Question

(Discussion post of Marketing 270 need a paragraph answer)

1. Why do companies use marketing intermediaries? What would be pros and cons?   Explain how retailers can be classified based on the amount of service offered and discuss an example of each retailer type.

Answer 1

Marketing Intermediaries

Marketing intermediaries, also known as distribution intermediaries, are firms hired by the product manufacturer to promote, sell and distribute the products to the final consumer. Basic types of marketing intermediaries include agents, marketing agencies, wholesalers and retailers and distribution companies. Agents and marketing agencies assist with product promotion, while wholesalers, retailers and distribution companies sell the product to customers.

When to Use Marketing and Sales Intermediaries

Whether to use an intermediary or work directly with your in-house staff will depend on your business and the resources you have available. Some businesses don’t have a marketing or sales team, so outsourcing those roles can help them to complete tasks they would not have otherwise been able to do. Other organizations have marketing and sales departments, but use intermediaries during times of growth or when requiring a specific skill or expertise they don’t currently have available in-house. Using an intermediary can help organizations reach new geographic regions, access new spheres of knowledge and attract new customers from other markets.

However, certain activities should generally be kept in-house. For example, if your organization has some low-cost activities that anyone in the business can perform without much supervision, it may make sense to do those kinds of tasks yourself. Many businesses also choose to keep their core competencies, aspects of the business that are critical to their success, in-house. This enables them to have more control over the key elements of their business and invest in the areas that really matter.

Cost and Time Savings

Hiring a marketing or sales employee within an organization takes time. The business needs to review several candidate applications, interview prospective employees and onboard their pick, all of which can take several months. After going through the hiring process, the company may experience employee turnover which can lead to another round of hiring, wasting time and resources in the process.

Reputation Risks of a Middleman

One of the biggest disadvantages of using a middleman is that you put the reputation of your company into someone else’s hands. While businesses work in good faith, you don’t always know how the outsourced company will behave and whether it will be in line with your company’s core values.

Lack of Attention

It’s no secret that middlemen often work with several organizations at one time. Sales distributors and marketing agencies have several clients. While this can be an advantage in some ways, it can also cause a business to suffer if they receive a lack of attention.

Retailers also attract consumers by providing the services which enhances the purchase experience along with offering desirable products at an affordable prices. Retailers are classified in to There levels based on the service they perform. They are self-service, assorted service, Full service. Rather using glossy terms in simple words they can be described as:

Self-Service: In self-service the customer’s help themselves for choosing the product. For example consider Automatic Teller Machine which revolutionized the banking system it is an example of self service. Where people can deposit their money or withdraw their money by themselves.

Assorted-Service – Many of the retailers offers different kind of services at some level. The different service which includes are assisting in the selection of the product, helping the handling of point of purchase transaction, arrangements for delivery of the products etc. For example consider a retail shop you went to purchase a refrigerator. You completely don’t have any idea of the product or confused due to different brands, you can assistance and guidance for choosing the product depending on your requirements, choosing the best payment plans, delivery to home, etc., depending on the requirements one can avail the service which he needs.

Here are some examples of the different types of retail stores where consumers can purchase products for immediate use or consumption.

• Department Stores: Sell a wide range of merchandise that is arranged by category into different sections of the physical retail space. Some department store categories include shoes, clothing, beauty products, jewelry, housewares, etc. Examples of department store retailers include Macy's, Nordstrom, and JCPenney, to name just a few.
• Grocery Stores and Supermarkets: Sell all types of food and beverage products, and sometimes also home products, clothing, and consumer electronics as well.
• Warehouse Retailers: Large no-frills warehouse-type facilities stocked with a large variety of products packaged in large quantities and sold at lower-than-retail prices.

• Specialty Retailers: Specialize in a specific category of products. Toys ‘R’ Us, Victoria's Secret, and Nike are examples of specialty retailers.
• Convenience Retailer: Usually part of a retail location which sells gasoline primarily, but also sells a limited range of grocery merchandise and auto care products at a premium "convenience" price from a brick-and-mortar store.