Revel Flashcards 8.2 What is the rationale for using intermediaries?
What is the role of an intermediary?
Is to increase the efficiency and reduce the costs of individual transactions.
What is the value of intermediaries?
- They add value for the manufacturer and customer.
Value added services fall into 3 main categories: transactional, logistical and facilitating.
Transactional value: Risk, marketing, administration.
Logistical: Assortment, storage, sorting, bulk breaking and transportation.
Facilitating: Financing, training, information and after sales.
What is transactional value?
risks move to the intermediary who takes title to the goods and as legal owner is responsible for their resale.
With the transfer of title and risk, the need to communicate effectively with the market increases.
Logistical value?
Assortment strategy is a critical variable in a retailer’s marketing strategy. The key is to build an assortment to reflect the needs of the target market.
Assortment can operate at a brand or product level, the benefit to the consumer is the wide choice available from one source.
The role of wholesalers: major role in providing the wide assortment of goods required.
Further dimensions of logistical value: Storage, Sorting and Bulk Breaking.
- Storing products at locations that are appropriate and convenient to the customer.
- Sorting means grouping many diverse products into more uniform, homogenous groups. Which then may be further divided into smaller sub-categories such as size, shape, weight and colour.
- Bulk breaking is the division of large units into the smaller more manageable quantities required for the next step in the chain.
Transportation is last step
