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What factors encourage firms to opt for indirect distribution?Market presenceOrder sizeAdded valueAll of these

Question

What factors encourage firms to opt for indirect distribution?

  • Market presence
  • Order size
  • Added value
  • All of these
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Solution

There are several factors that encourage firms to opt for indirect distribution:

  1. Market Presence: Indirect distribution can help a firm increase its market presence. By using intermediaries such as wholesalers, retailers, or agents, a firm can reach a larger customer base than it could on its own. This is particularly beneficial for firms that do not have the resources to establish their own distribution channels.

  2. Order Size: Indirect distribution can also be more efficient for handling large order sizes. Intermediaries often have the necessary infrastructure and systems in place to manage large volumes of products, which can save the firm time and resources.

  3. Added Value: Intermediaries can add value to a firm's products in various ways. For example, they can provide after-sales service, product information, and customer support. This can enhance the customer's experience and increase their satisfaction with the product.

  4. All of these: All of these factors - market presence, order size, and added value - can encourage firms to opt for indirect distribution. The specific factors that influence a firm's decision will depend on its unique circumstances and strategic objectives.

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