(a) State any five channels of distribution for consumer goods. (b) Explain five factors to...
(a) State any five channels of distribution for consumer goods.
(b) Explain five factors to be considered before choosing a particular channel.
Explanation
(a) Five channels of distribution for consumer goods are:
(i) Manufacturer --->agent---> wholesaler---->Retailer--> Consumer.
(ii) Manufacturer ---> Wholesaler ---> Retailer ---> Consumer.
(iii) Manufacturer ---> Retailer ---> Consumer
(iv) Manufacturer ---> Consumer.
(v) Manufacturer ---> Agent ---> Consumer.
(b) Factors to be considered in choosing a channel of distribution are:
(i). Nature of the product: The more expensive the product, the shorter the channel. Also the more technical and complex the product is , the shorter the channel.
(ii) Location of customers: When customers are concentrated, the producer can use the short channel, but when they are scattered, the longer channel can be used.
(iii) Size of the order: When the buyers demand for large quantity, the producer can by pass the middlemen.
(iv) The channels used by the other competitors: These should be taken into consideration before choosing a particular channel.
(v) A financially buoyant producer can employ salesmen to sell directly to the consumers
(vi) Number of buyers: The number of buyers will determine the channel to be chosen. If the number is small, then it is preferable to use shorter channel but if the number is large, it is better to use longer channel.