Which of the following is a factor that affects the choice of distribution channels?
The tools or ingredients or the variables mixed together by the marketers to interact with a specific market are known as Marketing Mix. It is the essence of any marketing endeavour and is the main building block of the marketing efforts of an organisation. The concept of marketing says that on the side there is the producer or marketer and on the other side there is the customer. The organisation wants to have a transaction with the customers and to do so it has to first develop or produce a product or service, design it, pack it, price it, name it, label it, promote it, and distribute it. Every one of these decisions is the core of a marketing mix, which consists of four elements; viz., Product, Price, Place, and Promotion.
Place/Physical DistributionIt is essential to make the product or service available to the customer at the right place and at the right time, then only the customer would be able to purchase the product or service. Place is an element of marketing and is a process of transferring goods from the place of production to the place of consumption. Therefore, Place Mix is an important decision and is related to the physical distribution of the goods and services to the customers. The decisions under place mix include deciding the market for distribution, the channel of distribution, etc. Hence, the place mix consists of Channels of Distribution and Physical Movement of Goods. The two different channels of distribution are direct channel and indirect channel. And the components of physical distribution include order processing, transportation, warehousing, and inventory. Factors Determining Choice of ChannelsThe factors which determine the choice of channels of distribution are as follows: 1. Product Related Factors: The selection of distribution channel is affected by the products manufactured by a company. Some of the related factors are as follows:
2. Company Characteristics: Some of the most important factors which influence the choice of channels are:
3. Competitive Factors: The choice of channel also depends on the channel selected by the competitors. A company can select the same channel as selected by its competitors. For example, Most e-commerce shopping apps opt for similar distribution channels. Sometimes, companies adopt entirely different channels than their competitors. For example, Urban Company provides customised services which are available at the doorstep of the customers, unlike usual salons in which customers have to go to avail services. 4. Market Factors: The choice of the channel also depends upon the market. Some of the prominent factors are:
5. Environmental Factors: The choice of channel is also affected by environmental factors, like economic condition, government policy, statutory provisions, technological development, etc. For example, shorter channel is used during depression to achieve economy in the distribution of goods. |