(a) State any five channels of distribution for consumer goods.
(b) Explain five factors to be considered before choosing a particular channel.
(a) Five channels of distribution for consumer goods are:
(i) Manufacturer –>agent–> wholesaler–>Retailer-> Consumer.
(ii) Manufacturer –> Wholesaler –> Retailer –> Consumer.
(iii) Manufacturer –> Retailer –> Consumer
(iv) Manufacturer –> Consumer.
(v) Manufacturer –> Agent –> Consumer.
(b) Factors to be considered in choosing a channel of distribution are:
(i). Nature of the product: The more expensive the product, the shorter the channel. Also, the more technical and complex the product is, the shorter the channel.
(ii) Location of customers: When customers are concentrated, the producer can use the short channel, but when they are scattered, the longer channel can be used.
(iii) Size of the order: When the buyers demand large quantities, the producer can bypass the middlemen.
(iv) The channels used by the other competitors: These should be taken into consideration before choosing a particular channel.
(v) A financially buoyant producer can employ salesmen to sell directly to the consumers
(vi) Number of buyers: The number of buyers will determine the channel to be chosen. If the number is small, then it is preferable to use a shorter channel but if the number is large, it is better to use the longer channel.