Types of intermediariesWholesalersbuyproductsfromthemanufacturerand resellthemtoretailersBrokersfacilitatetransactionsbetweenbuyersandsellersAgentsmayrepresenteitherthebuyerorsellerManufacturers'agentsrepresenttheseller·Purchasing agents represent the buyer.7001070100111001000010010111010010C2006PrenticeHal
©2006 Prentice Hall 12-6 • Wholesalers buy products from the manufacturer and resell them to retailers. • Brokers facilitate transactions between buyers and sellers. • Agents may represent either the buyer or seller. • Manufacturers’ agents represent the seller. • Purchasing agents represent the buyer. Types of intermediaries
Channel Length and FunctionsChannellengthreferstothenumberofintermediaries between the supplier and theconsumer.Direct-distributionchannelshavenointermediariesIndirectchannelshaveoneormoreintermediariesEliminating intermediaries canpotentiallyreduce costs107001:070100111101000010010111010010C2006PrenticeHal
©2006 Prentice Hall 12-7 Channel Length and Functions • Channel length refers to the number of intermediaries between the supplier and the consumer. • Direct-distribution channels have no intermediaries. • Indirect channels have one or more intermediaries. • Eliminating intermediaries can potentially reduce costs
Channel Length and Functions.Disintermediation is the process of eliminatingtraditionalintermediariesCompletedisintermediationhasnotoccurred.TheU.S.distribution system is the mostefficient inthe world.Using intermediariesallows companies to focusonwhat they do best.Manytraditionalintermediarieshavebeenreplacedwith Internetequivalents.·Online storefronts can lower costsof retail space andwarehouses100010001111010000100101110100102006PrenticeHa
©2006 Prentice Hall 12-8 • Disintermediation is the process of eliminating traditional intermediaries. • Complete disintermediation has not occurred. • The U.S. distribution system is the most efficient in the world. • Using intermediaries allows companies to focus on what they do best. • Many traditional intermediaries have been replaced with Internet equivalents. • Online storefronts can lower costs of retail space and warehouses. Channel Length and Functions
Functions of a Distribution ChannelChannelfunctionscanbecharacterizedasfollows:Transactional·Logistical·Facilitating1000007001010100111101000010010111010010C2006PrenticeHall000
©2006 Prentice Hall 12-9 Functions of a Distribution Channel • Channel functions can be characterized as follows: • Transactional • Logistical • Facilitating
Transactional FunctionsTransactionalFunctionsinclude.MakingcontactwithbuyersMarketingcommunicationstrategiesMatchingproductstobuyerneedsNegotiatingprices·Processingtransactions100000000110000000700700C2006PrenticeHall
©2006 Prentice Hall 12-10 • Transactional Functions include: • Making contact with buyers. • Marketing communication strategies. • Matching products to buyer needs. • Negotiating prices. • Processing transactions. Transactional Functions