When a business manufactures a certain product then it can transfer the bulk of its product units to a large number of customers through marketing intermediaries. Distribution is an important function of any business which is not possible without the involvement of marketing intermediaries. Marketing Intermediaries consist of a chain of suppliers that help in effective delivery of products and services from the end of producers to the other end of consumers. It may include distributors, whole sellers and retailers, etc.
Importance of Marketing Intermediaries
The business can have the option to directly sell its products or services to the customers. But it is more profitable for a business to employ a suitable chain of marketing intermediaries in its distribution channels. Although apparently it seems disadvantageous to involve marketing intermediaries, because in this way a business gives some control to them regarding the decisions of to whom and how products should be sold. But actually the availability of products or services to the targeted customers becomes efficient and effective through the use of marketing intermediaries. The reason behind their efficiency is the experience, specialization, scale of operation and their contacts that can make possible for them to achieve something extra than the independent achievement of the business organization.
In fact the intermediaries lower the burden of workload by the manufacturers and customers in searching for their desired items. The marketing intermediaries buy the bulk of quantities of different types of products from different manufacturers. They then make a wider assortment of this product, but in smaller quantities. In this way these intermediaries match the different demands of customers with the different supply of products from different manufacturers.
Besides the physical products and services are effectively distributed to the demanding customers by the employment of marketing intermediaries both in private and public sector, service provider organizations still pay special attention to the customers.
Functions of Marketing Intermediaries
The products or services are transferred from manufacturer to the customers through marketing intermediaries. The place, time and possession gaps are overcome by the marketing intermediaries that separate the products or services from their users. Following are the important functions of marketing intermediaries.
1) Information: One big function of marketing intermediaries is that they are helpful in provision of useful information about the forces and actors in the markets in the management and marketing research teams.
2) Promotion: They also communicate with the customers about the new offering of the businesses.
3) Contact: Prospective customers are found by the marketing intermediaries and then they are effectively communicated by these intermediaries.
4) Matching: Marketing intermediaries also match the various diversified needs and wants of customers to the different supplies of the manufacturers including the assembling, grading and packaging of products.
5) Negotiation: This is an important function in which the intermediaries negotiate with the customers in order to reach at a certain price so that the ownership of the product is shifted.
There are also some other functions that are performed by these intermediaries which are.
6) Physical Distribution: The physical distribution of products is also done by them.
7) Financing: Intermediaries also provide some funding to the businesses which are properly used by the businesses to cover some of their distribution costs.
8) Risk Taking: These intermediaries also take some risk in acquiring different old and new products or services from various businesses.
Levels in Distribution Channels
Channel Level reflects the specialty of the distribution channel. Every marketing intermediary that is helpful in distributing the products or services to the final customers is known as channel level. The customers and manufacturer also perform some work in delivering and receiving of products or services, so they are also a part of the marketing channels. The length of a channel is indicated by the number of intermediaries involved in it. There are many types of distribution channels on the basis of different lengths. These are discussed below:
- Direct Marketing Channel:
In this channel there are only two parties involved, which are the manufacturer and the customers. In this case the manufacturer delivers directly to the demanding customers without the use of any marketing intermediary.
- One Intermediary Level Channel:
In this channel only single intermediary is involved in delivering the products or services to the final customers. In most of the cases this single intermediary is a retailer like manufacturers of furniture, cameras, television and other major appliance deliver their products to the wholesale retails who further sell these items directly to the final customers.
- Two Intermediary Levels Channel:
In this distribution channel two intermediaries are involved which are wholesaler and retailer. Most small producers of Drugs, hardware and food items use this distribution channel.
- Three Intermediary Levels channel:
Meat Industry uses this type of distribution channel in which the meat is delivered to the wholesalers by the producer. The jobbers then take this meat item and deliver it to the retailer and in this way the whole channel works.
The distribution channel may include even more complex and lengthy structure of marketing intermediaries, but generally the above mentioned types are more common in Business Environments.
Behavior of Channel and Organization
A channel includes a number of firms that are linked with one another and flow of certain products or services take place from one end to another to accomplish a common goal of all these firms. Besides their business identity, each one of them is also like a system of behavior that posses some personal goals. Some sort of interaction is occurring among all of these members of a channel and these interactions may be either informal or formal. The channel can also change the form by the addition and deletion of any of its member form the line.
Every channel member in the channel is dependent on the other members and plays a specialized role. The efficiency of the whole channel increases, when each member performs the task that best suits for it. Besides this all members of the channel must understand and accept its duties, coordinate its activities and goals and cooperate with other members so that the overall objective of the channels is accomplished.