INTRODUCTION:

CHANNEL, LENGTH OF CHANNEL. FACTORS DETERMINING THE LENGTH OF CHANNEL. FACTORS INFLUENCING DISTRIBUTION DECISIONS.

CHANNEL
The path through which goods and services travel from the vendor to the consumer or payments for those products travel from the consumer to the vendor. LENGTH OF CHANNEL Number of individual entities comprising the channel of distribution between the producer and the consumer.

FACTORS DETERMINING THE LENGTH OF CHANNEL

Four factors determining the length of channel. They are: Size of the market Order lot size Service Requirements Product Variety

FACTORS DETERMINING THE LENGTH OF CHANNEL

Size of the market- The larger the market size, larger channel needed. Smaller the market size, smaller should be the market length. Order lot size- Avg. Order lot size is small or bulk order- longer channel.

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Service Requirements- If market requires high level of service, shorter channel is required

Product Variety- Firm should ensure availability of its product in all outlets selling complimentary/substitute products if customers look for assortment of products.

FACTORS INFLUENCING DISTRIBUTION DECISIONS 7 factors that influencing distribution decisions: Market Characteristics Customer Characteristics Company Characteristics Product Characteristics Channel Characteristics Intensity of Competition Environmental Factors

FACTORS INFLUENCING DISTRIBUTION DECISIONS

Market Characteristics- High level of service requirements Customer Characteristics- Attitude towards waiting time, expectations etc. Company Characteristics- Companys long term objectives, financial, resources, manufacturing capacity, marketing mix etc..

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Product Characteristics- Nature & Product value. Channel Characteristics- Storage, contract, credit, promotion etc... Intensity of competition- Intensive Distribution Strategy(IDS). Environmental factors- political, technological, industrial etc....