How Do Market Intermediaries Affect Business?
By Chron Contributor Updated October 16, 2020 (Houston Chronicle)
To get a finished product to the end consumer, a corporation generally goes
through several channels of distribution. One of the core facilitators of
distribution is the market intermediary who works as the connection between the
product and the customer. Because they are such an influential part of the
distribution chain, these intermediaries not only get products onto store shelves or
directly into the hands of customers, they also have insight into how products
should be best marketed 7hich is why market and marketing intermediaries are
often used interchangeably.
The Role of Market Intermediaries
Marketing intermediaries, also known as distribution intermediaries, are firms
hired by the product manufacturer to promote, sell and distribute the products to
the final consumer. As described by Monash University, they include
wholesalers, retailers, agents, marketing services agencies, distribution
companies and financial institutions. Agents and marketing agencies assist with
product promotion, while wholesalers, retailers and distribution companies sell
the product to customers.
Importance of Intermediaries in Distribution Channels
While it’s possible for a company to sell products directly to the public, using a
market intermediary increases product awareness and makes the product available
to a larger audience, which in turn increases sales and revenue.
There is a lot involved in bringing products to the market. This goes far beyond
packaging and shipping, which often requires high volumes to get the best rates.
It also includes having the networks across the distribution channels to ensure
products are presented to the customer. This is why, as MMC Learning points
out, hiring market intermediaries for distribution activities is often far less
expensive than if the companies were to perform those activities on their own.
The result is higher profit on the end product and less cost spent on advertising or
promotion.
Packaging and Promotion of Products
Packaging and promotion of a product are sometimes just as important as the
product itself. Intermediaries generally have a keen awareness of the consumer
market and insight into establishing customer relationships. Marketing
intermediaries work to promote the product through marketing channels, which
builds customer relationships and ultimately increases brand loyalty and
awareness. The proper development of a marketing plan, promotion and
packaging ensures repeat customers and can affect the success or failure of a
product.
Why Use Market Intermediaries?
Because of their large part in distributing and promoting the product, market
intermediaries have significant influence on sales and customer demand. With so
much riding on marketing and distribution, market intermediary firms have just
as much vested interest in the success of a product as the manufacturer.
Therefore, they work hard to ensure the product and the company have a
successful end result.

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