factors affecting channel choice

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Factors Affecting Channel Choice :

1 Factors Affecting Channel Choice BY: MANOJ MISHRA M.B.A. 2nd SEMESTER


2 CHANNEL- A CONCEPT A Marketing channel is a set of organizations involved in the process of making product or services available for use or consumption.


3 FACTORS-: Market Factors Product Factors Competitive Factors Environmental Factors

Market factors:

Market factors Consumers Intermediaries Competitors 4


Consumers The number of consumers, their geographic location and purchase pattern considerable affect the choice of a channel 5


Intermediaries The relative strengths and weaknesses of intermediaries and the differences in the types of functions performed and facilities and privileges desired by them often determine the choice of channel. 6


Competitors The distribution channel used by competitors also influence the channel choice because it may be the customary channel used by all those operating in the field. 7

Product Factors:

Product Factors Industrial / Consumer product Perishable Nature Seasonality Technicality 8

Industrial / Consumer Product:

Industrial / Consumer Product When the product being manufactured and sold is industrial in nature, direct channel is useful because of the relatively small number of customers need for personalized attention, customer training requirements and after sale servicing. 9

Perishable Nature:

Perishable Nature When products are perishable nature, like milk, dairy products bread and meat, etc., it is useful to opt for direct channel 10


Seasonality when product sale is subject to seasonal variations like woolen textile in India. In such cases intermediaries are seldom prepared undertake the function of inventory carrying and as consequence manufacturer build up indirect distribution channels. 11


Technicality When a product is very technical and complex like computers business machines etc. the direct channel is relatively more useful. 12

Company Factors:

Company Factors Financial Strength Past Channel Experience Reputation 13

Financial Strength:

Financial Strength A financially strong company is better placed to select and design its distribution channel . 14

Past Channel Experience :

Past Channel Experience In case of an old and established company its past experience of working with certain kind of intermediaries also affect the channel choice. 15

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Environmental Factors:

Environmental Factors Economic Legal 17

Competitive Factors-: :

18 Competitive Factors-: Channels which are less expensive are generally preferred. Consumer convenience is also a factor to consider for selection. Alternative distribution channel may be used as a means of attaining competitive advantage Competition controls channel of Distribution.

Middleman Factors-: :

19 Middleman Factors-: Availability of Middleman Attitude of Middleman Services Provide by Middleman Sale potential of Middleman

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