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CHANNELS OF DISTRIBUTION






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Long-run Profit of channel

The channel decision should not be lightly treated. 'Decisions on distribution channels are not easily reversible and must be lined with for a considerable time'.

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Cost of Channel Usage of channel

As each channel will be doing some of the marketing functions, the cost of performing such marketing functions at each distribution level and the total costs of performing the entire marketing task has an influence in the choice of he channel.

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Sales Volume Potential of channel

To ensure the absorption of the desired volume of products, the channel should be capable of reaching a sufficient number of ultimate buyers. A channel's sales volume potential is to be estimated through special marketing surveys.

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Social and Ethical Considerations of channel

All new forms of retailing such as Departmental stores at the time of their birth were considered unethical by the traditional channels.

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Environmental Characteristics of channel

Environmental factors such as economic conditions and law also influence the channel selection. When economic conditions are depressed the producers prefer shorter channels to cut costs. When there is multi point tax on sales, they prefer to sell directly to retailers or consumers.

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Company Characteristics of channel

The choice Channel is also influenced by company characteristics such as its financial position, size, product mix, morale of its employees, past channel experience, executive prejudics and over all marketing policies.

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Channel Competition of channel

There are four distinct types of channel competitors viz.,

Click to read - Channel Competition of channel

Middlemen Characteristic of channel

The choice of channel should also depend upon the strengths and weaknesses of various types of middlemen performing various marketing functions.

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Customer Characteristics of channel

Customer characteristics such as their number, geographical dispersion, frequency and regularity of purchase, average quantities bought an their susceptibility to different selling methods greatly influence that channel selection.

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Supply Characteristics of channel

The characteristics of supply are also mattes of dispersion of the aggregate output institutionally and geographically. Small number of producers.

Click to read - Supply Characteristics of channel

Product Characteristics of channel

The product characteristics play an important role in influencing the channel selection. The marketing executive must study the uses of a product, its frequency of purchase, perishability, rapidity of fashion change, the service required, its value and its bulk.

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Exclusive distribution of distribution policy

This has been evolved as a further development of selective distribution. Here, the producer deliberately limits the number of intermediaries handling his product.

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Distribution Policy of channel

A company's distribution policy may be formed to achieve three degrees of market exposure viz., intensive distribution, selective distribution and exclusive distribution.

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Types of channel

The channel choice is influenced by:

Click to read - Types of channel

How to choose a Channel?

The best channel system is the one that works best in the marketing strategy selected by the company. The channel chosen should achieve ideal market exposure and should meet target customers' needs and preferences. In choosing the channels of distribution, producers always have to struggle with what is ideal and what is available.

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Franchise Selling of Selling Direct to Customers

This method is typically American in its orgin. I tis however, not a general and widely used method for distribution.

Click to read - Franchise Selling of Selling Direct to Customers

Consignment selling of Selling Direct to Customers

It is a practice of placing goods in the hands of middlemen with the tile and control remaining in the hands often seller. The distributors are, therefore, neither wholesalers nor retailers but occupy only the position of agents.

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Disadvantages to Dealers

There are some options of Disadvantages to Dealers

Click to read - Disadvantages to Dealers

Disadvantages to Manufacturers

There are some options of Disadvantages to Manufacturers

Click to read - Disadvantages to Manufacturers

Advantages to Retailers

There are several advantages to retailers

Click to read - Advantages to Retailers

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