Question

Which of the following are the factors determining choice of channels of distribution?

Options

• Product Type

• Characteristics of the Company

• Competitive Factors

• All of the above

Answer 1

All of the above

Explanation - 

The following factors influence channel selection.

1. Product Type: The distribution channel used is determined by the type of product produced. It is critical to determine whether the product is perishable or non-perishable, whether it is industrial or consumer, whether the unit value is high or low, and the degree of product complexity. If a product is perishable, for example, short channels should be used rather than long ones.
2. Company Variables: A company's financial strength and the degree of control it seeks to exert over intermediaries are the two most critical characteristics that influence channel selection. Shorter channels demand more finances and provide more control over the channel's subscribers than lengthier channels (intermediaries). Shorter distribution channels are preferred by companies who are financially strong or want more control over the channel of distribution.
3. Competitive Factors: The level of competition and the distribution channels chosen by other rivals have an impact on the distribution channel chosen. A corporation might follow in the footsteps of its competitors or choose an alternative channel, depending on its policies. If a company's competitors choose to sell through a retail store, it may follow suit or choose another channel, such as direct selling.