An investigation into the impact of distribution channel length on prices charged to final consumers for beverages: case of Mazoe Orange Crush

Abstract

The purpose of the study was to investigate the impact of distribution channel length on prices charged to final consumers for beverages using the case study of Mazoe Orange Crush of Schweppes Zimbabwe Limited and to recommend remedies to the management for the current prices and sales trends. The data of the study was gathered from Schweppes Limited as well as from the retail outlets the study was undertaken to find out the available channels of distribution for Mazoe Orange Crush as well as evaluating the most effective channel of distribution. It was also in this study that the assessment of the price variability for the longer and shorter channels of distribution was made for Mazoe Orange Crush. The t-statistical test was used to test the null hypothesis that there is no difference between prices charged to final consumers for long and short channel of distribution for Mazoe Orange Cush. Thirty retail outlets were selected randomly and observations and secondary data from Schweppes were used to assess the prices charged to final consumers. The research found that the existing distribution channels at Schweppes Limited have an impact on the final prices and company sales volumes for Mazoe Orange Crush. However it was concluded that price variability depends on the type of channel used and the longer the channel of distribution the higher the price charged to final consumers. It was also concluded that the use shorter channels of distribution results in the achievement of company goals and satisfaction of customers since the shorter channels were discovered to be most effective channels of distribution. Therefore it was recommended that management should on the use of the shorter channel which enables the organization reach consumers with reasonable prices whilst achieving company sales goals.