Although main roles of distributors include immediate access to goods and after-sales service, they typically specialize in a narrower product range to ensure better product knowledge and customer service. Retailers work directly with the customer. These intermediaries work with wholesalers and distributors and often provide many different products manufactured by different producers all in one location. Customers can compare different brands and pick up items that are related but aren't manufactured by the same producer, such as bread and butter.
Purchasing bread or medications directly from a manufacturer or pharmaceutical company would be time-consuming and expensive for a customer. But buying these products from a local retail "middleman" is simple, quick and convenient.
Agents and brokers sell products or product services for a commission, or a percentage of the sales price or product revenue. These intermediaries have legal authority to act on behalf of the manufacturer or producer. Agents and brokers never take title to the products they handle and perform fewer services than wholesalers and distributors. Their primary function is to bring buyers and sellers together.
The Major Functions of a Distribution Channel. What Are the Different Channel Organizations in the Wholesalers Wholesalers typically are independently owned businesses that buy from manufacturers and take title to the goods. The three basic functions performed by an intermediary in the distribution channel are: This function involves adding value to the distribution channel by bringing in the intermediary's resources to establish market linkages and customer contacts.
The intermediary either directly undertakes the marketing and sales function or helps to establish buyer-seller relationships by serving as a link between the manufacturer and the retailer. This function involves the physical distribution of goods. It involves sorting and storing supplies at locations within the reach of the end customer. It also breaks up the bulk production of the manufacturer into smaller portions and may include the transportation of smaller shipments to intermediaries or retailers further down the channel of distribution.
Although often confused with logistics, the facilitating functions of intermediaries supplement the entire marketing flow of the product and are separate from logistics. The facilitating functions include financially supporting the marketing chain by investing in storage capabilities. They may include facilitating sales by helping the consumer buy even when he or she does not have cash through financing plans, purchase agreements, etc.
Together, these functions performed by the intermediary ensure market coverage, reduce the cost of market coverage, increase the availability of cash flow in the distribution channel, and increase end-user convenience. A producer can bypass an intermediary by elimination or substitution, but the tasks performed by the intermediary cannot be eliminated. Advantages of Using an Intermediary The advantages of using intermediaries stem from the core economics of supply-chain management: The intermediary adds value to the marketing of the product by bringing in specialization, marketing knowledge, capacity to segment the market, and selling skills that allow the marketer to implement marketing strategies effectively.
Intermediaries providing logistic support increase convenience to both the producer and the consumer by offering effective delivery and pre- and post-purchase customer service as well as facilitating manufacturer services, making them indispensable to most mid- and small-scale producers. Disadvantages of Using an Intermediary Manufacturers quite often see intermediaries as parasites rather than assets.
The disadvantages of using an intermediary stem from psychological apprehensions, market antecedents which have created such apprehensions, and lack of managerial skills or resources that are sufficient to balance and manage the intermediary.
Marketing intermediaries help a firm to promote, sell, and make-available a good or service through contractual arrangements or purchase and resale of the item. Each intermediary receives the item at one pricing point and moves it to the next higher pricing point until the item reaches the final buyer.
Sep 08, · The marketing intermediaries refers to the firm or individual thatact as a link between the produces and the ultimate buyers. Thereare four types of the marketing intermediari es namely the agents,wholesalers, distributors and retailers.
marketing intermediaries who bring buyers and sellers together and assist in negotiating an exchange but don't take title to the goods. wholesaler a marketing intermediaries that sell to other organizations. Marketing intermediaries: the distribution channel Many producers do not sell products or services directly to consumers and instead use marketing intermediaries to execute an assortment of necessary functions to get the product to the final user.
Some businesses need "middlemen" to get their products to the public. Market intermediaries, part of the supply chain between the manufacturer and the ultimate consumer, keep the channels of distribution open and flowing. A marketing intermediary is the link in the supply chain that links the producer or other intermediaries to the end consumer. The intermediary can be an agent, distributor, wholesaler or a retailer. These parties are used in the selling, promotion or the availability of the goods/services through contractual agreements with the manufacturer.