Page 769 - MARSIUM'21 COMP OF PAPER

748 Rahimah & Dr.Norzafir(2021)

1.1 BACKGROUND OF STUDY

According to the title, this study is about the effectiveness and barriers of multichannel distribution in Syarikat Helang Gagah
Sdn. bhd. Syarikat Helang Gagah Sdn. Bhd. Is a company located in Sungai Petani. This company has been operating for 4 years
starting 2018. The company was established in Melaka. Melaka is the HQ of Lesong sdn bhd. At the Sg. Petani, they have 3 operator
employees and 5 suppliers. The main effort of this company is to be a producer of cooking oil and has several Lesong Mart branches
operated by HQ from Melaka. In Sungai Petani they focus on the production and sale of bottled cooking oil. There are three types
of bottle sizes produced including 1Litre, 2litre and 5litre. Most of their customers are local retail business owners only.

The company uses several distribution methods including through distributors, retailers, and then customers. The company
only focuses on existing distribution channels, and this means the distribution of goods depends on the distributor. Because these
companies only rely on distributors to market their products, they have received complaints from several retailers about product
delivery problems. This is because distributors do not give commitment in carrying out their duties as distributors. This can affect
the business performance of this company.

Therefore, multi-channel can help this company to facilitate customers to continue to place orders to the factory without having
to use distributors or agents. To study the effectiveness of multi-channel in this company, an interview will be made to the retailers.
The purpose of this study is also to examine the barriers faced by these companies to improve distribution channels to various
distribution channels. The company has problems in terms of lack of employees in the required expertise and they also do not have
space to store finished goods. This is because the company will process the goods according to the order from the distributor.

1.2 PROBLEM STATEMENT

The use of various types of distribution channels among B2B and B2C is a strong element in businesses. Multi -channel distribution
is becoming more common in marketing, and the internal organizational dynamics that come with it are strategic in nature (Michael
J. Valos, 2008). In previous studies, individual customers have swiftly embraced the habit of making purchases across a variety of
channels, with 65–70% of them being multi-channel buyers (Business Horizons, 2007). Multi-channel distribution is important
because it can contribute an increasing of revenue and it also can help to increase level of awareness toward this brand. This study
was conducted to determine the suitable Marketing Channel and the challenges of using Multichannel Distribution. Syarikat Helang
Gagah is a producer of Minyak Cap Lesong , they carry out buying and selling activities only through agents or distributors. All
sales proceeds depend on orders made through wholesalers and only accept orders in bulk. However, this way of distribution alone
is not enough to make this brand better known to the public. This has resulted in limited distribution and revenue may not have a
positive impact on revenue.

1.3 RESEARCH OBJECTIVES

This study listed two main objectives:

i. To determine the most effective Marketing Channel Strategy for Minyak Cap Lesong
ii. To examine the challenges of using Multichannel Distribution to market Minyak Cap Lesong.

1.4 RESEARCH QUESTIONS
This study listed two main research questions:

i. What is the suitable Marketing Channel for Minyak Cap Lesong product distribution?
ii. What is the challenges to use multichannel distribution for Minyak Cap Lesong ?

1.5 RESEARCH SIGNIFICANCE

The channel of distribution greatly influences the pattern of the product market. Multichannel distribution can provide pleasure to
retailers or users to know and get our products. Multichannel distribution can also have a positive impact on consumer feedback.
If the distribution method provided achieves customer satisfaction it can affect consumer loyalty. So, a manufacturing company
needs to plan and make a choice of distribution channel that suits the needs of consumers. However, to make a good choice there
are also challenges that need to be faced by the company. This study is about to explore the effectiveness and the challenges of
Multichannel in Helang Gagah Sdn. Bhd. The findings in this study are also important to help Helang Gagah Sdn. Bhd. handle
consumer complaints.

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