Question
Download Solution PDFWhich of the following is not true while determining length of distribution channel?
Answer (Detailed Solution Below)
Detailed Solution
Download Solution PDFThe incorrect option is "If the average lot size is large, it is better to have a longer channel."
Key Points Distribution Channel:
- A distribution channel is a network of businesses or intermediaries through which a good or service is purchased by the final buyer.
- Wholesalers, retailers, distributors, and the Internet are all examples of distribution channels.
- When the manufacturer sells directly to the consumer it is called a direct distribution channel.
Important Points Factors determining distribution channel:
- Size of the market: The larger the market size, the longer the channel. Conversely, the smaller the market the smaller the channel. Hence, option 1 is correct.
- Order lot size: If the order lot size is small, it is better to have a longer channel and vice-versa. Hence, option 2 is incorrect
- Service Requirements: If the product and market require a high level of service, and it is a major factor in buying decisions, it is better to keep a shorter channel. Hence, option 3 is correct.
- Product variety: If a wide assortment of same type of product is available in the market, then it is advisable to select a wider channel. Hence, option 4 is correct.
Last updated on Jun 6, 2025
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