This document discusses factors that affect channel selection in marketing, including market considerations, product considerations, company considerations, and middleman considerations. It provides details on each factor, such as how the nature of the market, customers, competition, product price, perishability, and company resources influence whether direct or indirect channels are more appropriate. The document emphasizes that thorough understanding of these factors is needed to optimize channel selection strategy.

1. NAME: MOHAMMED AQUIB PATHAN
DIV/ROLL NO.: C/176
SUB.: PRINCIPLES OF MARKETING

2. FACTORS AFFECTING CHANNEL
SELECTION
MARKET CONSIDERATION
PRODUCT CONSIDERATION
COMPANY CONSIDERATION
MIDDLEMAN CONSIDERATION
4 TYPES

3. 1.MARKET
CONSIDERATION
1.NATURE OF MARKET
2.NATURE OF CUSTOMERS
3.GEOGRAPHIC
CONCENTRATION
OF CUSTOMERS
4.ORDER SIZE
5.MARKET COMPETITION
2.PRODUCT
CONSIDERATION
• 1.NATURE OF PRODUCT
• 2.UNIT PRICE OF PRODUCT
• 3.NEWNESS
• 4.PERISHABILITY OF THE
PRODUCT
• 5.TECHNICALITY OF
PRODUCT
• 6.TYPE OF PRODUCT

4. 3.COMPANY
CONSIDERATIONS
• MARKET POLICIES AND
STRATEGIES
• FINANCIAL RESOURCES AND
COST OF DISTRIBUTION
• MANAGERIAL RESOURCES
• CONTROLLING CHANNEL
• SERVICES TO CUSTOMERS
4.MIDDLEMEN
CONCIDERATION
• AVAILABILITY OF MIDDLEMEN
• COST FACTOR
• LOCATION
• SPECIALISATION
• ACCESS TO MARKET
• FACILITIES
• MARKET REPUTATION

5. MARKET CONSIDERATION
NATURE OF MARKET:
SIZE AND LOCATION ALSO
INFLUENCE THE MARKETING CHANNEL. IN CASE OF
LOCAL MARKET MANUFACTURER MAY RESORT TO
DIRECT CHANNEL DUE TO LENN NO. OF CUSTOMERS.
WHEN THE CUSTOMERS ARE IN LARGE THERE IS A
NEED OF MIDDLEMEN IF THEY ARE WIDELY
SCATTERED.

6. NATURE OF CUSTOMERS:
WHILE SELECTING
MARKETING CHANNEL THE CUSTOMERS
SHOULD BE TAKEN INTO ACCOUNT. SELECTING
CHANNEL FROM VIEWPOINT OF CUSTOMERS
REQUIRE INFO. REGARDING THEIR
AGE,INCOME GROUP,INTEREST,ETC.

7. GEOGRAPHIC CONCENTRATION OF
CUSTOMERS:
WHEN THE CUSTOMERS ARE
CONNECTED AT A SINGLE PLACE DIRECT
DISTRIBUTION IS ADVISABLE, AND WHEN THE
CUSTOMERS ARE SCATTERED AT DIFF, PLACES
INDIRECT CHANNEL OF DISTRIBUTION IS
APPROPRIATE.

8. ORDER SIZE:
IF THE CUSTOMERS PURCHASE IN
SMALL QUANTITY AT SHORT TIME INTERVAL IT
IS DESIRABLE TO CHOOSE INDIRECT CHANNEL,
AND WHEN THEY PURCHASE LARGE QUANTITY
OF PRODUCTS DIRECT CHANNEL IS
PREFERABLE.

9. MARKET COMPITITION:
THE NATURE AND
INTENSITY OF MARKET COMPETITION IS ANOTHER
FACTOR CONNECTED WITH THE SELECTION OF
MARKETING CHANNEL. IN CASE OF CERTAIN
PRODUCTS LIKE MEDICINES A MANUFACTURER
HAS TO FOLLOW THE SAME WAY IN WHICH HIS
OPPONENT USES.MANUFACTURER CAN USE A
SHORTER CHANNEL IF THE COMPETITION IS
LIMITED.

10. PRODUCT CONSIDERATION
UNIT PRICE OF PRODUCT:
SELECTION OF
OPTIMUM CHANNEL OF DISTRIBUTION
DEPENDS ON UNIT PRICE OF THE PRODUCT. IF
THE UNIT PRICE IS HIGH IT IS WISE TO SELECT
DIRECT DISTRIBUTION. IF THE PRICE OF UNIT IS
LOWER THE FIRM WILL SELECT INDIRECT
CHANNEL.

11. PERISHABILITY:
DIRECT CHANNEL OF
DISTRIBUTION IS MOST SUITABLE TO
DISTRIBUTE GOOD LIKE ICE, FRUITS,
VEGETABLES ARE MARKETED THROUGH
DIRECT CHANNEL. THEY WILL LOSE THEIR
QUALITY IF DISTRIBUTED

12. NEWNESS OF PRODUCT:
INNOVATIVE PRODUCT SHOULD BE
SOLD THROUGH DIRECT CHANNEL OF
DISTRIBUTION. SUCH PRODUCT WILL NEED
AGGRESIVE PERSONAL MARKETING. AFTER
GETTING THE PRODUCT ESTABLISHED THE
FIRM MAY USE INDIRECT CHANNEL OF
DISTRIBUTION TO FOR MAXIMUM PROFIT.

13. TECHNICALITY OF PRODUCT:
CUSTOMERS
EXPECT EXPLANATION AND DEMONSTRARION
OF TECHNICAL AND COMPLEX PRODUCT. IT IS
DESIRABLE TO USE DIRECT CHANNEL OF
DISTRIBUTION. NON-TECHNICAL PRODUCTS
CAN CONVENIENTLY BE SOLD THROUGH
MIDDLEMEN

14. COMPANY CONSIDERATIONS
MARKETING POLICIES AND STRATEGIES:
IT ALSO
DETERMINE CHOICE OF DISTRIBUTION WHEN A
FIRM PRODUCES QUALITY AND HIGHLY PRICED
PRODUCTS IT USES DIRECT CHANNEL OF
DISTRIBUTION.ON THE OTHER HAND IF THE FIRM
MAKES MEDIUN OR REASONABLY PRICED
PRODUCTS TO WAST SEGMENT OF MARKET IT
USES INDIRECT CHANNEL OF DISTRIBUTION.

15. FINANCIAL RESOURCES AND COST
DISTRIBUTION:
MANUFACTURER WITH LIMITED
FINANCIAL SUPPORT HAS TO USE THE
SERVICES OF MIDDLEMEN FOR DISTRIBUTION
OF GOODS. HE CAN USE SHORTER CHANNEL
OR CAN SELL HIS GOODS DIRECTLY TO
CONSUMERS IF HE IS FINANCIALLY STRONG.

16. MANAGERIAL RESOURCES:
WHEN THE FIRM
POSSESSES RESOURCES IT WILL GO FOR
DIRECT CHANNEL OF DISTRIBUTION. WHERE IT
LACKS MANAGERIAL RESOURCES IT WILL USE
INDIRECT CHANNEL OF DISTRIBUTION.

17. MIDDLEMEN CONSIDERATIONS
COST FACTOR:
THE FIRM SHOULD SELECT
THOSE CHANNEL OF DISTRIBUTION WHERE
GOODS CAN BE SOLD WITH MINIMUM
DISTRIBUTION COST. THE SHARING OF
EXPENDITURE SUCH AS PROMOTIONAL
EXPENSES MAY REDUCE FIRM’S FINANCIAL
BURDEN.

18. LOCATION:
LOCATION OF RETAILERS IS AN
IMPORTANTCONSIDERATION TO THE FIRM.
RETAILERS HAVING GOOD LOCATION SHOULD
BE GIVEN PREFERENCE.SOME MAKERS
DEVELOPE THEIR PRODUCT SPECIFIC IDENTITY
EX.:SELLING CONSUMER DURABLE
PRODUCTS.CUSTOMERS SAVE TIME IN
SHOPPING.

19. THANKYOU