Enterprise factors affecting channel decisions, Marketing Management

Company of the enterprise factors: the choice of channel is also influenced by company characteristics such as its financial position, size, product mix, morale of its employers, past channel experience and executive and overall marketing policies.

1.       Financial resources: the financial strength of the company determines which marketing tasks, it can handle efficiency and which ones are to delegate to the middleman. A company having good financial resources may engage itself in the direct marketing in a profitable manner. A weak financial position may force a company to use financially strong intermediaries even if this is not profitable.

2.       Size of the company: a large company already handling a wide line of products may be in a good position to take an additional product of the same line and handle it in the same way, usually directly. But a smaller firm or one with the narrow lines would find middle man more practical.   

3.       Product mix: a fresh expression of plant capacity may require more aggressive channels. If the product mix of a company is wider, it can deal with its customers directly. Similarly, consistency in the company's product mix ensures of its marketing channel.

4.       Attitude of the company executives: the attitude of the company executives may also influence the channel selection. Their experience of working with the certain types of middle man may tend to develop channel preferences.

5.       Marketing policies: the company marketing policies such as speedy delivery, after - sale - services, heavy advertising, and uniform retail price also influence the decision of channel. If is of the view that the intermediaries can provide the services to the customers according to the company marketing policies, it can delegate to distribute its products to middle man otherwise it may engage itself in direct selling.

6.       Marketing experience and marketing managerial ability: when the enterprise has sufficient marketing experience and managerial ability, decision may be take for distributing product to the consumers. If the enterprise lacks marketing experience and managerial ability, the enterprise should decide to distribute its product through the middleman.

7.       Goodwill of the enterprise: if the product is of repute, he can select any channel of his choice because every middle man is ready to work for such a repute producer and of popular products. If the producer is new or does not enjoy such repution, he should take the advantage of the repution of middle man and should select the channel which enjoys high repution.

8.       Desire to control: producers desiring good control over the distribution of their products prefer short channels controlling is necessary to undertake aggressive promotion, to maintain the fresh stock and retail prices. If, on the other hand, manufactures do not have such a desire, he may decide a long channel.

9.       Cost of the distribution: cost of the distribution is added to the price of the product. A producer should select least expensive channel. Direct marketing is generally costly and distribution through middle man is economical.

Posted Date: 9/19/2012 7:32:29 AM | Location : United States

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