ABAIGAR, ANGENIC JOY B.
CBET19-5013P
THE CHANNEL PARTICIPANTS
Summary
There are various types of channel participants in these are includes the wholesalers,
retailers, brokers, manufacturing agents and other channel members. The basic
divisions of the marketing channels are producers and manufacturers, intermediaries
and final user. Producers and manufacturers consist of firms or organizations that are
involved in making of products. Products must be made available to customer when,
where and how they want it in order to meet the customers’ satisfaction. Intermediaries
are the one that assists producers and manufacturers in negotiation and distribution
tasks. Final users are often defined as the consumers or the target markets. It is
necessary for manufacturers and producers to shift the distribution tasks to
intermediaries because intermediaries can leads into wholesale and retail
intermediaries and a consumer. Intermediaries are able to extent their fixed cost since
they are the one who distributes the product from the manufacturer and producer. The
three major types of wholesalers are the Merchants Wholesaler, Agents, brokers, and
commission merchants and lastly the Manufacturer’s sales branches and offices.
Merchant Wholesalers are firms that involves in buying and handling large quantities of
products and do reselling. Agents, brokers and commission merchants are usually
compensated from the commission on its sales or purchases. Manufacturers’ sales
branches and offices are owned by the manufacturers and it’s where they operate.
Structures and trends of wholesaling in which wholesalers will continue to increase the
services they provide to retailers. Size and concentration in wholesaling most
wholesalers are small businesses but has great revenue. Distribution Tasks performed
by the Merchants includes providing market coverage, making sales contact, holding
inventory, processing orders, gathering market information and offering customer
support.
Discussion Question #1
Why do you suppose Wrigley has chosen to use intermediaries rather than sell direct to
consumers? Explain the underlying economics of the company’s policy.
Wrigley is the leading manufacturer of chewing gums because of its millions of
packages that is produced every day. In line with this, Wrigley is able to have a huge
scale of production and they have to make huge effort in making the successful
distribution of the product. Aside from the distribution task, there will be a large
inventory of Wrigley products that should be maintained in order to meet the consumers’
demand. Wrigley chose to use intermediaries instead of selling directly to consumer is
because they need the help of different type of channel intermediaries who are
specialized in the markets. They are the one who will make a deal into many companies
in selling the product. Apart from that, channel intermediaries have the knowledge and
expertise in this kind of market where they are able to get the market and customers.
Discussion Question #5
Why do you think Best Buy is flexing its muscle in the channel? Do you think this type of
behavior is inevitable on the part of giant dominant retailer?
Best Buy is the largest electronic company for retailers. This company is aiming on
adding retail channel. Best Buy is flexing its muscle in the channel because there is a
significant demand of technology and innovation. This type of behavior is inevitable
because as a giant dominant retailer Best Buy will be able to impress ot frighten people
in order to show them that they have the power and using their product must be
considered.
Discussion Question #6
Why do you think 3PLs have become such an important type of facilitating agency in the
market channel? Do you expect this trend to continue?
3PLs or third-party Logistics Company is becoming essential for retailers. They are
important in the growing need of better online fulfillment. 3PLs are important in
facilitating agency because it takes cares of the supply chain processes. It helps
retailers to be more flexible because they won’t have to build more warehouses and
invest in technology. Retailers can expand without taking on the extra work themselves.
This trend will continue as technology makes everything easier and accessible. Aside
from that, technology innovates everything we used to do.
