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DISTRIBUTION

CHANNEL
STRUCTURE: AN
OVERVIEW OF
DETERMINANTS

Introduction
Distribution

problem has an enormous


importance in the marketing literature
and managerial contexts today.
Stern and Reve (1980) said, channel
theory is divided into two orientations: an
economic approach and other behavioral.
First

one analyzes the efficiency of the


channel
The second one is sociological oriented

Introduction

(contd.)

Structure

of channels requires a
set of strategic decisions
The appropriate intermediary
Distribution intensity
Type

of intermediary
The coverage of the market
The kind of distribution (direct or
indirect)

The channel design issue


Channel

is not easy selected.


Constraints The

availability of good middlemen.


Traditional channel patterns.
Product characteristics.
Company finances.
Competitive strategies.
Customer dispersion question.

The channel design issue


(Contd.)
Choice

of a channel - considerable
freedom of action in matters of
marketing policy.
Channel choice is a cost & financial
decision, and has control aspects of
channels and their adaptability.
Current channels literature cant
explain channel structure came to be
and how it will change over time.

The Question is
Firms are able to choose or only adapt in
a given channel structure? What factors
beneath it?

Factors Determining Distribution


Structure
The channel varies from direct to
indirect based in the following
factors:
Size of the firm.
Size of average order.
Technical-purchase complexity.
Stage in the product life cycle.
Degree of standardization.
Purchase frequency.

Different distribution intensity in


the same category of products
Quality.
Focus

for a brand.
coordination efforts.
Inverse relationship.
Support programs.

Influencing factors of a
channel structure.
Consumer.
Market.
Marketing
The
The
The
The
The

mix.
life cycle of a product.
number of products produced.
pricing factor.
promotion strategy.
mass media.

Factors Determining
Distribution Structure
Buying

Behavior
Types of Goods
Product Characteristics

Factors Determining Industrial


Distribution
Geographic

concentration
Intensity of competition
Frequency of purchase
Availability
Product Differentiation

The framework analysis


Consumer

Habits
Product Characteristics
Market Factors
Company Factors

Conclusion
Distribution Intensity has received little attention by
marketing researchers lately. After a literature review
we built a framework with several items to be
tested by empirical studies.
Further research must be set to accomplish more
understanding about channel design. We also know
what factors determine a given channel structure.