20 Factors That Determine the Distribution Channels

20 Factors That Determine the Distribution Channels
Distribution Channels

Distribution Channels-. Producers should pay attention to a wide range of influential factors in the selection of distribution channel. These factors, among others, concerning: (1) market considerations, (2) the consideration of the item, (3) consideration of the company, and (4) the consideration of the provider.

1. Market Considerations

Because distribution channels are strongly influenced by consumer purchase patterns, then the State of the market this is a determining factor in the selection of channels. Several market factors that must be considered are (a) the consumer or industrial market, (b) the number of potential buyers, (c) the concentration of the market geographically, (d) the amount of the order, and (e) in purchasing habits.

a. Consumer or industrial market

When its markets in the form of industrial market, then retailers rarely or even never used in this channel. If the market in the form of consumer and industrial markets, the company will use more than one channel.

b. The number of potential buyers

If the number is relatively small in the consumer market, so the company can hold a sale directly to users.

c. Market Concentration is geographically

Geographically s market can be divided into several concentrations such as the textile industry, paper industry, etc. For areas that have concentrations of high density level then companies can use an industrial distributor.

d. Number of orders

The sales volume of a company will be very influential towards the channel that he was wearing. If the volume purchased by the user industry is not too large or relatively small, then the company can use the distributors industry (goods for this type of equipment operation)

e. In purchasing Habits

Buying habits of consumers and end users the industry's very influential to the wisdom in channeling. Included in these buying habits, among others:

• A willingness to spend money

• Her on purchasing with credit

• Prefer to make purchases that are not multiple times

• Her vending service

2. Consideration of the goods

Some of the factors that should be considered in terms of this item include: (a) the value of units, (b) large and heavy goods, (c) easy destruction of goods, (d) the nature of the technical, standard items (e) and (f) order, the breadth of the product line.

a. The value of the unit

If the quantity of units of the goods sold is relatively low so the manufacturers tend to use a long distribution channels. But otherwise, if the value of the units is relatively short distribution channels so high or direct.

b. Big and heavy goods

Management should consider the transport fares in relation to the overall value of the goods where the goods are very large and heavy. If transport fare is too large compared to the value of the goods so that there is a heavy burden for the company, then a portion of the load can be transferred to an intermediary. So, an intermediary join bear some of the transport fare.

c. Easy destruction of goods

If the goods sold easily damaged then the company does not need to use intermediaries. If you want to use it then to choose the provider that has a pretty good storage facilities.

d. Technical Properties

Several types of goods, such as industrial installations are usually channelled directly to industrial users. In this case the manufacturer must have a seller who can explain the various technical issues of use and maintenance. They must also be able to provide services both before and after the sale.

This work is very rarely or never even done by wholesalers/wholesale.

e. Standard Items and orders

If the goods are sold in the form of standard goods then maintained a number of inventory at resellers. Vice versa, if the goods are sold on the basis of the order then the dealer does not have to keep inventory.

f. The breadth of product line

If the company makes only one kind of stuff, then the use of large traders as a retailer is good. However, if the range of the goods a lot so companies can sell directly to retailers.

3. Consideration of the company

On the company's standpoint, some of the factors to consider are: (a) the resource expenditure, (b) experience and management capabilities, (c) the supervision channels, and (d) the services provided by the seller.

a. Sources of spending

The use of direct or short distribution channels typically requires a larger amount of funds. Therefore, the short distribution channel is mostly only done by companies that are strong in the field of finance functions. The company's strong financial condition would not tend to use distribution channels.

b. Experience and management capabilities

Typically, companies that sell new stuff, or want to enter new markets, prefer to use intermediaries. This is because generally the intermediary already have experience, so that management can take a lesson from them.

c. Oversight of the channel

Factor supervision channels sometimes being the center of attention in the discretion of the manufacturer's distribution channels. Oversight would be easier done when its distribution channels. So, companies that want to keep an eye on channeling goods tend to choose short channels though ongkosnya high.

d. Services provided by the seller

If the producers want to provide better service as it builds a showcase (room demonstration), to find suitable buyers untuik intermediary, it will be much intermediaries who are willing to be penyalurnya.

4. Consideration of the provider

On in terms of the provider, some factors to consider are: (a) services provided by intermediaries, (b) usefulness of intermediaries, (c) an intermediate stance against the wisdom of the manufacturer, (d) sales volume, and (e) charges.

a. Services provided by intermediaries

If the middlemen want to give a better service, for example by providing storage facilities, then manufacturers will be willing to use it as a supplier.

b. Usefulness of intermediaries

The provider will be used as your dealer if he can bring the goods manufacturers in competition, and always have the initiative to give suggestion about the new stuff.

c. The attitude of the provider against the wisdom of the manufacturer

If the provider is willing to accept the risk of being charged by the manufacturer, e.g. the risk of decline in price, then the manufacturer may choose it as a supplier. This can lighten the responsibilities of manufacturers in the face of various kinds of risks.

d. The Volume of sales

In this case, manufacturers tend to choose the provider that can offer goods in large volumes for long periods of time.

e. Expenses

If the fare in channeling goods can be more mild with use of intermediaries, then it can be implemented continuously.

That's tips on do distribution channels you should look within bestowed. Thank you..


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