Question

What are some of the disadvantages that can result when companies use channels of distribution to market their products overseas? 400 word

Answer 1

Answer..

Meaning of channels of distribution Channels of distribution is the route and pathway through which goods flow from producer to customer.

Channels of distribution inclues manufacturer, Distributor, Wholeseller, producer that distribute good and services from producer to customer.

Disadvantages of Channels of distribution are follows

1. Revenue Loss: The manufacture sold their goods to the intermediaries at very low margin or on very low price.

And all intermediaries sold these goods to customer at high price and earn profit from the goods and services. Therefore the manufacture goes for a loss in revenue.

2. Loss of product importance due to delay : In case of channels of distribution the goods transfer from many areas due to delay in transportation, The importance of goods in the chennel get decreased.

3. Lack of communication control : With the increase in chennel of distribution there is lack of communication control. When there is more intermediaries the manufacture loses control over what message is conveyed to the final customer. Sometimes the seller is engage in to maximise his personal sale and he forgot to comunicate about the product to final customer. This may lead to miscommunication problem with the final customer

4. More Importance to competitor's product : It may be possible that the copetitor of the product may provide more incentives or more margin to the seller.