What factors should be considered when choosing a channel of distribution?

Explain factors to consider when choosing a channel of distribution.

(i) Level of competition: Where the competition is stiff, a short channel is preferable, and vice and versa.

(ii) Availability of intermediaries: Where agents/ intermediaries are not available, then the producer will use a short channel.

(iii) Size of the firm/ available resources.

(iv) Where a firm may be/ have its own resources for example, vehicles to take products to the consumers will use a short channel and vice versa.

(v) The nature/ type of goods: where goods are perishable, a shot/ direct channel is preferred.

(vi) Size of the market/ geographical spread of consumers; where the market is large/ spread intermediaries will be required/ long channel would be chosen, and vice versa.

(vii) Cost of distribution: producer would choose an affordable/ cheaper channel.

(viii) Government policy: producers would choose a channel that is line/ comply with the government policy.

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maurice.mutuku answered the question on July 26, 2017 at 09:47

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