What are the six influencing factors in the choice of channel?
Cost
The costs arising from a) capital or investment of developing the channel and b) the continuing cost of maintaining it. The marketing cost is the cost of sales revenue less the production cost.
Capital Requirement
Maximum investment usually required when a firm establishes its own distribution channel, and less investment the more it hands over the work to middlemen
Control
More control if the firm has its own distribution channel, less if it hands activities out to middlemen.
Coverage
Market coverage in order to → gain the optimum volume of sales obtainable in each market, to secure a reasonable market share and to attain satisfactory market penetration.
Character
The chosen distribution system must fit the character of the company and the markets in which it is doing business. These relate to bulk of the product, complexity of sale, sales service required and value of the product. Also, patterns change.
Continuity
Most middlemen have little loyalty to their vendors, handling brands in good times when the line is making money but quickly reject them when they don't. Thus, channels of distribution often pose longevity problems.
Learn More :
International Distribution and Retailing
- What are the factors influencing marketing via the internet?
- What is the key variable that affects the marketer's choice of distribution channels?
- How is distribution-channel structure affected by increasing emphasis on the government as a customer and by the existence of state trading agencies?
- In what circumstances are trading companies likely to be used?
- In what circumstances is the use of an EMC logical?
- How and why are distribution channels affected when the stage of development of an economy improves?
- How does physical distribution relate to channel policy and how do they affect one another?
- Why is the EMC sometimes called an independent export department?
- In what ways and to what extent do the functions of domestic middlemen differ from those of their foreign competitors?
- How does the globalisation of markets, especially in the EU, affect retail distribution?
- What are the distinguishing features of the European distribution system?