Saturday, April 6, 2013

Factors Affecting Channel Choice

In class this week, we talked about the factors that affect channel choice. Managers must answer quite a few questions before choosing a market channel. In order to a choose a market channel, managers must analyze several factors, which interact often. Theses factors are normally grouped as market factors, product factors, and producer factors.

Producer Factors: Factors having to do with the producer are very important to the selection of a market channel. In general, producers with large, financial, managerial, and marketing resources are better abel to use more direct channels

Product Factors: Products that are more complex, customized, and expensive tend to benefit from shorter and more direct marketing channels.

Market Factors: Target customer considerations is one of the most important market factors affecting the choice of distribution channel. Specifically, managers should answer certain questions: Who are the potential customers? What do they buy? Where do they buy? When do they buy? How do they buy? In addition, the choice of channel depends on whether the producer is selling to consumers or to industrial customers.

Out of these 3 group factors, which one do you think is the most effective when it comes to channel choice?

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