Selective Distribution Strategy and Competitive Advantage of Fast Moving Consumer Goods Companies in Kisumu County

Abstract

To survive in the competitive marketing environment, fast moving consumer goods manufacturing firms need to adopt selective distribution strategy so as to attract and retain customer thus long term relationships and growth with regard to competitiveness. Increased revenue, increased client-base and customer loyalty are measures of competitive advantage of any organization in the competitive market. The study was built on the signalling theory, Economic distribution Theory, Market theory. The study utilized 40 Fast Moving Consumer Goods Manufacturing firms in Kisumu County, Kenya. Data was collected with the aid of structured questionnaires from selected key informants in the organisations. Similarly; published articles such as journals, magazines, reports and periodicals were used to collect secondary data. The reliability and validity of the data collection instruments was established by undertaking a pilot study. Both qualitative and quantitative techniques were employed for the analysis of the collected data. Quantitative method involved the use descriptive analysis such as frequencies, percentages which were presented in form of tables. Data from questionnaire was coded in the computer with the aid of Statistical Package for Social Science. The study concluded that perishability of product, size and weight of the products, the technical nature of products, after sales service, number of consumers, expansion of consumers and the size of order and objectives of the purchase determine the choice of the selective distribution strategy. The study concludes that level of production; financial resources, managerial competence and experience the attitude of society towards middlemen or agents and the freedom of altering (middlemen and agents) determine the choice of the selective distribution strategy.The study concluded that meeting customers’ needs, service cost to customers is lower than other distribution strategies, level of trust with the customers, legal and technical security challenges and firm for generation, dissemination and response to market changes faster are some of the benefits of adoption of selective distribution strategy. The study concluded that lack of management support, high implementation cost, lack of adequate funds, lack of proper communication, complexity of customer needs and lack of policies, processes and procedure to support implementation of strategy was a challenge for the implementation of selective distribution strategy.The study recommends for consideration of the product related factors to enhance selective distribution strategy such as the size and weight of the products, the technical nature of products, after sales service determine, number of consumers, expansion of consumers and the size of order and objectives of the purchase determine the choice of the selective distribution strategy. The other factors related to the producers such as the level of production, financial resources, managerial competence and experience determine the choice of the selective distribution strategy. There is need to have adequate management support for the implementation of selective distribution strategy. The study further recommends for the consideration of implementation cost, adequate funds, proper communication, clear policies, processes and procedure to support implementation of selective strategy to enhance competitive advantage of the FMCG companies in Kisumu County, Kenya