January 31, 2024

How Does Geographic Location Affect Your Selection of Distribution Channels?

The selection of distribution channels is an important aspect of the product development process. The right channel selection will ensure that the company's products reach their target customers within a stipulated time frame. A number of factors affect the choice of distribution channels. One of the most significant is geographical location.

Geographical location can be either absolute or relative. Absolute location refers to the exact position of a point on the Earth's surface, usually described by its latitude and longitude coordinates. Relative location, on the other hand, describes a point's location in relation to another, for example, Lille is north of Paris.

Both types of geographic location are used in different situations, but for a business, it is important to know which one to use and when. For example, the geographical location of a market determines whether it is suitable for direct selling or using middlemen. If the market has a small customer base, direct sales will be more appropriate. However, if the market has a large population, it is best to use middlemen to distribute products.

Another factor that affects the choice of distribution channels is the prevailing economic conditions. If the economy is in a boom, sales will naturally be high, and channels of distribution will be more willing to take on the distribution of the company's products. On the other hand, if the economy is in a recession, sales will be low, and the channels of distribution may be reluctant to distribute the company's products.

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