Choice of Distribution Channel – SS2 Marketing Lesson Note (First Term)

Determinants of the choice of distribution or factors that influence the choice of distribution channels.

1. Company’s Objective: The objective of the company must be taken into consideration when designing channels of distribution for a product.
2. Market Consideration: market has been defined as potential as actual or potential buyers of a given product. The selection of distribution channels by the firm depends on whether the product is for the consumer or industrial market.

3. Product Characteristics: This includes the unit value of the product, perishability, technicality etc.
4. Middlemen Characteristics: The choice of distribution channel depends on services rendered by middlemen, availability and willingness of desired middlemen, ability to render the services and attitude towards company policies.
5. Managerial Ability: company management may not have the capability to discharge distribution activities, hence need to turn to the middlemen who are professionals.
6. Desire for channel control as this brings aggressive promotion and better control of merchandise and retail price of product.
7. Competitive consideration: competitors are one of the task environments that affect a company’s activities to serve its target market. In designing channels of distribution, competitors’ consideration needs to be taken care of, these are; methods used by competitors, financial strength of competitors and competitors’ market share.
8. Environmental characteristics: these include; prevailing Economic situation, legal regulations and constraints and technological change.