REVIEW THE EFFECT OF MARKETING INTERMEDIARIES ON FIRMS EFFECTIVENESS.


INTRODUCTION

Marketing intermediaries refers to resellers, physical distribution firms, marketing services agencies, and financial intermediaries. Marketing intermediaries help to sell, promote, and distribute goods. Intermediaries take �many forms. Resellers Physical �distribution firms Marketing services �agencies Financial �intermediaries Customer markets must be studied. Market types Consumer Business Government Reseller International Customer markets must be studied. Market types Consumer Business Government Reseller International Various publics must also �be considered Government Media Financial Local General Internal Citizen Action Groups

IMPORTANT INFORMATION ABOUT MARKETING INTERMEDIARIES.

The production manager at my company argued at yesterday’s staff meeting that wholesaling intermediaries or “middlemen” simply increase the cost of products and that is whey company sales are lower. What would I tell the Production Manager? Is there any benefit from marketing intermediaries? Where are my choices?
a. The marketing intermediaries are primarily useful for the government. He intermediaries are responsible for administering the tax and inspection programs imposed by the Federal Trade Commission.
b. Marketing intermediaries add efficiency to the distribution of products by reducing the number of buyers seller transaction required to satisfy the buyer’s needs.
c. Marketing intermediaries conduct the product development function. Although this may be expensive companies benefit by having a steady flow of new product ideas
d. The primary benefit involves supporting foreign marketing operations in the domestic market; however, market intermediaries are really not necessary and tend to just add another layer of administration between the producer and the buyer.
Marketing intermediaries refers to resellers, physical distribution firms, marketing services agencies, and financial intermediaries. These are the people that help the company promote, sell, and distribute its products to final buyers. Resellers are those that hold and sell the company’s product. They match the distribution to the customers and include places such as Wal-Mart, Target, and Best Buy. Physical distribution firms are places such as warehouses that store and transport the company’s product from its origin to its destination. Marketing services agencies are companies that offer services such as conducting marketing research, advertising, and consulting. Financial intermediaries are institutions such as banks, credit companies and insurance companies.
Another aspect of microenvironment is the customers. There are different types of customer markets including consumer markets, business markets, government markets, international markets, and reseller markets. The consumer market is made up of individuals who buy goods and services for their own personal use or use in their household. Business markets include those that buy goods and services for use in producing their own products to sell. This is different from the reseller market which includes businesses that purchase goods to resell as is for a profit. These are the same companies mentioned as market intermediaries. The government market consists of government agencies that buy goods to produce public services or transfer goods to others who need them. International markets include buyers in other countries and includes customers from the previous categories.
Competitors are also a factor in the microenvironment and include companies with similar offerings for goods and services. To remain competitive a company must consider who their biggest competitors are while considering its own size and position in the industry. The company should develop a strategic advantage over their competitors.
The final aspect of the microenvironment is publics, which is any group that has an interest in or impact on the organization’s ability to meet its goals. For example, financial publics can hinder a company’s ability to obtain funds affecting the level of credit a company has. Media publics include newspapers and magazines that can publish articles of interest regarding the company and editorials that may influence customers’ opinions. Government publics can affect the company by passing legislation and laws that put restrictions on the company’s actions. Citizen-action publics include environmental groups and minority groups and can question the actions of a company and put them in the public spotlight. Local publics are neighborhood and community organizations and will also question a company’s impact on the local area and the level of responsibility of their actions. The general public can greatly affect the company as any change in their attitude, whether positive or negative, can cause sales to go up or down because the general public is often the company’s customer base. And finally those who are employed within the company and deal with the organization and construction of the company’s product.

Functions performed by marketing intermediaries
Marketing intermediaries provide 3 major functions:
1. Maturity transformation
Converting short-term liabilities to long term assets (banks deal with large number of lenders and borrowers, and reconcile their conflicting needs)
2. Risk transformation
Converting risky investments into relatively risk-free ones. (lending to multiple borrowers to spread the risk)
3. Convenience denomination
Matching small deposits with large loans and large deposits with small loans.

Advantages of marketing intermediaries
There are 2 essential advantages from using financial intermediaries:
1. Cost advantage over direct lending/borrowing
2. Market failure protection the conflicting needs of lenders and borrowers are reconciled, preventing market failure
The cost advantages of using marketing intermediaries include:
1. Reconciling conflicting preferences of lenders and borrowers
2. Risk aversion intermediaries help spread out and decrease the risks
3. Economies of scale using financial intermediaries reduces the costs of lending and borrowing
4. Economies of scope intermediaries concentrate on the demands of the lenders and borrowers and are able to enhance their products and services (use same inputs to produce different outputs)

Types of f intermediaries
Marketing intermediaries include:
• Banks
• Building societies
• Credit unions
• Financial advisers or brokers
• Insurance companies
• Collective investment schemes
• Pension funds

There is a variety of intermediaries that may get involved before a product gets from the original producer to the final user. These are described briefly below:
Retailers
Retailers operate outlets that trade directly with household customers. Retailers can be classified in several ways:
• Type of goods being sold( e.g. clothes, grocery, furniture)
• Type of service (e.g. self-service, counter-service)
• Size (e.g. corner shop; superstore)
• Ownership (e.g. privately-owned independent; public-quoted retail group
• Location (e.g. rural, city-centre, out-of-town)
• Brand (e.g. nationwide retail brands; local one-shop name)

Wholesalers
Wholesalers stock a range of products from several producers. The role of the wholesaler is to sell onto retailers. Wholesalers usually specialise in particular products.

Distributors and dealers
Distributors or dealers have a similar role to wholesalers – that of taking products from producers and selling them on. However, they often sell onto the end customer rather than a retailer. They also usually have a much narrower product range. Distributors and dealers are often involved in providing after-sales service.

Franchises
Franchises are independent businesses that operate a branded product (usually a service) in exchange for a licence fee and a share of sales.

Agents
Agents sell the products and services of producers in return for a commission (a percentage of the sales revenues)

SOME OF THE EFFECTS OF THESE MARKETING INTERMEDIARIES ON FIRMS EFFECTIVENESS MAY INCLUDE;

1. If Retailers operate outlets that trade directly with household customers indirectly, this will cause inefficiency to a firm.
2. If agents sells products and services of producers in higher returns for a commissions not in line with best business practices.
3. If franchise firms fail to pay agreed license fees this will certainly affect other firm’s effectiveness.
4. An ineffective distribution chain or channel can cause ineffectiveness to a firm base on their narrower product range.
5. If whosaler decides to stock or hoard a firm’s product, this will affect their marking functions and its intermediaries.

Many producers do not sell products or services directly to consumers and instead use marketing intermediaries to execute an assortment of necessary functions to get the product to the final user. These intermediaries, such as middlemen (wholesalers, retailers, agents, and brokers), distributors, or financial intermediaries, typically enter into longer-term commitments with the producer and make up what is known as the marketing channel, or the channel of distribution. Manufacturers use raw materials to produce finished products, which in turn may be sent directly to the retailer, or, less often, to the consumer.

The natural environment is another important factor of the marketing intermediaries. This includes the natural resources that a company uses as inputs and affects their marketing activities. The concern in this area is the increased pollution, shortages of raw materials and increased governmental intervention. As raw materials become increasingly scarcer, the ability to create a company’s product gets much harder. Also, pollution can go as far as negatively affecting a company’s reputation if they are known for damaging the environment. The last concern, government intervention can make it increasingly harder for a company to fulfill their goals as requirements get more stringent.
The technological environment is perhaps one of the fastest changing factors in the macroenvironment. This includes all developments from antibiotics and surgery to nuclear missiles and chemical weapons to automobiles and credit cards. As these markets develop it can create new markets and new uses for products. It also requires a company to stay ahead of others and update their own technology as it becomes outdated. They must stay informed of trends so they can be part of the next big thing, rather than becoming outdated and suffering the consequences financially.
The political environment includes all laws, government agencies, and groups that influence or limit other organizations and individuals within a society. It is important for marketers to be aware of these restrictions as they can be complex. Some products are regulated by both state and federal laws. There are even restrictions for some products as to who the target market may be, for example, cigarettes should not be marketed to younger children. There are also many restrictions on subliminal messages and monopolies. As laws and regulations change often, this is a very important aspect for a marketer to monitor.
The final aspect of the macroenvironment is the cultural environment, which consists of institutions and basic values and beliefs of a group of people. The values can also be further categorized into core beliefs, which passed on from generation to generation and very difficult to change, and secondary beliefs, which tend to be easier to influence. As a marketer, it is important to know the difference between the two and to focus your marketing campaign to reflect the values of a target audience.
When dealing with the marketing environment it is important for a company to become proactive. By doing so, they can create the kind of environment that they will prosper in and can become more efficient by marketing in areas with the greatest customer potential. It is important to place equal emphasis on both the macro and microenvironment and to react accordingly to changes within them.

Meso-Environment
Marketing intermediaries help to sell, promote, and distribute goods. Intermediaries take �many forms. Resellers Physical �distribution firms Marketing services �agencies Financial �intermediaries Customer markets must be studied. Market types Consumer Business Government Reseller International Customer markets must be studied. Market types Consumer Business Government Reseller International Various publics must also �be considered Government Media Financial Local General Internal Citizen Action Groups.

One general type of intermediary is the “marketing intermediary.” The marketing intermediary is an agent of the seller or buyer, or both. These organizations obtain nonexclusive marketing rights from one or more federal labs to market their intellectual property. They may even obtain contracts with the labs for the marketing efforts. Examples of “marketing intermediaries” that represent the labs include:
• Navy Techmatch, http://www.navytechmatch.com
• EPA Techmatch, http://www.epatechmatch.com
• Firstlink for first responder technologies, http://www.dodfirstlink.com
• Techlink, http://www.techlinkcenter.org
• National Technology Transfer Center, http://www.nttc.edu
• The Technology Commercialization Center, Inc., operator of the Mid-Atlantic Regional Technology Transfer Center, http://www.teccenter.org
• TRSG, Inc., http://www.teamtrsg.com

A commercial example of a “marketing intermediary” that represents the user is the MEMS Exchange, http://www.mems-exchange.org, which helps users find MEMS equipment and facilities available for use.
Other intermediaries can be called “contractual intermediaries” because they are authorized by the labs to enter into formal agreements with companies under defined guidelines set by the labs or agencies. In these cases, the labs enter into a single, general agreement with the intermediary, which in turn can enter into multiple “sub” agreements with any number of private companies, universities or state/local governments. In other words, a “contractual” intermediary participates directly in the deal between government and user.
The advantages of “contractual intermediaries” to the government include:
• Resource leveraging. The intermediaries can promote, identify, negotiate, make agreements and manage many relationships with very little government cost and only government oversight involvement.
• The intermediary can gather values from multiple organizations and provide compensation directly to a lab in the form of “in-kind products and services.”
• A lab can orchestrate partnership development and task performance without direct involvement if it so chooses.
• Use of an intermediary under agreements such as an EUL can unlock the values of fixed government assets to apply them to contemporary government missions.
• Depending on the nature of the relationship, government costs can be reduced from rents, leases, or other consideration, including investment in buildings and infrastructure.

Advantages of the intermediary organizations to the organizations that commercialize government technologies include:
• Help identifying the technology/needs match.
• Reduction in confusion. Deals with the intermediary are more like conventional commercial deals, so companies do not have to learn complex government procedures before coming to a workable agreement.
• Swiftness. Typically, the intermediary can come to agreements with other organizations much faster than formation of a direct company/government relationship.
• The intermediary can receive and leverage private sector gifts to support economic development projects that coincide and are integrated with lab missions.
• Users can reduce capital and investments required to grow their activities by using government facilities and personnel.
• These programs save time and money for users and allow them to accelerate their growth.

SUMMARY & CONCLUSION
Marketing institutions (intermediaries) perform the vital role of bringing together those economic agents with surplus funds who want to lend, with those with a shortage of funds who want to borrow.
In doing this they offer the major benefits of maturity and risk transformation. It is possible for this to be done by direct contact between the ultimate borrowers, but there are major cost disadvantages of direct finance.
Indeed, one explanation of the existence of specialist financial intermediaries is that they have a related (cost) advantage in offering financial services, which not only enables them to make profit, but also raises the overall efficiency of the economy. The other main explanation draws on the analysis of information problems associated with financial markets.

REFERENCES
1. ^ a b Siklos, Pierre (2001). Money, Banking, and Financial Institutions: Canada in the Global Environment. Toronto: McGraw-Hill Ryerson. p. 35. ISBN 0-07-087158-2.
2. ^ Sullivan, Arthur; Steven M. Sheffrin (2003). Economics: Principles in action. Upper Saddle River, New Jersey 07458: Pearson Prentice Hall. pp. 272. ISBN 0-13-063085-3. http://www.pearsonschool.com/index.cfm?locator=PSZ3R9&PMDbSiteId=2781&PMDbSolutionId=6724&PMDbCategoryId=&PMDbProgramId=12881&level=4.
3. ^ Robert E. Wright and Vincenzo Quadrini. Money and Banking: Chapter 2 Section 5: Financial Intermediaries.[1] Accessed June 28, 2012
4. ^ Gahir, Bruce (2009). Financial Intermediation. Prague, Czech Republic.

7 responses

  1. Whether or not REVIEW THE EFFECT OF MARKETING INTERMEDIARIES ON FIRMS … is tried and true, it does not fully explain how nationwide insurance company based services are best utilized.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s