There are a lot of factors that go into geographical location of distribution channels. Two
examples that stick out to me are that different geographical locations have different prices
for the same item(s) as well as provide different products available from region to region.
The company I work for has many locations in the same city and across the nation. In the
city where I work, eggs at my store cots $3.29 but at another location in the same city, they
cost $2.79! When determining which location, I will buy my groceries at, I pay for
convenience since I work at the location with the more expensive eggs, I will, and do, buy
my eggs there. I would not drive fifteen minutes out of the way to ‘save’ fifty cents. I
would use more gas driving fifteen minutes out of the way and then go home, which is
another thirty minutes out of the way.
I know of locations of the chain I work for that sell regional items in Florida and Louisiana
that I have not seen in Virginia or Pennsylvania.
Market related factors since the channels of distribution operate in the market. The market
related factors are very important. There are several forces in the market which dictate the
choice of channels of distribution. Customers the ultimate purpose of any channel of
distribution is to distribute the goods to the customers. Therefore, the requirements and the
nature of the customers should be considered while deciding the channel of distribution. If
the customers are widely scattered the channels must be able to reach them out effectively.
This requires appropriate channels but if the customers are not widely scattered smaller
channels would be sufficient. If the customers are very large in number such as individuals,
very wide channels of distribution will be necessary, but if the customers are small and
purchase in large quantities such as the industrial purchasers, small channels or even direct
distribution will be sufficient. Competition one must consider the channels of distribution
arranged by the competitors. This choice represents the wisdom and experience of the
competitors. It also means that the competitors have been successful in using such channels
over the long run. A company can adopt such channels of distribution if found suitable to
itself. Unless there are compelling reasons, a company should not try to change the pattern
of distribution as compared with that of the competition. Existing channels of distribution
one must make study of the existing channels of distribution. The functions performed by
these channels, their strengths and weaknesses, their suitability and such other factors affect
the choice of channels. Their relative advantages must also be studied. Product factors since
it is the product, which is to be distributed, the product characteristics also must be
analyzed while choosing a channel of distribution. Different products are different in nature
and this nature of the products requires different types of channels. Perishability if the
products are highly perishable, the channel must be short or even direct marketing would be
suitable. This is because long channels of distribution with many intermediaries delay the
distribution of goods. Products like milk, flowers etc. require very fast distribution.
Consumer goods are purchased by a larger number of people, in smaller quantities and
more frequently. Therefore, such goods require longer channels of distribution which have a
wide range. The presence of retailers is a must. Industrial goods on the other hand are
purchased in larger quantities by a smaller number of purchasers and less frequently.
Moreover, the industrial goods purchaser is well informed, knowledgeable and rational.
Such goods require shorter channels of distribution. Business operations contribute to the
fate of any organization and the choice of partners must be strategic for the goals to be
realized. Relevant stakeholders should be keen on making informed decisions especially
when dealing with distribution. Various factors play significant roles in enhancing the
performance levels of an institution. Location is critical as it defines the services offered to
clients when distributing products to different destinations. A company requires to conduct
a feasibility study to establish the suitability of any target area. It is through the distribution
channels that producers engage with clients to facilitate efficient transactions that determine
the outcomes. A good example is how established organizations like Coca-Cola have set
strategic distribution channels that help in reaching to their target market with ease.
Geographic location has a direct impact on the selection of distribution channels because it
determines the efficiency of interacting with clients. The element will affect my choice of
distribution location options because the setup must be in a strategic position to ensure all
customers are served. Choosing a location requires the consideration of the number of
clients that can be reached through the distribution channel hence making the geographic
dimension a crucial factor to embrace when determining picking an ideal location. Also, the
transportation networks in the area should be reliable to ensure the timely delivery of goods
to customers since delays will have a detrimental impact on the performance of the
company. The prices in different regions differ based on the economic status of a country
hence playing a role in shaping the effectiveness of distribution channels from different
geographical locations. Operational policies are designed to control the level of engagement
in the business sector, and it influences the choice of distribution channels in various
geographic contexts whereby individuals need to evaluate the underlying measures.
Geographical location can be strategic for access to goods and services. Similarly, nearness
to the target market makes it easier to distribute goods and services to the buyers. For
example, when a farmer is near the market, they will take a shorter distribution channel
than when the target market is located in a different geographical area. Any middleman in
the distribution chain is removed with a direct sales business strategy, leaving the brand to
offer its products directly to customers. This implies that there isn't a merchant or other
independent outlet to stock inventory and advertise goods. Apple is arguably the company
that uses a direct sales strategy the best. Customers frequently must purchase software,
equipment, and other goods directly from the brand. Where it prefers to sell its products,
Apple runs its own physical stores and online marketplaces. Although it does have a
presence in independent brick and mortar stores, the company works to draw clients to its
own branded locations. A company that manufactures products and goods on-site and sells
to customers would be a more rigorous type of direct sales. For instance, bakers follow a
rigid direct sales business strategy and presume that customers can only purchase their
products from their storefronts. Intensive Distribution This type of retail distribution, in
which goods are distributed to as many locations as possible, is perhaps the one that
consumers are most familiar with. It gives brands the greatest visibility possible, enabling
them to connect with more prospective customers in various markets.
