Posted in Marketing and Strategy Terms, Total Reads: 4343
Definition: Marketing Intermediaries
The bodies involved in transacting the product from the producer till the time it gets purchased by the ultimate consumer can be termed as the market intermediaries. Market intermediaries can be individuals or firms. The products keep changing the possession at each level where subsequent transporting and inventory costs get added. Finally the product gets available at the retail outlet at a certain price.
Though intermediaries pose a challenge to firms when they compete on the prices yet they are indispensable as a vast distribution network cannot be handled by the company alone.
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. They receive the products at a particular price point, add their margins to it and move it to the next link in the supply chain at the higher price point. They are also known as middlemen or distribution intermediaries.
The four types of marketing intermediaries are agents, distributors, wholesalers and retailers.
The agent is an independent entity that acts as the manufacturer’s representative for the buyer. Agents have possession of the products without actually owning them. They work on commission basis.
Wholesalers purchase product in bulk and resell it. They own the products that they sell. They usually sell these products to retailers at a profit.
Distributors are different from wholesalers in that the wholesalers carry many product lines, say Tide and Surf Excel, but distributors carry only one of complementary lines, either tide or Surf Excel products. Distributors will carry these products to points of sale and they maintain very close working relationships with suppliers and buyers.
A retailer can be independent, like small kirana stores, or they can be supermarket chains, like Big Bazaar or Reliance Fresh. They own the products that they stock. The retailer is usually the last link of the supply chain, reaching products to the end consumer for a profit.