Revel flashcards 8.3 What are the different types of intermediary?
What are the 5 different types of intermediary?
- Wholesalers
- retailers
- Agents and Brokers
- Distributors and dealers
- Franchisees
Key characteristics of distributors and dealers:
- They add value through services associated with stocking or selling inventory, credit and after sales service.
- Often used in B2B markets, but can be seen being used in B2C markets, as in the case of computer dealers.
Key characteristics of Agents and Brokers:
- Intermediaries which have legal authority to act on behalf of the manufacturer, but they don’t take the legal title of the goods or handle them in anyway.
- Prime function is to bring the buyer and seller together.
Example: Universities may sometimes use agents to recruit overseas students.
Key characteristics of wholesalers:
- Don’t normally deal with the end consumer, but with other intermediaries such as retailers.
- Wholesaler takes the legal title to the goods as well as taking physical possession of them.
Key characteristics of Franchisees:
- Franchisee holds a contract to supply and market the design of a product of. a franchisor.
Examples: McDonald’s
Key characteristics of Retailers:
- Sell direct to the consumer, may purchase directly from the manufacturer or deal with a wholesaler depending on the purchasing power and volume.
Retailers can be classified on a number of criteria such as…
Form of ownership:
- Independent
- Corporate chain
- Contractual system
Level of service.
Form of ownership : Retailing.
- Retailing for many years was the realm for small and independent businesses.
- However, since the 1950s the retail structure of the high street has evolved now favouring the larger organisations.
Independent form of ownership: Retailing.
- Most common form of ownership in terms of the number of retail outlets, typically the usual retail outlet is managed by a sole trader.
Benefit to the consumer of this is personalised attention and flexibility can be offered.
Forces which work against a small retailer are:
- Changing population patterns.
- Supply and resource problems
- Professionalism of large multiple chains.
To combat this smaller retailers must look for niches, specialised working ours and be more effective with suppliers.
Corporate chain form of ownership: retailers.
- Has multiple outlets under common ownership.
- Many will centralise decision making where economies of scales can therefore be benefited from. Gain greater purchasing power over suppliers.
- Main strength of corporate chains comes from unity rather than diversity.
Contractual system form of ownership: Retailers.
Definition = The linking of members of distribution channels through formal agreements rather than ownership.
Collective strength as with franchisees, can provide a valuable tool in promoting customer awareness and familiarity, leading in turn to retaining loyalty.
Level of service: retailers
3 main types of service level are: full, limited and self-service.
Full service providers - clear objective to treat customers as valued individuals. Which reflects their premium pricing strategy.
Self-service (supermarkets)
Limited service - charge competitive prices but want to make purchasing easier, e.g.Home delivery may be offered.
What is the definition of the breadth of range?
Represents the variety of different product lines stocked.
Definition of depth of range?
Defines the amount of choice or assortment within a product line, on whatever dimensions are relevant to that kind of product.
Some reasons for why operating methods are changing…
- Changing customer attitudes.
- Technological advances in logistics.
