Selective distribution means that the manufacturer chooses from the available outlets instead of using all the outlets. The objective of this policy is to provide the selected channels with sufficiently large sales to sell the manufacturer`s product satisfactorily. This can increase sales with reduced distribution costs and lead to better cooperation between dealers. Government policies and regulations also influence the choice of distribution channels. The government may impose certain restrictions on the distribution of certain products, such as wine and narcotics. The choice of channels depends mainly on the requirements of the market, i.e. what the consumer wants and the desired quantity. A manufacturer must also decide for himself what he wants; what market share he wants to reach and how much he is willing or able to invest to reach it. This can be said of items such as refrigerators, space coolers, air conditioners, etc. However, if it is a relatively unimportant thing, the potential buyer may not want much information and may be inclined to make a purchase once the product is available. The choice of a channel or series of channels is determined by the type of product introduced. The choice of an appropriate distribution channel that can be used to channel the flow of existing products from producers to final consumers is generally determined by the following eight factors: High unit value products are suitable for shorter distribution channels or even direct marketing, but low unit value products consumed in bulk require longer distribution channels. v.

The type and nature of intermediaries required by the company and their availability also influence the choice of distribution channel. However, in the case of hypermarkets, where there are a large number of buyers, a longer distribution channel is used, as the distribution process cannot be carried out efficiently without the services of wholesalers and retailers. If the manufacturer wants to reach customers concentrated in a particular place or market, the distribution channel is short and the manufacturer can deliver the goods directly to that territory by opening its own stores or sales warehouses. In practice, a startup can be done with a channel that aggressively promotes the product, although the cost in the form of margins is high. Once the product is accepted on the market, the manufacturer can switch to channels that mean less costs (e.g. wholesalers). Direct selling is only possible if the manufacturer is financially sound and has marketing expertise. For a single-product company, direct selling is not economical. If the manufacturer wants to control distribution, direct selling is preferable.

The company`s sales policy also influences the choice of distribution channel. Perishable products must be sold and consumed immediately after manufacture. For perishable products, a direct or short channel is generally advised. For sustainable products, an indirect or multi-step channel is preferred. However, due to the availability of fast means of transport and advanced cold storage, the perishable product can also be sold through long indirect channels. The type of product is an important factor when choosing distribution channels. Consumer products tend to be standardized, cheaper and non-technical, and have a large number of buyers spread over a wide geographical area, requiring a wider network of channels involving many intermediaries to sell and distribute the products. On the other hand, industrial products are technical, expensive, usually customized according to customer requirements, have a smaller number of buyers and therefore require personal or direct sales with short circuits with fewer intermediaries. Perishable goods need to be sold more quickly, so short distribution channels are assumed. Legal factors can determine whether or not there is a business behind the sale of a particular product (e.g., drugs or sharps) and can also influence the mechanisms by which a business stores inventory or interacts with the customer. A company`s previous experience can also influence the channel`s decision.

If a company has a favorable and satisfactory experience of working with intermediaries, it can continue to work with them. If it is not satisfied with the conditions and services of intermediaries, it will shorten its distribution channel. Companies consider several middleman-related factors when making channel decisions. Consumers influence the choice of distribution channels as follows: 13 II. Issues with channel pricing**1. (Resale) Price maintenance modification: Illegal in itself  Common sense rule, unless there is a specific price agreement: e.g. Business Electronics vs. Sharp (1988) * New dealer: Office World  Decision in favour of Sharp  “It is sometimes legitimate and pro-competitive for manufacturers to inhibit price competition between their dealers” ©McGraw-Hill Companies, Inc iii.

The distribution costs of each channel are also an important factor as they affect the price of the final product. In general, a cheaper channel is preferred. But sometimes customers prefer a more convenient channel, even if it`s more expensive. The marketing environment can also influence the channel`s decision. In times of recession or depression, shorter, cheaper channels are always preferable. In times of prosperity, there is a wider choice of channel alternatives. Technological innovations also have an impact on sales. The distribution of perishable goods, even in distant markets, has become a reality thanks to cold storage and transportation warehouses. (d) Unit value – In general, products with a lower unit value and high turnover are widely distributed through indirect channels, e.g.

hosiery, cosmetics, etc.