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DEMAND SIDE FACTORS
Facilitation for search- the process of searching is characterised by uncertainity on the part of both users & sellers; end users are uncertaim about where to find the products while sellers are uncertain about how to reach target end users.
Adjustment of assortment discrepancy- the discrepancy between the assortment of goods made by a manufacturer & the assortment demanded by the end user results into need for marketing channels to harmonise the assortments because a manufacturer produces a large quantity of limited variety while consumers usually demand a limited quantity of wide variety of goods.
SUPPLY SIDE FACTORS
Routinisation of transactions-costs of distribution can be minimised if the transactions are reutilized otherwise every transaction is subject to bergaining with an accompanying loss of efficiency. On the other hand, routtinization leads to standardisation of gods for which performance characteristics can be easily compared & assessed thus it encourages production of goods that are highly valued hence leading to efficiency with the execution of channel activities
Reduction in number of contacts- without channelintermediaries, every producer would have to interact with every potential buyer in õrder to create all possible market exchanges thus as the importance of exchange in society increases, so doesthe difficulty of maintaining all these interactions
