ABSTRACT
TQM In Ajmal Perfumes Distribution
The aim of this research is to find out the overall performance of Ajmal perfumes brand. To find out how effective its distribution system, quality and how it is satisfying its customer. For this research, we have used a qualitative method of research. In qualitative research, we have questionnaires to be filled by our respondents for this research. The respondents of our research are customers of Ajmal Perfumes. The sample size of this research is 100 respondents. A single factor ANOVA, descriptive statistics and histogram techniques have been used to analyze the data. The result that we have found in our research is that our seven hypotheses are accepted while three hypotheses are rejected. This explains that customers agree that Ajmal perfumes are proving its customers with the best quality, packaging, and best delivery.
Table of Contents
Applying TQM in the distribution of Ajmal Perfumes. 1
Applying TQM in the distribution of Ajmal Perfumes. 9
Nature of perfumes affecting the supply volume. 14
Perfume bottles Materials and Packaging. 16
Erasing Distribution Issues for the Perfume Industry. 20
Choosing the right distribution channel 21
Chapter 1
1.1 Introduction
This will consist of an insight into the history and work of the company. We will focus on the products on offer at the company. All important information about the company goal, values and procedure will be explained. In addition, we will elaborate on the chief officer here and the company’s working principle.
Moreover, all service offerings and products from this company will be looked at on an extricate note.
1.2 Company history
The brand “Ajmal perfume” was started in 1950 by Mr Ajmal Ali. A brand with a rich legacy gained through 60 years of experience and ability in the many-sided craft of perfumery, Ajmal Perfumes has cut a specialty for itself in the scent industry as an innovator in fragrance making and a pioneer in the showcasing of aroma products to a worldwide customer base.
Ajmal takes incredible pride in the way that, work date, all its scents have been imagined, made, advanced and fabricated in house. The crude materials sourced for the different perfumes that the organization produces are sourced just from globally famous suppliers, known for their amazing standards. These incorporate H&R, IFF, Dragoco, V Mane Files (VMF), and so on. Essentially, with a perspective to guaranteeing that the packaging of its scents is in accordance with global standards, Ajmal Perfumes sources glass bottles from some globally eminent producers, for example, Brosse, NVM, Heinz Glass, Bormioli, and so on.
Ajmal prides in the information obtained throughout the years to without a doubt bear itself as an aromas house. We make current forces that lace signature Ajmal stresses. This empowers us to engage the contemporary purchaser in the meantime hold our signature inside the mixes. Sweet-smelling, crisp, hearty, animating – at Ajmal, we understand that decently created aromas say a ton in regards to you and the way you radiate yourself. Ajmal gladly exhibits a bundle of the finest contemporary aromas. Beautify yourself with entrancing aromas, sparkling out from inside, an impression of self, a mirror picture of you.
Ajmal Perfumes has about 6 decades of aptitude in making a percentage of the most charming and luring Oriental perfumes. We have consummated the science, workmanship, and specialty of oriental perfumery and are enchanted to present our manifestations to you. These choices engage up to date experts who are likewise profoundly established in accepted qualities.
These concentrated scent oils and Eau de perfumes offer perceiving shoppers a sincerely vital experience. The organization has an open and nature’s turf, with ardour for execution, want for accomplishment and duty to fulfil our errand. Our centre qualities of high trustworthiness with a Never-Say-Die methodology are instilled and unmistakable in all our individuals, practices and techniques. Ajmal perfumes raise and look after a worldwide workforce reflecting with our client base – utilizing a differing assembly of individuals from diverse foundations, with a tremendous reach of abilities and experience, yet all associated by practical judgment skills of society.
1.3 Importance of study
The importance of this research can be seen by the value it will give to the company. With the help of this research, Ajmal perfumes will be able to find out how effective their distribution system is and what is their lacking in their distribution system management.
1.4 Objectives
The objective of this research is to find out how effective is the distribution system and management of the Ajmal Perfumes.
1.5 Hypothesis
| H1 | An effective distribution channel is a crucial factor in the growth and success of the business. |
| H2 | Proper distribution channels can result in an increase in sales of the business. |
| H3 | Effective distribution can result in the availability of products to all the targeted customers |
| H4 | Ajmal perfumes are using an effective distribution strategy |
| H5 | Effective distribution of Ajmal perfume has made its products available to the customer on time. |
| H6 | The services of Ajmal perfumes is best in term of delivery as compared to other brands |
| H7 | The promotions and offers of Ajmal perfumes attract many customers. |
| H8 | Customers are attracted because of high-quality perfumes. |
| H9 | Customers mostly prefer Ajmal perfumes as a product that can be gifted to someone special. |
| H10 | The packaging of the product is very attractive and it attracts many customers |
1.6 Problem Definition
We will write on the problem of distribution of perfumes from Ajmal. This will cover the sub-aspects of issues such as network hassles, distributional cost structuring, and ability to reach the targeted customer base.
The problems or challenges in the way of distributing the product sustainably will be highlighted. The need for implementing this and the probable means to do so will be taken up for discussion. In addition, the focus will be on understanding how this stands grappled with challenges.
Solution: The structural, methodical and practical challenges of ensuring proper distribution will be discussed and the plausible reasons for the same too will be enumerated herein. The pricing challenge and the need for a distribution management system will be introduced here.
1.7 Scope Limitation
The limitations in terms of distributing the product within time targets and budgets constraints will be elaborated here.
Possible challenges that limit the distribution of perfumes are:
Identity tangent conflicts such as lack of ample communication about the brand by channel managers
Customer acceptability issues
Marketing channel constraints in knowledge or strategy
Motivational issues with channel partners hindering the distribution
The practicality behind each of these challenges will be enumerated as will be the flaws under each header.
1.8 Background
Exploring the main solutions that can be implemented to do away with the issues in distribution at Ajmal. We will focus on a solution that curtails the problems of distribution.
The solution to Customer acceptability issues- Market survey and customer feedback can be taken to understand this issue and erase it.
System integration is another solution to do away with the distribution issues arising from brand managerial conflicts.
Alternatives like direct selling; online selling or wholesale can be weighed in terms of effective solutions for the problems of marketing channel issues.
Chapter 2
Literature Review
Applying TQM in the distribution of Ajmal perfumes
The perfumes industry has to work within certain environmental factors- these factors relate to the events and circumstances that affect each part of the marketing environment. These environmental factors are uncertain and these characteristics can also affect the way the company distributes its products. These uncertainties normally revolve around the changes that can unexpectedly take place in the competitor products, customer demands and wants, supplier margins and business and the technology used in the various aspects of developing the fragrance.
(http://managementresources.blogspot.in/2010/12/factors-affecting-selection-of-channel.html)
Changes can also take place in the economical, ecological, social, legal aspects of the business environment in which the company has to operate in, political factors won’t really affect the sales of fragrances but in the event of a political upheavals, the market of a country can be affected and this may also affect the sales levels. Any issues related to the factors can also affect the distribution and can disrupt the flow of the goods to those countries that are experiencing changes or disruptions in these environmental factors. The operating environment within the company and the factory are also factors that can affect the distribution for example, if the factory does not have work standards or guidelines to determine the flow of activities, the scheduled and timely delivery of product batches can be affected. The same idea can be applied to the corporate environment- if the company has suddenly gone bankrupt, or the activities and work are not planting out well, the factory may not find it easy to do their work as they can only work on the figures provided to them from their corporate offices. These figures relate to the number of products that have to be dispatched and where they have to go to.
Governmental policies, regulations, and norms also affect the market at large and when changes are made at such a level, they affect all industries-these usually are about the taxes, new regulations that affect the use of national resources or international foreign trade policies and can affect the usual distribution levels and the supply rates that a company would have already have in progress.
These same factors can also affect the environmental factors in other countries are could also be prevailing conditions- these can affect the supply of goods throughout this country and can even result in the products being sold on the black market. This can prove to be very risky for suppliers, can cause the company to take decisions on not investing and can also affect the terminations of business contracts.
How the company chooses to handle these environmental changes will depend upon the resources and their ability to handle the impact that such changes have. They will have to devise separate strategies and policies that can see them through environmental uncertainties and the effect that it will have ton their distribution channels. The development of a process strategy that can be implemented during emergencies or critical times can ensure the effective use of resources while scaling down on the manufacturing outputs and also devising control measures for the same can help companies to handle uncertain situations.
The perfume industry is characterized by its own standards and factors that play an important role in how the perfumes are made, distributed and sold in the market. Where distribution is concerned, things are very different in the perfume industry but these same factors have an impact on the volumes at the distribution level.
The distribution of the finished perfumes from the manufacturers or from the company is affected by the promotion of the perfumes brand. These factors also affect the price that the consumers will pay for the perfumes and how frequently they make fragrances purchases. Just like any other product, the promotion of the perfumes brand name will determine the number perfumes bring distributed. The promotional activities will be decided by the company and are planned according to the demand and expectations of the customers. The perfumes that are in demand will require more promotional activities that will increase the popularity of the particular perfume and will imprint on to the buyer’s mind that this is the perfume that they have to buy. This will lead to an increase in the sales of the perfumes and will mean an increased distribution level. This basis interconnection between promotional activities, sales and distribution activities is what determines the distribution levels. The measures taken to promote the product will be just as important as the perfume itself.
(com/distribution-decisions/marketing-issues-in-channels“>http://www.knowthis.com/distribution-decisions/marketing-issues-in-channels)
If the company is making a conscious effort to promote one particular perfume brands, then it will have to ensure beforehand that they have to the right amount of stocks available and the prepares an efficient distribution channel that can cope with this increased demand.
The type of promotional activities will also affect the distribution of the perfume brand concerned, if the perfume company depends upon extensive use of salespersons to reach their customers, then distribution pattern for this promotional activity will be very different. Here the volume of distribution will depend upon the number of orders that they get and respond accordingly. In those promotional activities that don’t have any sales assistance, the distribution pattern will be based on estimated figures and will be targeted towards specific markets and estimating the demand that will affect the distribution levels.
Some companies may choose to use their intermediaries to promote their perfumes as they have the clear insight into what the customers want and will be able to give useful information to the companies or they may be asked to promote the products in a way that they think will be suitable. This may lead to increased demand as the intermediaries will ably assist companies in modifying the price of the perfumes, identify the current trends and narrow down those features that the customers want or don’t want to see in the fragrances that they buy.
(http://smallbusiness.chron.com/market-intermediaries-affect-business-10402.html)
When customers see that they are getting just what they want from a perfume brand- they will continue to buy perfumes from that particular company and the company will have to plan out their distribution strategies based on the increased demand.
The fragrance market is just like any other market and is characterized by trends and factors that determine how well your perfume will sell. Plenty of research has to be done in order to analyze the entire market and then devise a distributions strategy to get your products to the desired target market.
The target market refers to a set of specific customers that a company seeks to cater to as they have researched these particular customers and have created a product for them that will satisfy their need. The data that you derive from analyzing this group of customers can help you to determine the size of the target market, the perfume brands that they use, what are the perfumes trends in this market.
The idea of analyzing and monitoring the trends that affect the perfume industry is to determine who the customers are and what other forms of potential the market has in store for the company.
(http://www.euromonitor.com/fragrances)
The external stakeholders are those people and organizations that are affected by the activities of your company or can affect your company. Identification of these stakeholders can help you to define your target markets and once you do this, you can build the value propositions that will be ideally suited to these customers. (http://unltd.org.uk/portfolio/3-6-understanding-your-target-audience-and-defining-your-value-proposition/).
Like all other marketing factors, the target market will also affect the choice of distributions channel- a distribution channel can only be truly effective when the customers can actually obtain the product that they will receive through it. So when planning the distribution factor you will have to consider the ways in which you can optimize it by using the most appropriate approach that will ensure that the products will reach the customer as quickly and effectively as possible.
The customer will want to receive a product that is not damaged and within the shortest realizable time possible. In order to reach the target customer in time is to take into consideration the total distribution coverage distance and time that will be required to effectively reach the customer. This distance is usually measured by the degree of intensity in which the perfume can be made available to the customer. (com/distribution-decisions/level-of-distribution-coverage“>http://www.knowthis.com/distribution-decisions/level-of-distribution-coverage).
Based on the intensity factor, we have three distribution levels- the mass coverage in which the products are widely distributed in throughout nearby locations. The selective coverage where the products are distributed in select locations and the exclusive coverage in which the perfumes are delivered to narrow markets and to a smaller number of high-end customers.
When your target market receives the product on time they will develop a favourable image of the company and will also make them loyal customer, this is why the distribution network has to be efficient.
The distribution coverage will be affected by many factors that will inevitably affect the costs incurred by the company, while the customer will bear some part of this cost through the shipping and handling fees, there are many costs that you can’t expect them to cover. Analyzing the benefits of each distributions channel will determine which one would be the right and most cost-effective one for your company.
The distribution channels and strategy of any company are affected by the factors, both internal and external that shape their market in which the company works in, the same can be applied to the perfume industry. Perfume companies have to develop fragrances and sell them using data that will make their sales more positive. The distribution of the product and the volumes that are distributed are affected by the same issues that surround marketing and are the crucial ones that have to be solved as they will determine how far a company reaches into a market.
(http://www.knowthis.com/distribution-decisions/marketing-issues-in-channels)
The nature of the product is a key criterion that is used to assess the way that it will be distributed into the market through the various retailers, wholesalers and middlemen or agents. Perfumes are considered to be delicate and fragile because of two things –the glass bottles and the contents held within it. Glass will break if it is not packed well and this is most likely to happen during distribution as the transportation of the manufactured perfumes from the factory to the warehouse and then to the wholesalers and retailers is a rough journey. The manufacturer will have to ensure that the trucks have a system that will hold the crates or boxes in place so that the bottles won’t get damaged when they are being transported from one place to another. The crates containing the ready perfume bottles will have to be stacked evenly in the transport vehicle and in the warehouse, to prevent them from falling or to prevent the thousands of crates from collapsing if they are stored at great heights in huge warehouses. The manufacturer will have to assess the measures that can be used to prevent damage or loss during transport and ensure that they are applied before the transport vans move out of the factory.
The contents of the perfume bottles are volatile and can be very harmful when placed in improper conditions, this is because perfumes have ethanol in it and this is an inflammable substance. So when it is being prepared for distribution, it should be packed into the delivery crates in ideal conditions and away from heat and humidity. When it is being stored in the warehouses, the manufacturer or distributors will have to ensure that there is no source of heat near the perfume bottles, which include open flames, heating systems etc. Humidity will affect the product’s usage and this is another important point consider while the product is actually being moved from place to place or when it is being stored in a warehouse to be awaiting distribution. Humidity affects the product because it causes the fragrance to evaporate therefore lessening the contents and also lowers the concentration of the scent. Perfumes don’t have any expiry dates and sometimes there are stored for long periods of time on warehouses before they are actually distributed. The correct storage will enhance the shelf life and prevent the perfumes from losing the scent and become musty and metallic. (http://www.wikihow.com/Store-Perfume)
Nature of perfumes affecting the supply volume
The full focus of perfumes will range from fifteen to forty P.C. with forty being the highest. Perfumes will always have a high price as they are extremely concentrated. There are a few things that you will need to know about the distributions of perfumes and use this to plan out which distribution channel to use. The popularity of the perfume category or type is one way to determine the issue of the correct supply that has to be allotted to the different distribution channels. (http://www.entrepreneur.com/businessideas/perfume)
This depends on the type of perfume that you are manufacturing, whether it is an Eau de Cologne, Eau de Parfum, Eau de Toilette, sprays and fragrance and use this to determine the volume of supply and how often the stocks of the retailers or the wholesalers will have to be replenished. The demand for the products will have an impact on the supply and overstocking will force the distributors to lower their prices to cope with excess stock. In terms of manufacturing, this means that extra resources have been wasted as the end product will not cover the entire production costs. Another factor that has to be considered when assessing the number of bottles that has to be supplied to each outlet or distributions channel:
This is the first perfume category that companies will manufacture and make available to their customers. The intensity of the fragrance can be measured and because they are concentrated, they last for a longer period of time. At a retail outlet, a customer will only buy a single piece of a fragrance and only in very rare cases do they buy more than that, so companies will first have to analyze how many bottles were sold and accordingly stock those fragrances that are most popular. For example, if a company manufactures fragrance A and fragrance B and fragrance sells out faster than fragrance A, the company making these fragrances should supply fragrance B to the distributors.
Eau de parfum is the second perfume category and the difference between them and fragrances is that their concentration rage lies between 7% – 15%. This means that they last longer but are at the same time extremely affordable. This combination offers the highest value to customers as they get a perfume that lasts longer but at low prices. This perceived value means that the demand for this type of perfume is very high and is the reason why most retail and online outlets stock this perfume category. Manufacturers normally produce very larger numbers of this perfume category as it is profitable as they can recover the production costs. Since both the manufacturers and the customers derive a high level of value and profit from it respectively, companies will have to maintain a regular and stipulated supply of this category as the demand for it is very high. (com/en/russia-the-distribution-issue,3684″>http://www.premiumbeautynews.com/en/russia-the-distribution-issue,3684)
This type of perfume came into being as it was initially used to refresh people after they woke up in the mornings. Today it used as a typical perfume and has a concentration level that varies between 1% and 6%. This much lower than the concentration level found in fragrances and Eau de parfum. The mild scent does not last very long and is perfect for those customers who want milder scents. There are two ways to assess the supply limit for this perfume category, the mild scent will make customers buy two or more bottles or they may but it at regularly if they like the perfume. This will mean that the supply will have to be regular if the demand is very high or it might not be very popular with customers. The only way to analyze the supply is to determine the sales volume and ensure that the suppliers have the right quantity.
In many circumstances, this term is used to describe those perfumes that have a gentle fragrance. The supply levels can be determined based on the volume of sales. Fragrances are normally bought as gifts and are bought less frequently as they last longer, the company will probably face an increase in sales around the festive season. Distribution channels that have excess bottles will have to come up with a way to store them or sell them if there isn’t enough storage space. The perfume will have to be stored away from heat and humidity to protect the concentration of the perfumes and preferably in soft packaging to prevent the bottles from breaking.
The category to which the perfumes belong to will also determine how fast they sell out and companies will have to continuously monitor the volume of sales and use this as the main factor to determine the quality to be manufactured in the next production cycle and how much the quantity that is required by the distributors.
Perfume bottles Materials and Packaging
The first thing that manufacturers will have to work on are the bottles that will be used for the fragrance. The design of the bottle and the type of material that is used to make it will play an important role in how it will attract customers and the way that it will be distributed to outlets.
Companies have to come up with new bottles of designs and ideas, these two factors normally affect how popular the fragrance is. Many bottles design will have decorative attachments on it, the shape of the bottle will also differ and the spray pump or nozzles are some factors that have to be considered when packaging the bottles for distribution.
Glass is normally used to make the bottles as the perfumes have different concentrations types and glass is the only material that will protect the scent from diffusing out. Sprays and the lotions that are normally sold as a part of a fragrance set will be made out of plastic, aluminium or stainless steel as the concentration is much weaker. Glass bottles are put into brand packaging that is reinforced from the inside- these are the small bits of paper or cardboard that hold the bottles in place inside the box that you buy. (http://in.answers.yahoo.com/question/index?qid=20100929104723AAc4m4B)
Glass has to be handled carefully when being transported from one place to another for the simple reason that it will break easily. Many perfume bottles have broken during distribution and working out the correct packaging is the only way to handle this issue.
Manufacturers have to ensure that something similar can be done when packaging thousand of bottles into a compact freight box; something should be put around the bottles so that it will serve as a buffer that absorbs the high impact and extra weight that compresses the freight boxes when it is being shipped off to different countries. In international distribution, there will be many other crates or boxes that will be placed on top of it and ensuring that the right labels and certifications for the boxes will help to ensure that the contents reach their destination safely.
In domestic transportation, the distributors will have smaller distances to cover and the containers with the bottles and they may not require too much protection. The containers can be built rigorously and should be tough enough to absorb shock so that nothing happens to the bottles when they are being sorted in the warehouses.
Protecting the contents while they are being distributed to outlets or being transported to various countries is a very big issue given the delicate nature of the perfumes. The packaging that is used should enable the handlers to move or lift, transport and distribute them. Choosing a more compact shape for the external box or packaging makes it easier for the distribution channels to reduce the damage that may take place to the bottles when they are being moved. Boxes made out of thicker materials crafted into compact solid shapes will make it easier for the many boxes to be placed in a normal box when is being prepared for distribution, taking the extra precaution in developing solid brand packaging can actually help in the reduction of distribution cost as special crates used to transport perfumes may prove to be costly.
The compact shapes of the boxes will ensure that all the space on the boxes or crates as selected for the distribution does not go to waste meaning that manufacturers can reduce the number of boxes that they have a smaller freight amount to deal with- this too can significantly reduce their overall distributions costs. (http://www.technologystudent.com/prddes1/perfpk2.html)
Packaging that is square, cuboid or any other compact shape that is more or less equal on all sides makes it easier to stack in warehouses as their will ensure that extra space does not go to waste. Another advantage of choosing compact shapes is that they are less likely to fall off the shelves when they are being displayed in the stores or when being put into warehouses. This is also good from a distribution point of view as they will not move or slide around easily and incur any form of damage while inside the boxes.
The staff and personnel manning the retail outlet’s warehouses or distributions outstations will find it easier to handle a perfume packaging when it is less cumbersome- this is an important factor to consider as the perfume itself is a fairly expensive product and not taking the right measure to protect these bottles can result in heavy losses.
Sturdy materials that are at least 1000 microns or more can withstand the bumps and knocks that are to be expected to take place when distributing the bottles to the outlets, although it is assumed that the logistics company handling the deliveries will be careful and pay attention to the precautions on the boxes-certain unforeseen accidents can damage the products and it is up to the manufacturers to be prepared to handle such circumstances.
Marketing consists of different aspects and each one has a part to play when developing a product and selling it to the market- these aspects also include the policies that affect the distribution of a product and will differ according to the market, country and company. Distribution policy is a set of corporate outlines that consists of the data or messages that are shared or distributed in relations to the distribution of a product, these are basically the guidelines that the company and its distributor have planned and the rules that they adhere to make their distribution process easier and more manageable.
The entire distribution network of a company will have many aspects that revolve around the movements of the finished products from the factory to distribution outlets and finally to the customer. At each level of the network, we see the different agents handling the products that come through their departments. They use the distribution policies to understand what has to be done with the product once it reaches them and also described who they are to be sold to the upcoming layers of intermediaries.
(http://www.businessdictionary.com/definition/distribution-policy.html)
Perfume companies will have to formulate a distribution policy given the nature of the products that they sell and the cost of the perfumes as well. Since the perfumes are fragile products and the contents are volatile and delicate, a policy has to be created so that the distributors will know what to do in case the products get damaged in any way.
The policy will define each and every point related the distribution, the profit margins that the respective distribution levels can expect and will also cover the measures to be taken in case there is there are retailers or consumers who have defaulted in their payments.
It gives a description of what has to be done in case a customer returns products and the actions that have to be taken in a case of failed payments. Every issue that one can expect in the distribution process had been described in the distribution policy and it also addresses the actions that can be taken in the event that these situations take place.
(http://smallbusiness.chron.com/channels-distribution-affect-marketing-24224.html)
The problems that can arise in distribution policies is that there can be a breach in this policy where the distributors may not be adhering to the rules as stated, in such a case usually legal actions are taken. There can also be a disagreement between the parties concerned relating to the issues of the profit margins and is such cases the distribution network can be disrupted till the parties involved in the distribution process agree upon new policies. The distribution policy may not cover all issues and in such stray cases, the company will have to work with the distribution administrators to determine what can be done.
The policies governing distribution may differ among nations- in some cases, the import barriers or taxes may be high in some countries and this may affect how one country sells their perfumes in another country. The distribution policy of a company belonging to one country may not be suitable for the labour laws in another country; this can affect the flow of products between these two countries.
Erasing Distribution Issues for the Perfume Industry
Distribution refers to the way a company moves finished goods from manufacturing to retail or wholesale outlets, where customers have access to them. Companies normally plan their entire distribution channel based on the properties that the product has, perfumes normally come with a high price as they need special distribution methods that deliver them to the places where they will be sold without damaging them in any way. Perfumes normally cost a lot because there is firstly the packaging and advertising or promotion costs and also the cost of using various forms of distribution processes.
(http://www.entrepreneur.com/encyclopedia/distribution-models)
There are many issues that surround the distribution of perfumes; manufacturers usually stick to the distribution channels that are used for any other products. The important thing is to be prepared with any issues that may come up. The conventional distribution channel normally includes the retailers, producers and wholesalers- this main problem here is that each will try to secure their own interests and can cause problems in that affect the flow of products using this channel. The only way to address this issue is to ensure that each has the margin that they want. This will increase the price that the customer has to pay and is the only solution if you don’t have any alternative channel.
Direct distribution is the smarter way to get perfumes in the market. Many bigger companies like Avon, Lorenzo Dante Ferro and designer labels in particular use this model. This takes out the middleman and prevents issues like escalating distribution costs that can either delay or hamper the product distribution. Companies with direct distribution normally have a distribution structure where they sell and distribute or deliver the product themselves. They find this to be more cost-effective as they do not have to pay any external distributors and the profits that they get from direct distribution are much higher. (http://smallbusiness.chron.com/become-perfume-distributor-19102.html)
This decision to use direct distribution has to be done carefully and only in at a time when the company feels like they longer have to be dependent on external distributors because they might not be easily available in those situations where the company would need them.
If the company is in such a situation where they need to curtail their distribution cost by using direct distribution but want to hold on to their external distributors either because that have not yet defined their own distribution processor because they have inventory that has to be distributed right away. They can work on building a distribution network that has two sections-one sections where they would only sell their perfumes directly to their clients or customers and the other section where they go directly to the retailers and cut out the wholesalers.
When companies cut out a distribution level, there are a number of products that have been relocated to another channel. Consider other ways to increase sales once you have decided to go with direct distribution, evaluate the factors of the product that you are selling like the size, durability and the life span. Companies can ad live demonstrations, free samples, and easier access to stores. Innovative methods will make up for the eliminated distribution channel.
To be more cost effective in their distribution channels, companies will have to take a closer look at all the levels of their distribution network and decide where they can lower costs by cutting out certain levels without hurting or slowing down their distribution. This can also include the elimination of markets or segments that are not faring well in sales, companies can also assess the way that their more successful competitors are distributing their products and use the same methods after modifying it to suit their own requirements. (http://www.eimi.com/perfumeoriginals/perfumefaq.htm)
Companies can encourage retailers to come directly to them; this will also broaden the companies reach in the market without significantly increasing costs as practised by Wal Mart.
Choosing the right distribution channel
The next step that most any manufacturers will take after the production process is to select or finalize the distribution channel that they feel is most suitable and feasible at the same time. Things are not very different in the perfume industry; the choice of a distribution channel will affect the production costs, how fast the products are delivered to respective outlets. The distribution channels will have a lot of levels that the company will have to consider which include the various facets like the agents, retailers, wholesalers. It will also include the warehouse and the inventories that are being stored here and in the possible retail stores. The main types are the direct and indirect distribution channels, there are many factors that the manufacturer will have to consider when choosing a distribution channel such as the costs involved, the quantity that has to be delivered and the time by which the stocks have to reach their final destinations. (http://old.nios.ac.in/Secbuscour/20.pdf).
Here are some factors that can be used to solve the issue of choosing the right channel:
The first thing that has to be considered is how you plan on selling the perfumes, online retail stores are fast becoming a popular shopping option and exploring this option might be a good idea. If you want to sell the perfumes online, then you can either team up with bigger more reputed shopping websites such as Bonanzle, eBay or develop your own website and sell directly to customers or retailers. This is more direct as a distribution channel and can be cost effective if it is handled the right way. With online sales, you will have to manage the inventory and the payments received through online portals like PayPal or through banks, and also handle the delivery through courier or post. This would mean that that you will have to set up a different department to handle the payments and deliveries of the perfumes- this may or may not be feasible depending upon the resources that are ready to be used.
The changes taking place in the customer base and their expectations as well as a factor that will affect the choice of distribution channels, since this is an uncertain factor it will require continuous monitoring and will affect the amount of product that is being distributed.
If the escalating costs are a problem, then the manufacturer can consider distributing the perfumes through another company. Bigger companies will probably have their own distribution network, but smaller companies will find that working through other companies may help in lowering their distributions costs.
Longer distances will cost more and smaller manufacturers can start with smaller steps by initially distributing their perfumes in the stores that are nearby or restrict their distribution to certain states within their native country. They can expand their distribution channel once they feel that it is more feasible for them to do so. (com/236-5-common-problems-that-distributers-face.html”>http://www.barakabank.com/236-5-common-problems-that-distributers-face.html)
Managing the distribution on an international scale can be easy- this is because certain products will cost less in certain countries. This can work to the manufacturer’s advantage if they are distributing to a country where the costs related to perfume distribution are cheap. If they are distributing to a country where the costs are relatively higher and this is an issue, then the company will have to reconsider their distribution channel in that particular country. Apart from this the difficulties that arise out of an international distribution network will include the tracking visibility, managing the lead times and handling the many tiers in the distribution network that is required to support the movement of the inventories. The addressing of these issues can only be done through the resources available to the manufacturers.
If you are choosing an external distribution channel, make sure that you have a customer service or support to assist the customers with their deliveries. This is because some channels may not possess market knowledge, inaccurate invoicing, poor delivery standards that can affect how customers perceive your brand. Manufacturers can also set up quality and customer service guidelines that they can discuss with the distributors. (com/marketing-solving-channel-distribution-problems-20661.html”>http://smallbusiness.chron.com/marketing-solving-channel-distribution-problems-20661.html).
This may also include providing the customer with some form of compensation if their delivery is lost or damaged so that they will understand that the issue was out of your control and that you are taking some action to resolve the issues.
There have been many recent changes in the logistics and transportation landscape which has made many companies modify their supply chain system from top to bottom. Keeping up to date with the latest trends and data in logistics can help distributors to identify and resolve issues related to merchandise costs, weaknesses in their network infrastructure, constraints affecting the capacities permitted and the changes in the government regulations that affect the working of the logistics company.
Any industry operates on its reliance on different factors that surround it; each company that exists within any industry will have to assume that there are certain factors that govern its existence, the way that it operates and the products that it sells. The perfume industry has its own standards and guidelines that it has to formulate how it does its work.
The price of a perfume is one of these factors and will ultimately determine how the company will plan their distribution- the price is affected by a number of factors which include covering the cost of operations or productions, taxes, value-added services and also the cost incurred in the distribution of the finished products. The price will also be defined by how much the customers are prepared to pay for it. The finalized price that we get after we have added all the frills and costs have been added to it is the desired price, which the marketer feels is the most ideal price at which the product must be sold.
(http://www.knowthis.com/distribution-decisions/marketing-issues-in-channels)
The price of a product will be affected by the profit margins that the distributors expect to receive for their services. This cost can be controlled by the number of middlemen there are in the entire distribution network, very high distribution costs can affect the sales targets and is a very expensive way to distribute products.
Optimizing the final cost will also include the analysis of the future prices, price sensitivity, consumer’s purchasing power and their average income and marketing the perfumes at the prices that they expect to see.
Given the importance of the price, it is to be understood that it also affects the demand for a product. The price will determine how fast and often a product sells and depending upon the demand level, the distribution will have to be planned. Perfumes are sold by bigger luxury and designer brands and there are also smaller companies involved in the same trade- this has an impact on the price of the perfumes being sold by them, designers perfumes are fairly expensive and would be better if they choose a smaller distribution channel as the number of customers will be less. Companies like Oriflame, Revlon and Avon will have to use a bigger distribution network as their fragrances will be more affordable as will have a bigger customer base.
Based on the factor of affordability, the distribution strategies as used or devised by the companies concerned will be affected. It obviously makes no sense to distribute a large amount of product when you have a very low demand for it; more affordable perfumes will be distributed using a longer route. Affordability will also affect the distribution of the perfumes, as more customers are likely to purchase something that they can afford, meaning that those perfumes with a lower price tag will be bought more often and that their distribution volumes will also be significantly larger when compared to perfumes from luxury brands that have a higher price tags .
Chapter 3
Methodology
The methodology used in this research to find out how effective the distribution system of Ajmal is and how it can affect the customers and sales, we have used a qualitative research method. The data is collected using the questionnaire. The questionnaire is made on a Likert scale of 5 in which 1 represents the strongly disagree level and 5 represent strongly agree level.
Data collection
The data for the research will be collected by filling the questionnaire with the customers and the general public. The total sample size of the research will be 100 respondents. These respondents will the general public and the customers of Ajmal Perfumes.
Statistical tool
The statistical tools used in this research are descriptive analysis and regression method. These methods will help to analysis the data which qualitative in nature. The methods will help us to find out the relationship between the factors like distribution system of Ajmal perfumes, it’s quality and customer response.
Tabulated data
| Strongly disagree | Disagree | Neutral | Agree | strongly agree | |
| The effective distribution channel is the crucial factor in the growth and success of the business. | 4% | 15% | 27% | 22% | 32% |
| Proper distribution channels can result in an increase in sales of the business. | 3% | 10% | 15% | 24% | 48% |
| Effective distribution can result in the availability of products to all the targeted customers | 1% | 10% | 24% | 31% | 34% |
| Ajmal perfumes are using an effective distribution strategy | 0 | 2 | 39 | 29 | 30 |
| Effective distribution of Ajmal perfume has made its products available to the customer on time. | 0 | 3 | 18 | 35 | 44 |
| The services of Ajmal perfumes is best in term of delivery as compared to other brands | 0 | 5 | 23 | 29 | 43 |
| The promotions and offers of Ajmal perfumes attract many customers. | 0 | 3 | 21 | 12 | 59 |
| Customers are attracted because of high-quality perfumes. | 3 | 0 | 35 | 44 | 18 |
| Customers mostly prefer Ajmal perfumes as a product that can be gifted to someone special. | 0 | 2 | 31 | 30 | 37 |
Chapter 4
ANALYSIS AND RESULTS
The results of this research show that our seven hypotheses are accepted while three hypotheses are rejected. H1, h2 and h4 are rejected while all other hypotheses are accepted.
DESCRIPTIVE STATISTICS
| Q1 | Q2 | Q3 | Q4 | Q5 | |||||
| Mean | 3.630 | Mean | 4.040 | Mean | 3.870 | Mean | 3.870 | Mean | 4.200 |
| Standard Error | 0.119 | Standard Error | 0.115 | Standard Error | 0.103 | Standard Error | 0.087 | Standard Error | 0.084 |
| Median | 4.000 | Median | 4.000 | Median | 4.000 | Median | 4.000 | Median | 4.000 |
| Mode | 5.000 | Mode | 5.000 | Mode | 5.000 | Mode | 3.000 | Mode | 5.000 |
| Standard Deviation | 1.195 | Standard Deviation | 1.145 | Standard Deviation | 1.031 | Standard Deviation | 0.872 | Standard Deviation | 0.841 |
| Sample Variance | 1.427 | Sample Variance | 1.312 | Sample Variance | 1.064 | Sample Variance | 0.761 | Sample Variance | 0.707 |
| Kurtosis | -0.909 | Kurtosis | -0.050 | Kurtosis | -0.634 | Kurtosis | -1.318 | Kurtosis | -0.395 |
| Skewness | -0.369 | Skewness | -0.985 | Skewness | -0.523 | Skewness | 0.071 | Skewness | -0.707 |
| Range | 4.000 | Range | 4.000 | Range | 4.000 | Range | 3.000 | Range | 3.000 |
| Minimum | 1.000 | Minimum | 1.000 | Minimum | 1.000 | Minimum | 2.000 | Minimum | 2.000 |
| Maximum | 5.000 | Maximum | 5.000 | Maximum | 5.000 | Maximum | 5.000 | Maximum | 5.000 |
| Sum | 363.000 | Sum | 404.000 | Sum | 387.000 | Sum | 387.000 | Sum | 420.000 |
| Count | 100.000 | Count | 100.000 | Count | 100.000 | Count | 100.000 | Count | 100.000 |
| Q6 | Q7 | Q8 | Q9 | Q10 | |||||
| Mean | 4.100 | Mean | 4.420 | Mean | 3.740 | Mean | 4.020 | Mean | 4.280 |
| Standard Error | 0.093 | Standard Error | 0.098 | Standard Error | 0.086 | Standard Error | 0.088 | Standard Error | 0.328 |
| Median | 4.000 | Median | 5.000 | Median | 4.000 | Median | 4.000 | Median | 4.000 |
| Mode | 5.000 | Mode | 5.000 | Mode | 4.000 | Mode | 5.000 | Mode | 5.000 |
| Standard Deviation | 0.927 | Standard Deviation | 0.976 | Standard Deviation | 0.860 | Standard Deviation | 0.876 | Standard Deviation | 3.275 |
| Sample Variance | 0.859 | Sample Variance | 0.953 | Sample Variance | 0.740 | Sample Variance | 0.767 | Sample Variance | 10.729 |
| Kurtosis | -0.776 | Kurtosis | -0.417 | Kurtosis | 1.322 | Kurtosis | -1.252 | Kurtosis | 79.983 |
| Skewness | -0.591 | Skewness | -0.801 | Skewness | -0.634 | Skewness | -0.223 | Skewness | 8.452 |
| Range | 3.000 | Range | 4.000 | Range | 4.000 | Range | 3.000 | Range | 34.000 |
| Minimum | 2.000 | Minimum | 2.000 | Minimum | 1.000 | Minimum | 2.000 | Minimum | 1.000 |
| Maximum | 5.000 | Maximum | 6.000 | Maximum | 5.000 | Maximum | 5.000 | Maximum | 35.000 |
| Sum | 410.000 | Sum | 442.000 | Sum | 374.000 | Sum | 402.000 | Sum | 428.000 |
| Count | 100.000 | Count | 100.000 | Count | 100.000 | Count | 100.000 | Count | 100.000 |
DESCRIPTIVE ANALYSIS
The descriptive testing and single factor ANOVA techniques help us to find out which of our ten hypotheses are accepted or which are not. The hypothesis 1, 3 and 4 are rejected while other all hypotheses are accepted. It explains that most people agree that the effective distribution can result in the increase in the sale of the business while many more than average respondents don’t agree to the statement that Ajmal perfumes are using an effective distribution strategy. On the other hand, many respondents agree to the statement that products of Ajmal perfumes are available for customers on time every time. The packaging, promotion and product quality are the factors that have made the positively marked by the customers.
GRAPHICAL PRESENTATION
Q1-
| bin value | Frequency | Cumulative % |
| 1 | 4 | 4.00% |
| 2 | 15 | 19.00% |
| 3 | 27 | 46.00% |
| 4 | 22 | 68.00% |
| 5 | 32 | 100.00% |
| More | 0 | 100.00% |
Explanation:
the above graph shows that 4% are strongly disagree to the statement that Effective distribution channel is the crucial factor in the growth and success of the business while 15% disagree, the statement has a greater amount of responses for agreement level but its mean is less than 4 which represent that the hypothesis is not accepted.
Q2
| BIN VALUE | Frequency | Cumulative % |
| 1 | 3 | 3.00% |
| 2 | 10 | 13.00% |
| 3 | 15 | 28.00% |
| 4 | 24 | 52.00% |
| 5 | 48 | 100.00% |
| More | 0 | 100.00% |
Explanation:
The above graph shows the response of respondents for question no. 2 of the questionnaire. 48% of respondents agree to the statement that Proper distribution channels can result in an increase in sales of the business. 24% of people agree to the statement while the percentage of disagreement is 25%.
Q3
| BIN VALUE | Frequency | Cumulative % |
| 1 | 1 | 1.00% |
| 2 | 10 | 11.00% |
| 3 | 24 | 35.00% |
| 4 | 31 | 66.00% |
| 5 | 34 | 100.00% |
| More | 0 | 100.00% |
Explanation:
The above graph shows the responses of respondents regarding question no. three of the questionnaire. It shows that 34% of respondents agree to the statement that Effective distribution can result in the availability of products to all the targeted customers. A total respondent that agree to the statement is 64%.
Q4
| BIN VALUE | Frequency | Cumulative % |
| 1 | 0 | 0.00% |
| 2 | 2 | 2.00% |
| 3 | 39 | 41.00% |
| 4 | 29 | 70.00% |
| 5 | 30 | 100.00% |
| More | 0 | 100.00% |
Explanation:
The above graph shows the responses of respondents regarding question no. four of the questionnaire. It shows that 30% of respondents agree to the statement that Ajmal perfumes are using an effective distribution strategy. A total respondent that agree to the statement is 59%.
Q5
| BIN VALUE | Frequency | Cumulative % |
| 1 | 0 | 0.00% |
| 2 | 3 | 3.00% |
| 3 | 18 | 21.00% |
| 4 | 35 | 56.00% |
| 5 | 44 | 100.00% |
| More | 0 | 100.00% |
Explanation:
The above graph shows the responses of respondents regarding question no. five of the questionnaire. It shows that 30% of respondents agree to the statement that Effective distribution of Ajmal perfume has made its products available to the customer on time. A total respondent that agree to the statement is 59%.
Q6
| BIN VALUE | Frequency | Cumulative % |
| 1 | 0 | 0.00% |
| 2 | 5 | 5.00% |
| 3 | 23 | 28.00% |
| 4 | 29 | 57.00% |
| 5 | 43 | 100.00% |
| More | 0 | 100.00% |
Explanation:
The above graph shows the responses of respondents regarding question no. six of the questionnaire. It shows that 43% of respondents agree to the statement that The services of Ajmal perfumes are best in term of delivery as compared to other brands. A total respondent that agree to the statement is 72%.
Q7
| BIN VALUE | Frequency | Cumulative % |
| 1 | 0 | 0.00% |
| 2 | 3 | 3.00% |
| 3 | 21 | 24.00% |
| 4 | 12 | 36.00% |
| 5 | 59 | 95.00% |
| More | 5 | 100.00% |
Explanation:
The above graph shows the responses of respondents regarding question no. seven of the questionnaire. It shows that 59% of respondents agree to the statement that The promotions and offers of Ajmal perfumes attract many customers. A total respondent that agree to the statement is 71%.
Q8
| BIN VALUE | Frequency | Cumulative % |
| 1 | 3 | 3.00% |
| 2 | 0 | 3.00% |
| 3 | 35 | 38.00% |
| 4 | 44 | 82.00% |
| 5 | 18 | 100.00% |
| More | 0 | 100.00% |
Explanation:
The above graph shows the responses of respondents regarding question no. eight of the questionnaire. It shows that 44% of respondents agree to the statement that The promotions and offers of Ajmal perfumes attract many customers. A total respondent that agree to the statement is 71%.
Q9
| BIN VALUE | Frequency | Cumulative % |
| 1 | 0 | 0.00% |
| 2 | 2 | 2.00% |
| 3 | 31 | 33.00% |
| 4 | 30 | 63.00% |
| 5 | 37 | 100.00% |
| More | 0 | 100.00% |
Explanation:
The above graph shows the responses of respondents regarding question no. nine of the questionnaire. It shows that 37% of respondents agree to the statement that Customers mostly prefer Ajmal perfumes as a product that can be gifted to someone special. A total respondent that agree to the statement is 67%.
Q10
| BIN VALUE | Frequency | Cumulative % |
| 1 | 1 | 1.00% |
| 2 | 9 | 10.00% |
| 3 | 23 | 33.00% |
| 4 | 25 | 58.00% |
| 5 | 41 | 99.00% |
| More | 1 | 100.00% |
Explanation:
The above graph shows the responses of respondents regarding question no. ten of the questionnaire. It shows that 41% of respondents agree to the statement that The packaging of the product is very attractive and it attracts many customers. A total respondent that agree to the statement is 66%.
TESTING OF HYPOTHESIS
| Anova: Single Factor | ||||||
| SUMMARY | ||||||
| Groups | Count | Sum | Average | Variance | ||
| Q1 | 100 | 363 | 3.63 | 1.427374 | ||
| Q2 | 100 | 404 | 4.04 | 1.311515 | ||
| Q3 | 100 | 387 | 3.87 | 1.063737 | ||
| Q4 | 100 | 387 | 3.87 | 0.760707 | ||
| Q5 | 100 | 420 | 4.2 | 0.707071 | ||
| Q6 | 100 | 410 | 4.1 | 0.858586 | ||
| Q7 | 100 | 442 | 4.42 | 0.953131 | ||
| Q8 | 100 | 374 | 3.74 | 0.739798 | ||
| Q9 | 100 | 402 | 4.02 | 0.767273 | ||
| Q10 | 100 | 428 | 4.28 | 10.72889 | ||
| ANOVA | ||||||
| Source of Variation | SS | df | MS | F | P-value | F crit |
| Between Groups | 54.221 | 9 | 6.024556 | 3.11861 | 0.00104 | 1.889321 |
| Within Groups | 1912.49 | 990 | 1.931808 | |||
| Total | 1966.711 | 999 | ||||
The above single factor ANOVA analysis measure all the hypothesis and on the basis of the result generated we can find out which of our hypothesis is accepted and which one is not. the hypothesis whose mean is greater than 4 which our agreement level than it means that our hypothesis is accepted and if the mean is less than 4 then it means the hypothesis is rejected. Another way to test the hypothesis is that when the p-value is less than significant value than the null hypothesis is rejected. The p-value in this research is 0.00104 which is less than 0.05 that means that the null hypothesis is rejected while the alternative hypothesis is accepted.
| HYPOTHESIS | MEAN | AGREEMENT LEVEL | STATUS |
| H1: | 3.63 | 4 | Rejected |
| H2: | 4.04 | 4 | Accepted |
| H3: | 3.87 | 4 | Rejected |
| H4: | 3.87 | 4 | Rejected |
| H5: | 4.2 | 4 | Accepted |
| H6: | 4.1 | 4 | Accepted |
| H7: | 4.42 | 4 | Accepted |
| H8: | 3.74 | 4 | Accepted |
| H9: | 4.02 | 4 | Accepted |
| H10: | 4.28 | 4 | Accepted |
Chapter 5
CONCLUSION
It has been concluded that the company “Ajmal perfumes” has been using an effective distribution system but at the same time, it is facing a few problems. The problems are not in terms of customers get their products late but the problem is related to management. Overall the brand is making its customers satisfied with all aspects. They are providing products to their customers on time, the promotion and packaging are making customers satisfied.
The quality controls of Ajmal are the main positive point of the company. its Utilizing profoundly progressed quality control supplies, the boss perfumer then guarantees that the quality of the mixes adjust to universally distinguished standards or those set by territorial figures, for example, GMO and nation particular associations, for example, SASO.
In today’s competitive surroundings it is basic to leave your sign of qualification at each level. From your administration to your stationery, every single detail talks volumes for your association. This is the excuse for why names like The Burj Al Arab, Saudi Airlines, and Emirates Airline to name a couple of puts resources into altering even those seemingly insignificant issues that are generally common. Yet it is this fastidious enumerating that the “peculiarity” genuinely appears. This is the place Ajmal come in.
RECOMMENDATION
The Ajmal perfumes are a very old and renowned brand in UAE. The only lacking that the business is facing nowadays is in its distribution system which can be controlled if the brand will apply total quality management in its distribution system. The mismanagement of products in the distribution process causes the problem for the business. It can be solved by applying quality management. The problems can also be solved by using external channels for distribution processes.
REFERENCES
Bowersox, D. J., Smykay, E., & La Londe, B. (1968). Physical distribution management: Logistics problems of the firm. new york Macmillan.
Eilon, S., Gandy, W. C., & Christofides, N. (1971). Distribution management: Mathematical modelling and practical analysis. london: Griffin.
Stock, J. R., & Lambert, D. M. (1982). Strategic physical distribution management. Homewood: R.D. Irwin.
Appendices
| Name: | ||||
| Gender: | Male | Female | ||
| NATIONALITY | ||||
| Age group | 18-25 | 26-35 | 36-45 | 45+ |
| Marital status | Single | Married | Divorcee | Widow |
| Educational level | Intermediate | Diploma | Undergraduate | Post Graduate |
| STATEMENTS | AJMAL CAPLETON | |
|
Tick your desired reply.
|
Strongly disagree
Disagree
Neither Agree nor Disagree
Agree
Strongly Agree |
|
| 01 | The effective distribution channel is the crucial factor in the growth and success of the business. |
1 2 3 4 5 |
| 02 | Proper distribution channels can result in an increase in sales of the business. |
1 2 3 4 5 |
| 03 | Effective distribution can result in the availability of products to all the targeted customers |
1 2 3 4 5 |
| 04 | Ajmal perfumes are using an effective distribution strategy |
1 2 3 4 5 |
| 05 | Effective distribution of Ajmal perfume has made its products available to the customer on time. |
1 2 3 4 5 |
| 06 | The services of Ajmal perfumes is best in term of delivery as compared to other brands |
1 2 3 4 5 |
| 07 | The promotions and offers of Ajmal perfumes attract many customers. |
1 2 3 4 5 |
| 08 | Customers are attracted because of high-quality perfumes. |
1 2 3 4 5 |
| 09 | Customers mostly prefer Ajmal perfumes as a product that can be gifted to someone special. |
1 2 3 4 5 |
| 10 | The packaging of the product is very attractive and it attracts many customers |
1 2 3 4 5 |
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