CIMA P2 Syllabus A. Managing The Costs Of Creating Value - Distribution Channel Profitability - Notes ^{10 / 11}

Both costs and revenues are driven not only by products but also by distribution channels chosen.

The channels profitability differs due to different cost incurred or different sales volume.

In order to select the right channels entity should understand their profitability profiles.

DIRECT CHANNELS

• Sales team

• Telephone

• Shops

• Internet etc.

INDIRECT CHANNELS

• Retailers

• Wholesalers

• Resellers

• Agents etc.

Key aspects

There are several key aspects to be considered when selecting the distribution channels:

1. Access to the customer base

2. Brand awareness

3. Competitiveness

4. Achieving sales and market targets

5. Speed of payment

6. Customer retention rates