Explain the factors determining a choice of channels of distribution.
Explain the factors determining a choice of channels of distribution.
Factors affecting the choice of channels of distribution are :
(i) Nature of the product: While industrial goods are usually technical, made to order and expensive products purchased by few buyers, they require shorter channels, whereas, consumer goods which are standardised, non-expensive, less bulky and frequently demanded, require longer and indirect distribution channels.
(ii) Perishability: Perishable and dairy products also use direct channels, while durable products require longer channels to reach widespread markets.
(iii) The unit value of the product: At the same time, goods whose unit value is low, prefer longer channels, whereas, high-value products are directly distributed.
(iv) Product complexity: Similarly, complex products requiring technical details prefer direct channels, while non-complex products usually prefer longer channels.
Factors affecting the choice of channels of distribution are :
(i) Nature of the product: While industrial goods are usually technical, made to order and expensive products purchased by few buyers, they require shorter channels, whereas, consumer goods which are standardised, non-expensive, less bulky and frequently demanded, require longer and indirect distribution channels.
(ii) Perishability: Perishable and dairy products also use direct channels, while durable products require longer channels to reach widespread markets.
(iii) The unit value of the product: At the same time, goods whose unit value is low, prefer longer channels, whereas, high-value products are directly distributed.
(iv) Product complexity: Similarly, complex products requiring technical details prefer direct channels, while non-complex products usually prefer longer channels.
