which of the following companies uses a direct marketing channel? This is a topic that many people are looking for. bluevelvetrestaurant.com is a channel providing useful information about learning, life, digital marketing and online courses …. it will help you have an overview and solid multi-faceted knowledge . Today, bluevelvetrestaurant.com would like to introduce to you Episode 56: Types of Distribution Channel Intermediaries – YouTube. Following along are instructions in the video below:
“This brief lecture. We re going to focus on discussing some of the different types types of channel intermediaries in a prior lecture. We discussed obviously the purpose of distributors how they add value and one of those purposes of course is to get our products in the right product to the right person at the right place at the right time. It s a significant benefit of distribution and one of the primary objectives of distributions.
But one of the ways they do that is through what we call distribution channels. Which involves the route that products take to get to a location from where they re produced to ultimately where they re going to be consumed and so we re going to highlight some of those intermediaries. Some of those individuals and groups and businesses that are involved in the distribution channel that assist in moving products along to the next group or the end user now to start us off. Here let me go ahead and just draw out a basic distribution channel.
And so we ll say this first group is the producer. The group that actually produces the product. This next group here is going to be the wholesaler. And this next.
Group is going to be the retailer now these individuals and these businesses. Both perform some very very important functions. There s a reason that they re involved in the process..
Now first off when discussing wholesalers wholesalers are distributors that they buy products from producers. And they sell though they sell those products to other businesses or what we call non final users. And so these are obviously in groups that are going to use those either goods to produce something else or they re in turn going to sell them themselves of course now in some situations. You have some groups or some distributors that act.
Both as wholesale others. And retailers costco and sam s club is a perfect example of a distributor that works as a wholesaler and as a retailer. So there are of course. Exceptions to the rule.
But generally wholesalers will purchase those goods from a producer. Much like we are in this example. Here and then they sell them to other businesses or non final users. If you will now there can be some variation in terms of how this works logistically you can have what we call merchants.
Wholesalers or you can have what we call agents and brokers now merchants wholesalers actually take legal possession of the goods they distribute. And so they actually own the title they purchase them outright and take ownership of them. But they don t necessarily or may not necessarily take physical ownership of the goods..
Some might. But some may not you deal with drop shippers that of course don t take physical ownership. But full service merchants wholesalers. Often do the other end are agents and brokers and agents and brokers do not take possession of goods.
They actually don t even take ownership of goods agents and brokers merely facilitate a transaction they connect buyers and sellers and they arrange the transaction to take place they typically earn some type of commission and this is very uncommon or very common particularly with insurance right if you ve ever purchase insurance before maybe auto insurance. Usually you dealt with some type of agent or broker oftentimes. They re not necessarily related to the company that they re selling for they merely represent a number of different companies and they partner you with a particular insurance policy based upon cost and based upon need and policy and all those different types of things. And so they don t take ownership of it they merely facilitate and the exchange that takes place for you to purchase insurance.
And then in term for them to be able to sell you insurance and provide you with coverage now on the other end we have of course retailers now retailers are distributors that sell products to the final user. And so typically retailers will purchase products usually the wholesaler. But in dis certain distribution channels. The wholesaler does not always exist sometimes they produce or or actually purchase those goods directly from the producer themselves the person that actually manufactures and produces the actual products and so that is certainly a possibility of course.
But for our example. Let s assume that we have a wholesaler in this case. The retailer will actually purchase the goods from the wholesaler..
And they in turn will go ahead and sell those to an end user now you might ask yourself well what s to prevent producers and wholesalers from selling them themselves right. Why would you have another party in the chain a retailer to sell your particular goods. If you could do it yourself. And the reason is retailers provide a valuable service.
And what that is generally speaking is they provide the brand recognition and this is a very important thing you deal with retailers like walmart like target. Not only do they have instant brand recognition instant credibility. They have a wide consumer base. If you will but they have the means necessary to market different products and services.
Because if you are a retailer you re a wholesaler and a producer maybe you don t have the bricks and mortar locations necessary to develop a presence and to reach a wider audience and so you may not have that piece to the puzzle. And so maybe you work with the retailer in order to actually market towards a wider audience and extend your reach. Which is very very important and one of the reasons. Why retailers are commonly used and a lot of companies don t control the entire distribution channel.
Because they know about the capital investment. That s going to be required to set up all of these. Smaller locations and ultimately develop that recognition in this case..
Maybe you can work with the retailer that can provide you with that particular recognition now there are a number of different types of retailers typically we group them into a couple different categories usually we have what we call store retailers and we also have what we call non store retailers and store retailers typically include retailers. That obviously have a particular location a physical bricks and mortar location. If you will and so those obviously you have a physical presence. But a non store retailer can include things like on online retailing can include things like direct response retailing.
Which your selling products through catalogs and infomercials can include things like direct selling in which you re actually selling products directly to consumers in their homes. Most commonly mary kay or pampered chef and it also includes things like vending in which you re selling products through actual vending machines. And there are a number of different things you can sell it used to be that it was merely sodas and snack foods. And now when you look some vending machines sell electronics that are in hotels and airports and so you can buy ipods and headphones and all these other things that originally you couldn t actually purchase in an actual vending machine.
So ultimately the retail side is very very important here and as i said before not necessarily in all environments will you have each of these intermediaries involved in the process and of course as we add more channel intermediaries. We re of course increasing the cost of our goods and services. Which is why you see some companies go a direct route because they know that they can help maintain low costs and in turn attract and make it more appealing for customers to purchase their particular products. ” .
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Channel intermediaries include those businesses that assist in transferring between the producers and the ultimate consumer. In this video I ll describe those two channel intermediaries: wholesalers and retailers.
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