Question

How do the 'Company-related factors' affect the choice of channels of distribution? Explain

Answer 1

There are two important characteristics of a company which determine the channel of distribution used by it, namely financial strength and the degree of control which the company wishes to command over intermediaries. Shorter channels of distribution require greater funds but also offer greater control over intermediaries. Accordingly, a financially strong company or a company which wishes to command greater control over intermediaries would opt for shorter channels of distribution.