Marketing Intermediary

A business firm that operates between producers and consumers or business users, also called a middleman.

May be a wholesaler, retailer, or facilitating intermediary.

Activities involved in selling goods and services to ultimate consumersRetailing

© PhotoDisc

Activities involved in selling goods and services to ultimate consumers

Wholesaler

Retailing

An intermediary that handles the redistributes of goods to retailers, other distributors, and sometimes end consumers

© PhotoDisc

Activities involved in selling goods and services to ultimate consumers

Wholesaler

Retailing

An intermediary that takes title to the goods it handles and redistributes them to retailers, other distributors, and sometimes end consumers

DirectMarketing

A distribution channel consisting of direct communication to a consumer or business recipient

Figure 14.2: Major Types of Wholesaling Intermediaries

Types of Wholesaling Intermediaries

Sales branch: carries inventory and processes orders from available stock

Sales office: serves as a regional office for for manufacturer’s sales personnel, but does not carry an inventory

Manufacturer-Owned Facilities

Square D

Types of Wholesaling Intermediaries

Trade fair: Periodic show in which manufacturers in a particular industry display their products and services for wholesale and retail buyers

Merchandise mart: A permanent facility in which manufacturers display products for visiting wholesale buyers

Manufacturer-Owned Facilities

Americas Mart

Types of Wholesaling Intermediaries

Merchant wholesaler: An independently owned intermediary that takes title to the goods it sells

Merchant wholesalers include: Rack Jobbers Cash-and-Carry

Wholesalers Truck Wholesalers Drop Shippers Mail Order Wholesalers

Independent WholesalingIntermediaries

Types of Wholesaling Intermediaries

Agents and Brokers: A second group of independent intermediaries who may or may not take possession of the goods, but never take title. They include:

Commission merchants Auction houses Brokers Selling agents Manufacturer’s agents

Independent WholesalingIntermediaries

Types of Wholesaling Intermediaries

Manufacturers’ agent: A wholesaling intermediary who represents multiple manufacturers of related, but noncompeting products

Work on a commission basis and are assigned to geographic territories

Independent WholesalingIntermediaries

Fundamental Retail Challenges: Shelf Space

Stockkeeping unit (SKU): specific product offering within a product line that is used to identify items within the line

Slotting allowances: fees paid by manufacturers to secure shelf space from retailers for their products

Assortment Management: selecting the right mix of products and product lines to meet target market.

Types of Retailers

Retailers can be categorized by: Form of ownership Shopping effort by customer Services provided to customers Product lines Location of retail transactions

Classifying by Product LinesClassifying by Product Lines: This classification system groups stores by the product lines they carry. Limited-line storeLimited-line store: A retailer that offers a

large assortment within a single product line, or within a few related product linesExamples include IKEA home furnishings and

Ethan Allen furniture Category killers: retailers that combine huge

selection and low prices within a single product categoryHome Depot and Staples are examples

Department storeDepartment store: large store that offers a variety of merchandise, such as men’s and women’s clothing, appliances, linens, and furniture

Mass merchandiserMass merchandiser: store that stocks a wider line of goods than a department store, usually without the same depth of assortment within each line

SupercentersSupercenters: Large stores, though still smaller than hypermarkets, that combine discount store merchandise and groceries

Off-price retailersOff-price retailers: Stores that find exceptional deals on well-known, brand-name clothing and resells them at low prices

Classification of Retailers by Form of OwnershipClassification of Retailers by Form of Ownership Chain stores: Groups of stores that operate under

central ownership and management and sell essentially the same product linesChain stores have the advantages of purchasing and

advertising economies of scale Independent Retailers: account for about 43%

of all retail salesAdvantage of friendly, personalized service

Cooperatives: Groups of independent retailers who band together to increase buying and advertising power

Ace Hardware Cooperatives like

Ace help independent retailers compete with chains

Classification by Shopping EffortClassification by Shopping Effort: Classification system based on the reasons why consumers shop at particular retail outlets

Retail stores can be classified as: Convenience Shopping Specialty

Classifying by Services ProvidedClassifying by Services Provided: This classification system consists of three retailer types: Self-service Store (e.g., Kmart) Self-selection Store (e.g., Winn-Dixie or

Kroger grocery stores) Full-service Retailers (e.g., Dillard’s or

Macy’s)