Question

Channels of distribution tend to vary according to the level of economic development of a market. The more developed the economy, the shorter the channels tend to be. Why? Be specific and give examples.

Answer 1

          Yes, it is true that distribution channel of a country varies as according to the economic development of a market. It tends to be short in more developed companies. The term ‘short’ means it is less costly as compare to under-developed or developing countries. In my opinion, the developed countries are the less growth countries which have well-developed infrastructure. These countries have more matured distribution channel that reduce the cost of the product also as compare to the developing countries where there are more chances of growth and lack of the ways of good, effective and short transportation because there is need of development highways, bridge and airports etc. Secondly, the people who live in developed countries have high per capita income; this is the reason that they have high purchasing power of buying the items other than their necessary and basic needs. Thus they received the products in less time at low cost because of effective, fast and short way of the transportation. More developed economy promotes the growth of the market that positively affect the market and its product.