How and why are distribution channels affected when the stage of development of an economy improves?
As an economy advances, the distribution system begins to take the form of distribution in the U.S. The apparent reason for this change in structure is due to the decentralization of the total marketing function. As an economy becomes more sophisticated it places increasingly complicated and sophisticated demands upon the marketing function.
This results in modification of the existing system to be able to meet the increased demand placed upon it by the emerging economy. Consumer segments become much larger and diversified and each in turn places new demands on the distribution system which causes modification in order to administer to the requirements of that segment.