Types & Functions of

Intermediaries

By:
Ishita Dhingra
(30)
Identifying Channel Alternatives

1.Types of 3. Terms &

available 2. Number of Responsibilities
Intermediaries Intermediaries of
Intermediaries
 Types of Intermediaries
 Wholesalers:
 Buy from producers and resell to retailers

 Break down 'bulk' into smaller packages for resale

 Stock a range of products- several producers

 Take ownership or 'title' to goods

 Provide storage facilities

 Reduce the physical contact cost

 Types of Intermediaries
 Retailers:
 Stronger personal relationship with the consumer

 Hold several other brands and products

 Offer credit to the customer

 Products and services are promoted &

merchandised by the retailer

 Set final selling price to the product

 Strong 'brand' themselves

 Types of Intermediaries
 Agents:

 International markets

 Take an order for a producer and will take a

commission

 Don’t take title to the goods

 Can be very expensive to train

 Physical distances

 Difficult to control
 Types of Intermediaries
 Franchise:
 Independent businesses
 Operate a branded product (usually a service)
 In exchange for a license fee and a share of
sales.

 Internet:
 Geographically disperse market
 Products reach a wider audience
 Use e-commerce technology
 paradigm shift in commerce and consumption
 Number of Intermediaries
 Strategies available :

1.Exclusive
2. Selective 3. Intensive
Distribution
Distribution Distribution
 Exclusive Distribution
 Limiting the no. of intermediaries

 Exclusive dealing agreements

 Dedicated selling

 Greater partnership between seller & reseller

 Used in:
• Distribution of new automobile
• Women apparel brands
 Selective Distribution
 No. of intermediaries > few

 Used by established companies

 More control, less cost than intensive

 Enables producer to gain adequate market

coverage

 Eg:
 Nike
 Intensive Distribution
 Product at as many outlets

 Increase coverage & sales

 Helps in short term performance

 Used by where great deal of location convenience required

by consumer

 Used in:
 Tobacco products
 Soap
 Snack foods
 Gum
 Terms and Responsibilities
 Opportunity to be profitable

 Respect ,rights & role to be defined

 Elements of trade relation mix:

• Price policy
• Conditions of sale
• Distributors territorial rights
• Mutual services and responsibilities