What is Marketing Intermediaries? Types, Characteristics

  • Post last modified:10 August 2023
  • Reading time:7 mins read
  • Post category:Sales Management
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What is Marketing Intermediaries?

The market broker is an agency involved in the handling of products from the manufacturer to the point of purchase by the end consumer. Market brokers can be individuals or businesses. Products are constantly changing at all levels, adding to the cost of subsequent transportation and storage. After all, this product is available in retail stores at a specific price.

Brokers are essential because it is difficult for a company to compete for price, but it is not possible for a company to manage a huge distribution network on its own. Marketing intermediaries are links in the supply chain that connect manufacturers or other intermediaries to end users. An intermediary is an agency, distributor, wholesaler, or retailer. These parties are used to sell, promote or make available goods/services through a contractual agreement with the manufacturer.

They receive the goods at a specific price, add a margin and go to the next link in the supply chain at a higher price. They are known as brokers or sales brokers.

Many manufacturers do not sell their products or services directly to consumers, but they use marketing agents to perform many of the functions needed to deliver their products to end users. These intermediaries or brokers (wholesalers, retailers, agents, and brokers), distributors, or financial intermediaries usually have long-term obligations with manufacturers to form so-called marketing or sales channels.

Manufacturers can use raw materials to produce finished products, which can be sent directly to retailers or, in rare cases, to consumers. However, the finished product usually flows from the manufacturer to one or more wholesalers before reaching the retailer and ultimately the consumer. Each party in the distribution channel usually takes legal ownership of the goods during a physical transfer, but this is not always the case. For example, in the case of consignment, the manufacturer retains full legal ownership even if the goods are in the hands of a wholesaler or retailer. Until the goods reach the final consumer.

Distribution channels in less industrialised countries tend to be more direct, that is, shorter and simpler. However, there are some notable exceptions. For example, the Ghana Cocoa Commission collects cocoa beans in Ghana and licenses trading companies to process the raw materials. Similar marketing processes are used in other West African countries. Due to the large number of small producers, these agents work through intermediaries, who recruit sub-buyer to find runners to transport products from remote locations.

Until the second half of the 20th century, long and complex sales channels and numerous wholesalers characterised Japanese marketing organisations. The product may go through at least five separate wholesalers before it reaches the retailer. There is a wide variety of sales channels available to businesses, and building the right channels can be one of the most important marketing decisions for a company. As with most industrial capital goods, companies can sell their products directly to their end customers.

Alternatively, you can use one or more intermediaries to deliver the goods to the end consumer. The design and structure of consumer and industrial marketing channels can be very similar or very different.

Types of Marketing Intermediaries

The four types of marketing intermediaries are:

  • Agent: The agent is an independent entity that acts as an agent for the buyer’s manufacturer. The agent owns the product without actually owning it. They work on a commission basis.

  • Distributor: Distributors differ from wholesalers in that wholesalers have many product lines such as Tide and Surf Excel in stock but distributors are complementary lines of either Tide or Surf Excel products. Only one of them is in stock. Distributors bring these products to POS and work very closely with suppliers and buyers.

  • Wholesalers: Wholesalers buy and resell products in bulk. They own the products they sell. They usually sell these products to retailers for profit.

  • Retailers: Retailers can be independent such as small convenience stores, or supermarket chains such as Tesco, Walmart, Big Bazaar, and Reliance Fresh. They own products in stock. Retailers are usually the last link in the supply chain to make a profit and deliver products to end users.

Characteristics and Roles of the Distributor

In addition, based on the characteristics and roles of the distributor, there are usually the following formats:

  • Commercial brokers: wholesalers, retailers and other brokers buy goods and then resell them for profit.

  • Brokers: brokers, manufacturer representatives, commercial agents serve customers. We are looking for and will negotiate the terms of sale on behalf of the manufacturer.

  • Brokerage support: Manufacturer’s support advertising in shipping companies, warehousing, banks and manufacturing processes.

Marketing intermediaries (also known as distribution intermediaries) are product distribution, numerous organisations and people operate as a link between manufacturers and customers. Marketing intermediates are companies that assist businesses in advertising, selling, and delivering goods and services to customers.

Product distribution intermediates, distribution support establishments, marketing service institutions, and financial intermediaries are all examples of these businesses. A distributor can be a retailer, wholesaler, agency, or broker, among other things.

Article Source
  • Scott, G. Effective Selling and Sales Management

  • Theodoridis, C., Sarmaniotis, C., & Stalidis, G. (2019). Marketing Intelligence in Retail and Distribution Management. Bradford, West Yorkshire: Emerald Publishing Limited.

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