Ex.
1. Intermediaries like wholesalers and retailers who buy, take title and sell are known as – Merchants
2. Some others who act on behalf of the producer but do not
take title are known as - agents.
Importance
1. It must convert potential buyers to profitable order
2. It must not only serve markets but also ‘make markets’
3. Push v/s Pull strategy needs to be worked out
4. Push is for low brand loyalty, impulse item
5. Pull is for high brand loyalty, high involvement item
Channel development
1. Usual intermediaries – agents, wholesalers, retailers, trucking companies (transporters) and warehouses
2. Hybrid channels : use of sales force, internet, home shopping, telephone along with usual intermediaries
Role
1. Intermediaries bring in pooled financial resource
2. They help in breaking bulk and create assortment for customer
3. They are most cost effective due to specialization
4. They are most helpful in small value items which cannot be sold through direct marketing
Function
1. Gather information from the marketing environment
2. Develop and send persuasive communication to customers
3. Reach price agreement and transfer ownership
4. Acquire funds to finance inventories at different levels
5. Provide storage and movement to products
6. Provide customer with retail financing
7. Carry the risk associated with the channel work
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