There are different ways of how we can get a final product in our hands. The first and easiest way is buying the product directly from the manufacturer and the other way is through a middleman. A different better-structured term about middleman is marketing intermediary. Marketing intermediaries are one part of the chain supply that is helping to transfer the final product to the consumer. We can distinguish four types of marketing intermediaries: agents, distributors, wholesalers, and retailers.
Marketing Intermediaries Example |How Marketing Intermediaries are working?
So how they are gaining the profit from these transactions. To make the definition simple and to understand how they are working, let’s make a small example. One company is producing a product that has a selling price of $100, but the price of producing is $50. The marketing intermediary is contacting the producer and they are making an agreement about the product.
They are talking about the quantity and the price of the product. So from here, the marketing intermediary can sell the product at a bigger price than he bought from the producer and the difference is the profit that he is gaining.
It is important to say that the different types of middlemen are functioning in another way, so let’s see the different types that we mentioned in the first paragraph.
Types of Marketing Intermediaries
Let’s begin with the agents. The agents are an independent entity that works on a commission basis. They act as a manufacturer’s representative to the final buyer of the product. They are not owning the products in their personal storages, they are getting them from the producer.
Wholesalers purchase the product in large quantities at smaller rates. They have possession of the products and they usually sell these products to other marketing intermediaries (retailers). The example provided is mostly applying to this type of marketing intermediary.
Distributors are people that are delivering one type of product or let’s say one brand. As a difference, the wholesalers are selling a lot more products from the distributors. Same as the wholesalers the distributors can have a deal with another retailer. They are selling the products to them and from there they are gaining the profit.
And the last type the retailers are usually the final supply chain. They are getting the products from the wholesalers or the manufacturers and they are selling the product in their physical or online stores. Of course, they own the products that they are selling and usually, the customers are getting the final products from them.
Pros and Cons of Marketing Intermediaries
The most important thing is that they are helping a lot to the manufacturer in terms of marketing, delivery, and all the steps to getting the product to the customer’s home. They can create a better marketing campaign through different sources and in that way enlarge the profit of the manufacturer.
They can definitely help because they will cover all of the things that are leading to selling the products. If all the steps are finished without any mistakes then they are giving positive feedback for the product.
The cons happen when mistakes occur. The marketing does not always give positive results, most of the time they can give negative results, because of the bad managing.
Another negative side is the distribution if the product during the delivery is crashed or it is not working, that situation is giving negative feedback to the retailer, but also to the manufacturer.
We must say that the delivery time is another thing that can make a positive or negative impact depending on how it is executed.
In this article, we tried to cover this topic and in simple words try to describe all the important elements about marketing intermediaries.
The whole article is opposition to the article about micromarketing. There we are talking about the production of unique products, here we have mass production. The same product is selling to the customers without a chance of customization.