Middlemen in Marketing PDF

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Summary

As the term implies, a middleman, or channel member, is an independent business functionary who acts as a link between a manufacturer and a consumer. Brokers fall into two categories: (a) Merchant brokers and (b) Agent brokers. Merchant brokers are the most common sort of broker....

Description

MIDDLEMEN IN MARKETING As the term implies, a middleman, or channel member, is an independent business functionary who acts as a link between a manufacturer and a consumer. Brokers fall into two categories: (a) Merchant brokers and (b) Agent brokers. Merchant brokers are the most common sort of broker.

The Merchant Middleman: Manufacturers' middlemen are those third-party intermediates who actually take custody of items when they are transferred from the maker to the end customer. So, merchant middlemen become proprietors in their own right and execute all required tasks as principals in the process of distributing products and services to their customers. Wholesalers and Retailers are the two basic types of merchant middlemen to be found in the marketplace.

Wholesaler (or distributor)

The wholesaler serves as a marketing intermediary, operating as a link between manufacturers and retailers. That is, the wholesaler's target market is not consumers, but rather retailers. One of the most crucial characteristics of this sort of middleman is that they deal in enormous amounts of merchandise. Their business model is to purchase large quantities of items from manufacturers with the intention of distributing them to retailers, who in turn sell

them to customers. Example: A wholesaler of rice may purchase tones or truckloads of rice and sell it to retailers in quintals, who will then sell it to customers in kilos or smaller amounts of rice.

Retailer A retailer is a type of distribution middleman who acts as a link between wholesalers and customers. He is the final unit in the network of channels to be reached. When compared to a wholesaler, a retailer does not deal in large quantities of merchandise. Generally speaking, wholesalers deal in huge numbers of a few different sorts of commodities, whereas retailers deal in modest amounts of a variety of different types of items. Listed below are the most common categories of retailers:

I)

General stores: These can be located in the vicinity of residential communities. They carry a wide range of products that people require for their everyday lives.

II)

Stores that specialise in a single sort of goods: These types of shops specialise on a single type of product. Pharmacies, footwear stores, bread goods stores, and stationery stores are examples of such businesses.

III)

Specialty Stores: These establishments are dedicated to meeting the needs of a certain sort of consumer. For example, women's shops, children's clothing stores (such as Little Kingdom), and so on.

IV)

The fourth type of dealer is the exclusive dealer, who only deals with one manufacturer's items. For instance, Vimal's special store or Philip's exhibition room are both examples.

V)

Department store: They strive to meet all of their customers' needs in a one location. These are often quite big stores with a vast inventory of things in a wide variety of sizes. In India, these kinds of establishments are rare. A department store is comprised of a number of departments that sell a variety of various types of products.

(b) The Middleman, who is an agent.

It is not the agent middleman's responsibility to gain title to or ownership interest in the process of distribution of commodities. They play an active role in the transfer of ownership. Simply put, the agent intermediary operates as an agent for the manufacturer, facilitating the formation of contracts between him and the buyer. Occasionally, a middleman will establish the price, define the terms and conditions of sale, arrange for delivery, and so on, but they will not be involved in the actual transaction with the buyer. Because they do not act in their own right, they are not exposed to any risks throughout the course of business transactions.

Listed here are the most common categories of agent middlemen:

1. Brokers

Brokers are not involved in the actual purchase or sale of products. They only serve as intermediaries between buyers and vendors, bringing them together. Brokers are often hired by sellers to find potential purchasers for

their

wares, and they work on

commission. They enter into transactions with purchasers on the seller's behalf in accordance with the terms and conditions specified. They vanish from the picture as soon as the purchase is completed and a 'buyer – seller relationship' is created between the manufacturer and the consumer. Brokers do not take any risks on their own behalf. A commission is paid to them in exchange for their services.

2. Agents: The Commission Agents are the second type of commission agent. They serve a function that is nearly identical to that of brokers. In other words, they do not acquire and sell items on their own behalf. In addition to resolving contracts between the seller and the buyer, commission brokers arrange for the supply of products and the underwriting of the transaction. Consequently, they keep large

inventories of items in their warehouses. Commission agents are occasionally given the authority to sell on credit at their own risk. In other words, they agree to assume the risk of bad debts accruing as a result of the credit sales.

(iii) Sales Representatives

Manufacturer's products are sold through selling agents who are granted exclusive rights to deal with or sell the manufacturer's products in a certain geographic area. As a result, a territorial restriction is imposed on the region in which they operate. For the most part, they only work in the defined zone when it comes to the items of the producer....