FACTORS AFFECTING CHANNEL SELECTION

FACTORS OF CHANNEL SELECTION

1. NAME: MOHAMMED AQUIB PATHAN DIV/ROLL NO.: C/176 SUB.: PRINCIPLES OF MARKETING

2. FACTORS AFFECTING CHANNEL SELECTION MARKET CONSIDERATION PRODUCT CONSIDERATION COMPANY CONSIDERATION MIDDLEMAN CONSIDERATION 4 TYPES

3. 1.MARKET CONSIDERATION 1.NATURE OF MARKET 2.NATURE OF CUSTOMERS 3.GEOGRAPHIC CONCENTRATION OF CUSTOMERS 4.ORDER SIZE 5.MARKET COMPETITION 2.PRODUCT CONSIDERATION 1.NATURE OF PRODUCT 2.UNIT PRICE OF PRODUCT 3.NEWNESS 4.PERISHABILITY OF THE PRODUCT 5.TECHNICALITY OF PRODUCT 6.TYPE OF PRODUCT

4. 3.COMPANY CONSIDERATIONS MARKET POLICIES AND STRATEGIES FINANCIAL RESOURCES AND COST OF DISTRIBUTION MANAGERIAL RESOURCES CONTROLLING CHANNEL SERVICES TO CUSTOMERS 4.MIDDLEMEN CONCIDERATION AVAILABILITY OF MIDDLEMEN COST FACTOR LOCATION SPECIALISATION ACCESS TO MARKET FACILITIES MARKET REPUTATION

5. MARKET CONSIDERATION NATURE OF MARKET: SIZE AND LOCATION ALSO INFLUENCE THE MARKETING CHANNEL. IN CASE OF LOCAL MARKET MANUFACTURER MAY RESORT TO DIRECT CHANNEL DUE TO LENN NO. OF CUSTOMERS. WHEN THE CUSTOMERS ARE IN LARGE THERE IS A NEED OF MIDDLEMEN IF THEY ARE WIDELY SCATTERED.

6. NATURE OF CUSTOMERS: WHILE SELECTING MARKETING CHANNEL THE CUSTOMERS SHOULD BE TAKEN INTO ACCOUNT. SELECTING CHANNEL FROM VIEWPOINT OF CUSTOMERS REQUIRE INFO. REGARDING THEIR AGE,INCOME GROUP,INTEREST,ETC.

7. GEOGRAPHIC CONCENTRATION OF CUSTOMERS: WHEN THE CUSTOMERS ARE CONNECTED AT A SINGLE PLACE DIRECT DISTRIBUTION IS ADVISABLE, AND WHEN THE CUSTOMERS ARE SCATTERED AT DIFF, PLACES INDIRECT CHANNEL OF DISTRIBUTION IS APPROPRIATE.

8. ORDER SIZE: IF THE CUSTOMERS PURCHASE IN SMALL QUANTITY AT SHORT TIME INTERVAL IT IS DESIRABLE TO CHOOSE INDIRECT CHANNEL, AND WHEN THEY PURCHASE LARGE QUANTITY OF PRODUCTS DIRECT CHANNEL IS PREFERABLE.

9. MARKET COMPITITION: THE NATURE AND INTENSITY OF MARKET COMPETITION IS ANOTHER FACTOR CONNECTED WITH THE SELECTION OF MARKETING CHANNEL. IN CASE OF CERTAIN PRODUCTS LIKE MEDICINES A MANUFACTURER HAS TO FOLLOW THE SAME WAY IN WHICH HIS OPPONENT USES.MANUFACTURER CAN USE A SHORTER CHANNEL IF THE COMPETITION IS LIMITED.

10. PRODUCT CONSIDERATION UNIT PRICE OF PRODUCT: SELECTION OF OPTIMUM CHANNEL OF DISTRIBUTION DEPENDS ON UNIT PRICE OF THE PRODUCT. IF THE UNIT PRICE IS HIGH IT IS WISE TO SELECT DIRECT DISTRIBUTION. IF THE PRICE OF UNIT IS LOWER THE FIRM WILL SELECT INDIRECT CHANNEL.

11. PERISHABILITY: DIRECT CHANNEL OF DISTRIBUTION IS MOST SUITABLE TO DISTRIBUTE GOOD LIKE ICE, FRUITS, VEGETABLES ARE MARKETED THROUGH DIRECT CHANNEL. THEY WILL LOSE THEIR QUALITY IF DISTRIBUTED

12. NEWNESS OF PRODUCT: INNOVATIVE PRODUCT SHOULD BE SOLD THROUGH DIRECT CHANNEL OF DISTRIBUTION. SUCH PRODUCT WILL NEED AGGRESIVE PERSONAL MARKETING. AFTER GETTING THE PRODUCT ESTABLISHED THE FIRM MAY USE INDIRECT CHANNEL OF DISTRIBUTION TO FOR MAXIMUM PROFIT.

13. TECHNICALITY OF PRODUCT: CUSTOMERS EXPECT EXPLANATION AND DEMONSTRARION OF TECHNICAL AND COMPLEX PRODUCT. IT IS DESIRABLE TO USE DIRECT CHANNEL OF DISTRIBUTION. NON-TECHNICAL PRODUCTS CAN CONVENIENTLY BE SOLD THROUGH MIDDLEMEN

14. COMPANY CONSIDERATIONS MARKETING POLICIES AND STRATEGIES: IT ALSO DETERMINE CHOICE OF DISTRIBUTION WHEN A FIRM PRODUCES QUALITY AND HIGHLY PRICED PRODUCTS IT USES DIRECT CHANNEL OF DISTRIBUTION.ON THE OTHER HAND IF THE FIRM MAKES MEDIUN OR REASONABLY PRICED PRODUCTS TO WAST SEGMENT OF MARKET IT USES INDIRECT CHANNEL OF DISTRIBUTION.

15. FINANCIAL RESOURCES AND COST DISTRIBUTION: MANUFACTURER WITH LIMITED FINANCIAL SUPPORT HAS TO USE THE SERVICES OF MIDDLEMEN FOR DISTRIBUTION OF GOODS. HE CAN USE SHORTER CHANNEL OR CAN SELL HIS GOODS DIRECTLY TO CONSUMERS IF HE IS FINANCIALLY STRONG.

16. MANAGERIAL RESOURCES: WHEN THE FIRM POSSESSES RESOURCES IT WILL GO FOR DIRECT CHANNEL OF DISTRIBUTION. WHERE IT LACKS MANAGERIAL RESOURCES IT WILL USE INDIRECT CHANNEL OF DISTRIBUTION.

17. MIDDLEMEN CONSIDERATIONS COST FACTOR: THE FIRM SHOULD SELECT THOSE CHANNEL OF DISTRIBUTION WHERE GOODS CAN BE SOLD WITH MINIMUM DISTRIBUTION COST. THE SHARING OF EXPENDITURE SUCH AS PROMOTIONAL EXPENSES MAY REDUCE FIRM’S FINANCIAL BURDEN.

18. LOCATION: LOCATION OF RETAILERS IS AN IMPORTANTCONSIDERATION TO THE FIRM. RETAILERS HAVING GOOD LOCATION SHOULD BE GIVEN PREFERENCE.SOME MAKERS DEVELOPE THEIR PRODUCT SPECIFIC IDENTITY EX.:SELLING CONSUMER DURABLE PRODUCTS.CUSTOMERS SAVE TIME IN SHOPPING.

19. THANKYOU