A company will incur frequent changeovers and shorter production runs to be able to provide a broad product line. Therefore its production cost will be high.
And since the company has to provide immediate delivery, inventory has to be kept in the retail stores. These companies incur low production cost but higher inventory cost as the product has to be made available in the retail store. Mail-order and e-stores follow this strategy.
They offer a wide range of products and supply them to the customers from a central warehouse. Some companies compete on the basis of low cost. These companies try to minimize transportation and inventory costs while maintaining adequate service levels.
These companies keep minimal amount of inventory in the stores. They use low-cost modes of transport like rail. They ship full truck-load or car-load of goods. They centralize inventory as much as possible, especially for low-volume items.
The low-volume items may be shipped by air-carriers if they are high-value items. Lower inventory costs outweigh higher transport charges for high-value, low volume items if they have to be delivered immediately. These companies also strive for lowest cost routing of products from plants to warehouses to customers. Channel intermediaries are responsible for ensuring the product is available at the right quantities, at the right time and place for end user consumption.
They also serve as a channel of communication between the consumer and producer regarding such issues as product quality. Intermediaries may sometimes provide transport and logistics management for the distribution process. They also offer storage and handling of the product as it makes its way towards the consumer. Channel intermediaries may also facilitate payment processing for certain products.
Explain the role of channel intermediaries in the product distribution process. Expert Answers Karen P. Definition and Function in Business " Starting with definitions , the product distribution system is a product flow channel that begins with logistical transportation to outlets, such as retailers, and ends with transportation to end customers Definition and Function in Business " Starting with definitions , the product distribution system is a product flow channel that begins with logistical transportation to outlets, such as retailers, and ends with transportation to end customers.
Related Questions Explain the role of channel intermediaries in the product distribution process. Why is their role Begin typing the name of a book or author: You can make it easier for us to review and, hopefully, publish your contribution by keeping a few points in mind. 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.
Previous page The consumer buying process. Page 6 of Next page Brokers and agents. Learn More in these related Britannica articles: The mass transportation market—its riders and potential riders—comprises two broad groups, captive riders and choice riders. Captive transit riders must rely on mass transit; they do not have an alternative way to travel for some or all of their trips because an….
Producers sell vegetables through various retail and wholesale practices. Retail sales are made directly to the consumer, often through roadside stands. Many growers sell most of their produce at wholesale to retail stores, to various types of buyers on local markets in nearby cities,…. The marketplace for agricultural commodities is exceptionally risky for three important reasons.
First, no single farm producer can place or withhold enough of a single item on the market to affect the market price; second, the quantity of a commodity taken off the….
Modern research and the evolution of current theories. Toward the beginning of the 20th century, researchers began to undertake studies of the motivations of many types of consumers and of their responses to various kinds of salesmanship, advertising, and other marketing techniques. Unless the farmer is able and ready to take advantage of new opportunities and his product can be marketed profitably, reform efforts may be futile.
Costly or inaccessible credit and the excessive charges of middlemen increase the relative costs of farming. Imperfect knowledge and tastes signs In sign spam In spam commodities and services agricultural products In farm management: Reducing market risks In vegetable farming: Types of production In vegetable farming: Selling fashion industry In fashion industry: Fashion retailing, marketing, and merchandising mass transit In mass transit: Marketing mass transit social aspects consumer research and propaganda In propaganda: Modern research and the evolution of current theories land reform programs In land reform: Articles from Britannica Encyclopedias for elementary and high school students.
Help us improve this article! Contact our editors with your feedback. Introduction The evolving discipline of marketing Roles of marketing The marketing process Strategic marketing analysis Market segments Market niches Marketing to individuals Positioning Marketing-mix planning Product Product development Packaging and branding Marketing a service product Price Place Promotion Sales force Advertising Sales promotion Public relations Marketing implementation Marketing evaluation and control Marketing control Annual-plan control Profitability control Efficiency control Strategic control Marketing audit The marketing actors Customers Consumer customers Factors influencing consumers Cultural factors Social factors Personal factors Psychological factors Consumer buying tasks High-involvement purchases Low-involvement purchases Brand differences The consumer buying process Business customers Factors influencing business customers The business buying process Marketing intermediaries: You may find it helpful to search within the site to see how similar or related subjects are covered.
Any text you add should be original, not copied from other sources. At the bottom of the article, feel free to list any sources that support your changes, so that we can fully understand their context.
Channel Intermediaries: Definition. How does a consumer go about purchasing a product? Do they knock on the door of the producer? Most products are purchased from channel intermediaries, whose main purpose is to deliver product from the manufacturers to the end users. The purpose of a channel intermediary is to move products to consumers, .
Intermediaries. Intermediaries, also known as distribution intermediaries, marketing intermediaries, or middlemen, are an extremely crucial element of a company’s product distribution channel. Without intermediaries, it would be close to impossible for the business to function at all.
Channel intermediaries are defined as entities that facilitate one or more steps in the product flow channel and perform transactional, logistical, and facilitational functions required by the manufacturer. There are four types of channel intermediaries: distributors, agents, wholesalers, retailers. These intermediaries, such as middlemen (wholesalers, retailers, agents, and brokers), distributors, or financial intermediaries, typically enter into longer-term commitments with the producer and make up what is known as the marketing channel, or .
Importance of Channel intermediaries in Product Distribution! Products need to be made available in adequate quantities, in convenient locations and at times when customers want to buy them. Channel intermediaries are those organizations which facilitate the distribution of products from producers.