wanted by all producers. Long channel naturally increases the cost and price of the product. The number of layers of middlemen should be kept to the minimum. The competitor who is efficient in reducing distribution cost will sell more as his price tends to be lower.More the middlemen are lesser will be the level of control and more problems on the part of the producers.
Quality of distribution service can be ensured and loyal customer base can be created with less middlemen. In some areas there may be scarcity of right middlemen and in some other cases the policies of producers may be not acceptable to the middlemen. Commerce - - . .
PM v. Capacity of the Manufacturer A financially strong producer may select a high technology oriented channel which will reduce cost in the long run. Manufacturers with large volume of production may open direct branches in cities and towns where there is more sales. They can also provide more services expected by consumers.
Small and medium producers require the services of middlemen for selling their products. A producer offering wide range of products can have a long channel as he can defray the cost of distribution over more number of products. vi. Cost and Time Involved in the Channel of Distribution The channel cost should go along with the quality of service provided by middlemen.
Ordinary goods are routed through economical channel even though the time taken by the channel for delivery is more. vii. Services Required along with the Product Machinery or equipment which need to be installed and demonstrated should be sold with shorter channel. Technical services can be provided by manufacturers or by their trained technicians.
Therefore a shorter channel is preferred for sales. viii. Life Cycle of the Product An established product can select an ordinary channel. But a new product entering into the market should be carefully promoted by experienced middlemen.
. Middlemen The term ‘Middlemen’ refers to all those who are in the link between the primary producer and the ultimate consumer in the exchange of goods or service. The