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Question
How is the channel of distribution influenced by the type of buyer?
Solution
Buyers can be of two types: General Buyers and Industrial Buyers.
If more buyers of the particular product belong to general category then there will be more middlemen. The reason is that the product has to reach the ultimate customer who can be anywhere in the country and to reach them, numerous middlemen are required.
In case of industrial buyers there will be fewer middlemen. The reason is the industry is the ultimate consumer and to reach them there is no need to have many intermediaries in between.
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RELATED QUESTIONS
Which is the shortest channel of distribution?
Arpit, an entrepreneur, was short of capital. He was worried about the fact as to how he will reach out to his customers. He met his friend who is at present working in a start-up firm. He explained to Arpit a way to reach customers without any middlemen which will help him overcome the shortage of cash. So, Arpit decided to keep his channel of distribution simple as advised by his friend.
- Identify the channel of distribution adopted by Arpit.
- Explain the channel of distribution mentioned above.
- Give any two of advantages of this type of channel.
