Question

Explain five factors that influence choice of distribution channel

Answer 1

1. Nature of goods –where goods are easily perishable, short channels are applied
2. Nature of market – consumers spread over a large area may need a larger channel
3. Resources and size of the firm – the size of the firm determine the size of its market hence the channel to be used
4. Role of intermediaries- Middle men perform different roles and will therefore determine the channel used.
5. Government policy- various regulations may influence selection of the channel of distribution eg the government may demand sale of goods directly to consumers
6. Competitors – a firm will select a channel that will compete favorably with the competitor
7. Marketing risks – where manufacturer wants to avoid cost of distribution, they may use middlemen.