BA 3301 Lecture Notes - Lecture 73: Predatory Pricing, Direct Selling, Pricing Strategies
Document Summary
Channel length refers to the number of intermediaries between the producer and the consumer. When the producer sells directly to the consumer, the channel is very short. When the producer sells through an import agent, a wholesaler and retailer, a long channel exists. An exclusive distribuion channel is one that is diicult for outsiders to access. Japans system is an example of a very exclusive system. o. Channel quality refers to the experise, competencies and skills of established retailers in a naion, and their ability to sell and support the products of internaional businesses. o. The quality of retailers is good in most developed countries, but is variable at best in emerging markets and less developed countries. Choice of strategy determines which channel the irm will use to reach potenial consumers. Since each intermediary in a channel adds its own markup to the products, there is generally a criical link between channel length and the irms proit margin.
