Influence of distribution logistics on performance of soft drinks manufacturing firms in Kenya: a case of Nairobi Bottlers Company Limited, Nairobi County

Abstract

Growth of a business sometimes complicates the process of moving products from manufacturers to customers. Business organizations must confront the issue of how to effectively optimize distribution logistics to meet customer demands. Most companies are recognizing that distribution strategy must be robust enough to handle current demand, while remaining flexible enough to react to changing market conditions and minimize business risk. The purpose of this study was to find out the influence of distribution logistics on performance of soft drink manufacturing firms in Kenya. The study’s specific objectives were to establish the influence of nature of product, distribution structure, organizational resources and industry competitiveness on performance of soft drinks in Nairobi Bottlers Company, Nairobi County. The study was anchored on four theories; resource-based view theory, agency theory, theory of performance and systems theory. The study adopted descriptive survey design to examine the relationship between the independent and dependent variables. Target population was 2345 people who include distribution department, whole sellers as well as retailers in the company. The study used stratified sampling technique to select groups of its subjects. Simple random sampling method was then used to select a sample size of 341 respondents. A pilot test was conducted to ensure validity and reliability of the data collection instrument. Data analysis was done using descriptive as well as inferential statistics. This was done via Statistical Package for Social Sciences (SPSS). The findings revealed coefficient of determination (R squared) of 0.771 at 95% significance level, implying that nature of product, distribution structure, organizational resources and industry competitiveness jointly explains 77.1 percent of the variation in the performance of Nairobi Bottlers in Kenya. The findings also revealed that nature of product had a positive and significant influence on the performance of Nairobi Bottlers in Kenya (β =.382, p=.000<.05); distribution structure had a positive and significant influence on the performance of Nairobi Bottlers in Kenya (β =.191, p=.000<.05); organizational resources had a positive and significant influence on the performance of Nairobi Bottlers in Kenya (β =.103, p=.000<.05) and industry competitiveness had a positive and significant influence on the performance of Nairobi Bottlers in Kenya (β =.206, p=.000<.05). The study concludes that distribution logistics positive and significant influence on the performance of soft drink firms with focus on Nairobi Bottlers in Kenya. The study recommends that soft drinks firms should ensure that their possess production have to incorporate the various aspects which enables a product to attract consumers during production. This is to enhance competitiveness of the industry. Organizational resources has to be increased by the Nairobi bottlers has restructure their distribution systems which include distribution structure as well as organizational resources as market for their products is expanding day in day out. .