Using 75 words or more, provide an example of how geographical location can affect your selection of distribution channels
To quote an example of how geographical location can effect your selection of distribution channels, Firstly i would like to mention that there are 2 main widely used distribution channels in all types of market. Direct channel and Indirect channel, In direct channel where the manufacturer directly sells away the goods to the end user where as in Indirect channel the manufacturer sells away his goods to the Wholesaler and then to the retailer and finally it reaches the end user where all the costs for indirect channel like the discount and Logistics are levied on the end user using MRP.
So In case of these distribution channels the geographical location plays a major part in order to make the good available to the end user. the major challenge is Transportation of the manufactured products as it plays a major role to safely transfer the good to the next level of player in the distribution channel in a cost effective manner by which only the company can provide the good at the right demand price and stay alive in the competition. In case of the manufacturing unit located in a remote region, where the transportation cost is higher and in a region where there is no 3rd party logistics operator providing service in that particular region or the proper mode of transportation like proper roads and connectivity is also an issue in such circumstances the producer of the goods has to incur all the additional costs to transfer the goods to the consumer and which in turn increases the cost of producing and selling the good which ultimately reduces the profits.
So choosing the right geographical location plays a major part to distribute or transfer the goods and in case of indirect channel where Wholesalers and retailers are involved, location plays a major role as it should to feasible to the wholesaler or the retailer to transfer their goods to their next channel of distribution. Thus choosing the location is the major key to cost cutting.
Using 75 words or more, provide an example of how geographical location can affect your selection...
This week we are reviewing Distribution Channels and I need assistance with the below: Provide an example of how geographical location can affect your selection of distribution channels.
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