Question

What are the factors affecting a channel of distribution?

Answer 1

The factors affecting a channel of distribution are as follows:

1. Product Characteristics: Seasonal products are distributed through fewer layers of middlemen. Nonstandardized products that are made according to customer specifications may be delivered directly.
2.  Market Characteristics: The size of the market for the goods is a major factor while selecting the route for the distribution of products.
3. Number of Consumers: Large purchases made by few consumers require centralized distribution.
4. Middlemen factor: Middlemen who are experienced and have produced more sales are wanted by all producers. A long channel naturally increases the cost and price of the product.
5. The capacity of the Manufacturer: A financially strong producer may select a high technology-oriented channel which will reduce cost in the long run.
6. Cost and Time Involved in the Channel of Distribution: The channel cost should go along with the quality of service provided by middlemen.
7. Services Required along with the Product: Machinery or equipment which need to be installed and demonstrated should be sold with the shorter channel.
8. Life Cycle of the Product: An established product can select an ordinary channel. But a new product entering into the market should be carefully promoted by experienced middlemen.