ROLE OF MIDDLEMEN IN THE CHANNEL OF DISTRIBUTION IN ENUGU METROPOLIS
CHAPTER ONE
INTRODUCTION
Background of the Study
Physical distribution overriding goal is to ensure that the right productions got to the consumer at the right place, time and conditions desired by them. Actually production is not complete until the goods gets to the consumers for whom they are meant. Getting goods to the consumers usually involves a system of inter-company and inter-company relationship that would satisfactorily arrange for and deliver goods to the consumers. A basic element of the system is the channel of distribution.
A product may be in the market, but it will be little or more use to the consumers, if these products cannot be located. This is concerned with the place, where the users can acquire these goods or services for use when the need arises. Distribution is the flows of good from the producer/manufacturer to the en users through the channels of distribution, which is made up of middlemen; distribution of goods and services has been an essential aspect of marketing in our lives.
Though it was not recognized earlier, distribution in the 90’s is the most important link for acquiring goods and services from the producers to the final consumers even with a so ring inflationary period which may break all records in the short history of Nigeria, distribution still is vital to the continued existence of business.
According to Olakunori (1999:56) noted that middlemen considerations is the attitude of middlemen or intermediaries towards a company’s products, their availability in the desired target market, ad the extent to which the functions and services they perform meet the desire of the company would greatly determine thee extent to which it would employ them for distributing its products. If a manufacturer is not willing to satisfy the demand of established middlemen, it may have to distribute its product to customers by itself. Sometime, the particularly type of the middlemen desired by a manufacture may be available. In such a situation, it may have to distribute its products directly. But where middlemen are co-operative, experienced and have no exclusive arrangement or territorial restrictions, the manufacturer may prefer to use them rather them dealing directly with final consumers. Producers on their own engage in the distribution of their products. But when the demand for these products increases, they found out that there wasn’t enough time, energy and expertise needed for effective distribution.
According to Kotler (1989:349) channel of distribution is the set of firms and individual that takes little or assists in transferring little to goods or services as it move from the producer to the final consumers or individual user. Due to the development to the economy, retailers began to specialize. The wholesalers now buy in bulk from a large number of producers to sale to the retailers. This was how middlemen come into the scene as link between the economies advances the need for agents, distributors, and broker etc. spring into the chain of distribution.
Building material need to be available because of its importance in providing one of the basic necessity of life (housing) it is because of importance of the middlemen in making these products available to its users that the researchers makes a critical look at the contribution of middlemen in the marketing of building material in Nigeria with emphasis on Emenite operation within Enugu Metropolis.
Statement of the Problem
The importance of middlemen in the marketing of goods and services including building material need not to be over emphasized. Building material are made available by the middlemen but the activities of this middlemen leaves much to be desired. The have been accused of unhealthy business practice. Most of them are cheats, selling building material at discriminatory prices. Most of them sale at high prices than the company stipulated price.
Middlemen have equally been accused of boarding of material and at the same time, most are of them are appointed on the basis of man, therefore lack marketing basis skill. At times one can find that there are a lot of middlemen in the chain of distribution of building materials. All these ill activities of middlemen have affected the sale of building materials. Thus this study looks at these problems in order to find solutions.
Purpose of the Study
This research work has the following objective:
1. To find out if middlemen make a building materials available in Enugu State.
2. To fond out the impact of the activities of middlemen on the profit of building materials.
3. To determine if middlemen are important link between the producer and consumer.
4. To evaluate criticisms against middlemen in order to determine their important in availability in marketing of goods.
5. To recommend solutions on how to improve the functions of middlemen in the marketing of building material.
Research Questions
1. Do middlemen make building materials available in Enugu State?
2. Can middlemen be eliminated in the marketing of building materials in Enugu State?
3. To what extent do middlemen activities affect positively the price of building materials in Enugu State?
4. Should middlemen be eliminated in the distribution of building materials in Enugu State?
5. Do middlemen activities affect positively the marketing of building materials in Enugu State?
6. To what extent do the activities of middlemen impact positively on the profit of Emenite?
7. Are middlemen important link in the distributing of building materials?
8. Are middlemen important link between producers and consumers of building materials?
Significance of the Study
This study is not just a mere academic exercise. It holds immense benefits. Hence the study will be very significance to the marketing of building materials most importantly in Nigeria which is faced with myriad of building materials problem due it its under developed nature and structure. Among these problems include the inadequate and dilapidated nature of its distribution network.
This study will structure a more efficient distribution system that could be adopted in the marketing of building materials. Again building materials company and middlemen stand to benefit greatly from their study. This is because the study will critically investigate some of the distribution problems encountered in making the commodity available to users at an affordable prices. Other groups that stand to benefit from the study are the low-income earners. This is because the study unveils any undue influence of the middlemen in the distribution of the commodity with a view to recommending a cost effective strategy of distributing the material.
It is beneficial to both the readers and researchers as the information contained will form a body of knowledge that will widen their horizon of under standing of the study which could stir up further enquiry.
Delimitation of the Study
This study will only investigate the role and activities of middlemen its influence on the price of building materials with particular note on Emenite operations within Enugu Metropolis.
Definition of Terms
Channel structure: This reveals the kind of participants involved in the production, distribution and ultimate use of a product. It shows the nature of the linkages connecting the producers, the middlemen and the consumers, according to Adirika Ebul and Nnolim (1997:220).
Conflict in the channel: According to Kotler (2000) is the disagreement between members interpretation of goods, amount of margin to be enjoyed and over levels of gates, selling efforts etc.
Distribution Channel: This is an inter-organizational system comprised of a set of inter independent institutions and agencies in valued with the task of moving any thing of value from its point of production, conception, extractions to a point of consumption. According to Adirika Esuel and Nnolim (1997:219).
Metropolis: A large city, especially the chief city of a country London is an England metropolis, overcrowding is a problem in our metropolis; since we come from a small village we think every small town is a metropolis.