question_answer

Sunil, the marketing manager of a reputed watch company, faces the problem of selecting the channel of distribution for the company's new expensive watch. Which channel should he select? Give two reasons in support of your answer and also discuss any two factors which determine the choice of channel.

Answer:

As a marketing manager, Sunil should select 'one level channel' of distribution for the company's new expensive watch. In this arrangement, one intermediary is used in between the producer and the customer. The manufacturer sells to the retailer who in turn, sells to the ultimate consumer. Following are the two reasons for selecting "one level channel' of distribution: (i) 'One level channel' is usually suitable for speciality goods like expensive watches or home appliances (ii) This type of distribution network covers wide area of market. Factors determining choice of channels are as follows: (i) Product Related Factor The product related considerations like value of product line, product complexity, nature of product all help in deciding the channel of distribution. (ii) Company Characteristics Company related factors like financial strength of the company, degree of control, etc also affect the choice of channel of distribution.