Manufacturer Retailer Consumer b Manufacturer Wholesaler Retailer Customer Two

Manufacturer retailer consumer b manufacturer

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Manufacturer→ Retailer→ Consumer (b) Manufacturer-Wholesaler-Retailer-Customer (Two level channels): Under this channel, wholesaler and retailer act as a link between the manufacturer and the customer. This is the most commonly used channel for distributing goods like soap, rice, wheat, clothes etc. Manufacturer→ Wholesaler→ Retailer→ Customer (c) Manufacturer-Agent-Wholesaler-Retailer-Consumer (Three level channels): This level comprises of three middlemen i.e. agent, wholesaler and the retailer. The manufacturers supply the goods to their agents who in turn supply them to wholesalers and retailers. This level is usually used when a manufacturer deal in limited products and yet wants to cover a wide market. Manufacturer → Agent → Wholesaler → Retailer → Consumer Factors Determining Choice of Channels of Distribution: Following are the main factors which help in determining the channels of distribution:
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1. Product Related Factors: Following are the important product related considerations in deciding on channels of distribution: (a) Nature of Product: In case of industrial goods like CT scan machine, short channels like zero level channel or first level channel should be preferred because they are usually technical, expensive, made to order and purchased by few buyers. Consumer goods Ike LCD, refrigerator can be distributed through long channels as they are less expensive, not technical and frequently purchased. (b) Perishable and Non- Perishable Products: Perishable products like fruits or vegetables are distributed through short channels while non perishable products like soaps, oils, sugar, salt etc. require longer channels. (c) Value of Product: In case of products having low unit value such as groceries, long channels are preferred while those with high unit value such as diamond jewellery short channels are used. (d) Product Complexity: Short channels are preferred for technically complex goods like industrial or engineering products like machinery, generators like torches while non complex or simple ones can be distributed through long channels. 2. Company Characteristics: Following are the main Company Characteristics offering choice of channel of distribution: (a) Financial Strength: The companies having huge funds at their disposal go for direct distribution. Those without such funds go for indirect channels. (b) Control: Short channels are used if management wants greater control on the channel members otherwise a company can go in for longer channels.
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3. Competitive Factors: Policies and channels selected by the competitors also affect the choice of channels. A company has to decide whether to adopt the same channel as that of its competitor or choose another one. For example, if Nokia has selected a particular channel say Big Bazaars for sale of their hand sets, other firms like Samsung and LG have also selected similar channels.
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  • Fall '17
  • Mahvish ali

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