Types of Intermediaries

A firm should recognize the types of channel members available to carry out its channel work. For instance, imagine a manufacturer of test equipment has developed an audio device that detects poor mechanical connections in machines along moving parts. Company executives think this manufactured goods would have a market in all of industries in which combustion, electric, or steam engines are made or used. The company's present sales force is short, and the difficulty is how best to reach these different type of industries. The following channel alternatives may emerge from management discussion:

Company sales force: Enlarge the company's direct sales force. Assign outside salespeople to territories and have them contact all of prospects in the area or expand separate company sales forces for different industries. Or, add up an inside telesales operation in which telephone salespeople handles short or midsize companies.

Manufacturer's agency: Hire manufacturer's agents-self-governing firms whose sales forces handle related products from various companies-in several regions or industries to sell the new test equipment.

Industrial distributors: discover distributors in the several regions or industries who will buy and carry the fresh line. Give those good margins, selected distribution, product training, and promotional support.