Product Related Factors Determining Choice of Channels
Choice of suitable channel of distribution is an especially vital marketing decision, which affects the performance of an organization. When the product is extremely costly it is best to use small distribution channel. For example, Industrial Machinery or Gold Ornaments are extremely costly products that are why for their distribution small distribution channel is used. On the other hand, for less costly products long distribution channel is used.
The significant product related considerations in deciding the channels include whether the product is an industrial or a customer product, whether it is a fragile or a non-perishable product, what is the unit value of the product and the degree of difficulty of the product.
Industrial products are typically technical, made to order and expensive products purchased by few buyers. These products require short channels i.e., direct channel or involving few middlemen. Consumer products, on the other hand, are typically standardized, less expensive, less bulky, non-technical and regularly bought products.
These can be enhanced distributed by long network of channels, involving many middlemen. Fragile products like fruits, vegetables, and dairy products are best sold through short channels, while non-perishable products like toiletry products (e.g., soap, toothpaste, hair oil etc.), groceries (vegetable oil, tea leaf etc.), fabrics require longer channels to reach wide spread consumers.
Product is a major factor in channel selection. Product-related factors are among most relevant and influential factors affecting channel decision. Channel must be fit the type and nature of company’s products.