The Influence of Indirect Distribution Channels on Retailer Restocking Decisions of Hair Products in Selected Retail Outlets Within Nairobi Central Business District

Abstract

Retailer restocking decision is a key strategy in marketing that ensures customers access good a and services yet still faces challenges associated with distribution channels. Distribution channels are characterized by intermediary activity which impacts operational and administrative activities along the channel. Retailers form part of the distribution channel, and in most cases are end of the chain. The study examines hair products retailers in an effort to understand their decision making process in selecting products for restocking. The objective of this study was to determine the influence of indirect distribution channels on retailer restocking decisions of hair products in selected retail outlets.[[The study was anchored on commitment trust theory and contrast theory and employed descriptive cross sectional survey design. The population of the study comprised of 211 hair product retail outlets within central business district of Nairobi county .A sample of 80 shop attendants was conveniently drawn from this population. Primary data was collected using self-administered questionnaire with both open and close ended items using a lickert type scale. Data was analyzed where descriptive statistics was computed for all variables using frequencies, percentages, arithmetic mean and standard deviation. Inferential statistics was analyzed using linear and multiple regressions. The study established that indirect distribution channels had statistical significant influence on retailer restocking decision. Of the three levels of indirect distribution channels, one level channel was most significant as displayed in aspects of operational costs, channel flexibility, product movement as well as the size of retail outlet. The study further reveals the relevance of interaction of contrast theory and commitment-trust theory in understanding retailer restocking decision making. The study highlights the effect of number of intermediaries on price differentiation, bulk breaking and value addition on retailer decision making. The study recommends strategies to create a competitive business environment where retailers can benefit from regular updates on prevailing level of intermediaries within the distribution channel. This study recommends further research to establish the influence of pricing at each intermediary level on retailer restocking decision.