Explain the primary concerns of managers when establishing distribution policies

What will be an ideal response?

Managers consider two overriding concerns when establishing channels of distribution: 1. the amount of market exposure a product needs and 2. the cost of distributing a product.
Degree of Exposure-In promoting its product to the greatest number of potential customers, a marketer must determine the amount of exposure needed. An exclusive channel is one in which a manufacturer grants the right to sell its product to only one or a limited number of resellers. An exclusive channel gives producers a great deal of control over the sale of their product by wholesalers and retailers. It also helps a producer to constrain distributors from selling competing brands. In this way, an exclusive channel creates a barrier that makes it difficult or impossible for outsiders to penetrate the channel.
When a producer wants its product to be made available through as many distribution outlets as possible, it prefers to use an intensive channel–one in which a producer grants the right to sell its product to many resellers. An intensive channel provides buyers with location convenience because of the large number of outlets through which a product is sold. It does not create strong barriers to channel entry for other producers, however. Nor does it provide much control over reseller decisions, such as what competing brands to sell.
Large companies whose products are sold through grocery stores and department stores typically take an intensive channel approach to distribution. The obstacle for small companies that choose an intensive channel approach is gaining shelf space–especially companies with lesser-known brands. The increasing global trend toward retailers developing their own private-label brands (brands created by retailers themselves) exacerbates this problem. In such cases, retailers tend to give their own brands prime shelf space and give lesser-known brands poorer shelf locations that are up high or near the floor.
Channel Length and Cost-Channel length refers to the number of intermediaries between the producer and the buyer. In a zero-level channel–which is also called direct marketing –producers sell directly to final buyers. A one-level channel places only one intermediary between the producer and the buyer. Two intermediaries make up a two-level channel, and so forth. In general, the greater the number of intermediaries in a channel, the more costly it becomes. This happens because each additional member adds a charge for its services onto the product's total cost. This is an important consideration for companies that sell price-sensitive consumer products, such as candy, food, and small household items, that usually compete on the basis of price. Companies that sell highly differentiated products can charge higher prices because of their products' distinctiveness; therefore, they have fewer problems using a channel of several levels.