Company

ABSTRACT

Product planning distribution and management are very vital in the production and distribution of very manufacturing organization. Before ever a manufacturing company should come out with a good quality product, it must undergo many processes, from planning for either short range or long, fore casting doing market research and consumer survey, protesting the product and introducing the product to the market through different channels of distribution.

The aim of this study is to describe how the Nigeria bottling company plc, Enugu is really involved in the process of product planning, distribution and management. This is done by gathering information from certain problems usually associated with product planning, and proposing remedial measures after revealing areas of problem. The question in the questionnaire were based on the research question s developed for this purpose while analysis were made using the chi-square (x2) test and percentage from here a discussion of the findings, recommendation and conclusion were made by the researcher.

It is hoped that this will aid managers in planning, distribution and managing the their products by taking effective and efficient decisions in these important decision areas. For examples the company should recruit highly staff and give them adequate training.

PREFACE

This work is deemed to high light on problems involved in product distribution and management. These tasks are undertaken by management to ensure product growth and increase market share.

My reason for selecting the Nigeria bottling company Plc, Enugu is due to the wide range of produce in the market needed to be evaluated against the back ground of produce planning distribution and management. For the continued existence of companies products must be produced and sold profiatably. New product must have to be introduced and told and unprofitable products must have to be deleted.

CHAPTER ONE INTRODUCTION

BACKGROUND OF THE STUDY

A product has been defined by the American marketing association as any thing that can be officered to a market for attention, acquisition or consumption including physical objects, services, personalities, organization and desires. A product as defined by stanchion in fundamentals of marketing. A product is a set of tangible and intangible attributes that leads to customer satisfaction. roduct planning embraces all the activities that enables a company to determine what product t will market. Management deals with all those who have supervisory responsibility ranging from the chief executive down to the first line supervisor, in this case, management is regarded to as box, that is those who direct the work of others and their own through their own offers and efforts of others thus, product planning and management, comprises all the activities that enables a company to determine what it will market of product so as to satisfy customers wants and need respectively.

This involves the process of effectively planning and regulating the operations of that part of enterprises which is responsible of that part of enterprises which is responsible for the actual transformation of materials into finished products. This includes all the activities required. In storage and distribution of the company’s goods. This addresses the questions of. a. Which type of channels a seller should select for his product. b. Which particular middlemen include in each channel type and. c. How to management distribution n system for effective performance.

The company or firm should know the degree of channel control desired, by controlling the channel, the producer attempts to ensure that this product will receive the necessary sales push as well as any other essential elements needed to present the product properly and satisfy and customers. The company of firm should make necessary effort to control the quality of the product. Product quality-the quality level to be built into the product is a conscious decision to be made by the manufacture. A higher quality product normally is more costly to product than a lower quality one and so commands a higher price on the market.

The quality level decision therefore should be related to the price range that will be attractive to the mainstreams of potential buyers, quality is multifaceted. It relates to, or depends on. Such factors as the quality of raw materials used the production process Itself, quality controls during production packaging or dressing of the product, price of the product, the environment in which the product is displayed for buys, the durability of the product is used and the buyers, expectation and appreciation in general, product quality tends to be high to the extent that any of the above factors is good or high as the case may be.

The quality produced has be in line with demand at a particular point in time so as to fight against out of stock and over stock. The company has to be watchful at any point in time so as to know what type of product to be produced, when to produce. How to produce, whom to produce for the (target market) and cloy such a product is required. According to Charles a Scheve and Reuben M Smith. The basic goal of product management is to ensure that a product matches the wants and needs of consumers in its market.

Then many markets make the mistake of thinking that consumers feel and act as they do and share their wants” invalid assumptions on the part of marketers. Results to marketing failures previously, about one hundred years ago, there were few producers. The sellers oriented type of market was prevailing consumers out weighted the number of producers and little or no regards was paid to consumers welfares. Production concept of marketing philosophy was prevalent. What ever was produced had to be consumed. This goes to mean that the total produce concept is the entire set of benefits the products provides to the consumers.

No attention was paid to product packaging, branding product quality and other important physical attributes of a product. As time went on, more and more producers come into the market. This gave rise to conception among the available producers consumption was based on good packaging brand image, product quality convenient. This is known as product concept in marketing philosophy. It is this situation that forced manufactures to spend time in product packaging, labeling, branding etc. Now due to advancement in both technology and communication as will as production equipment introduced into the circulation makes the market more complicated.

This is the era that brought about marketing concept. Here manufactures and producers first of all is out to find really the needs and wants of consumers, then the most admirable type colour, package design, branding and labeling that all best suit the desire of the potential and actual consumers of the product. Product planners must try to match the firms resources lie what it is capable of producing with the men, money, machines and materials it ahs with the needs of consumers satisfaction and highest company profits can be achieved wit the limited resources available.

Because of the sophisticated nature of today’s business, many tactics are being applied by different companies to fight back competitions and to stand firmly in the market. Many new products are constantly being introduced into the market. Innovators are seriously doing their job; old and profitable products are modernized while some are deleted out of the market. Companies use specific and admirable packaging design, good branding and beautiful types of labeling to distinguish their products from many in circulation. Similar products in the market.

STATEMENT OF PROBLEM

In most business operations today the task of planning and managing a product is not an easy one. Emphasis is laid on the problems associated with product planning distribution and management in NBC PLC Enugu. The company is having problems in procuring raw materials. The reason is that. a. The Federal Government banned the importation of the base material-what? b. Local supplier do not always have enough to give the company. c. The local inputs have to be refined to bring them to the standard record by the company. d.

Transporting the raw materials is a problem since the company does not have enough f town trucks. e. The raw materials are usually bulky. The company is also having problems in product planning and development. The reason being that the company exists in an economy strangled by hyperinflation and insecurity. Consumers are now being very careful on what to spend for or consumer. Another problems that the company encounters is that of increased competitions from companies like 7 up bottling PLC. The company’s competitors are having a high quality of product often not much different from the NBC.

Even where NBC gain in terms of quality and diversification, other gain by more liquid content, as 7 up against sprite and cheaper prices. In the area of distribution and product management, the company has insufficient number of trucks and experiences bottle breakages and pilfrages.

OBJECTIVE OF THE STUDY

This study is purely on product planning, distribution and management. It aims at describing how NBC PLC is really involved in these task. To do this the study is armed with information gathered from extensive literature review as a base.

The main and primary objectives of this study is to define certain problems usually associated with product planning distribution and management in NBC PLC which require a proposal of remedial measure after reveal areas of the problems. The study will investigate on the areas of the company’s procurement of raw materials use. How the company plans for its products. How this product is developed. How the management and workers take decision, what channel of distribution is used, and how are the products managed from production to consumption.

It is also important to mention that this research work is very vital in partial fulfillment of the award of ordinary national diploma (OND) in the polytechnic IMT Enugu state.

RESEARCH QUESTIONS

For the purpose of this study the following research question have been proposed by the researcher.

1. Do you have problems in procuring raw materials used by your company.
2. Do you plan for your product before production.
3. Do you encounter certain problems in planning and managing your products.
4.  Do you normally meet up with demand during peak period.
5. How do distribution cope with the distribution system of your company.
6. Do your products meet a real need of consumers or do they complain of poor quality.

COPE OF THE STUDY

This study covers the Nigerian Bottling company PLC Enugu the producer of i. Coca-cola ii. Sprite iii. Fantat (Quinine and Orange) iv. Krest v. Tonic water vi. Chapman vii. Club soda The researcher basing my write up-on coca-cola which is the first product of the company when it state production in 1963. For NBC PLC, Enugu this study is structured to consider product planning distribution and management only.

LIMITATION AND PROBLEMS

Initially the scope of this study was designed to cover all the plants in the Eastern region including Makurdi) of Nigerian but due to time and finance constraints, only the Enuygu plants was studies, this plant however covers most of the old Eastern region, minus Aba and Port-Harcourt. Makurdi is considered a part of Enugu. In carrying out this product work, the researcher faced some problems which ranged from financial constraints, time constraints, to the problems of data collection.

The researcher faced some financial problems in carrying out this research arising from frequent traveling to all depots for data collection with the unsteady high transportation cost. There is also high cost of writing sheets and high secretarial charges in the typing and binding of the research work. Another major constraint is that of time factor. This is imminent as the researcher was exposed to two strongly opposing alternative choices to chose from. That is choice between attending lectures and that of traveling to depots for data collection in which the opinions have to be met within weeks posses as an.

Data collection also posses as an obstacle in the task accomplishment in that the data so sought were not readily available and the researcher had to make repeated visits on several occasions before obtaining th required data. In the face of all these problems the researcher forged ahead by overcoming these problems and making the researcher work successful.

SIGNIFICANCE OF THE STUDY

This write up is likely to be beneficial to three parties particularly. The student (Writer). The subject matter (Nigerian Bottling company PLC Enugu) and the Institute of management and technology (IMT) and probably the country in general.

It is beneficial to the write in the sense that it gives him opportunity to review personally almost all that it exposed the writer to a very wide area f business most especially during the cross of research and widened his knowledge. Also with the opportunity provided by the research study, the writer having obtained facts from research carried out will be privileged to express higher opinion based on personal judgment on the subject matter (Nigeria Bottling Company PLC Enugu) when the suggestions and recommendations provided by this study are implemented this is it fault will reality the weaknesses identified during the course of study.

Also the exposure and awareness which this project will create about (Nigerian Bottling Company PLC Enugu) could help in attracting different categories of individuals and groups to come and invest in (Nigeria n Bottling Company PLC Enugu as required by the Authority. Finally, since it is generally believed that examination alone does provides the true test of one’s ability or knowledge the polytechnic could use this project work to measure the performance and seriousness of the student or writer.

DEFINITION OF TERM

Because of the misconception of product and the mis-positioning of products there is need to explain some production know how which few has been explained above.

ORGANIZATION OF BRANDING Organizing of the product branding is a variable product attribute. Branding considered as one aspect of product policy. It seemed also to be a phase of promotional policy since it is an and to communication. Brand policy issue center ground the question of whether to brand in the first place and their whether to use individual product brand of a family or blanket brand. The same brand far all the product in the line in there exist a problems of whether to sell price brands.

PRODUCT POSITIONING Management ability to position a product appropriately in the market is a major determinant of company profit. According to William Stanton. A product position in the image that product prefects is relations to competitive products by the company in question William Stanton goes on saying that the more to product positioning is an attempt by business.

PHYSICAL DISTRIBUTION This is the part of marketing that addresses how product are moved and stored. A physical distribution channel include intermediates often not considered to e part marketing channel, such as transportation companies public were house and insurance companies that participates and the movement and a towage of products. These agent who do not take thrift to actually own the goods they handle are referred functions is to facilities the movement of goods.

CHAPTER TWO LITERATURE REVIEW

MEANING OF PRODUCT

The attempt to undertake a study of product planning is beneficial by booking into the books of many intelligent personnel who had done some of work on this topic the following re the views of these learner human beings. A product has been defined by the American Marketing association as anything than can be offered to a market for attention, acquisition or consumption, including physical objects services, personalities, organization and desires” `Product is something that is viewed as being capable of satisfying a need or want.

A product is any thing than can be offered to a market for attention acquisition used of consumption that input satisfy a need. It includes physical objects, services, persons, places organization and ideas. It may also be a set of tangible and intangible manufacturing prestige and manufacturers accept as offering wants satisfaction product as defined by Stanton in fundamentals of marketing “A product is a set of tangible attributes that leads to customer satisfaction”. Product according to Nonyelu G.

Nwokoye markets buyers and it is of central importance in the marketing effects “A product may be defined as a bundle of physical and psychological satisfactions that a buyer receivers from a purchase. It includes not only the tangible object but also such supportive elements as packaging convenience of purchase, post-sale services and others that buyers value”. According to pride/feared: A product is everything (both favourable and unfavourable) that on receives in an exchange. It is a complex of tangible and intangible attributes including functional, social and psychological utilities or benefits.

A product can be idea, a services, a good or any combination of the three.

PRODUCT CLASSIFICATION

“One result of taking this broad view of product is that there are literally millions of products to be marketed. A new products are identified developed, discovered, invented or born every day. While each of this product demand a unique marketing mix” We have two broad types of product:

1. The consumer product and
2. Industrial product.

Consumer s products:In this type of products, not all consumers product are the same. Rather they can be subdivided on the basis of how people buy them.

Since the purpose of marketing is to satisfy wants and needs. It is only logical to classify products on the basis of consumer behaviour. Thus consumer product can be divided into four subgroups.

1. Convenience products.
2. Slopping products
3. Specially product and
4. Unsought products.

Industrial products:This type of product is make up of goods or services used in the production of other products. Industrial goods encompass suppliers, accessories, services and even plant and equipment. This many raw materials and subassemblies that go into a finished can are all industrial products.

They are market to automobile manufacturers, not to ultimate consumers. Buyers of industrial products are different frame the buyers of consumer products. In terms of this write up, I do not have to go into detail of industrial products. My concern is on consumer product.

TYPES OF CONSUMER PRODUCTS

CONVENIENCE PRODUCTS Are items that consumers want to buy with the least possible shopping effort. Their selection is characterized by routing buying behaviour. Through these product are bought often, consumers do not seek information about them. Examples are milk, eggs, cigarettes, chewing gum, chariots.

There are three types of convenience products. a. Staples b. Impulse items and c. Emergency goods A. STAPLES- Items are convenience products for which consumers usually do some planning. Food items are good examples. For instance though consumers don’t seek such information about milk, they do buy it often and they plan to buy it when preparing to go to grocery stock banking is an example of service that is staples with staple items, the brand or trademark can be very important in buyers minds. And buyers want staples items to be located conveniently. B.

IMPULSE ITEMS Are not purchased because of planning, but because of strongly it immediate needs. Thus distribution is an important factor in marketing impulse products. If they are not located conveniently exchange will not take place. That is why items like novelties, and expensive pans are placed near the cash register in many stores.

EMERGENCY PRODUCTS-Are items that are needed to solve an immediate crisis time and place utilities are the major ingredients of satisfaction, price and quality are less important, although the product obviously has to be of sufficient quality to meet to meet the emergency.

SHOPPING PRODUCTS-In shopping product, consumer visits several stores to compare price and quality before buying. Even before going into the store to buy or examine such products, consumer may study magazines like consumer reports or ask friends for their opinions about certain products or study, advertisement. In order words, before buying shopping products consumer seek information that will allow them to compare two or more brands or substitute products. Shopping products can thus be divided into two: a. Homogeneous product and b. Heterogeneous product.

SPECIALTY PRODUCTS Are items for which there are no acceptable substitutes in the consumers mind. Consumers are ready to s each long and hand until they find them.

4. UNSOUGHT PRODUCTS Are items that consumers do not readily realize they want or need. They are those products which the consumers do not readily realize they want or need.

PRODUCT PLANNING AND PRODUCT DEVELOPMENT

According to Stanton- “product planning embraces all activities that enable a company to determine what product it will market. Product development encompasses the technical activities of product research, engineering and design.

More specifically the combined scope of product planning and product development includes making decisions in the areas named below.

DESIGN AREAS IN PRODUCT PLANNING

1. Which product should the firm make?
2.  Should the company market more or fewer products?
3. What new uses are there for each product.
4. What brand, package and label should be used for each product?
5. How should the product be styled and designed and in what sizes, colours and materials should it be produced.
6. In what quantities should each item be product.
7. How should the product be priced. According to Grolier in modern business (marketing)

“The evolution of scientific product planning in business, designed to reduce the risk of failure and to avoid the enormous waste that failures cause, has led to the formalizing of the various activities involved in product planning.

THE FUNCTION OF PRODUCT PLANNING

Can be summarized in general in the following ten points. a. Evaluation of the idea-Does the product belong in our line? Is the time right for it now? Does this seem like a good idea for us to make this item? Evaluation of the potential market: Does the consumer want or need this product. Is the market big enough to warrant our investing the necessary time, manpower and money to make it what influences consumer buying of this type of product? c. Evaluating the product: Is the new idea sufficiently different and superior to existing products competitive product gives the consumer substantially more for his money? d. Evaluating company resources: Is our company set up to make this new product? What additional equipment of manpower will we need to make and market it?

Can we make and sell it economically against the price the consumer is willing to pay? How long will it take our company with its present or potential resources to recoup investment and start making a profit from its operation. Approximately where is the break-even point? (The point at which marginal revenue equals margarita cost, at this point there is not profit or loss). e. Preparing customer specifications-If preliminary evaluation is favorable just what is it that the consumer would like in a product of this kind what could the consumer not like?

What assurance do we have that a product meeting those specifications will find a ready market? What should our new product be like? What should it do to meet customer specifications? f. Developing the product-Armed with this information, which marketing research has developed for us, we can turn to the engineering or laboratory department for the, development of a [product which meets those specifications as nearly as possible. g. Pre-testing the product-The sample model product, as designed and enveloped by engineering has to be tested in the market against competition.

If there is nothing like it on the market now. It must be tested against consumer apathy or resistance. Generally at this stage some modification are indicated as consumer lasted change, or as our model fails to meet customer specifications. h. Producing the product:Once was have tested the model and have confirmed customer desire to buy. We can return it to engineering for last minute modifications and then turn it over to manufacturing for production for the market. Careful sales, advertising and promotion department to prepare their programmes for proper market coverage and market introduction. . Marketing the product-If all necessary planning and programming have been accomplished, marketing the product should begin as son as production has turned out enough unit to meet the initial plan. It is important that dealers and distribution as well as the company’s own sales force, shall have full knowledge before hand. j. Control and evaluation-After new product has been introduced into the market, it has to be controlled and continuously evaluated. Does it meet a real need? Is there sufficient repeat business to keep it in the line?

Does it carry its own weight (Volume of sales, volume of profit addition to company prestige etc)

NEW PRODUCT

What is a “New” product? Must an inter be totally new in concept before we can class it as a new product? Each marketing category may requires quite different marketing programme to ensure a reasonable probability of market success. Three recognizable categories of new products are as following. 1. Products that are really innovative-Truly unique. Example would be a hair-restorer or a cancer cure-products for which there is a real need but for which no existing substitutes are considered satisfactory.

In this category we can also include products but satisfy the same needs. Thus television to a great extent replaced radio and movies. 2. Replacement for existing products that are significantly different from he existing foods. Instant coffee replaced ground coffee and coffee bean in many markets, then freeze dried inkstand replaced instant coffee. Annual model changes in autos and new fashions in clothing belongs to this category. 3. Initiative product that are new to a particular company but not new to the market. The company simple wants to capture pant of an existing market with a mention product.

Perhaps the key criterion as to whether a given product is new is how the intended market perceive it. If buyers perceive that a given item is significantly different (from competitive goods being replaced) in some characteristic appearance, performance) then it is a new product.

PLANNING FOR NEW PRODUCTS

It is now clear that modern business takes the matter of new product very seriously. The well known management consultant, Peter Druck, refers to it as the management in innovation. Basically, business consider that new product pose three major challenges to management . a.

The uncertainty of new-product results the rate of failure, even with better organizations, is great until recently eighty to night present of all new products failed. In some companies now, the rate of failure is down as low as 25 percent. But in industry as a while, a new product has no more than a 50-50 chance of success. b. Shortage of the technically-Trained technically trained personnel, capable of taking change of new product development are scare. As new product multiply, the burden on the technically trained grows. Further more, as technology progresses, the technological proficiency of the individual has to increase.

This is often a slow process of conation and experience gained on the job and it cannot be developed over night. c. Difficulty of organizing and controlling the new-product development process. We have seen how companies are all empting to meet the problems of organizing and controlling the new product development process. It is largely a human rather than a technical problem involving such decision as how we use the skill s available, where to place the product manager, to whom he should report. And what functions will be assigned to him.

Before ever emphasis, is to be laid on functions of product manager, first of all I have to emphasis on management. Management and administration are interchangeable. Management defined broadly as getting things done through other people. This include lower strata and top management. Management deals with “All those who have supervisory responsibility ranging from the chief executive down to the first line. Supervisor in this case management is regarded to as a Box and that is those who direct the work of others and their work through their own efforts and effort of others.

Management generally has three basic task. 1. To set up a general plan or strategy for the business. 2. To direct the execution of this plan 3. To evaluate , analysis, and control the plan in actual operation. Management is usually defined in term of function performed management is what management does. This means that management is both the executive personnel (boss) and a body of knowledge, a practice a discipline or a process. A widely accepted listing of management functions includes. 1. Planning 2. Organizing 3. Directing 4. Coordinating and 5. Controlling

THE EXPANDING DUTIES OF THE PRODUCT MANAGER

There is a growing need of a product manager, a single individual in the product division who coordinates the developments of new products. The product manager because, in effect a product specialist who meets the special problems posed by the rapidly growing number of products, the growing importance of new product. The product manager has the responsibility of making sure that each new product has the necessary effort behind it to make it a success. He is more than a mere coordinator. Typically he is charge with the following duties and functions. a. He recommend additions to the line (base on research reports of market needs). . He forecasts sales (based on sales potentials established by research). c. He supervises the preparations of sales promotion to achieve sales goals. d. He determines new product specification based on reports fromn the research department. e. He participates in the preparation sales programmes f. He assists in selling big accounts. g. He councils and advises regional and distribute sales managers. h. He participates in the preparation of advertising plans and programs. i. He prepares product-development budgets (including the budgets for marketing the product). j. He makes pricing recommendations. k.

He coordinates the development of new product from idea through commercial marketing. It is important to be aware that the situation with regard to the product manager is in most cases, quite fluid and it is constantly changing. Some companies have used a production manager for years. While many others have adopted the system only recently. The position of product manager, is in neither standard nor settled. In general, there are three main types of product manager set ups emerging in business. One type of product manager places the emphasis on product, another on sals service and the third on decentralization. .

PRODUCT ATTRIBUTES.

“A firm might elect to product a product based on specific attributes. But these attributes can never be catalogued. The alternatives of product form are infinite. In fact, this great range in alternatives is the reason product development is such a challenging management problem, while we can look at all of the potential features of products, we can look at all of the potential features of products, we can look at certain attributes that historically have command considerable management attention.

PRODUCT DIFFERENCIATIO. A firm seeks the maximum degree of product differentiation, since this large profits. The demand curve for such a product is more elastic, and the firm more nearly approximates a monopoly position. But every product differentiation is subject to coping by competitors, and a firms competitive advantage is gradually erodes. The goal of product differentiation is universal, there are occasions when it is loss important as objective.

In some situations, it can readily be accomplished. Further more, there is always a large segment of industry that tasks a product follower” Position seeking to duplicate the offerings of product leaders.

PATENTABILITY For many firms, an essential feature of product development and product competition is the degree of which a candidate product can be protected through patents (or literary work). A tight patent which perpetuates a product is a comparative advantage. And for most firm this potential is deemed essential if they are to invest large sums in product research.

But caution should be urged when it comes to relying havily on potent protection. Even the best of patents can be circumvented by developing new materials and processed.

PRODUCT KNOW-HOW Equally as significant as palatability is production know-how in seeking competitive product advantages companies with high research and development investments, substantial capital vested in production facilities, or a skilled work-force may be able to distinguish their offerings in the market place through lower cost or product improvement.

QUALITY The level of product quality requires management action.

A decision on a candidate product is frequently made on the basis of the company’s ability to make the product and maintain it reputation for quality, lack of materials, inadequate labour skills or the stage of the products development may be compelling reason for concluding that the product cannot be made commensurate with past quality standards. STYLE We think of style as a distinctive artistic expression in s product. as such it is a permanent thing. This is in contrast to a fashion-a style currently popular. Thousand of styles and created.

A fed in contrast to a fashion, is considered to be short-lived and les predictable as to interpolation COLOUR Problems of colour selection for product are allied in those of style selection. For they, too encompass artistic expression. Colour as a variable product feature would seem to warrant special comment, however, for it has become such a significant form of product competition in the consumer goods field. Colour consciousness has compounded production and inventory control problems but correct prediction of consumer colour preferences has again led to competitive advantage.

SIZE For some products, a decision is not necessary on product size. But for most of industry size is a product variable. It may tasks the form of varying the size of the product or the amount of the product sold in particular package. Regardless of its form, varying product size calls for a careful analysis of such factors as family size rates of consumption and storage facilities. PACKAGING Packaging is also a product attributes of considerable importance to some firms. Its advantages are quite memories.

Packaging the product facilities protecting it form it from spoilage, evaporation and spilling it protects the product from changes in the weather and from damage from handling by the customer package products are also easier for both consumer and the retail dealer to handle. Consumers find correct packaging an aid to taking products home, in storing them and dispensing the contents dealers’ find that well-packaged product are easier to display, easier to handle at check-out counters and more adaptable to inventory control.

A major function of packaging is to aid in product identification, both for dealer and consumer. Well displayed package products represent a principal means of communicating to consumer buyers at a critical stage in the buying process. The point of purchase, in recent years products like been soft drinks etc. has appeared in forms of multiple package. This increases the quality bought by the consumer as a product quality. BRANDING A brand name is a variable product attribute. It is part of the product and part of what consumer buys.

Brand name it is seemed also to be a phase of promotional policy since it is an aid to communication. Brand policy issues center around the question of whether to use individual product brands of a family” or “blanket” brand. The same brand for all the product in the line. There exist a problem of whether to sell private brand. A

DVANTAGES OF BRAND IDENTIFICATION “It enables the sellers o build a consumer following and identify a diven level of quality with a product. It facilities differentiating a product from competitions.

It expedites the process of communicating to buyers not at the point of purchase nut through the medium of advertising and occasionally through the publicity. Finally, brand may enable the firm to communicate psychological as well as material values. These psychological values and developed through promotional efforts and they hinge on the connotations that can be associated with the brand name. In some firms there exist a product director often such a product director is called a brand manager.

The purpose of a brand manager is to ensure adequate attention and push behind each product. “A brand manager is responsible for drawing up complete promotional (advertising) programs for him product or a single brand.

PRODUCT POSITIONING

Management ability to position a product appropriately in the market is a major determinant of company profit. In according to William J. Stanton. A product position is the image that product projects is relations to competitive products and to other products marketer by the company in question.

William Stanton goes on saying that the more to product positioning is an attempt by business to increase its creditability, build a reputation for reliabilities and generally satisfy a boarder market spectrum over the long run. Again E. Jerome Mc Cathy said product positioning should where proposed and/ on present brands are located in a market it requires some formal market research.

PHYSICAL DISTRIBUTION

Physical distribution is the part of marketing that addressed how products are moved and stored.

A physical distribution channel includes intermediate often not considered to be part of marketing channel, such as transportation companies, public were houses and insurances companies that participates and the movement and a storage of products, these agents ho do not take title to (actually own) the goods they handle, are referred to as facilitators because their main function is to facilitate the movement of goods.

TWO VIEW OF PHYSICAL DISTRIBUTION Marketing mangers have different view on what physical distribution really is. Some see physical distribution only as the flow of furnished goods to he consumers, whereas others se it as including activities that occur earlier in the process, such as procuring and moving raw materials. A traditional marketing view of physical distributions looks at only the outward consideration and ignores the physical supply and processing or manufacturing activities. The view or typically referred to as simply distributors management. A more comprehensive term for all these physical movement and storage activities is business logistics, which involves the coordination of movements or raw materials, parts, and finished goods to achieve a give service level while minimizing total cost.

The concepts contains four element and includes both physical supply and physical distribution that is both inbound and outbound activities, we shall concentrate on three important logistics problems storage, inventory control and transportation. Move recently, several development have viewed physical distribution or logistics as getting goods to buyers, as a supportive subsidiary activity. Managements, interest has now been awakened in the logistics problem. One alerting factors is the stand climb in the bill for physical distribution services as freight, warehousing, and inventory.

Freight warehousing bills are rising as a result of increased labour, energy and equipment costs. The inventory bill is rising because buyers are tending to place smaller order more frequently, and manufacturers are tending to expand the with and depth of their product lines. According to Nonyelu G. Nwokoye, Physical distribution or logistics is concerned with the efficient movement or raw materials from supplier and finished goods from the end of the production line to the customers. Series of activities must be performed which grouped under four main categories called physical distribution activity center namely. 1. Transport 2.

Inventory 3. Warehousing and 4. Communications. In the design of a physical I distribution system starting point by the producer is to set customer service standard. This has a number of dimension of which the most important is the time it takes to get the merchandise to the customer, that is delivery time. The decision that lead to cost reduction in one activity area such as transportation, may lead to a cost increase in another area like inventory. Therefore, an appropriate strategy in logistics design, is to arrange al the required activities so as to minimize the total cost of providing a desired level of customer service.

Now the physical distribution activity areas are to be taken one after the other. 1. TRANSPORT There is availability of wide range of transportation modes to move products to mark rail, highway, water, pipeline, and air, each of this is having different cost and service 9speed) characteristics. Decision must be made on the type of mode of transportation to use for each type of shipment, coordinates movement using more than one mode might be possible. In considering the activity area in transportation order processing is also inclusive. This include checking prices and shipping documents. . INVENTORY Inventory is of central importance in physical distribution system design since actual demand (in the form or orders) is rarely exactly the same as forecast demand, inventories or goods must be established and maintained. There are other reasons for carrying inventories. a. To ensure against risks of various kind (strikes in the factory supplier failure). b. Accommodation of production runs before sales and. c. Seasonality of product and/or seasonality of demand, also need are raw material inventories to support production.

Inventory carrying cost is high and procedures for proper inventory management must be installed. Over stocking leads excessive inventory carrying cost, while under stocking leads to cost sale and poor customer service. 3. WAREHOUSING Warehousing (for depots) store inventories decision must be made on number of warehouses that are required where they should be located and what products should stocked in what quantities. Storage may be emphasized in a warehouse for a long time that is the product remaining in one place for a long time.

Seasonal products of agriculture in processed from require long-term storage before sale, temporary storage and through out volume may however, be emphasized in which case the warehouse becomes a distribution center. A distribution center receives large loads of homogenous goods, which are mixed and consolidated into out bound shipment to end markets. The emphasis is on moving goods through the facility and not on storage per see material handling is the movement of goods within the plants and warehouses. In this case, suitable equipment must be available to permit economical handling of goods.

Unit loads refers to the possible economic to be gained by handling products as a unit load, unit load are form a train load of coal to a master carton containing the individual product units purchased by the final buyer. proper design of unit loads minimizes handling cost. 4. COMMUNICATION Information is vital for the effective management and control of physical distribution. , this information and related to action and performance within the areas of inventory, warehousing and unit. loading transportation, eg a good communication system should be able to make available on demand the present stock position of each item at each stock..

PHYSICAL DISTRIBUTION OBJECTIVE

Many companies state their physical distribution objective as getting the right goods to the right places at the right time for the least cost. Unfortunately this provides little actual guidance. No physical distribution system can simultaneously maximize customer services and minimize distribution cost maximum customer service implies such policies as large inventories premium transportation and many warehouses, all of which raise distribution cost. Minimum distribution cost implies such policies as slow and ship transportation, low stock, and few warehouses.

LEVEL OF SERVICE (OUTPUT) Basic output of a physical distribution system is the level of customer service. Customer services represents one of the key competitive benefits that a company can offer potential customers in order to attract their business. Philip Kotler view as regard to the level of service from the customers view point, customers service means several things. 1. The speed of filling and delivering normal orders. 2. The supplier’s willingness to meet emergency merchandise needs of the customer. 3. The care with which merchandise is delivered do that it arrives in good condition. 4.

The supplier’s readiness to take back detective goods and resupply quickly. 5. The availability of installation and repair service and parts from the supplier. 6. The number of options of shipment load and carries. 7. The supplier willingness to carry inventory for the customer. 8. The service changes, that it whether the services are free or separately prices.

DISTRIBUTION CHANNELS

Modern producers do not all their goods directly to the final users. There is a clink between them and the final users such as the intermediaries, which are performing variety of functions and bearing a variety of naries.

Some intermediaries-such as wholesalers and retailers-buys, take title to and resell the merchandise. They are called merchant middleman. Others such as brokers manufacturers representatives and sales agents search for customers, and may negotiate on behalf of the producer but do not take title to the goods. Skill others such as transportation companies, independents warehouses, banks and advertising agencies-assist in the performance of distribution but neither take title to goods non negotiate purchases of sales. They are called facilitators.

Buck lines definition of marketing channel. A channel of distribution shall be considered to comprise a set of institution, which performs all of the activities (functions) utilized to move a product and its title from production to consumption.

SELECTION CHANNELS OF DISTRIBUTION

Distribution of consumer goods five channels are widely used in the marketing off consumer products. In each of the channels the manufacturers also has the alternative of using sales branches or sale office. According to William J. Stanton five channel of distribution are. 1.

Producer consumer this channel is the shorter simplest channel of distribution for consumer products is from the producer id from the producer to the consumer, with no middle men involves the producer may sell from house to house or by mail. 2. Producer retailer- consumer. May large retailer buy directly from manufacturers and agricultural producers. 3. Producer-wholesaler-retailer-consumer. If there is a traditional channel for consumer goods this is it. Small retailer. And small manufacturers by the thousands find this channel the only economically feasible choice. 4.

Producer-agent-retailer-consumer instead to use a manufacturers agent, a broker or some other agent middlemen to re ach the retail market, especially large scale retailers. For example, a manufacturers or a glass clearer selected a food broker to reach the grocery store market, including the large chains. 5. Producer-agent-wholesaler-retailer-consumer. To reach small retailers the producers mentioned in the proceeding paragraph often used agent middlemen, who in turn call on the wholesaler who sell to small stores. Distribution of industrial goods, four types of channels is widely used in reaching industrial users”.

Again a manufacturer may use a sales branch or a sales office to reach to next institution in the channel, or two levels of wholesalers may be used in some cases see 9fig. 2. 1). 1. Producer-industrial user. This direct channel accounts for a greater dollar volume of industrial products than any other distribution, such as locomotion generators, and beating plants usually sell directly to user. Figures 2. 1 Major marketing channels Available to producers. 2. PRODUCER-Industrial distributions-users: producers of operating suppliers and small accessory equipment frequently use industrial distributors to reach their markets.

Manufacturers of building materials and air: Conditioning equipment are only two example firms that make heavy use of the industrial distributor. 3. Producer-agent-user: Firms without their own marketing department find this a desirable channel,. Also a company that wants to introduce a new product or enter a new market may prefer to use agents rather than its own sales force. 4. producer-agent-industrial distribution-user:This channel is similar to the preceding one, it is used when, for some reason it is not feasible to sell through agent directly to the industrial user.

The unit sale may be too small for direct selling or decentralized inventory may be needed to supply users rapidly, in which case the storage service of an industrial distributor are required.

CHAPTER THREE RESEARCH METHODOLOGY

The purpose of this chapter is to identify and state the various method in which data are been collected. 3. 1RESEARCH DESIGN This research work was aimed at finding out the product planning, distribution and management (NBC, PLC, ENUGU DISTRIC). This end focus was on getting information from the entire staff of personnel, accounts sales and distribution from which the sample size was used.

Therefore, the researcher adopted survey research design for the work. This mean that questionnaires were administered as a means of collecting primary data.

METHOD OF DATA COLLECTION

In collecting information for this study the researcher used both the primary and secondary source of data.

PRIMARY DATA

This includes all those materials or data which the researcher gathered at present because of the project understudy.

SECONDARY DATA

Secondary data includes all past data, which can be found in the organizations records and in libraries. 1.

To obtain enough past data and all the libraries here in Enugu were made use of in eliciting information from various textbook, journals, and newspapers etc

POPULATION FOR THE STUDY

The population of the study is the entire staff strength of NBC plc ENUGU DISTRIC which total up to about 500 staff. This population is made up of 130 senior staff and 370 junior staff.

SAMPLES AND SAMPLE SIZE DETERMINATION

In order to obtain the sample size from the population the YARO YAMENI formula was used as a guide to arrive at the sample size N N = 1 + N (E)2 Where n = sample size

N = population e = error estimate the researcher used 15% error estimate and the entire population is 500 therefore N = 500 e = 0. 15 N N = 1 + N (E)2 500500 1 + 5000 (0. 15)21 + 500 (0. 0225) 500 12. 25 8. = 41 So the number of questionnaire distributed is 41

RESEARCH INSTRUMENTS

For this research project to be successful the researcher made use of the following instruments: i. Oral interview ii. Personal observation iii. Questionnaire 3. 5. 1ORAL INTERVIEW This is method instrument, which was prepared and used to elicit information for certain contradicting issues.

This is imply face to face asking and answering question between the researcher and the staff of NBC PLC ENUGU DISTRICT.

PERSONAL OBSERVATION

This simply means the general perceptive or over view of the aggregate performance of the company and analysis of data so far collected and thereby value judgment and interpretations made.

QUESTIONNAIRE

The researcher used the structured or closed from of questionnaire where questions are asked and below it the expected responses to the answers are stated for the respondent to close any one that suit lim.

AREA OF STUDY

The area of study of this research work is the product planning, distribution, and management in NBC PLC ENUGU DISTRICT.

VALIDITY OF INSTRUMENT

The instrument used was constructed by the researcher on the directive of the supervisor who retted it and made necessary. Correction before it was finally type out and distributed as research instrument (the questionnaire)>

RELIABILITY OF THE INSTRUMENT

The various instrument used in this research work are very reliable because the researcher made use of liable and reliable instrument like the questionnaire which is sample in it’s approach and method of application.

METHODS OF DATA ANALYSIS

the data collected using the research instrument were analyzed using simple percentage and descriptive methods. Some response to the question were grouped and recorded so that frequencies and percentage could be computed.

REFERENCES

1. Odo P. O. Et Al (1999) Introduction to Project Writing Enugu, Sunny Enterprises Publishers.
2. Melynk M. (1984) Principles of Applied statistics, New York Pergamon Press Inc.

CHAPTER FOUR

PRESENTATIONS AND ANALYSIS OF DATA

This chapter will deal with analysis and interpretation of primary data which was collected by administering questionnaire to the sample size in accordance with the research methodology stated in chapter three. To make the analysis and interpretations meaningful some of the questions were grouped together table and descriptive method were used as shown below. TABLE 4. 1 DISTRIBUTIONS OF RESPONDENTS BY DEPARTMENT |Department |Response |Percentages | |Administration |13 |31. | |Marketing |7 |17. 1 | |Account |9 |21. 9 | |Distribution |5 |12. 2 | |Computer |7 |17. | |Total |41 |100. 00 | Source:Survey data 2005 from the above table 13 of the respondents that completed and returned the questionnaire were in administration department with 31. 7% were 7 of them are in marketing department with 17. 1%, 9 of them in accounts dept with 21. 9%, 5 in distribution with 12. 2 and the finally ones in computers dept is 7 with 17. 1%. TABLE 4. 2 DISTRIBUTION OF RESPONDENTS BY CUSTOMERS, DEALERS AND STAFF Response |No of questionnaire |Percentages | |Customers |15 |36. 6 | |Dealer |14 |34. 2 | |Staff/mgt |12 |29. 2 | |Total |41 |100. 0 | Source:Field survey 2005 The table above shows that 15 questionnaires were distributed to customer with 36. 6 why 14 were given to dealers with 34. 2%, and 12 to staff with 29. 2%. TABLE 4. 3 QUESTION:DOES NBC PLC ENUGU DISTRICT OPERATES A GOOD DISTRIBUTION SYSTEM |Response |No of questionnaire |Percentages | |Yes |30 |73. 7 | |No |11 |26. 83 | |Total |41 |100. 00 | SOURCE:survey data From the above table 30 respondents representing 73. 17% agreed that Nigerian Bottling company (NBC) PLC operates a good distribution system why 11 disagrees with 26. 83%. TABLE 4. 4

RESPONSE ON THE IMPACT OF DISTRIBUTION MANAGEMENT STRATEGY IN CREATING CUSTOMERS SATISFACTION. |Response |No of questionnaire |Percentages | |Very effective |15 |36. 6 | |Ineffective |5 |12. 2 | |Indifferences |10 |24. | |Effective |11 |26. 8 | |Total |41 |100. 00 | Source:Survey data 2005 The above table shows that 15 respondents agreed that the impact of distribution/management strategy in creating customer satisfactions is very effective with 36. 6% while 5 disagrees, that if ineffective with 12. 2%, while 10 are indifference with 24. ^ and 11 agreed that it is effective. TABLE 4. 5 DOES ALL THE CUSTOMER AGREES ON THE PRICE OF THE COMPANY’S PRODUCT. |Response |No of questionnaire |Percentages | |Yes |30 |73. 17 | |No |11 |26. 83 | |Total |41 |100. 0 | From the above table, it shows that 30 respondents agrees that all the customers are aware of the price of the company’s products with 73. 17% while 11 disagrees that they are not aware with 26. 83%. TABLE 4. 6 DOES CUSTOMERS AGREES WITH THE QUALIFY OF THE COMPANY’S PRODUCT. | Response |No of questionnaire |Percentages | |Yes |32 |78. 5 | |No |9 |21. 95 | |Total |41 |100. 00 | Source:Survey data 2005 The above table shows that 32 respondents agreed that customers are satisfied with the qualify of the company’s product with 78. 05% while 9 disagrees with 21. 95%. TABLE 4. 7 ARE THERE FACTOR FOR IMPROVEMENT OF PRODUCT PLANNIN DISTRIBUTION AND MANAGEMENT. Response |No of questionnaire |Percentages | |Yes

• Why did many textile jobs apparently migrate out of the United States in the years after the establishment of NAFTA?

Jobs migrated out of the United States because where the average labor for US was $10 to $12 an hour compared to rates in Mexico at $10 to $12 a day. For example, the company Fruit of the Loom Inc. would benefit more and increase their revenue by paying their employee’s less to perform the job. It is also stated that NAFTA was credited with helping crease increase political stability in Mexico. So this could be another reason for the Jobs migrating out of the United States.

• Who gained from the process of readjustment in the textile industry after NAFTA? Who lost?

Due to this readjustment in which the United States jobs migrated to Mexico had a major effect on workers in the textile mills in the United States. But indeed had a great benefit on consumers in the US. It stated that employment in textile mills dropped from 478,000to 239,000, employment in apparel plummeted from 858,000 to 296,000. This shows that a great amount of workers were left empty handed searching for new employment. But on the other hand, this adjustment made it more reasonable for people like myself.

Due to textiles moving to Mexico, prices dropped on clothing. Now it makes it easier for consumers to buy clothing at a cheaper price rather than spending a lot of money just to do so. This shows that the market will grow because people can and willing to spend more money at the cheaper rate. In this case, Mexico and U.S will benefit. Mexico would increase jobs as low cost production moves south. And U.S will increase a prosperous market and lower the prices for consumers from goods produced in Mexico. Especially when prices are at a discounted rate.

• With hindsight, do you think it is better to protect vulnerable industries such as textiles, or to let them adjust to the painful winds of change that follow entering into free trade agreements? What would the benefits of cost of protection be? What would the costs be?

I have a two-sided opinion on this matter. I feel that in a way we should protect industries such as the textiles because jobs would be lost and wages levels would decline tremendously in the United States and Canada. Mexican workers would emigrate north and pollution would increase due to Mexico’s more lax standards. And also Mexico would also lose its sovereignty which is not an important factor. But on the other hand, we shouldn’t protect because this would prosper in the market & benefit the consumers.

A company with low gearing is one that is mainly being funded or financed by share capital (equity) and reserves, whilst the one with a high gearing is mainly funded by loan capital. Now the question to address is which of the two (equity and debt) is cheaper to the company? The answer is that cost of debt is cheaper than cost of equity. This is because debt is less risky than equity and the tax advantage of debt over equity as discussed below: Risk: debt is less risky than equity because: the required return needed to compensate the debt investors is less than the required return needed to compensate the equity investors; •the payment of interest is often a fixed amount and compulsory in nature and it is paid in priority to the payment of dividends; •in the event of a liquidation, debt holders would receive their capital repayment before shareholders as they are higher in the creditor hierarchy (the order in which creditors get repaid), as shareholders are paid out last. Corporate tax advantage: in the income statement, interest (on debt) is subtracted before the tax is calculated; thus, companies get tax relief on interest.

However, dividends (on equity) are subtracted after the tax is calculated; therefore, companies do not get any tax relief on dividends. From the above discussion, we can observe that debt is cheaper than equity when financing a company. However, there are implications of pursing high gearing rather than low gearing. Watzon and Head (2007) described the following as implications of high gearing: Increased volatility of equity returns: the higher a company’s level of gearing, the more sensitive its profitability and earnings are to changes in interest rates.

The company’s profit and distributable earnings will be at risk from increases in the interest rate. This risk will be borne by shareholders as the company may have to reduce dividend payments in order to meet its interest payment as they fall due. This kind of risk is referred to as financial risk. The more debt the company has in its capital structure, the higher will be its financial risk. Increased possibility of bankruptcy: at very high levels of gearing, shareholders will start to face bankruptcy risk.

This is defined as the risk of a company failing to meet its interest payments commitment and hence putting the company into liquidation. This is because interest payment may become unsustainable if profits decrease or interest payments on variable rate debt increase. Reduced credibility on the stock exchange: at a very high level of gearing, investors will be reluctant to buy the company’s shares or to offer further debt. The encouragement of short-termist behaviour: in order to prevent bankruptcy, managers may focus on the short-term need to meet interest payment rather than long term objective of wealth maximisation.

Effects of capital gearing upon WACC, company value and shareholder wealth The capital structure of a company refers to the mixture of equity and debt finance used by the company to finance its assets. Some companies could be all-equity-financed and have no debt at all, whilst others could have low levels of equity and high levels of debt. The decision on what mixture of equity and debt capital to have is called the financing decision. The financing decision has a direct effect on the weighted average cost of capital (WACC).

The weighted-average cost of capital (WACC) represents the overall cost of capital for a company, incorporating the costs of equity, debt and preference share capital, weighted according to the proportion of each source of finance within the business (Cornelius, 2002). The weightings are in proportion to the market values of equity and debt; therefore, as the proportions of equity and debt vary so will the WACC. Therefore the first major point to understand is that, as a company changes its capital structure (i. . varies the mixture of equity and debt finance), it will automatically result in a change in its WACC. It is important to note that the financing decision (i. e. altering the capital structure) affects the overall objective of maximizing shareholder wealth. This is based on the ground that wealth is the present value of future cash flows discounted at the investor’s required return. The market value of a company is equal to the present value of its future cash flows discounted by its WACC.

It is fundamental to note that the lower the WACC, the higher the market value of the company, and vice versa. Therefore, a change in the capital structure to lower the WACC can then increase the market value of the company and thus increase shareholder wealth. As a result, the search for optimal capital structure becomes the search for the lowest WACC, because when the WACC is minimized, the value of the company and shareholder wealth is maximized. Hence, it is the responsibility of finance managers to find the optimal capital structure that will result in the lowest WACC.

Kraft Food Company was founded by James Kraft in 1903. Kraft started off by selling wholesale cheese in Chicago, they later expanded, distributing to over 30 specialty cheeses under the name Kraft and Elkhorn. By 1920 Kraft began to mass produce specialty cheeses which were then exported to Canada and Europe. They later established plants in England and Germany. James Kraft’s development to new products and the use of innovative advertising methods led Kraft to be an early user of all communications media and as early as 1911 they were advertising on Chicago elevated trains, using outdoor billboards and mailing circulars to retail grocers.

Kraft was also the first to use colored advertisement in national magazines. By 1933 Kraft began using radio for advertising as well. Kraft’s innovation is also witnessed by the introduction of products such as; Velveeta in 1928, Miracle Whip salad dressing in 1933, Kraft macaroni and cheese dinner in 1936, Parkay margarine in 1940, sliced processed cheese in 1951, and Cheez Whiz in 1952. Kraft is primarily operated as a subsidiary to other larger corporations, the first being National Dairy Company in 1930.

Kraft was later purchased by Philip Morris in 1988 for twelve million, nine hundred thousand dollars. Morris then merged Kraft with General Foods unit in 1989, creating one entity known as Kraft General Foods Inc. , making it the largest food company in the United States and the second largest in the world. Philip Morris then acquired Nabisco in December 2000 and immediately began to integrate it into the operations of Kraft Foods and Kraft Foods International.

In 2001 Philip Morris created a new holding company for the combined operations know as Kraft Food Inc.. Kraft Food then had two main units, Kraft Food North America and Kraft Foods International with 2 chief executive officers (CEOs) Betsy D. Holden and Roger K. Deromedi respectively were name co-CEOs of Kraft Foods Inc.. In June of 2001 Philip Morris sold 16. 1 percent stake to the public, making it the second largest initial public offering in United States history.

EST1 – Ethical Situations in Business A small local grocery stores disadvantages in a metropolitan areas EST1 Task 1 Being a small, local grocery store chain in a major metropolitan area does not come without its challenges. National and regional chains are frequently forcing small and locally owned stores to close their doors.

For this reason, as well as the huge obligations to the social responsibilities required by their communities and customers alike pushes both the small business owner as well as the larger corporations to be able to adjust their organizations goals and objectives to balance not only their goal to be profit driven but to also be socially and ethically perceptive with the way they conduct business and operate their stores. Recently Company Q has chosen to close two store locations that operated in areas where crime rates were statistically higher within the city.

The store closures are being driven by consistent losses the stores experienced year over year. If the stores have consistently lost money year over year, we need to analyze the reasons as to why. To take the social responsible approach at analyzing this question; we would first need to understand our customer demographic for each of the geographical locations. For example, if one of our stores is located in a highly populated Hipic neighborhood and we are promoting Ethnic Asian foods, we could not expect these foods to sell at the same rate as we would handmade corn tortillas.

Taking an ethical and cultural marketing approach to sell foods that are Hipic-centric strongly supports the business and ethical approach that would be needed for our store to successfully show a profit. When we stop to understand our customer demographics and their communities in which they live, we then can recognize what is needed for our business to prosper within the community. After many years of customer requests Company Q, began offering a limited selection of health conscience and organic products in their stores.

Offering organic and environmentally friendly products in response to our customers’ requests is a large step in forming a social contract with our customers instead of merely offering then what we feel they need. Soliciting feedback from our customers provides us with the means to understand what they want and what they need. Offering a high end products to our customers that neither have the financial ability to afford the high costs that accompany high end products, nor do they have the desire to purchase these products to help Company Q’s bottom line.

In fact it will actually drive our results in the opposite direction. Our product choices must be targets to the consumer within our communities. Ethnic foods must be customary to the neighborhoods in which they are being offered. The marketing of our stores in cultural or racially specific communities must be stocked with the products that meet the needs of our customers in those communities. It takes very minimal effort to understand our customers, but that minimal effort makes the difference between a store being successful or failing.

There are multiple sources that can be used to help us understand our customer’s cultural and social desires. To gain a simple understanding of the cultural needs for a Hipic – centric neighborhood can begin with a simple Google search on Hipic Market Research. For example when preforming the following Google search we learned. “Market Research Hipics” “According to the U. S. Census Bureau, the terms Hipic (and Latino) refer to people “whose origins are from Spain, the Spanish-speaking countries of Central or South America, the Caribbean, or those identifying themselves generally as Spanish, Spanish-American, etc.

Origin can be viewed as ancestry, nationality, or country of birth of the person or person’s parents or ancestors prior to their arrival in the United States. ” Hipics can be of any race. There are more than 48 million Hipics in the United States. Latinos now account for 16% of the American population. The 32 million Latinos of Mexican origin account for around 66% of the Hipic population. Hipics accounted for more than half of all of the growth in the U. S. population that occurred between 2000 and 2009.

Latinos also are expected to be responsible for more than half of the growth in the U. S. population between 2010 and 2015. With an estimated buying power of $616 billion, Latinos of Mexican heritage represent the single most influential segment of the Hipic market. Mexicans in the United States account for 59% of all Hipic buying power. On a per capita basis, however, Cubans are the most affluent of the major Hipic population segments. Their per capita buying power is substantially higher than that of Mexicans ($32,724 vs. $19, 426).

The vast majority (92%) of Hipics under 18 were born in the United States as were about 47% of those 18 and over. Mexicans are most likely to be U. S. -born. More education leads to higher-paying jobs and increasing affluence among high-acculturation Latinos. High-acculturation Hipics are more likely than their low-acculturation counterparts to work as managers and professionals (19% vs. 6%). They are twice as likely to have a household income of $75,000 or more (37% vs. 19%) and are much more likely to own their home (62% vs. 40%) (Census Bureau, 2012 www. marketresearch. om ). ” Preforming a simple marketing search on the Hipic cultural give us insight as to how we can begin to market and set ourselves apart in the marketplace. How we can currently target and begin to build a marketing strategy that will ensure the future growth and the economic sustainability of our stores within a Hipic – centric neighborhood. Currently Company Q operates under the policy of disposing of day-old products, this a perfect example where our management team is missing out on a great public relations and corporate social responsibility opportunity.

When approach by the area’s food bank to donate day-old products that would otherwise been thrown away, our management team declined. Management being more focused on the possible loss of revenue due to the potential increase in fraud and stealing that could be done its employees who could claim that that they were donating the food. One thing that we need to understand it the actual cost associated with and or the actual / perceived benefits. Our company will write –off any product that needs to be disposed of due to the shelf life expiration date.

The products are disposed if in a dumpster and therefore currently ends the usefulness of the product from the company’s perspective. If we are paying for the products by weight or volume, we will incur a greater disposal rates from the waste removal company for the disposal of those unsellable products instead of donating them to a local food bank. This concern of a possible increase in expenses does not begin to look at the tax benefits that could be received by the donating of the product to a local food bank as well as other possible economic impacts that this policy can have on the economy of our community.

Another concern that we need to be aware of is the impact that our policy to throw away on day-old products will have on employees moral. If we’ve communicated to our employees that we will not be socially contentious to our local communities, then what is the message that we are delivering to our employees since they are part of our communities. How will they relate that to how valued they feel as an employee for Company Q? In our technology and media driven society it would e foolish not to except a socially aware employee or customer to film the disposal of the food that we may have not been able to sell, but it could easily be donated to our local food banks to help those in need. The potential of the negative publicity and feedback from such an event would be devastating to a small chain stores such as ours. The above mention concerns addressed not only some of the potential financial impacts but also the possible social capital losses that we could face in our current position.

Thankfully, we do not need to pay out much financially or in employee efforts to make a substantial difference in our stores and neighborhood communities. One delivery van can be used at the end of each day to deliver the products that would have otherwise been thrown away to our local food bank. The food can be unloaded by the food bank staff while the food bank manager shares with the Manager or Supervisor of our company the impacts that this donation will have on the community. This same information can be taken back and share with the store employees.

The minimal time spent delivering and unloading the products daily at the local food banks in a minor change in the daily operations for the store, but will have an overall impact to the community that will consistently strengthen our relationship within in the local communities, our relationships with our employees as well as enhancing our brand across our chain of stores. References * Census Bureau (2012). Hipic Market: market research reports. Marketresearch. com. Retrieved from http://www. marketresearch. com/Marketing-Market-Research-c70/Demographics-c81/Hipic-Market-c1692/

Saaraketha, meaning “bountiful field”; is an organization that intends to deliver the promise symbolized by its name. Saaraketha is a fully Sri Lankan owned 100% Organically certified Global Social Sustainable Enterprise; established in 2008 under the 300 Factories Programme of the Government of Sri Lanka, following registration with the Board of Investment (BOI) Sri Lanka. Saaraketha specializes in Agro Forestry, along with other downstream value additions such as Organic Agriculture, Alternate Sources of Energy, Bio Extracts, Agro Tourism and Carbon Sequestration and Trading.

Saaraketha strives to increase the productivity and profitability of small holder farmers of Sri Lanka through a cohesive program that addresses the current constraints for adopting agro forestry in their farming systems. The company’s philosophy is to infuse dignity to the vocation of farming through knowledge infusion, professional skill development and facilitating access to appropriate technology.

Saaraketha’s aims to provide the socially responsible global citizens of the world the means to live a healthy, simple and ethical life; that supports integrated clean development while leaving only a minimal footprint on the environment. The farm is located in the picturesque village of Gangeyaya, Perakanatte, Wilgamuwa in the Matale District overlooking the knuckles range, bordering the Mahaweli river and is a six hours drive from the city of Colombo where it supports many poor farmers to defy the odds of their circumstances.

The scenic nature of the village hides the various hardships that compound an already difficult life for the community of Wilgamuwa where attacks from wild elephants pose a very real threat to both life and livelihoods, scarcity of clean drinking water, lack of access to basic health & education, and crippling cycle of poverty are part and parcel of everyday life. We are privileged to be working with the people of Wilgamuwa who are striving to improve their quality of life while embracing sustainable practices of agriculture amidst these unequal odds.

The sustainable community forestry model we use merges a number of commercially viable crops with mixed life cycles, to ensure regular income generation and healthy cash flows. We work to promote endemic plant species that are usually not thought of as cash crops, in an attempt to ensure their survival for the generations to come, while proving to be an additional source of revenue to rural farmers, thereby creating a sustainable model for conservation. With the organic agriculture element of the venture, we hope to reach the modern consumer who is conscious of the effects of her consumption on the planet.

At Saaraketha we believe in sustainable growth: that man and nature can exist in harmony. We harness the benefits of Organic Agro Forestry as our primary means of doing business. Through this we are assured a commercially viable platform that allows users to reap maximum benefits with no damage done to the environment. To this end, we strive to leave behind a minimal carbon footprint. As a Global Social Sustainable Enterprise, we hold fast to the principles of the Triple Bottom Line, “people, planet, profit”.

BUSMRH 4490 2 The Walt Disney Company: The Entertainment King Kaitlyn Kisiday Alex Maicks Chelsea Parker Jonathan Russ Ryan Terek 1. ) Why has Disney been successful for so long? Disney has sustained prolonged success for a variety of reasons. One source of success was the way Walt and Roy Disney decided to manage the company internally when the organization was founded in 1923. Disney emphasized teamwork, communication, and cooperation in the workplace to make employees feel valued and strengthen their commitment to the company.

These values remain at the core of Disney’s corporate culture, and have been formally incorporated into their new-hire training program at the company’s corporate university. With the use of animation, Disney can control an entire entertainment experience, unlike actors, because cartoon characters and their environment can be created and controlled by imagination. Disney’s most distinct corporate skill, according to former CEO Michael Eisner, is the ability to manage that creativity. Eisner encouraged innovative ideas and was protective of the company’s creative efforts even at their earliest development.

Emphasis on this development allowed Disney to take advantage of opportunities in the market and often become the first mover. Disney has proved successful at determining which advantages would be sustainable and which should only be temporary. The main contributors to prolonged success have been the results of the key strategic decisions made by the organization regarding diversification. Disney has used diversification to create additional sources of revenue beyond cartoon shorts and feature films by expanding vertically into television, theatre, retail, and the internet.

Creating divisions outside production, such as Disney Music Company, Disneyland, Disney Cruises, and DisneyQuest, created cross-promotional opportunities among Disney’s products, services, and strengthened the brand itself. Disney’s ability to effectively manage both vertical and horizontal integration into a wide array of business activities and projects continues to drive the company’s progress and profit. 2. ) What did Michael Eisner do to rejuvenate Disney? Specifically, how did he increase net income in his first four years?

Michael Eisner entered Disney as CEO in 1984, and committed his efforts to producing annual revenue growth and return on stockholder equity in excess of 20%. He also pledged to strengthen the Disney brand and protect corporate values of quality, creativity, entrepreneurship, and teamwork. Believing that “managing creativity” was Disney’s most unique corporate capability, Eisner was to able harness Disney’s creative and innovative capabilities to maximize profits from new and existing operations. Rebuilding the strength of their television programming and films was an important part of this strategy.

Disney increased its presence on network television to re-establish Disney as a producer of quality programs, and increase demand for Disney’s other entertainment ventures. The Disney Sunday Movie, debuted on ABC in 1986, and was followed by the popular Golden Girls on NBC, and production of syndicated non-network shows. Disney also increased their screen presence and generated revenue by selling older programs to other networks through a newly created syndication operation. A struggling movie division produced two films, held only 4% of box office share, and generated a profit of only a $1 million 1984 [Exhibit A, page 6].

To increase film output, Eisner used the Touchstone label to compete in new segments of the film industry, predominantly comedies, without diminishing Disney’s core audience. These films were produced on moderate and closely managed budgets with intent to be profitable rather than to become the next box-office juggernaut. Disney also increased the output of their animated films though investment in new technology and human capital and the decision to release these films every 12 to 18 months, versus every 4 to 5 years.

After four years, the Disney film division reached an averaged output of 15 to 18 films per year, produced the highest earning film in 1988, Who Framed Roger Rabbit, and became the market leader with 19% box office share. Most impressively, income from the movie division grew from $1 million in 1984, to $34 million, $54 million, $131 million, and $186 million in each corresponding year. Income from Disney theme parks increased more than 200% during Michael Eisner’s first years, from $186 million in 1984 to $565 million in 1988 [Exhibit A, page 6].

New national advertising, increased park capacity, expanded hours of operation, and increased ticket prices contributed to the short term increase, while investments in new attractions, event spaces, and hotel development would help sustain steady profits into the future. In 1984, income from consumer products totaled $54 million [Exhibit A, page 6]. The new leadership and direction of the company under Michael Eisner from that time renewed the strength of Disney’s brand equity. A stronger brand supported development in the consumer products division of the “retail as entertainment” concept.

The Disney Store, launched in 1987, achieved twice the average rate of sales per square foot in the retail industry. By 1988, income from consumer products totaled $134 million, increasing by more than 140% during Eisner’s first years as CEO. Successful leadership by Michael Eisner at Disney’s top resulted in financial success at Disney’s bottom line. Disney’s net income increased from $242 million in 1984 to $885 million by 1988. Over the same period of time, income growth averaged 40% each year, and Return on Equity reached 24% and 25% in 1987 and 1989, respectively. 3. Does Disney pursue vertical integration? Apply transaction cost economics to understand Disney’s vertical expansion decisions. Disney pursued vertical integration in a variety of ways. Aside from cartoon shorts and animation films, Disney expanded to enter the television, internet, and theme park markets with creations such as Disneyland, DisneyQuest, and the Disney Channel. Disney saw the internet as a possible distribution channel for its film library and its sports and news programming. Disney believed that the internet would soon be where entertainment in the home consolidates.

Disney also pursued forward vertical integration. Disney ended their relationship with distribution partner RKO in 1953 and created Buena Vista to save distribution costs for their animated films. Disney was able to save ? of their gross revenues due to this decision to distribution their movies themselves. Disney also further improved the bottom line by avoiding exorbitant salaries by developing the studio’s own pool of talent. Disney also employed forward integration through the initiation of Disney Stores.

This provided Disney with a wholly owned retail outlet to distribute product through that generated sales per square foot at twice the average rate of traditional retail. Disney Stores allowed Disney total control of customer experience and brand management in that space. The EuroDisney project is an example of Disney’s use of vertical disintegration. Although responsible for the design, development, and operation of the park, Disney did not have a majority ownership. Investment from outside parties limited their initial investment and share of risk.

Disney chose to give up sole claim to the profits of EuroDisney in exchange for a fixed percentage of ticket sales and revenues. In many its operations, Disney employs a vertical integration strategy because it eliminates much of the transaction costs that come from working with the market, such as the possibility that the markets may fail. Creating contracts is another cost, as contracts take time and are difficult to form in a way that satisfies both parties involved, in an attempt to cover all possible contingencies. In addition, companies have their own, unique motives.

When working in the market, there is always risk these other companies will work in their own favor as they come across opportunities that only benefit them. Also, Disney is very committed to holding to their values. This may create another cost in the form of conflict because they may come across differing views and cultures with other companies that do not run their business the same way. 4. ) What corporate strategy does Walt Disney employ? Identify and explain all types of diversification/integration within Disney’s overall corporate strategy.

Disney employs both vertical and horizontal integration as part of their corporate strategy. The Walt Disney Company pursues a highly differentiated strategy, operating primarily in five distinct segments: Theme Parks and Resorts, Consumer Products, Media Networks, Studio Entertainment, and Internet and Direct Marketing. Theme Parks and Resorts is Disney’s second highest grossing segment. Included under this segment are all Disney Theme Parks, with the exclusion of EuroDisney, and all other resorts and resort activities.

Sports teams, the Anaheim Mighty Ducks and the Anaheim Angels, as well as regional entertainment facilities like ESPNZone and DisneyQuest, are within this business line. Media networks, Disney’s highest grossing business line, can be broken down into two subcategories: Broadcasting and Cable Networks ; International. Broadcasting consists of ABC Television and Radio Network along with associated TV and Radio stations. Cable Networks and International includes ESPN, Disney Channel, Toon Disney, and SoapNet. Various newspapers and periodicals acquired through the ABC merger also fall into this business line.

Studio Entertainment is a very diverse segment including: Television, Film, Home Video, theatrical, and music production, as well as, distribution and syndicated TV. Disney has created or acquired multiple movie production companies including Walt Disney Pictures, Touchstone, and Miramax, each company producing a very distinct product with a separate target audience. A similar pattern is identifiable with Disney’s various music production companies; each produces a distinct product with a distinct target market. Television production includes program development in the form of live-action, animation, and pay television services.

Consumer Products consists primarily of licensing arrangements with various retailers, promoters, and publishers, where Disney allows third parties to use “Walt Disney”, Disney characters, and other intangible properties for specific purposes. Consumer Products also includes Disney Stores, Disney’s direct retail outlet. Finally, Disney also produces books, magazines, and audio and computer software for entertainment and educational purposes. Internet and Direct Marketing includes all of Disney’s’ online activities as well as the Disney catalogue. This includes entities such as the Disney catalogue, ESPN. om, Disney. com, GO. com, Etc. Aside from all the aforementioned business activities, Disney is or has been involved in many more projects and lines of business. Disney started an in-house travel company to work with travel agents and airlines to draw customers to Disney Parks and Resorts. Disney created the Disney Development Company to find the best way to utilize Disney’s unused acreage. Disney also has been involved in timeshares, night clubs, theatre operations, Disney On-Ice, and the Disney Parade. 5. ) Evaluate the benefits and costs of each type of diversification.

From this analysis state and justify (through quantitative analysis) whether Disney is creating or destroying value via diversification? After analysis, Disney has an obvious benefit of diversification, mainly because it allows them to expand their initial business idea into several different markets. Disney was able to take a relatable set of characters and ideas in the film industry, and not only maximize the profits from those characters in the form of amusement parks, resorts, and other entertainment facilities, but also expand their business into other markets which may seem nrelated. While the initial start-up cost and recurring operating costs of theme parks, studios, and media networks are high, they have proven to be one of Disney’s highest grossing business ventures. For example, in 2000 theme parks generated $6. 803 billion in revenue and operating income of $1. 62 billion [Exhibit A, page 6]. These theme parks help create and support much of the Disney brand that people think of today, which is one of their strongest sources of value. In the media networks, Disney earned $9. 615 billion revenue in 2000 and produced an operating income of $2. 98 billion. The benefit of this venture is that Disney is able to spread their brand across the country by reaching cable audiences with the Disney Channel and ESPN stations, as well as local viewers, after their purchase of ABC. Once again, the costs and risk of creating a channel and buying a major television channel comes with high cost, yet Disney is still able to make a profit from this segment of their business. While the film industry had revenues of $5. 994 billion, expenses for the segment are high as they only saw an operating income of $110 million.

This is one of Disney’s original lines of business, but it appears Disney has peaked in this segment. Even though profits aren’t as high as other segments of their business, the benefits of this segment still outweigh their costs. Additionally, due to the relatively cheap cost of consumer products line, in 2000 Disney was able to record an operating income of $455 million and with revenues of $2. 622 billion. Disney benefits by selling products related to their highly desired brand, and for a relatively low cost.

Unfortunately for Disney, their internet and direct marketing line saw an operating loss of ($402) during 2000, the fourth consecutive loss for this segment. Disney once again tried to carry success over from their well established brand into a new segment. However, the costs and demands of owning and running an internet and direct marketing line appear to be outside of Disney’s core competencies. Even though they may have foresight to predict the importance of e-commerce in retail, Disney has yet to make a profit of this segment.

Further supporting the benefits of Disney’s diversification is Disney’s Index on the S;P 500, having reached over 1,000 for the last three years of data provided (1998-2000. ) These marks were the highest Disney has ever reached in this Index, according to the data provided, and achieved at the height of Disney’s diversification. This upholds the position that Disney does produce value through its diversification into many different business ventures. 6. ) Which expansion modes have Disney utilized to implement its corporate strategy?

Use facts from the case to identify the benefits and costs of each expansion mode. Disney has pursued three primary forms of expansion: Vertical expansion, Horizontal expansion, and Geographic expansion. Vertical and Horizontal expansion refer to Disney’s various product and business lines, and geographic expansion refers to Disney’s physical presence. Disney owns or has licensed parks on three different continents. By expanding geographically, Disney has become one of the most recognized brands in the world, in large part due to their physical presence.

By having operations in multiple counties in several parts of the world, Disney is able to gain expertise and knowledge that can help it more closely connect it to its target market. Creating new parks, resorts, or other entertainment facilities carries huge initial start-up costs and recurring fixed costs. It also adds numerous employees and operations that can become difficult to manage efficiently. Expanding horizontally allows firms to take advantage of economies of scale by lowering the average cost per unit by spreading fixed costs over greater production.

Another key advantage is the potential to gain new distribution channels. Following the ABC merger, Disney gained over 20 radio stations and many print media outlets. Seemingly, the primary motivation for Disney to integrate horizontally appears to be for economies of scope. Economies of scope is the utilization of a wider array of available resources to new create synergies. After Disney merged with ABC, they were able to utilize economies of scope through cross-promotion. They could advertise and tie-in Disney products on the acquired ABC media outlets and vice versa.

Another advantage of vertical integration, made obvious through the merger with ABC, is the gain in market share. Though not stated explicitly, it’s not difficult to image that Disney may have gained substantial power in negotiations with cable and satellite television providers after merging with ABC. A major cost of horizontal integration comes from a new, bloated company. Departments become redundant across the organization, and the company becomes inefficient. Acquisitions like this also are accompanied by months and months of paperwork that ultimately distracts from the company’s primary operations.

Disney and ABC were forced to mesh together two distinct corporate cultures. This can irritate and de-motivate employees, ultimately causing further inefficiency. Vertical expansion can create better coordination within the supply chain. When Disney created its own distribution company, Buena Vista, they were able to directly control all operations involved in the distribution of their media, eliminating the potential costs of negotiations and hold-ups. Another benefit captured by creating Buena Vista was the ability to capture downstream profit margin.

Vertical expansion could eventually lead to Disney gaining more core competencies. Achieving lower unit cost, better coordination, and increase in core competencies create higher entry barriers for potential competitors. Vertical integration can also cause a firm to become too large and complex to efficiently manage. Owning and operating completely different business’ under the same corporation requires expertise in many different areas be successful, which can be a substantial cost. Exhibit AThe Walt Disney Company Financial Data, 1983 – 2000 ($ millions)