The Impact of Distribution (Place) Strategies on the Growth of Local Sales among Tea Manufacturers in Kenya

Abstract

This study examined the impact of place (distribution) strategies on the growth of local sales among tea manufacturers in Kenya. Tea contributes 23% of the country’s foreign exchange earnings and supports livelihood of over 600,000 smallholder farmers and five million Kenyans along the value chain. According to Omari (2015), Kenya exports over 90% of the total tea production leaving less than 10% for domestic market sales which exposes tea manufacturers and small-scale farmers to worldwide price fluctuations, unlike other leading tea-producing nations. Strengthening the local market sales is important economic resilience and long-term sustainability. The study focused on three distribution (place) strategies; intensive distribution, selective distribution, and exclusive distribution. This study is anchored on the Product Life Cycle concept (PLC). The study adopted a positivist paradigm, a descriptive survey design with a quantitative approach. The target population comprised 319 tea manufacturers registered with the Tea Board of Kenya, comprising 221 tea packers and 98 tea factories. A sample size of 175 was obtained using the Krejcie and Morgan (1970) table. This study used proportional stratified random sampling to ensure equal presentation from the sub-populations. Self-administered questionnaires were used to collect primary data. Data analysis was conducted using SPSS. To analyse impact of distribution (place) strategies on growth of local sales among tea manufacturers in Kenya simple linear regression was used and multiple linear used to test combined effect of intensive strategy, selective strategy and exclusive strategy. The study’s outcome indicated that distribution (place) strategies have a significant influence on growth of local sales among tea manufacturers in Kenya (β = 0.913, t = 7.687, p < 0.05). The findings indicated place (distribution) strategies collectively explained 45.1% of the variance in the growth of local tea sales. The omnibus F-test confirmed that the set of predictors significantly improves prediction beyond the intercept alone (F (3, 114) = 31.262, p < 0.001), indicating distribution (place) is an important determinant of local sales. The study concludes that widespread adoption of distribution strategies, particularly the use of intensive and selective approaches, highlights a strategic inclination toward maximizing market reach while maintaining operational control.