Discuss the Factors That Influence Distribution Decision

Question

Examlex · Accepted Answer

The Answer is The factors that influence the distribution decision include buyer considerations,product characteristics,and financial and control factors.
Buyer Considerations-Manufacturers look at the amount and frequency of purchases by buyers,as well as the margins over manufacturing costs that are available to pay for direct selling costs.
Competitive Considerations-Distribution channels are an important aspect of how a company differentiates itself and its products from others,and this may impel decision makers toward increased emphasis on direct channels.The Internet can change the economics of distribution in favor of direct marketing.
Product Characteristics-Companies consider product characteristics in deciding whether to use a direct or distribution-channel strategy.Complex goods and services often require close contact between customers and the producer,who may have to provide application assistance,service,and other supporting activities.
Financial and Control Considerations-It is necessary to decide if resources are available for direct distribution,and,if they are,whether selling direct to end-users is the best use of the resources.Both the costs and benefits need to be evaluated.Direct distribution gives the manufacturer control over distribution,since independent organizations cannot be managed in the same manner as company employees.This may be an important factor to the manufacturer.

Discuss the Factors That Influence Distribution Decision

Definitions: