A manufacturer of industrial goods may use any one of the following channels of distribution of his product.
Factors considered in selecting channels all products whether consumer goods or industrial goods or services require a channel of distribution. The market has to decide the most suitable channel. The selected channel must be efficient and effective. While selecting the channel or outlet of distribution, the marketer has to consider a number of factors.
The channel of distribution can be selected only after considering the features of the product. If a commodity is perishable or fragile, the producer prefers direct marketing or employees "few middleman". For perishable goods. It requires speed movement. This needs shorter channel. For durable and standardized goods, longer and rivers diversified channel maybe necessary.
This selection of channels depends on the requirements of the market. For consumer market, retailer is essential. In industrial market, we can eliminate retailer. If the market size is large, it to request many channels. In a small market, direct selling is better.
The buying habit of consumers, their number, location, frequency of purchase, quantity bought etc. Inference, the selection of the channel.
While selecting the channel, the company's financial strength, reputation etc. must be considered.
The middle man who want to offer good facilities of storage must be considered. The channel which generates maximum sales must be selected.
Cost is another factor which influences the channel selection. The cost of each channel maybe estimated on the basis of unit sale.
Competition also influences the decision on channel selection.
When the economy is depressed, manufactures made of in for shorter channels in order to cut cost. Under inflationary conditions, direct selling is better. If a multipoint system of sales tax is in Operation, direct selling is preferable.
Channel conflict is a clash of goals and methods among the members, of a distribution channel. If your sissy duration went to channel members relationship are not harmonious. Thus, channel conflict rubbers to a situation when channel members are opposed to each other because of disagreements about the common purpose or goals or ways of attaining them.
In a conversation and market system, the channel members have no affiliation with one another. All the members operate independently. Companies all over the world produce millions of rupees worth of goods for consumers. Does goods race to the end consumer through the variety of distribution system. Communist can develop their own distribution channels or delegate the function to different channel members, to draw channel integration. No channel member has complete or substantial control over other members. To fulfill the potential of effective distribution, it too becomes necessary to consolidate channels.
In addition to the conflict between members at different levels in the channel, the channel members may also compete with each other.
Marketing channel is made up of a chain of people. This chain constitutes manufacturer distributor, dealer, retailer and the consumer. Today, it has become an absolute necessity to add value to a channel. One of the many ways that we can add value to a channel is by building value networks of marketing channels.
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