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Marketing Intermediaries


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Agents and brokers are nearly synonymous in their roles as intermediaries. In fact, when it comes to real estate transactions, they are synonymous to any client, despite the differences in their roles in the industry. In most cases, however, agents serve as an intermediary on a permanent basis between buyers and sellers, while brokers do this on a temporary basis only. Both are paid in commission for each sale and do not take ownership of the goods being sold. In addition to real estate, agents and brokers are also common in the travel agency.

Companies routinely use agents and brokers when importing or exporting products across the border. Merchant wholesalers, which are also simply called wholesalers, buy products from manufacturers in bulk and then resell them, usually to retailers or other businesses. Some carry an extensive range of different products, while others specialize in a few products but carry a large assortment.

They may operate cash-and-carry outlets, warehouses, mail order businesses or online sales, or they may simply keep their inventories in trucks, and travel to their customers. Also called functional wholesalers, distributors do not buy products from the producers. Instead, they expedite sales between the manufacturer and retailers or other businesses. Like agents and brokers, they can be paid by commission, or they can be paid in fees from the manufacturer.

Whenever a consumer buys a product from anyone other than the company that makes it, the consumer is dealing with a retailer. This includes corner stores, shopping malls and e-commerce website. Similar marketing processes are used in other West African nations. Because of the vast number of small-scale producers, these agents operate through middlemen who, in turn, enlist sub-buyers to find runners to transport the products from remote areas. It was possible for a product to pass through a minimum of five separate wholesalers before it reached a retailer.

Businesses may sell products directly to the final customer, as is the case with most industrial capital goods. Or they may use one or more intermediaries to move their goods to the final user.

The design and structure of consumer marketing channels and industrial marketing channels can be quite similar or vary widely. The channel design is based on the level of service desired by the target consumer. The service variables are quantity or lot size the number of units a customer purchases on any given purchase occasion , waiting time the amount of time customers are willing to wait for receipt of goods , proximity or spatial convenience accessibility of the product , product variety the breadth of assortment of the product offering , and service backup add-on services such as delivery or installation provided by the channel.

It is essential for the designer of the marketing channel—typically the manufacturer—to recognize the level of each service point that the target customer desires. A single manufacturer may service several target customer groups through separate channels, and therefore each set of service outputs for these groups could vary. One group of target customers may want elevated levels of service that is, fast delivery, high product availability, large product assortment, and installation.

Their demand for such increased service translates into higher costs for the channel and higher prices for customers. In order to deliver the optimal level of service outputs to their target consumers, manufacturers are willing to allocate some of their tasks, or marketing flows, to intermediaries. As any marketing channel moves goods from producers to consumers, the marketing intermediaries perform, or participate in, a number of marketing flows, or activities.

The typical marketing flows, listed in the usual sequence in which they arise, are collection and distribution of marketing research information information , development and dissemination of persuasive communications promotion , agreement on terms for transfer of ownership or possession negotiation , intentions to buy ordering , acquisition and allocation of funds financing , assumption of risks risk taking , storage and movement of product physical possession , buyers paying sellers payment , and transfer of ownership title.

Each of these flows must be performed by a marketing intermediary for any channel to deliver the goods to the final consumer. Thus, each producer must decide who will perform which of these functions in order to deliver the service output levels that the target consumers desire.

Producers delegate these flows for a variety of reasons. First, they may lack the financial resources to carry out the intermediary activities themselves. Second, many producers can earn a superior return on their capital by investing profits back into their core business rather than into the distribution of their products.

Finally, intermediaries, or middlemen, offer superior efficiency in making goods and services widely available and accessible to final users. For instance, in overseas markets it may be difficult for an exporter to establish contact with end users, and various kinds of agents must therefore be employed.

Because an intermediary typically focuses on only a small handful of specialized tasks within the marketing channel, each intermediary, through specialization, experience, or scale of operation, can offer a producer greater distribution benefits. Although middlemen can offer greater distribution economy to producers, gaining cooperation from these middlemen can be problematic.

Middlemen must continuously be motivated and stimulated to perform at the highest level. In order to gain such a high level of performance, manufacturers need some sort of leverage. Researchers have distinguished five bases of power: As new institutions emerge or products enter different life-cycle phases, distribution channels change and evolve.

With these types of changes, no matter how well the channel is designed and managed, conflict is inevitable. Often this conflict develops because the interests of the independent businesses do not coincide. For example, franchisers, because they receive a percentage of sales, typically want their franchisees to maximize sales, while the franchisees want to maximize their profits, not sales.

The conflict that arises may be vertical, horizontal, or multichannel in nature. When the Ford Motor Company comes into conflict with its dealers, this is a vertical channel conflict. Horizontal channel conflict arises when a franchisee in a neighbouring town feels a fellow franchisee has infringed on its territory.

Finally, multichannel conflict occurs when a manufacturer has established two or more channels that compete against each other in selling to the same market. For example, a major tire manufacturer may begin selling its tires through mass merchandisers, much to the dismay of its independent tire dealers. Wholesaling includes all activities required to sell goods or services to other firms, either for resale or for business use, usually in bulk quantities and at lower-than-retail prices.

Wholesalers, also called distributors, are independent merchants operating any number of wholesale establishments. Wholesalers are typically classified into one of three groups: Merchant wholesalers, also known as jobbers, distributors, or supply houses, are independently owned and operated organizations that acquire title ownership of the goods that they handle.

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. Fears, which may come true if the producer fails to manage the intermediary, might include: These fears often undermine the working relationship between a producer and an intermediary and keep them from effectively utilizing each other's resources and maximizing the potential of the marketing mix.

Effective intermediaries add great value to marketing, and it is necessary to create constructive and positive relationships with intermediaries through leadership and strategy. In addition, proper products, pricing, and promotion can allow the producer to remain in control of supply and demand. Customer contact and ownership can be built and retained through various marketing strategies, including promotions and market research, that help to identify the consumer.

If closer examination of a distribution channel reveals that the use of an intermediary is necessary, it is better to use an intermediary than to inhibit marketing.

The old principles of specialization and division of labor still matter in the marketplace. If the marketer lacks adequate resources, it is better to use a suitable intermediary and leave specialized tasks to specialists.

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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.

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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.

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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.

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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.