(a) State any five channels of distribution for consumer goods. (b) Explain five factors to be considered before choosing a particular channel.

Answer Details

(a) Five channels of distribution for consumer goods

1. Manufacturer to consumer: The producer sells directly to the final consumer without any middleman.
2. Manufacturer to retailer to consumer: The producer sells to retailers who in turn sell to consumers.
3. Manufacturer to wholesaler to retailer to consumer: The traditional channel where goods pass through wholesalers and retailers before reaching the consumer.
4. Manufacturer to agent to wholesaler to retailer to consumer: An agent is used to link the manufacturer with wholesalers, especially in foreign or distant markets.
5. Manufacturer to wholesaler to consumer: The wholesaler sells directly to the consumer, for example through cash-and-carry outlets.

(b) Five factors to consider before choosing a channel of distribution

1. Nature of the product: Perishable and fragile goods require short, quick channels, while durable goods can pass through longer channels.
2. The market: A widely scattered market needs longer channels with many middlemen, while a concentrated market can be served directly.
3. Cost of distribution: The producer chooses the channel that delivers goods at the least possible cost.
4. Financial strength of the manufacturer: A firm with large capital can afford its own outlets and direct selling, while a weaker firm depends on middlemen.
5. Degree of control desired: Where the producer wants close control over price and promotion, a short channel is preferred.

(Also acceptable: volume of goods, availability and reliability of middlemen, and the practice of competitors.)