Factors Impacting Selection of Distribution Channel
iptv providers is a process that entails effecting the flow of products and services in the point of production to the end users or consumers. It is the means or process whereby goods and services moves from the production stage to the consuming stage. The principal importance of distribution is to help overcome the timeframe and place difference that different goods and services from people who are in need of those.
Channel of supply is the means by which goods and services are made available to customers on the market. It’s a coordinated system of agencies and institutions, which in combination performs all the activities required to link producers with customers in order to do the desired advertising task.
Kinds OF DISTRIBUTION CHANNEL
There are two Chief types of channel system which are;
1) Traditional Marketing System – This comprises of an independent manufacturer, wholesaler, and retailer. Each is another business entity trying to maximize its profit. It’s more or less an exceptionally fragmented network where loosely aligned manufacturers, wholesalers, and retailers have bargained and negotiated with regards to sale
2) Vertical Marketing System – This is a kind of distribution channel in which coordination is achieved because the producer, wholesaler and retailer behave as a unified platform. Anyone member owns the others, and no one member can dominate the machine. It is also effective in controlling channel behaviour and removing the conflicts that result when independent channel members pursue their own objectives.
FORMS OF DISTRIBUTION CHANNEL
Either of the above types mentioned previously can take some of these form.
There are 3 kinds of distribution channel which are;
I. Direct Channel – This is when manufacturers choose to sell directly to customers. It’s mostly common in the sale of industrial and perishable consumer products. It is a zero level method. In other words, Manufacturer – Consumer. This form is mostly based on providers. E.g Haidresser, Doctor etc.. There’s not any intervention of middlemen in this kind of distribution channel.
Indirect Channel – This includes the intervention of this middlemen to influence the movement of merchandise to the final customers. It is a 1 level technique. That is, Manufacturer – Retailer – Consumer.
Multi-Channel – This is using one or more channel system to reach the market. It’s a two level method. That is, Manufacturer – Wholesaler – Retailer – Consumer.
Factors Affecting Selection of Distribution Channel
The option of channel is based on the analysis of the consumer, the type of company, characteristics of this product, and attention of the environment of the firm.
Market Consideration: All these following evaluation should be done at the Industry level:
I. industrial or Consumer marketplace
II. Number of Possible consumers
III. Geographical concentration of this Industry
IV. Order size
Product Consideration: A thorough analysis of this product features should be done as this affects the choice of channel.
Bulk and weights
III. Extent of the product lineup
Business Consideration: Company’s reputation, resources, expertise and desire for control of channel are important factors that can affect the selection of channel. For instance, businesses with adequate fiscal and non resources will be less compelled to utilize middlemen.
Middlemen Consideration: Under this, we consider the type of service rendered by middlemen, availability of desired middlemen, and revenue volume opportunities.
Environmental Consideration: The environmental factors to consider include economy, engineering, legal, competition etc.. In most cases, when economic conditions are depressed, manufacturers turn to the least expensive and cheapest channel.