An Overview of Bread Distribution in Nigeria
The extent and size of distribution is an index of development in a developing country like Nigeria. Distribution is a large vigorous sector reflecting a high level of industrial and regional specialization in economy, demand pattern and high level of distribution services.
According to Ukwu (mimeograph) this situation is not true of Nigeria where a large distribution sector co-exist with low level of general productivity and income. He is of the opinion that the great number of traders and extended channels of distribution could be a rational responsibility of the inefficiency of the total economic content of production exchange. Distribution channel is the set of firms and individuals that take little or assist in transferring title to goods or services as it moves from the producer to the final consumer of industrial use Kotlar (1990: 349).
According to A.O. Daody (1986:14) there are some major reasons for the existence of middlemen in the distributive channel.
The first is the economic of operation, specialized efficiently which is the effort (financial or otherwise) in achieving a set is optimized under specialization in operation. This could be as a result of job familiarization, leaving expertise and experience.
From the economic view, middleman transfers the assertment of product made by producers into assetment wanted by consumers. This makes it possible for the consumers to obtain their needs according to the volume units they required, and to get them at the most convenient point. Producers make narrow assortment of products in small quantity. The middleman buy large quantity of many goods and break them down into smaller quantity and broader assortments as wanted by consumers.
In economics of capital and temporal convenience one can get a brand of tooth paste in Lagos as well as in Enugu to choose to buy some of 8 am or 8 pm. The middlemen consider place and time utilities more expertly then the retailer.
In some extreme cases, distribution involves a high cost in the production cost of good and services in the budget of marketing activities of product, distribution takes to the largest share after promotion.
In some extreme cases the producer lack the financial resources to carryout direct marketing of their product when that is the case, therefore such producer should secure some middlemen that have the money required to distribute the products.
For these and more reasons, economic function carried out by middlemen that is the more reason why it is often said that although you can think of eliminating the middlemen, you cannot eliminate their functions. One can look at these as the functions performed by the middlemen but in the Nigerian context middlemen see their job as exploitation of both consumers and producers for their selfish ends. And this can be as a result of high degree of laziness in the control of channels of distribution by manufacturers, hence the high prosperity to profiteer by the channel members.
Also the general scarcity of almost everything in Nigeria hence a producers market situation as contributing factor.
In a paper titled “Effective Distribution of locally produced item in Nigeria,” P.O. Okoli (1980:16) pointed out that the achievement of effective and efficient physical distribution system is hampered by the unfavourable economics conditions emanating from over dependence on foreign and imported goods. Local industries enables us to produce raw materials, manufacturers are pre-occupied with production problems and have little or no time for organization and management of channel and physical distribution, while the channel of distribution itself with physical movement of goods and services commonly called business logistics.
- Determining Channel Selection of Bread
For a bread producer to determine the selection of distribution channel to achieve the customers satisfaction objectives some important functions must be put into consideration. The product being a non durable consumable goods needs a key short chain of distribution and retailers who can promptly handle the goods and deliver it to the consumer sat the appropriate time and maintain the quality.
Bread bakers should from time to time supervise the packaging of the product by the retailers to ensure good sanitary conditions of the environment and a good packaging as it is said to be the silence salesman of any product.
- Physical Distribution
Kottler (1990:577) defined physical distribution as that involves planning, implementing and controlling the flows of materials and final good from point of origin to point of use to meet consumer needs at a profit.
He further said that no physical distribution system can maximize customer services and minimize distributive cost at the same time.
According to Udeagha and Okeke (1993:90) physical distribution is the term used to describe processing of sales of goods, materials handling inventory management, demand forecasting storage of materials transportation, customer services activities that had to do with movement of goods from manufactured to retailers to buyers.
Kotler designed total cost model in physical distribution as follows:-
T + PW + VW + S where it stands for total distribution cost of product. T stand for total freight cost of Proposed system (transportation) PW-total fixed warehouse cost, VW – total variable ware house cost (including inventory of proposed system), S- total cost of sales due to average under proposed system.
This study is purely on bread. The elements of physical distribution management involved in transportation and storage. These elements are not efficiently carried out. According to El- Rufai (using) the efficiency in the physical distribution of goods and services in Nigeria is as a result of lack of clear cut policy on physical distribution channels to different retailers either on that request or to persuade them to buy the product. While the pull system is when the retailer goes to the baker to buy the product and move it to their shops for display. This system is not as common as the former. It only occur on products that have made name and anticipated seasons such as Easter, Christmas, Idel-Kabir, etc.
- Available Bread Distribution Channels
There are many channels of distributions which bread makers can get their products to the ultimate end users. But only few are well notable which bakers can use.
- The direct channels or zero channels
- The one channels system .
These channels can be described in form of chart at thus:-
Diagram 1.2 Distribution channel of Bread
Manufacturers of Bakers
Retails Shops Retail Shops
Owned by Owned by
Bakers’ Independent retail
This diagram shows how the product moves from one point to another. Some bakers make use of direct channel. That means selling their product direct to the consumers through their own retail shops or supplying to big markets target like schools, hospitals, etc. An example of a baker that has numerous retail shops exclusively for its product is CROISSANT TECHNICAL makers of Dens Cook. Where as in most cases their bakers use one channel system.
That means getting their product to the consumers with only one middle man usually the retailers. These retailers display in their shop more than one type of bread from different bakers to meet the assorted of bread from different bakers bread choice of the consumers. The push system is where the baker move the product from the factory.
- Problems of Distribution
Experience has shown that the Nigerian distribution is selfish in tendency. The distributors and visa-vis is unconcerned about their production. They merely acquire the goods at convenient price and dump them in the market at a very ex-habitant price.
Bread distributors play very little role in the production, their only function is packaging the product with cellophane bags and printed labels provided by the bake.
The distributors always aimed at the Juicy and succulent aspect of the economy. They don’t hesitate to hurriedly leave the producers as soon as they (producers) are in trouble. For instance when the federal ministry government, under IBB prohibited the importation of flour which was the major raw materials used in baking bread without an immediate alternative local material. The break distributors went into their shells. It was the effort of national association of confectioning and the cry of the consumers that brought back the decision of the federal government to lift ban on importation of the materials. The problems in our distribution network starts with mode of selection of distributor.
There is no specified pre-requisite for selecting distributors or middlemen.
Distribution of bread in Enugu is hamper by some other problems. These include the poor state of our roads, storage, condition or weather, number and maintenance of delivery vans information etc.
In Enugu proper network of road are yet to be achieved, most of the roads heading to various areas of are in very bad conditions and due to this poor state of our roads, most bread producers are not prepared to risk the total loss or damage to their vehicle. This factor has an effect on the price for bread at the destination point since the transportation would change to cover his costs and the retailer as the case may be. It might increase the price since he pays for his cost.
Consumers generally receive poor services in the effort to maximise profit by the middlemen especially in the areas of consumer goods. In fact the absolute lack of control along the various fragmental channels of distribution had led to unscrupulous attitude of the middlemen in Nigeria in most cases. There is no clear out channel policy, hence the duplication of functions is concerned.
Finally, lack of information, form yet another problem majority of bread distributors in Enugu are not trained hawkers, small scale shop, entrepreneur, super market provision, many of them are net appointed distributors or product can afford to buy as much quantity as they can sell or as the producer may determine to supply.
distribution as we know is an important component of marketing mix. It provides time, place and possession utilities. Some costs are found due to the ever interesting physical distance between suppliers of raw material and manufacturers and the ultimate users.
Some annually distribution trade prove that cost of distribution is below 30 to 40% of the final cost of product to ultimate consumer.
As earlier stated, the cost of distribution of bread from the freight and storage. In either push or pull system of distribution, it increases the original cost of production which is born by the final consumer. If the baker moves the product with his delivery van all the expenses incurred such provision for depreciation of the van, other variable like drivers wages, fuel, maintenance etc, as shared on the cost of the product.
Due to the nature of the product of the feasibility study. It does not require warehousing or long storage hence the case for storage is negligible. However, the retailer pay rent for their shops and a little percentage can be attributed to floor space occupied by the product in their various shops.
As regards this study investigation reveals that prices of the product is not fixed with the distribution cost inclusive. The reason is that it is difficult or sometimes impossible to get the ration of distribution. Manufacturer account reason is that most bakers in the city are small scale firms they don’t engage in the service of accounting experts to work over these fundamentals. Therefore the prices are fixed.
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