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Management of channel systems

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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. 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.

They also communicate with the customers about the new offering of the businesses. Prospective customers are found by the marketing intermediaries and then they are effectively communicated by these intermediaries. 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. 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. The physical distribution of products is also done by them. Intermediaries also provide some funding to the businesses which are properly used by the businesses to cover some of their distribution costs.

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. Intermediaries act as middlemen between different members of the distribution chain, buying from one party and selling to another.

They also may hold stock and carry out logistical and marketing functions on behalf of manufacturers. Manufacturers sell products and services to their customers through direct and indirect channels. Where manufacturers sell direct to customers through their own salesforce or website, they do not require intermediaries.

If they wish to sell to customers and prospects their sales teams cannot reach, they appoint intermediaries to act on their behalf. Agents act as independent representatives for manufacturers, selling to other intermediaries such as wholesalers or retailers. These agents can be individuals or companies. Agents earn commission or fees for the sales they make or the services they provide. Independent stores and retail chains sell products to consumers and business customers.

By appointing retailers, manufacturers can reach different areas of the country and target smaller customers they could not afford to serve directly. 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.

There are two types of merchant wholesalers: Full-service wholesalers usually handle larger sales volumes; they may perform a broad range of services for their customers, such as stocking inventories, operating warehouses, supplying credit , employing salespeople to assist customers, and delivering goods to customers.

General-line wholesalers carry a wide variety of merchandise, such as groceries; specialty wholesalers, on the other hand, deal with a narrow line of goods, such as coffee and tea or seafood. Limited-service wholesalers, who offer fewer services to their customers and suppliers, emerged in order to reduce the costs of service. There are several types of limited-service wholesalers.

Cash-and-carry wholesalers usually handle a limited line of fast-moving merchandise, selling to smaller retailers on a cash-only basis and not delivering goods. Truck wholesalers or jobbers sell and deliver directly from their vehicles, often for cash.

They carry a limited line of semiperishables such as milk, bread, and snack foods. Drop shippers do not carry inventory or handle the merchandise. Operating primarily in bulk industries such as lumber, coal, and heavy equipment, they take orders but have manufacturers ship merchandise directly to final consumers. Rack jobbers, who handle nonfood lines such as housewares or personal goods, primarily serve drug and grocery retailers. Rack jobbers typically perform such functions as delivery, shelving, inventory stacking, and financing.

In less-developed countries , wholesalers are often the sole or primary means of trade; they are the main elements in the distribution systems of many countries in Latin America , East Asia, and Africa. In such countries the business activities of wholesalers may expand to include manufacturing and retailing , or they may branch out into nondistributive ventures such as real estate, finance , or transportation.

Until the late s, Japan was dominated by wholesaling. Even relatively large manufacturers and retailers relied principally on wholesalers as their intermediaries. However, in the late 20th century, Japanese wholesalers declined in importance. Even in the most highly industrialized countries, however, wholesalers remain essential to the operations of significant numbers of small retailers.

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Your contribution may be further edited by our staff, and its publication is subject to our final approval. Unfortunately, our editorial approach may not be able to accommodate all contributions. Our editors will review what you've submitted, and if it meets our criteria, we'll add it to the article. Please note that our editors may make some formatting changes or correct spelling or grammatical errors, and may also contact you if any clarifications are needed. Channel functions and flows 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.

Management of channel systems Although middlemen can offer greater distribution economy to producers, gaining cooperation from these middlemen can be problematic.

Wholesalers 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. Merchant wholesalers 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.

Full-service wholesalers Full-service wholesalers usually handle larger sales volumes; they may perform a broad range of services for their customers, such as stocking inventories, operating warehouses, supplying credit , employing salespeople to assist customers, and delivering goods to customers.

Limited-service wholesalers Limited-service wholesalers, who offer fewer services to their customers and suppliers, emerged in order to reduce the costs of service.

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Producers sell vegetables through various retail and wholesale practices. Retail sales are made directly to the consumer, often through roadside stands.

What is a 'Distribution Channel'

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Individual or firm (such as an agent, distributor, wholesaler, retailer) that links producers to other intermediaries or the ultimate buyer. Distribution intermediaries help a firm to promote, sell, and make-available a good or service through contractual arrangements or purchase and resale of the item.

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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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It is common for a business to use one or more kinds of intermediary when it comes to getting a product or service to the end customer. Here are the main kinds of distribution intermediaries. Intermediaries in a distribution channel provide services that enable manufacturers to reach different types of customers. A channel might include a number of intermediaries, such as agents, wholesalers, distributors and retailers.

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Distribution of goods takes place by means of channels, and the intermediaries are the independent groups or organizations within the channel that make the product available for consumption. There are four main types of intermediary: agents, wholesalers, distributors, and retailers. 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.