Factors Limiting The Growth Of Channels

Published Date: 02 Nov 2017

I, the undersigned, declare that this proposal is my original work and that it has not been presented in any other university or institution for academic credit.

Kigen

Signature __________________ Date ___________________

Supervisor

This proposal has been submitted for examination with our approval as University supervisors.

MR. SIMIYU

Signature _____________________ Date ____________________

ABSTRACT

The main purpose of this study is to determine factors limiting the growth of channels of distribution as a strategy for competitive advantage: a case study of Rift Valley Bottlers Ltd., Eldoret branch. The study is guided by theory of constraints (TOC) advanced by Goldratt (2009). The specific objectives of the study will be to determine the effect of physical infrastructure, communication, capital costs, skills and experience on growth of channels of distribution as a strategy for competitive advantage and identifying the challenges that hinder the growth of channels distribution of at Rift Valley Bottlers Ltd. The study will employ a case study as the research design. The study will target a total population of 126 employees and senior managers of the company. The researcher will select a sample size of 104 respondents based on the Mugenda and Mugenda (2003) formula for sample size determination. In sampling the respondents, stratified random sampling will be used to select employees while purposive sampling techniques will be used to select managers. The study will employ questionnaires and interview schedules to collect data from the respondents. The research instruments will be validated before submission for field work. Their reliability will be determined through test – retest technique. Data collected will be analysed using qualitative and quantitative methodologies. Qualitative data from interviews will be analysed using content analysis while quantitative data from questionnaires will be analysed using descriptive and inferential statistics. Statistical Package for the Social Sciences (SPSS) software will be used code, enter and analyse data. Descriptive statistics to be used include frequency distribution tables and percentages while inferential statistics to be used will be multiple regression analysis whereby the study will determine among the four variables, which factor influences growth of channel of distribution. It is hoped that the findings of the study will contribute to knowledge through which constraints to growth of channel of distribution can be overcome to ensure attainment of competitive advantage.

TABLE OF CONTENTS

DECLARATION ii

ABSTRACT ii

iii

TABLE OF CONTENTS iv

LIST OF TABLES v

LIST OF FIGURES vi

CHAPTER ONE 1

1.0 Introduction 1

1.1 Background to the Problem 1

1.2 Problem Statement 5

1.3 Research Questions 6

1.4 Significance of the Study 7

1.5 Scope and Delimitation of the Study 7

1.6 Theoretical Framework 8

1.7 Conceptual Framework 9

CHAPTER THREE 12

3.0 RESEARCH DESIGN AND METHODOLOGY 12

3.1 Research Design 12

3.2 Target Population 13

3.3 Description of the Sample and Sampling Procedures 13

3.4 Description of Research Instruments 15

3.5 Description of the Data Collection Procedures 17

3.6 Description of Data Analysis Procedures 18

REFERENCES 20

APPENDICES 23

APPENDIX 1 TIME WORK PLAN 23

APPENDIX II BUDGET PLAN 24

LIST OF TABLES

DECLARATION ii

ABSTRACT ii

iii

TABLE OF CONTENTS iv

LIST OF TABLES v

LIST OF FIGURES vi

CHAPTER ONE 1

1.0 Introduction 1

1.1 Background to the Problem 1

1.2 Problem Statement 5

1.3 Research Questions 6

1.4 Significance of the Study 7

1.5 Scope and Delimitation of the Study 7

1.6 Theoretical Framework 8

1.7 Conceptual Framework 9

CHAPTER THREE 12

3.0 RESEARCH DESIGN AND METHODOLOGY 12

3.1 Research Design 12

3.2 Target Population 13

Table 3.1 Target Population 13

3.3 Description of the Sample and Sampling Procedures 13

Table 3.2 Sample Size 14

3.4 Description of Research Instruments 15

3.5 Description of the Data Collection Procedures 17

3.6 Description of Data Analysis Procedures 18

REFERENCES 20

APPENDICES 23

APPENDIX 1 TIME WORK PLAN 23

APPENDIX II BUDGET PLAN 24

LIST OF FIGURES

DECLARATION ii

ABSTRACT ii

iii

TABLE OF CONTENTS iv

LIST OF TABLES v

LIST OF FIGURES vi

CHAPTER ONE 1

1.0 Introduction 1

1.1 Background to the Problem 1

1.2 Problem Statement 5

1.3 Research Questions 6

1.4 Significance of the Study 7

1.5 Scope and Delimitation of the Study 7

1.6 Theoretical Framework 8

1.7 Conceptual Framework 9

Figure 1.1 Factors limiting the growth of channel distribution as a strategy for competitive advantage 10

CHAPTER THREE 12

3.0 RESEARCH DESIGN AND METHODOLOGY 12

3.1 Research Design 12

3.2 Target Population 13

Table 3.1 Target Population 13

3.3 Description of the Sample and Sampling Procedures 13

Table 3.2 Sample Size 14

3.4 Description of Research Instruments 15

3.5 Description of the Data Collection Procedures 17

3.6 Description of Data Analysis Procedures 18

REFERENCES 20

APPENDICES 23

APPENDIX 1 TIME WORK PLAN 23

APPENDIX II BUDGET PLAN 24

CHAPTER ONE

1.0 Introduction

1.1 Background to the Problem

Several companies are unsatisfied with the distribution of their products and services across the world (Awino, 2002). Among the marketing 4 Ps: (product; place/distribution channels; price; and promotions/communications) marketing channels or distribution channels are still an important source of competitive advantage, since in the other Ps, for instance products, the rate of technology transfer between companies all over the world and global competition make new products and attributes available for competitors to imitate (Awino and Gituro, 2010). With respect to prices, companies can operate in several parts of the world, creating competitive offers. In communications, the massive exposure of consumers to advertisements builds a barrier to improve product differentiation . Distribution builds stable competitive advantages, since marketing channels have a long-run character and to build them it is necessary to have a consistent structure; and due also to the fact that they are focused on people and relationships (Stern et al., 1996; Rosenbloom, 1999; Berman, 1996; Neves, 2000).

Distribution channels are mentioned in system discussion of marketing channels by Stern and EI-Ansary (1992) at first. Philip (1997) considers that a distribution channel is the process that goods and service are moved from the maker to the consumer; the entities that gain the ownership of goods and the services just help to transfer the ownership. Moreover, Coyle et al., (2003) contend that distribution is the physical trail and legal title that products and services take between production and consumption (Coyle et al., 2003). Kotzab (2005) also defined distribution as the total sum of all activities and related organizations, which are necessary to assure a successful connection between production and consumption.

In today’s challenging competition in consumer goods marketing, the manufacturers strive for their products to reach final customers before they turn their heads to those of their rivals ones. This challenge is influenced by globalization, deregulation, new business comers and convergence of the industries. The need for competitive advantage in the beverage industries has spruced up in the recent years. Awino and Gituro (2010) argued that in Kenya today, large companies are mainly focusing on becoming efficient and flexible in their manufacturing methods in order to handle uncertainty in the business environment. They argue that to do this, they need different strategies to manage the flow of goods from the point of production to the consumer. However, most firms have not been able to formulate the right strategies required to achieve this objective in Supply Chain Management (SCM) because of limiting factors affecting the growth of their distribution channels.

Mathu (2010), writing on the challenges facing supply chain in coal industries in South Africa, opined that it is not uncommon for supply chains to experience bottlenecks, which are also referred to as constraints. The sources and causes of these bottlenecks vary according to industry and from time to time. Stroebel (2004) showed that numerous constraints affect the efficient marketing of products in most companies in South Africa, which had poor marketing infrastructure, lack of marketing size, high transaction costs and low purchasing power of buyers. Individually they lacked sufficient volumes of uniform products to attract buyers to their organisations (Jooste, 2001). Technical changes in marketing affect marketing and can be viewed as those transformations that allow goods to be available on the market at lower costs and in a more diversified set of markets (Carre and Drought, 2002). In most cases, retailers tend to be without access to technology and such a situation disadvantages them (Dorward, Poole, Morrison, Kydd and Urey, 2003). While physical infrastructure such as communication links, electricity, storage facilities, transportation facilities and roads are critical for success in marketing (Kenya Association of Manufacturers, 2004). Good roads, transportation and communication links are prerequisites to market access, especially to those potential market participants who reside in rural areas due to longer distances between them and their markets (Machethe, 2004).

Claro (2004) analysed the effect of cooperation on supplier – buyer relationships and concluded that information was the main asset that was generated by the organizational structure that benefited the organizational relationship. According to Markelova and Meizen-Dick (2009), both the characteristics of the market or products group, and the institutional arrangements are important factors for cooperation emergence. However Olson (2001) indicated that in most cases collective benefits are insufficient to motivate individual contributions. To address these challenges, Markelova and Meizen-Dick (2009) suggested the setting of rules that guide individual behaviour and as such, reduce governance and coordination costs.

The Coca-Cola Company’s major strength, aside from its product features and benefits, is the large-scale operation it possess that is widely distributed across 200 countries worldwide. Because Coca-Cola aims to be number one when it comes to product choice around the world, the company is very keen in developing its system of distribution to keep satisfying customers. Coca Cola’s distribution channels include vending machines, retail outlets, fountain retailers and wholesalers, and other distribution channels that supply home and immediate consumptions. In fact, 32% of the US gallon sales in 2003 are accounted to fountain retailers such as restaurants and to approximately 640 fountain wholesalers (Coke, 2008).

To be able to efficiently distribute their products, Coca Cola employs a strategy pretty much like franchisors do but with a slight variation. Coca-Cola obligates its bottlers to sign a separate contract, the "Bottler’s Agreement", that subjects the bottlers to specific terms and conditions which include the allowance to purchase entire requirements of the designated concentrates and syrups from the Coca-Cola Company and its authorized suppliers. This eases the distribution procedure of Coca Cola by providing the bottlers the ability to manufacture Coca products Cola (of course meeting the standards of the company) on their own by allowing faster production and distribution to the local sites all around the 200 countries. Simply put, anyone can avail of Coca Cola products on their local at whim because the production and distribution processes are decentralized as opposed to a centralized process where the main plant distributes every Coca Cola products all around the globe (The Coca Cola, 2008).

This study focuses on the soft drinks distribution industry, more specifically the Rift Valley Bottlers Ltd., Eldoret. It will analyze the frail factors of distribution channels under the framework of strategic management of distribution channels and the conflict of these chains if not managed strategically, brings forward strategy solutions to govern the distribution channel, in order to attain lower transaction cost, raise the customers’ satisfaction and increase the whole benefits of the distribution channels to the organization.

1.2 Problem Statement

Strategies are formed and implemented by organisations to achieve competitive advantage. As part of the 4Ps of marketing, channels of distribution(place) strategy is core in ensuring that the organisation’s products reach the intended market at a faster and more efficient way. A limiting factor is the link that must be taken into consideration before a strategic option is considered so as to achieve competitive advantage. In Kenya, there has been intense competition among beverage companies: PepsiCo, East Africa Breweries, Kuguru Foods and Kitale Bottling Plant over their market share for the past five years (Kibowen, 2012). This has put more pressure on Rift Valley Bottlers (A subsidiary of Coke) to initiate strategies through which they will continue holding their market share. However, looking at the chain of distribution, growth has not been observed and this is reflected where the number of distributors, wholesalers and retailers remain stable while others have closed up. What is not clear whether there are limiting factors influencing the growth of and investment in channel distribution network by Rift Valley Bottlers Ltd.

Looking at the theory of constraints, constraints along the supply chain can have the effect of increasing inventory and associated costs, slowing down the flow of goods to the consumer and reducing quality (Finch, 2008). A system constraint acts like the weakest link in a chain. The failure of these distributors will make the organizational product lose utility. Efforts to improve such a link will increase the strength of the chain. Once it is strengthened to the point that it is no longer be the weakest link and further improvement to it will do no good. In that case, a new weakest link needs to be identified (Finch, 2008). It is against this background that the researcher seeks to investigate factors limiting the growth of channels of distribution as a strategy for competitive advantage by Rift Valley Bottlers Ltd., Eldoret

1.3 Research Questions

The study is guided by the following research questions:

What is the effect of physical infrastructure on the growth of channels of distribution as a strategy for competitive advantage by Rift Valley Bottlers Ltd., Eldoret?

What is the effect of communication on the growth of channel distribution as a strategy for competitive advantage by Rift Valley Bottlers Ltd?

What is the effect of capital and other costs on the growth of channel of distribution as a strategy for competitive advantage by Rift Valley Bottlers Ltd?

What is the effect of stakeholders’ skills and experience on the growth of channel of distribution as a strategy for competitive advantage by Rift Valley Bottlers Ltd?

What are the challenges faced by Rift Valley Bottlers Ltd in managing its distribution channels strategies for achievement of competitive advantage?

1.4 Significance of the Study

The findings of this study will help Rift Valley Bottlers Ltd in understanding constraints limiting the growth of its channels of distribution for achievement of competitive advantage by offering suggestions on how they can be addressed. This will ensure that the company has a smooth flow of products from the factory to the final consumer . This will ensure that the constraint(s) are recognised by all those affected by them. It is also expected that the findings of the study will be of great benefit to other members of the l distribution chain: wholesalers, stockists, distributors and retailers, as their issues on capital, communication and knowledge, among others, will be enhanced by the recommendations of to be made.

Finally, the findings of this study will be used by other upcoming scholars and researchers who may be interested in carrying out further research on channels of distribution. This is because the study will provide adequate literature related to this field.

1.5 Scope and Delimitation of the Study

The study seeks to investigate factors limiting the growth of channels of distribution as a strategy for competitive advantage at Rift Valley Bottlers Company in Eldoret. The study will seek to identify whether infrastructure resources, communication, capital costs, skills,and knowledge, among other factors do limit the growth of channels of distribution for organisations’ products.

The study focuses on the beaverages industry . This may limit the generalization of the findings to this industry to the exclusion of other industries.. To enhance generalization of the findings, the study will ensure that it gets in- depth data so as to present the current phenomena under study.

1.6 Theoretical Framework

The study will be guided by the theory of constraints (TOC) developed by Goldratt in 1990 that provides the philosophy for constraints management (Goldratt 2001-2009). The TOC is based on the recognition that nearly all products and services are created through a series of linked processes (Bozarth and Handfield 2006). The Theory of Constraints (TOC) is a body of knowledge that deals with anything that limits an organisation’s ability to achieve its goals. Constraints can be physical or nonphysical. Physical constraints include processes, personnel, availability of raw materials or supplies. Non-physical constraints include procedures, communication, morale, training and others (Heizer and Render 2008).

Bozarth and Handfield (2006) liken the movement of goods through a process chain to the flow of liquid through a pipeline. If one has a pipeline with varying diameters at various sections (that is some wider and others narrower), then each section has a certain capacity analogous to the pipe diameter at that section. In this situation, the flow constraint is experienced at the narrowest section of the pipeline. According to the Goldratt Institute (2001-2009), the core constraint from virtually every organisation emanates from the fact that organisations are structured, measured and managed in parts rather than as a whole. This results in lower-than-expected overall performance output, difficulties securing or maintaining a strategic advantage in the market place, financial hardships, failure to meet customer expectations and chronic conflicts between people representing different parts of the organisation. Hence, the constraint(s) constantly shift from one place to another. Therefore the study seeks to identify constraints that limit the growth of channel distribution at Rift Valley Bottlers company in Eldoret by identify the constraints (limit factors) and ensure that the results of the study will provide solutions for industries to improve competitive advantage.

1.7 Conceptual Framework

The conceptual model for the study is adopted from theory of constraints by looking at how the various constraints in channel distribution influence competitive advantage of Rift Valley Bottlers.

Figure 1.1 Factors limiting the growth of channel distribution as a strategy for competitive advantage

Physical infrastructure

Communication

Capital and other costs

Skills and experience

Competitive advantage

Profitability

Market share

Loyalty

Business growth

Factors limiting the growth of channels of distribution

Independent variables

Dependent variable

Management

Ownership

Economy

Competition

Intervening variables

Source: (Author, 2013)

The conceptual model assumes that there are various distribution models that Rift Valley Bottlers Ltd uses in ensuring that its products reach the final consumer. However, the focus of this study is to identify the limiting factors influencing the growth of channels of distribution. These limiting factors; availability of physical infrastructure, communication methods and channels used, capital based and other costs, and stakeholders skills and experience in marketing distribution could have significant effect on the growth of channel distribution which is a strategy to which an organisation can achieve its edge over the other. The four limiting factors hypothesised above could have significant effect on attainment of competitive advantage, which in this study is the dependent variable and would be explained by indicators of profitability, market share, customer loyalty and other factors of business growth. However, in the middle of the part, there exist some intervening variables that could either decide the relationship between the two variables. For example when inflation is high, costs of delivery of products to consumers increase and this affects companies’ positions in the beverage market and when inflation is low, organisations’ capabilities of ensuring products reach end consumers is projected to increase, and vice versa. Therefore, the study assumes that have a bigger role to play in achievement of competitive advantage or not within the beverage market segment.

CHAPTER THREE

3.0 RESEARCH DESIGN AND METHODOLOGY

3.1 Research Design

Research design refers to a plan of action to be carried out in connection with a proposed research work (Creswell, 2003). Cohen and Manion (2002) adds that it provides a framework only a guideline for the researcher to enable him to keep track of his actions and to know what he is moving in the right direction in order to achieve his goal. Mugenda and Mugenda (2003) assert that research design can be classified based on the purpose, method of analysis and research type. The study seeks to determine factors limiting the growth of channel of distribution as a competitive strategy by Rift Valley Bottlers Ltd in Eldoret making the study to be classified under type of research. Gillham (2000) further adds that a case study is one which investigates the above to answer specific research questions (that may be fairly loose to begin with) and which seeks a range of different kinds of evidence, evidence which is there in the case setting, and which has to be abstracted and collated to get the best possible answers to the research questions.

Based on the focus of the study, a case study research design technique will be used. According to Yin (2004), a case study is an empirical inquiry that investigates a contemporary phenomenon within its real life context, especially when the boundaries

between phenomenon and context are not clearly evident. Since Rift Valley Bottlers Ltd is a single entity, the study seeks to get in-depth information on which factors influence the growth of channels of distribution in maintaining a competitive advantage against their competitors in the beverage market segment.

3.2 Target Population

Refers to as a complete set of individuals, cases or objects with some common observable characteristics (Mugenda and Mugenda, 2003). They further indicate that target population refers to population to which the researcher wants to generalise the results of a study and they should be accessible. The case study will be conducted in Rift Valley BottlersLtd plant in Eldoret town. The target population for the study will comprise all employees and managers working in the beverage plant. According to information from the company Human Resources Manager , there are 126 employees, 2 general managers, 10 route managers, 10 distribution retail managers and 104 subordinates. Table 3.1 shows the distribution of the target population.

Table 3.1 Target Population

Category

Number

General managers

2

Route managers

10

Distribution Retail managers

10

Subordinates

104

Total

126

Source: Rift Valley Bottlers (2013)

3.3 Description of the Sample and Sampling Procedures

Mugenda and Mugenda (2003) define sample population as a representative population selected from the accessible population to act as a representative. They argue that for a researcher to select the sample size, the size should be as representative and be generalised to the whole population. Gay and Airasian (2003) asserts that for correlation research, 30 cases or more are required, for descriptive studies, ten percent of the accessible population is enough and for experimental study, at least 30 cases are required per group but suggested that a more accurate calculation of the sample size is needed to minimise sampling errors. Therefore the sample size for the study will be calculated using Mugenda and Mugenda (2003) formula for sample size determination for population less than 10,000;

Where: nf = the desired sample size (when the population is less than 10,000)

n = the desired sample size (when the population is more than 10,000)

N = the estimate of the population size.

Based on the target population, the final sample size for the study will comprise of;

Table 3.2 Sample Size

Category

Target population

Sample size

General managers

2

2

Route managers

10

10

Distribution Retail managers

10

10

Subordinates

104

82

Total

126

104

Thereafter a sample procedure will be taken through which various respondents are going to be selected. Kothari (2004) define it as a definite plan for obtaining a sample from a given population. It refers to the technique or the procedure the researcher would adopt in selecting items for the sample. The respondents will be selected using probability and non probability sampling techniques. For probability sampling techniques stratified random sampling technique will be used in categorizing employees on different stratas (departments) the come from, thereafter random sampling will be applied to select the final respondents using random numbers for each stratum). According to Oso and Onen (2005), the goal of stratified sampling is to achieve a desired representation from various sub groups in the population. The advantage of using stratified random sampling technique is that it ensures inclusion, in the sample of subgroup which otherwise would be omitted entirely by other sampling methods because of their small numbers in the population (Mugenda and Mugenda, 2003). For general, route and distribution managers, purposive sampling technique will be used since they have important information that the study wants to get from them with respect to the research questions of the study. The process involves hand picking the considering that they are informative and process required characteristics. The advantage of using purposive sampling technique is that it is applicable in case studies whereby the study want to select cases that offer in-depth information and are less extreme. Mugenda and Mugenda (2003) opine that this sampling that involves selection of cases that manifest the phenomenon of interest intensely but not extremely.

3.4 Description of Research Instruments

Research instruments refer to techniques and materials used by the study to collect information (Gillham, 2000). Questionnaires and interview schedules will be used to collect required data for this study. Both quantitative and qualitative data will be collected in this study. The quantitative data will be collected mainly through questionnaires while qualitative data will be collected using interview schedules. According to Yin (2004) in case studies, interviews are important to assist the research to get more information on a particular area of interest in the study.

The questionnaires to be used for the study will comprise of open and close ended questions. The advantage of using both structured and unstructured questionnaires is that they are easier to analyse and also they permit greater depth of response whereby respondents are given responsibility of giving their own personal response. The questionnaires will be designed according to the objectives of the study by highlighting the four limiting factors that the study wants to check on a Likert scale. Mugenda and Mugenda (2003) argue that these types of scales are used to measure perception, values and behaviour. This helps in minimising subjectivity and makes it possible to use quantitative analysis. However the introductory part of the questionnaire will comprise of demographic characteristics of the respondents. Questionnaires will be prepared for employees working at Rift Valley Bottlers Company in Eldoret who will be selected to participate in the study.

The interview schedules will be prepared for general managers, route managers and distribution retail managers at Rift Valley bottlers. The interview schedules assist in collecting secondary data (Kothari, 2004). The interview schedule will be semi structured whereby questions will be asked to managers on the factors limiting the growth of channel distribution as a strategy for competitive advantage in their organisation. The advantage of having semi interview is that it allows probing and this gives in depth information to answer the research questions and allows structured questions to be asked during interviews. The disadvantage is that it is time consuming and sometimes it may be subjective.

To ensure the reliability and validity of the questionnaires items before taking them to the field, pre – testing process will be undertaken. The questionnaires will be pre – tested two times in a different company example; Unga Limited for a period of two weeks by involving 10 respondents since the number in pretests is required not to be too large. Mugenda and Mugenda (2003) advocates that the pre test sample should be between 1% and 10% depending on the sample size. Here the subjects to be involved in pre testing the research instruments will be encouraged to make comments and suggestions concerning instructions, clarity of questions and relevance. Its purpose is to detect any problems in the instruments so that they can be remedied before the actual study is conducted (Fraenkel and Wallen, 2000). Research supervisors will be contacted upon to assess what concept the instrument is trying to measure (content validity of the research instruments). The other group of experts in research from Catholic University of Eastern Africa (Gaba Campus) will be asked to determine whether the set of items or checklist accurately represents the concept under study.

3.5 Description of the Data Collection Procedures

After ensuring that the research instruments are reliable and valid for data collection, the research instruments will be prepared for field work. At first, research permit will be sought from Catholic University of Eastern Africa (GABA) campus to facilitate granting of permission by management of Rift Valley Bottlers Ltd. Thereafter permission will be sought from the company to conduct the study in their institution by informing the purpose and objective of the study. Thereafter, the researcher will arrange for interview dates with general managers, route managers and retail managers for specific time for interview with them. The researcher will conduct interview sessions by himself. In administering questionnaires, two research assistants will be trained on the process of administering the questionnaires and ethical guidelines to be followed during the research process.

The respondents will be given the questionnaire in their places of work. Instructions on how to fill the questionnaire will also be given to them. Confidential treatment of information will be assured. Respondents’ personal information will not be required and information from the respondents will be treated with utmost confidentiality. All other ethical procedures pertaining data collection process will be strictly followed. The interview schedule will be conducted through which managers will be required to write their responses on a sheet of paper after which the researcher will thank them for their voluntary participation in the research.

3.6 Description of Data Analysis Procedures

The data collected from the field will be analyzed qualitatively and quantitatively. At first, data will be screened to identify omissions and removal of non – answered questions. For quantitative data analysis, coding and entry will be done in electronic spreadsheet with the aid of Statistical Package for Social Sciences (IBM SPSS Version 16). Data generated from SPSS will be analysed using descriptive and inferential statistics. A multiple regression analysis will be conducted to determine the influence of the four independent variables; cost, physical infrastructure, capital base and skills and experience influence channel distribution growth at Rift Valley Bottlers. The formula is presented below.

Ŷ = α + β1X1 + β2X2 + βkX3 + βkX4 + Є

Where:

Ŷ = Expected growth of channel distribution

α = Y-intercept (a constant term)

β1, β2, β3 = Slope parameters

X1 = physical infrastructure

X2 = communication channels

X3 = capital costs

X4 = skills and experience

Є = Residual (error term)

The regression will model assumes the following: the relationship between the dependent and independent variables is linear; the variance around the regression line is constant (homoscedastic); for each combination of the values of the independent variables, the values of the dependent variable are independent and normally distributed; and lastly, the Єs are independent and normally distributed with a mean of zero. All tests will be two – tailed and significant levels will be measured at 95% confidence level with significant differences will be recorded at an alpha level of 0.05 (p <0.05).

Qualitative data from interview schedules will be analysed using content analysis. Content analysis is a detailed and systematic examination of the contents of a particular body of material for the purpose of identifying patterns, themes or biases. Content analysis is performed on some forms of human communication which include transcripts of conversations, newspapers, television clips, video recordings of human interactions and bulletin board entries (Leedy and Ormrod 2010) The responses from interview will be analysed and presented in a narrative form according to themes of the study. In addition, data from SPSS output will be presented using tables, pie charts and graphs.