大象传媒

Why choose different channels of distribution?

There are different reasons why businesses choose specific :

  • finance
  • image
  • legal restrictions
  • product
  • stage of the product life cycle
  • size

Finance

Companies may not have the money required to set up distribution directly to the consumer and would therefore be reliant on a wholesaler or retailers to distribute their products.

Image

Where a product is sold can influence how it is perceived. Premium products will only be sold at certain retailers that are able to maintain the quality image of the product.

Legal restrictions

Some products such as alcohol and medicines can only be sold through licensed premises.

Product

The type of product being sold will affect which is chosen:

  • A perishable product such as milk needs to get to the consumer quickly, so a shorter channel of distribution is required.
  • A highly technical or consumer-specific product such as double-glazed windows or a computer system for a business will need to come directly from the manufacturer.

Stage of the product life cycle

Products at the maturity stage of the need to be widely available through many retailers whereas a product at the introduction stage may only be available in a small number of retailers or direct from manufacturer.

Size

If a product has a large market, such as popular brands of food or drink, the company will need to use wholesalers and retailers to ensure that demand for the product is met.