Which of the following are functions performed by intermediaries in a marketing channel?

Marketing channels, such as distributors, wholesalers and retailers, provide your business with three kinds of functions: buying products for resale to customers, distributing products to customers and supporting sales to customers through financing and other services. The channel functions supplement your own direct sales operations and extend your market coverage to a wider group of customers.

Transactional Functions

Your channel partners offer you important transactional functions, according to Marketing Crossing. They buy products from you and sell them to their own customers, increasing the total revenue from your product range. At the same time, they minimize your transaction costs. You only deal with a channel partner; they deal with a large number of customers. They also take the risk of holding inventory on your behalf, reducing your stockholding costs and your risk of holding unwanted inventory.

Added Value

In certain markets, channel partners add value to a transaction. When channel functions are performed by intermediaries, they may increase the value of a product. For example, a channel partner may adapt the product for customers in specific industries – a process that could prove expensive for your business. Channel partners can also add value by grouping related products and services into packaged solutions that enable customers to obtain all their needs from a single source. Distributors that add value enhance your reputation by meeting customers’ needs effectively. Channel marketing managers oversee the partnership between channel and source, according to Noodle.

Logistical Functions

Distributors and wholesalers provide an important logistical function in the role of marketing channel. Some channel partners take responsibility for the physical distribution of products to your customers. They store the products and provide transport to fulfill customers’ orders. Other partners may take bulk deliveries from your company and split them into the smaller quantities that customers order. By taking on this function, they reduce the burden on your logistics operations.

Facilitating Functions

Channel partners provide a range of services that facilitate and support sales of your products. These intermediaries in business use their sales force to deal with customers, negotiate sales and provide customer service. The sales force also gathers market intelligence, which can help you to market products more effectively. In some cases, channel partners may provide credit and other forms of financing to make it easier for customers to buy.

Marketing Channel Support

If your products are complex and require support, you can allocate responsibility to your channel partners. They can set up service operations that can install, maintain, service and repair your products in their territories. This support reduces the workload for your service teams and ensures that customers can obtain prompt, local support when they need it.

Intermediaries in a distribution channel provide services that enable manufacturers to reach different types of customers. A channel might include a number of intermediaries, such as agents, wholesalers, distributors and retailers. Intermediaries act as middlemen between different members of the distribution chain, buying from one party and selling to another. They also may hold stock and carry out logistical and marketing functions on behalf of manufacturers.

Direct and Indirect Channels

Manufacturers sell products and services to their customers through direct and indirect channels. Where manufacturers sell direct to customers through their own salesforce or website, they do not require intermediaries. If they wish to sell to customers and prospects their sales teams cannot reach, they appoint intermediaries to act on their behalf. Intermediaries may have additional resources and relationships to supplement to a manufacturer’s own sales and marketing resources, enabling it to reach a wider customer base.

Selling Through Agents

Agents act as independent representatives for manufacturers, selling to other intermediaries such as wholesalers or retailers. These agents can be individuals or companies. Agents earn commission or fees for the sales they make or the services they provide. They form a valuable extension to a manufacturer’s internal sales resources.

Reaching More Customers Through Retailers

Independent stores and retail chains sell products to consumers and business customers. By appointing retailers, manufacturers can reach different areas of the country and target smaller customers they could not afford to serve directly. Retailers buy products for resale direct from manufacturers or from wholesalers. They generally stock goods from many different suppliers, including competitive offerings in the same product category, so manufacturers must use incentives and discounts to encourage retailers to push their products in order to achieve strong sales.

Simplifying Logistics through Wholesalers

Wholesalers buy products in bulk from a number of different manufacturers, stocking them in warehouses and selling them to retailers. By holding stock, wholesalers enable manufacturers to supply customers in different regions without investing in their own warehousing facilities. Wholesalers also help manufacturers reduce their logistics costs by delivering stock to retailers or offering stores a collection service.

Cooperative Marketing Through Distributors

Distributors carry out similar functions to wholesalers, but generally have closer working relationships with manufacturers. Distributors may have exclusive arrangements with manufacturers and do not carry competing products. They may be part of a franchise, only offering the products of one manufacturer. Like wholesalers, they provide valuable warehousing and logistical functions for manufacturers. They may also participate in cooperative marketing programs with suppliers, improving sales for manufacturers.

What are the 4 marketing intermediaries?

Which of the following functions are performed by marketing channels?

What are the essential functions that are performed by channel intermediaries?

What are the 3 main types of intermediary?