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 KCSE business studies paper 2 revision questions and answers set 3

Discuss five factors that may influence the choice of distribution channel.

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Answer Text:
-Nature of market:If market is widely spread, one can choose a long channel and if is concentrated in one area a short channel
-Nature of the product:e.g if the product is perishable, direct channel would be opted
-Resources and size of business:a business with large market or without resources would use long channel and a firm with resources can sell directly
- The intermediaries:A firm with the need of storage, breaking bulk would opt for long channel as opposed to the one without need for
such services provided by intermediaries
-A firm with reputation may sell through a longer channel whereas that without reputation would need to distribute through the short channel