriously different from the channels alternative usually utilized for industrial goods, for the purpose of this research, the researcher will concentrates on the alternative for consumer goods.

CHANNEL ALTERNATIVES IN CONSUMER

GOODS DISTRIBUTION

There are usually five channel alternative for the market of consumer goods. These channel alternatives are listed as follows.

(i)        Producer to consumer

(ii)       Producer to retailer to consumer.

(iii)      Producer to wholesaler to retail or consumer

(iv)      Producer to agent/ broker to wholesaler to retailer to consumer.

(v)       Producer to agent/broker to retail to consumer

Producer retail consumer: in this type of environment the producer was only able to see retailers who buy in large quantities than the available wholesales. The producer will pass the wholesaler and deal directly with the retailers. Such retailers in Nigerian markets are big out lets like, levertis and UTC they however. Sell in small quantities to the consumers.

Producer wholesale retailer- consumer: the most commonly used channel for most mass-produced goods in Nigeria is where producer get to the consumer through the wholesaler and retailer it is sometimes reffered to as the “ Traditional channel”  most mass- produced consumer products like “sweet, chewing gun, beer, soft drinks, soap and detergents get to Nigeria consumers via this channel. The wholesaler breaks the bulk to numerous consumers.

Producer-Agent/Broker-Wholesaler-Retailer-Consumer

The producer often use agent who usually connect whole saler who sell to small retailers. This channel is best suited for marketing of agricultural products by farmers.

When a producer  decides dealing with an agent or broker, the controlling factor may be that he can not see a wholesaler who can buy in large quantity in the market under consideration or that he want to  extend the control over his product up to the time when the product gets to the hands of wholesaler. The agent having bulky purchase then sells directly to the wholesaler who further breaks the bulk to the retailer.

Producer-agent/broker-Retailer-Consumer: The producer now eliminates the inclusion of the wholesaler because the use of the wholesaler will only unnecessary prolongs the channel without the wholesaler contributing any thing meaningful along the channel. The producer now sells directly to an agent who buys in bulk than the wholesaler would have done, the retailer fill up the vacuum created by the observation and sells directly to the consumer.

DISTRIBTION CHANNEL DECLTIONS:

The decision of what channel of distribution to utilize towards an effective marketing of ones product or services depends on the organizational marketing objectives. If the marketing objective of a producer is that of making available his product all over the market, he has to go for intensive distribution for his product. However, if his marketing objective is titled towards selective distribution, that producer has to make use of the numerous alternative channels.

A producer-marketing objective is never static. The prouder present marketing objective may support that of intensive distribution as of today, that policy or objective may turn out to be selective distribution policy by tomorrow, the controlling factors towards choice of channels are usually influenced by the preventing circumstances at a point in time.

Stanton (1981 339-342) in his discussion of choice of channel enumerates the following factors as the major controlling elements that guide products towards their channel selection:

RESEARCH AND DEVELOPMENT:

Before the product can be introduced into the market, it has to be developed like product; human beings also need to be developed in  their mothers womb, before the new baby can come into the world. In the R and D stage of all new products market research activity is carried out to know what to produce. Finally, prototype or samples of the new product are manufactured.

INTRODCTION

During the introduction stage sale tends to be very low profit will be nothing to write home about i.e. negligible, cash flow negative and development cost still borne by other product. The management objective is toward expenditure is very high in order to make the product known in the market. Distribution is very partly skeletal or selective; price tends to be very high in order to cover high investment research and development.

GROWTH:

At this stage there is a rapid increase in sales, profit is at its highest level, cash flow tend to be moderate, research and development is now born by the product, competitor are growing management objectives are money of market perforation, market emphasis work towards the creation of brand preference distribution strategy, it is intensive price is a bit covered, and the product is improved.

MJURITY:

At this rate, the rate of growth in sales show down, profit has started decline cash flow is still borne by product. Competitors are now many with their brands, management objective is to define their market share. Marketing expenditure tends to be reduced due to deckling profits, intensive distribution still remains,

The same, price tends to be lowest and product differentiated further.

DECLNE AND POSSIBLE WITHDRAWAL:

At this stage, sales decline, profit is low or non existence, cash flow is low, research and development cost already paid off, many competitors have now withdrawn their brand from the marketing expenditure is low, market, marketing expenditure is low, marketing emphasis is directed to selected segments, distribution returns once more to selective or skeletal nature, price is further lowered, product may be withdrawn at the stage. What can management to do a product that has gone into the decline and possible with drawl stage to further prolong the useful life of the product management can do the following: improve the quality of the product greatly.

Change the package of the product with a new package with the inscription of this work “newly improved.”

Taken the product to an entirety new market where the product will start its life cycle once more.

Why New- products fall? Newly developed and introduced products can fail because of the one or a combination of the following reasons.

Through under or over estimate of demand resting resulting to carrying to excess inventory, or lack of adequate inventory in the market. Unforeseen hidden product deficiency during production which only come up during wage by user’s consumers.

New product does not offer consumer any added advantage over already existing brands.  Inadequate marketing efforts to such and pull the new product along the distributive network. When projected cost is higher than actual this result to higher selling prices and un encouraging sales volume.  If competitors find it very easy to introduce their own brand of product almost along side the new product.

Unforeseen changes in consumer taste and preference immediately the product was introduced.

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 This article was extracted from a Project Research Work Topic “PRODUCT PLANNING MANAGEMENT, AND DISTRIBUTION PROBLEMS IN SOFT DRINK INDUSTRY. “

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