Question

Explain any three product-related considerations to be used by an entrepreneur while selecting the channel of distribution.

Answer 1

An entrepreneur must consider various product-related factors when selecting a channel of distribution. Three key considerations are:

1. Nature of the Product: To maintain quality, perishable and fragile goods such as dairy products and glassware require shorter transportation routes. On the other hand, durable goods like electronics can use longer ones.
2. Product Complexity and Customisation: Products that are highly technical or custom-made, such as machinery or high-end cars, must be sold either directly or through specialised intermediaries that provide displays and post-sale service.
3. Unit Value of the Product: Jewelry and high-end electronics are examples of expensive goods that are often sold directly or through selective channels. On the other hand, low-cost fast-moving consumer goods (FMCG) are distributed through wholesalers and stores to reach more people.