A grocery store displays tomatoes for sale to the consumer. The farmer complains that she only earns 50 cents per kilogram from the broker, but the store is selling the tomatoes to the consumer for $2 per kilogram. This is in part a factor of
A) channel length.
B) channel width.
C) direct channel efficiencies.
D) multi-channelling.
E) channel speed.

Question

Quizplus · Accepted Answer

Channel length refers to the number of intermediaries between the producer and the consumer. In this case, the farmer sells to a broker, who then sells to the grocery store, which sells to the consumer. The longer the channel, the more intermediaries there are, each taking a margin, which can result in a significant difference between the price the farmer receives and the price the consumer pays.

A Grocery Store Displays Tomatoes for Sale to the Consumer