Why Use Intermediaries in Marketing?

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Why Use Intermediaries in Marketing?

Whether offline or online, if the consumer cannot find a place where he or she can complete the transaction, then regardless of the quality of the rest of the marketing mix, the marketing will be a disaster and sales will plummet. This is why channel management, especially the management of distribution channels, is crucial to those in marketing. Unlike decisions regarding products, pricing, or promotion, distribution decisions require both intra-organizational as well as inter-organizational skills. The product's path to the market frequently involves interaction with external agencies or intermediaries that bridge the gap between the point of production and the point of sale.

Functions of an Intermediary
Deciding whether to use an intermediary in the distribution channel depends on many factors, but essentially it involves determining whether the needs of the consumer can successfully be met by the available resources and skills of the producer. The three basic functions performed by an intermediary in the distribution channel are: Transactional: This function involves adding value to the distribution channel by bringing in the intermediary's resources to establish market linkages and customer contacts. The intermediary either directly undertakes the marketing and sales function or helps to establish buyer-seller relationships by serving as a link between the manufacturer and the retailer. Logistical: This function involves the physical distribution of goods. It involves sorting and storing supplies at locations within the reach of the end customer. It also breaks up the bulk production of the manufacturer into smaller portions and may include the transportation of smaller shipments to intermediaries or retailers further down the channel of distribution. Facilitating: Although often confused with logistics, the facilitating functions of intermediaries supplement the entire marketing flow of the product...
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