Physical distribution and sales performance: A case of dairy processing firms in Nairobi

Abstract

This study has two main objectives (I) To identify physical distribution strategies employed by the dairy processing firms, and (ii) To find out if there is a relationship between physical distribution strategies and the firms' sales and market share performance. The strategies were based along physical distribution functions of order processing, storage/warehousing, inventory decision making and transportation. The focus was on all the dairy firms that distribute their products within the Nairobi market. The rationale behind this study is that presently dairy processing has become one of the most important agro-based industries in Kenya, with a contribution of up to 10% of the Gross Domestic Product. Since its liberalization in 1992, the industry has continued to attract attention from both the public and private sectors. Nairobi provides the largest market in the country. Both primary data (using questionnaires) and secondary data (from the Kenya Dairy Board) were collected. These data were analyzed using descriptive statistics, especially percentages. It also made use of figures and tables. The analysis revealed the following (i) That the physical distribution strategies utilized by the dairy processors are more or less the same, with a few variations caused by extraneous factors (ii) The physical distribution strategies do affect the sales and market share performance of the dairy processors.