Product Factors

Definition

Product factors refer to the various characteristics and attributes of a product that influence the choice of distribution channels used to deliver it to customers. These factors encompass the physical, functional, and market-related properties of a product that impact the most suitable channels for its effective distribution and sale.

5 Must Know Facts For Your Next Test

1. Product factors can influence the level of direct or indirect involvement of manufacturers in the distribution process, as certain product characteristics may require more control or specialized handling.
2. The size, weight, and fragility of a product can determine the most suitable transportation and storage methods, impacting the choice of distribution channels.
3. Perishable or time-sensitive products may require faster delivery times and more specialized handling, leading to the selection of distribution channels that can meet these requirements.
4. High-value or luxury products may be distributed through more exclusive channels to maintain brand image and control over the customer experience.
5. The target market for a product, such as its geographic reach or demographic characteristics, can also influence the selection of the most appropriate distribution channels.

Review Questions

• Explain how product factors can influence the level of direct or indirect involvement of manufacturers in the distribution process.
  • Product factors can impact the level of direct or indirect involvement of manufacturers in the distribution process. For example, products with unique or specialized characteristics, such as high value, fragility, or perishability, may require more direct control and oversight from the manufacturer to ensure proper handling, storage, and delivery. In these cases, the manufacturer may choose to utilize more direct distribution channels, such as their own sales force or company-owned retail outlets, to maintain control over the product and the customer experience. Conversely, products with more standardized features may be better suited for distribution through indirect channels, such as wholesalers or independent retailers, where the manufacturer can leverage the expertise and reach of intermediaries while maintaining a lower level of involvement in the day-to-day distribution activities.
• Describe how the size, weight, and fragility of a product can determine the most suitable transportation and storage methods, impacting the choice of distribution channels.
  • The physical characteristics of a product, such as its size, weight, and fragility, can significantly impact the transportation and storage requirements, which in turn influence the selection of the most appropriate distribution channels. For example, large or heavy products may require specialized transportation, such as freight trucks or cargo ships, and storage facilities with sufficient space and load-bearing capacity. Fragile products, on the other hand, may need to be transported and stored in a manner that minimizes the risk of damage, potentially necessitating the use of specialized packaging, handling procedures, and climate-controlled environments. These product factors can limit the suitability of certain distribution channels, as they may not have the necessary infrastructure or capabilities to accommodate the specific requirements of the product, leading manufacturers to choose channels that can effectively and efficiently handle the product's physical characteristics.
• Analyze how the target market for a product, such as its geographic reach or demographic characteristics, can influence the selection of the most appropriate distribution channels.
  • The target market for a product, including its geographic reach and demographic characteristics, can be a significant factor in determining the most appropriate distribution channels. For products with a wide geographic reach, distribution channels that can efficiently transport and deliver the product across large distances, such as national or international logistics providers, may be preferred. Conversely, products with a more localized target market may be better suited for distribution through regional or local channels that can better serve the specific needs and preferences of the target consumers. Additionally, the demographic characteristics of the target market, such as their shopping habits, income levels, and access to technology, can influence the suitability of different distribution channels. For example, products targeting younger, tech-savvy consumers may be more effectively distributed through e-commerce platforms and digital channels, while products targeting older or more traditional consumers may be better suited for distribution through physical retail outlets or direct sales. By carefully considering the target market's geographic and demographic factors, manufacturers can select the distribution channels that are most aligned with the needs and behaviors of their customers.

Related terms

Product Characteristics: The physical, functional, and market-related properties of a product that determine its distribution requirements, such as size, weight, perishability, and value.

Channel Suitability: The alignment between a product's factors and the capabilities and limitations of different distribution channels to effectively deliver the product to customers.

Channel Efficiency:

The ability of a distribution channel to transport, store, and sell a product in a cost-effective and timely manner, maximizing profitability for both the manufacturer and the channel members.