DISTRIBUTION CHANNEL STRUCTURE INFLUENCE ON THE PERFORMANCE OF CEMENT MANUFACTURING FIRMS IN KENYA

Abstract

Manufacturing firms need to choose the distribution channel which is effective to ensure their products reach their intended destination on time. This paper looks at how the decision by Kenya’s cement manufacturing firms to use a particular distribution channel structure influences their performance. The study targeted seven cement manufacturing firms located in the country. The targeted respondents were; 140 cement distributors, 140 cement customers, 35 cement firms finance directors, 140 sales and distribution department employees and 14 heads of department. A sample size of 216 from the target respondents was selected for this study using stratified sampling method. Data was collected through questionnaires that were designed as per the study theme. Data collected was analysed using both descriptive and inferential statistics with coding and entry of data enabled by use of Statistical Product and Service Solutions. The research result showed that most cement companies in the country had ensured that their channel structures were working and efficiently to serve their customers irrespective of their geographical location. Computed correlation statistics showed that there existed significant strong positive relationship (r=0.758 and p=0.001) between distribution channel structure and performance of cement manufacturing firms in Kenya. This means that changes in distribution structures appear to enhance performance of cement production companies. The paper recommends that to improve on distribution channel structure, all cement companies need to ensure that distribution objectives of their organization resonate with marketing and distribution objectives. This will ensure success of distribution process.