Factors influencing choice of a distribution channel.
Factors influencing choice of a distribution channel.(i) Nature of goods.- Certain goods need to be sold directly to the consumer e.g. perishables, bulky goods or industrial products.(ii) Nature of the market.- A wide market will require a longer channel.(iii) Nature of completion.- If competition is very stiff, producers may want to deal directly with the consumers so as to offer extra services and retain them for example, after sales services.(iv) Government policy.- The government may encourage the use of certain channels for someproducts to safeguard consumers’ interests.(v) Cost of the channel.- The least expensive distribution channel, which ensures the goods reach the consumers at the right time, should be chosen.(vi) Resources and the size of the firm.- The size of the firm determines the size of its market and therefore the type of channels to be used.- A small firm produces goods for a small market hence requires a short channel.(vii) Expensive goods.- Products of high value require fewer intermediaries.(viii) Bulkiness and heavy goods.- Bulky and heavy goods require shorter channels to reduce on the cost.