Function of the channels of distribution, Marketing Management

Function of the channels of distribution or the role of middle man or intermediaries:

1.       Information: Middle men have a role in providing information about the market to the manufacturer. Development like changes in customer demography, psychographic, media habits and the entry of a new competitor or a new brand and changes in the customer preferences are some of the information that all manufactures want. Since these middle men are present in the market place and close to the customer they can provide this information at no additional cost.

2.       Price stability: maintaining price stability in the market is another function a middle man performs. Many a time the middle man absorbs an increase in the price of the products and continues to charge the customer the same old price. This is because of the intra - middle ctionman competition. The middle also maintains price stability by keeping its overheads low.

3.       Promotion: promoting the product is in his territory is another function that the middle man performs. Many of them design their own sales incentive programmers, aimed at building customers traffic at the other outlets.

4.       Financing: middleman finance manufactures operation by providing the necessary working capital in the form of advance payments for the goods and services. The payment is in advance even through the manufacturer may extent credit, because it has to be made even e before the products are bought, consumed and paid for by the ultimgate consumer.

5.       Title: most middleman take the title to the goods, services and trades in their own name. This helps in diffusing the risks between the manufacfessturer and middleinman. This also enables to the middle man to be in physical promotion of the goods, which in turn enables them to meet customer demand at very moment it arises.

6.       Help in production function: the producer can concentrate on the production function leving the marketing problem to middlemen who specializa in the profession their services can best utilizeto selling theproduct thefinanance required for organizing marketing canprofitably beused in production where the rate return would be greater

7.       Matching demand and supply: the chief function of intermediaries is to assemble the goods from many producers in such a manner that a customer can affect purchases with ease. According to wrote alderson the goal of marketing is the matching of segments of supply and demand. The matching process is undertaken by performing the following functions:

A. contractual: finding out buyers and sellers.

B. merchandising: producing goods that will satisfy market requirements.

C. pricing: process of attaching value to the product in monetary terms.

D. propaganda: sales promotion activities.

E. physical distribution: distribution activities.

F. termination: settlement of contract paying the value and receiving the goods.

8.       Pricing: in pricing a product the producer should invite the suggestions from the middlemen who are very close to the ultimate users and know what they can pay for the product. Pricing may be different for different markets or products depending upon the channel of distribution.

Posted Date: 9/19/2012 7:07:31 AM | Location : United States







Related Discussions:- Function of the channels of distribution, Assignment Help, Ask Question on Function of the channels of distribution, Get Answer, Expert's Help, Function of the channels of distribution Discussions

Write discussion on Function of the channels of distribution
Your posts are moderated
Related Questions
A trapezoid midsegment measures 6. One of the bases measures 10. What is the measure of the other base? What rule makes this problem solvable

What are aspects of activities use in green marketing? At workshop of green ecological marketing was explained as the study of the positive and negative aspects of activities

What is Product Research in scope of Marketing Research? Product Research: Product research is related with the conversion of customer require to tangible product offer.

An art that predicts the likelihood of economic activity on the basis of certain assumptions: a. Compensation b. Sales forecasting c. Sales budgeting d. Selling policy


New products development process: Idea generation: the development of the new product starts with a generation of new ideas. There may be a number of sources of the ideas gen

You are a manager in the investment industry, whose role is to provide investment portfolio advice and managementto a client, who is your investorprincipal. You should identify t

Question 1: i). Use appropriate examples to describe and elaborate on the "Functions of advertising". ii) There are different types of advertising like Retail Advertising,

i would like to join your company as academic writer. how do i go about it?

Question: The Kaiserburger fast-food operates to the following pre-determined standards: Raw material 50 kg @2.5 125 Direct labour 14 hrs @ 4.75 66.50 The A